Country Desks — Western Europe
Italy
Legal System
Civil law based on the Codice Civile (1942, extensively updated); enterprise courts (Sezioni Specializzate in Materia d'Impresa) handle commercial disputes. EU member, fully aligned with EU law.
Principal Arbitration Centre
Camera Arbitrale di Milano — Italy's leading arbitration institution. Governed by Code of Civil Procedure Arts. 806–840 as reformed by Legislative Decree No. 149/2022 (Riforma Cartabia). Milan Arbitration Rules 2023.
Corporate Tax
IRES (corporate income tax) 24% + regional IRAP typically 3.9%; effective combined rate ~27.9%. VAT (IVA) standard 22%. Patent Box and R&D incentives available.
Partner Office
Served together with our Italian partner office across M&A, corporate structuring, infrastructure projects and arbitration proceedings.
Country Desk Brief
Legal System, Investment, Trade & Regulation
A civil-law jurisdiction governed by the Codice Civile and operating as a full EU member. Italy is the fourth largest economy in the EU and the eighth globally, with a manufacturing sector that accounts for approximately 16% of GDP — one of the highest proportions in Europe. Commercial disputes are handled by ordinary civil courts or specialised Enterprise Courts (Sezioni Specializzate in Materia d'Impresa) established in major Italian cities. Mermeroglu Legal advises on market entry, investment structuring, foreign trade and dispute resolution in Italy, working in coordination with our Italian partner office across M&A, corporate structuring, infrastructure projects and arbitration proceedings.
The standard entry vehicle for foreign investors is the S.r.l. (Società a responsabilità limitata; minimum capital €10,000, or €1 for the simplified S.r.l.s.). The S.p.A. (Società per Azioni; minimum capital €50,000) is used for larger or listed structures. There is no residency requirement for directors or shareholders; accounts and documentation can often be prepared remotely with local notarial coordination.
Italy offers equal treatment to foreign and domestic investors; there are no general sector ownership caps. However, Golden Power rules (Legislative Decree 21/2012, significantly expanded in 2020–2022) require prior notification and may allow the government to impose conditions or veto transactions in strategic sectors — energy, transport, communications, defense, financial infrastructure, healthcare, food security and space — applicable to both EU and non-EU acquirers.
At a Glance — 2023 / 2024
Investment & Trade Indicators
Establishment
How to Form a Company
The S.r.l. is the standard vehicle for foreign investors — minimum capital €10,000 (at least 25% paid at incorporation); no residency requirement for directors or shareholders. The simplified S.r.l.s. allows €1 minimum capital. The S.p.A. is used for larger or publicly listed structures with a minimum capital of €50,000.
Foreign ownership: equal treatment with no general ownership caps. However, the Golden Power framework (D.Lgs. 21/2012 as expanded by D.L. 23/2020 and Law 40/2020) requires prior notification for transactions in strategic sectors. The government may impose conditions or exercise a veto right; the rules apply to both EU and non-EU investors. Failure to notify can result in transaction nullity and significant fines.
Sector incentives: Italy offers the Patent Box regime (preferential tax treatment for qualifying IP income), R&D and innovation tax credits, and PNRR-linked investment grants for specific sectors including digitalisation, green energy and manufacturing.
Typical steps — S.r.l.
Investment Climate
Investment Models & Where Capital is Flowing
Italy's investment attractiveness is anchored in its industrial districts and world-class export sectors — precision engineering, fashion, food & beverage, chemicals and pharmaceuticals. The PNRR (Piano Nazionale di Ripresa e Resilienza) with approximately €191.5B in EU and national funds is driving significant investment activity through 2026 across green transition, digital transformation and infrastructure. Northern Italy (Lombardy, Piedmont and Veneto) accounts for the majority of inbound FDI.
- Industrial machinery & precision engineering — a global competitive advantage; Italy is the world's second largest machinery exporter. A primary FDI destination for manufacturing and supply chain investment.
- Fashion, luxury & design — a high-value export cluster with strong brand protection requirements; M&A activity in luxury goods is consistently active.
- Food & beverage — Italy is Europe's second largest food producer; agri-food processing and branded exports attract sustained FDI interest.
- Renewable energy — Italy has ambitious targets for solar and wind capacity; the energy transition and PNRR funds are generating significant project investment, particularly in southern Italy.
- Pharmaceuticals & life sciences — Italy is the EU's largest pharmaceutical manufacturer by production value; a consistent FDI sector with strong R&D incentives.
- Infrastructure & construction — PNRR-funded projects in transport, broadband, water networks and public buildings are creating a multi-year pipeline of contract opportunities.
Foreign Trade — 2024
Recent Trade & Principal Partners
Italy ranks among the world's top goods exporters with approximately €640 billion in total exports. The non-energy trade balance has been consistently in surplus since 2013; overall balance fluctuates with energy import costs. Principal export sectors are machinery and mechanical appliances, motor vehicles, pharmaceuticals, fashion and clothing, and processed food. Germany and France are the two largest trading partners, followed by the United States. China is Italy's largest single source of goods imports from outside the EU.
Top Export Partners
- Germany (~12%, largest)
- France (~11%)
- United States (~10%)
- Spain
- Switzerland
Top Import Partners
- Germany
- France
- China
- Netherlands
- Spain
Principal Export Sectors
- Machinery & mechanical appliances
- Motor vehicles & components
- Pharmaceuticals
- Fashion, clothing & footwear
- Food & beverages
Regulatory Developments
Notable Legislative Changes
In force 28 February 2023
Arbitration — Riforma Cartabia (Legislative Decree No. 149/2022)
Comprehensive reform of Italian civil procedure including arbitration (CPC Arts. 806–840). Key changes: simplified enforcement of domestic awards, consolidated procedural rules, enhanced alignment with international arbitration standards, and new provisions on the arbitral tribunal's powers. The Milan Chamber of Arbitration issued updated Rules in 2023 in response.
Expanded 2020–2022 — ongoing
Investment Screening — Golden Power (D.Lgs. 21/2012 as expanded)
D.L. 23/2020 (converted to Law 40/2020) significantly expanded the Golden Power regime during the COVID-19 period to cover 5G and digital infrastructure, food security, financial infrastructure and additional strategic sectors. Mandatory prior notification applies to both EU and non-EU investors; the government may impose conditions or veto qualifying transactions. Non-compliance can result in transaction nullity and fines up to twice the transaction value.
Fully in force 15 July 2022
Restructuring & Insolvency — Codice della Crisi d'Impresa (D.Lgs. 14/2019)
Comprehensive reform of Italian insolvency and corporate restructuring law, implementing the EU Restructuring Directive. Introduces early warning mechanisms, pre-insolvency procedures (Composizione Negoziata della Crisi), and a new restructuring plan framework. Replaced the previous Legge Fallimentare framework and significantly changes the landscape for distressed M&A and creditor enforcement in Italy.
2021–2026 — ongoing
PNRR — Piano Nazionale di Ripresa e Resilienza
Italy is the largest recipient of EU NextGenerationEU funds: approximately €191.5B allocated across six mission areas (digitalisation, green revolution, infrastructure, education, health and social inclusion). Each mission generates procurement activity, grant opportunities and regulatory developments specific to the relevant sector. Monitoring and implementation remain subject to EU conditionality milestones.
Note: in energy, construction and banking, regulatory changes occur primarily through sectoral legislation and EU directive implementation rather than single landmark primary statutes. Project-specific verification against current official sources is recommended.
Resources
Useful Official Links
Our Approach
How Mermeroglu Legal Engages in Italy
Italy mandates typically combine S.r.l. or S.p.A. structuring with Golden Power screening advice for strategic-sector transactions, and frequently engage the law of the investor's holding jurisdiction for tax and financing purposes. Cross-border M&A in Italian industrial sectors often requires simultaneous coordination of Golden Power notifications, merger control, local employment law and project financing — our practice is structured to manage that coordination through a single point of accountability, working in close coordination with our Italian partner office.
Each mandate is led by a single matter principal at the firm, supported by an internal team and local counsel — covering company formation, Golden Power notifications, PNRR-related procurement, foreign trade, M&A and dispute resolution before the Camera Arbitrale di Milano and Italian courts.
INITIAL ENQUIRIES
Market entry and cross-border matters in Italy are handled through coordinated internal and alliance teams.
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