Partner at Legnazzi & Partners, Italy
Managing partner at Legnazzi & Partners – tax firm specialising in local and international taxation, income tax, VAT, tax litigation, extraordinary operations, transfer pricing and accounting.
Investing in Italy
January 11, 2024
To gain a deeper understanding of the current state of investing in Italy and the prospects for the future, we talked with Claudio Legnazzi, a Partner at Legnazzi & Partners, a consultancy firm based in Italy, specialising in legal and financial advisory services.
Regulatory predictability amidst routine legislation
Understanding the regulatory climate is crucial for potential investors eyeing Italy. Claudio Legnazzi states, “Normally in Italy, two ‘Finanziarie – Financial Laws’ are issued yearly. However, the laws 2023 have not introduced any significant innovations or exciting aspects for any foreign companies/individuals interested in operating in Italy.”
While lacking groundbreaking changes, this regulatory stability presents an environment of predictability—a factor highly valued by investors seeking assurance in their business endeavours. Italy upholds its established legal framework, fostering an atmosphere conducive to foreign investment.
A focus on food and tourism
The service sector, a basis of Italy’s economic framework, has witnessed notable changes in the past year. According to Legnazzi, “I believe the greatest growth during 2023 in the world of services concerns the food sector and tourism.” In the food sector, a surge in new establishments, both small and large, reflects the enduring popularity of Italian cuisine. Renowned restaurateurs have extended their influence abroad, showcasing the global appeal of Italy’s culinary offerings.
Simultaneously, tourism demand has experienced a pronounced shift, with certain regions gaining prominence. Legnazzi notes, “The islands are always in vogue, but the demand also continues to grow for Puglia, in particular.” This diversification in tourism interests presents opportunities for investors exploring different facets of Italy’s service economy.
Outlook for the next 12 months
Looking ahead, Claudio Legnazzi adopts a cautious stance for the next 12 months. He states, “As far as the next 12 months are concerned, I don’t believe we will see significant growth.” The ongoing geopolitical landscape, marked by global conflicts, contributes to a climate of uncertainty. This uncertainty, Legnazzi suggests, is likely to keep the market relatively stagnant as investors adopt a wait-and-see approach.
ESG policies: a growing conversation
Environmental, Social, and Governance (ESG) policies are gaining prominence globally, but their impact in Italy is still evolving. Legnazzi observes, “At the moment in Italy, there is much talk about ‘ESG’, but few companies are already prepared for ESG policies.” He highlights that only some large groups are presenting their first sustainability reports, emphasising that the journey toward comprehensive ESG integration is still in its early stages.
The regulatory push for ESG is evident, with Legnazzi noting, “The Bank of Italy itself has asked companies operating in the banking and insurance world to fill out a questionnaire indicating the steps envisaged in the three years 2023-2025.” This signals a growing awareness of the importance of sustainability practices, with regulatory bodies taking steps to encourage corporate responsibility.
While challenges are evident, the allure of Italy’s cultural and economic offerings continues to interest investors, urging them to navigate through uncertainties with a strategic approach. Although Legnazzi believes Italy in a holding pattern for now, ESG regulation and supporting funding initiatives could still see Italian businesses considering restructuring to meet these new standards.