Country guide: Doing business with Italy

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Is the Italian economy returning to its former glory and is doing business with Italy easy? Find out in our free guide to trading with Europe’s fourth largest economy.

Food. Art. Architecture. Fashion. Literature. Few countries can claim to have contributed so much to the world. From the civilisation builders of ancient Rome and the Roman Empire (who invented concrete and the modern calendar system, to name a few) to the artistic and scientific advancements of the Renaissance, Italy has shaped the intellectual trajectory of the modern world.

However, beyond its rich culture and history, Italy is poised to be a good place to do business, especially since it’s one of the largest economies in the European Union (EU). As one of Europe’s and the world’s largest and most sophisticated manufacturing bases due to its well-established infrastructures for research and development, innovation, and design, it is an attractive location for foreign investment —–- Australia included. Add to that its large consumer market, and it is clear to see why many would assume that Italy holds much potential of being a key investment partner. 

Why is it good to do business with Italy?

While specific cultural characteristics can help make a country more attractive to overseas firms, other aspects make Italy an ideal country to expand a business internationally. From its modern infrastructure and developed economy to its strategic location and highly skilled and educated workforce, the advantages of doing business with Italy include:  

1. Still got the style

As a result of its rich history, modern Italy is a tourist hotspot. More than 52 million people visit each year, making Italy the fifth most popular global tourist destination. The ancient monuments of Rome, including the mighty Colosseum, St. Peter's Basilica, and Pantheon, help Rome attract 8 million tourists every year. Six million visitors head for Milan each year — the fashion capital of the world, known for its upmarket shopping centres and luxury lifestyle. Milan is also Italy’s main financial city, home to the Italian stock exchange. But tourism aside, data by the European Fashion Map has revealed that locals have been turning to online shopping to grab the latest fashion, with each spending hundreds per online shopping session. As the value of e-commerce in the country continues to grow with the younger generation abandoning in-store shopping, the once modest e-commerce market has potential for online businesses, especially those selling fashion products. 

2. Economic recovery wasn’t built in a day

Italy is a great place to visit, but is it a great place to ship your products and services? The Italian economy was sluggish to recover from the economic crash of 2008, but it’s starting to move in the right direction — albeit slowly. Although the marketplace is dominated by small and medium enterprises and family businesses, Italy has become more welcoming to foreign investors. Moreover, the changes in consumer behaviour brought about by the COVID-19 pandemic have also led to the booming popularity of e-commerce. With the rise in e-commerce adoption, the revenue of its e-commerce sector hit €64 billion in 2021, according to Statista. This is an unprecedented increase from previous years. Whether this increase in revenue should be attributed solely to the pandemic or the surge in the popularity of smartphones, the contribution of its booming e-commerce sector is undeniably supporting optimal economic recovery.

3. Robust manufacturing base

Italy is located at the centre of the Mediterranean Sea which makes it one of the most strategic gateways to consumers all over the globe. With several major ports and many airports, millions of goods and people can move with ease, solidifying the practicality of doing business with Italy. But besides being a strategic logistics hub for businesses, Italy is also known for its reputation for high-quality and design. Setting up and doing business with Italy will thus guarantee access to a large pool of experts in various fields and an extensive network of intermediate suppliers. Whether you run a fashion e-commerce platform or are in the food industry, the investment that Italy has put into advanced manufacturing technologies will improve productivity without compromising the quality of your products. 

What you need to know about doing business in Italy

While many Australian companies might find it optimal to capitalise on the above-mentioned advantages, the import-export trends between both countries and the ease of doing business with Italy are something that should also be looked into.

Having established diplomatic relations with Italy in 1959, the Australia-Italy relationship has led to major exports and imports between both countries. In general, some of the top exports of Australia include iron ores and concentrates, and the meat of bovine animals, according to the Observatory of Economic Complexity (OEC). This trend is also reflected in Australian exports to Italy. In 2020, the total exports to Italy from Australia stood at AU$419 million, OEC also found. Some of the main products exported included coal, wool, and iron. Over the last 25 years, there has, however, been a decrease in the exports of Australia to Italy — a 3.67% decrease annually to be exact. This decrease can be mainly attributed to the supply constraints for these resource exports. 

On the other hand, Australia’s major imports from Italy have increased at an annual rate of 4.07% per year. In 2020, Italy’s exports to Australia hit AU$4.2 billion and the top exports mainly comprised immunological products, machinery for cleaning, and machinery for aerating beverages, just to name a few. Despite the ‘buy local’ trend which gained momentum when international borders were closed, there was still a demand Italian goods down under.

Regardless of the Australia-Italy import-export trends, the benefits of setting up business in Italy remain clear to some Australian companies. Therefore, if you plan on setting up shop or exporting your goods to Italy, here’s what you need to know: 

1. Challenging business environment 

According to the ‘Ease of doing business ranking’ by the World Bank’s Doing Business 2020 report, Italy ranks 58th out of 190 economies. This means that Italy falls short on important aspects such as online business incorporation processes and electronic tax filing platforms. From the company formation costs to the time-consuming process of starting a business in Italy, there are several factors to consider before selling in the country.  

2. Business culture and traditions

Hierarchy is important in Italy, and traditions and a sense of historical play has a heavy influence on the Italian approach to business. This can in turn affect both the external and internal company operations, especially if one is unaware of the diplomatic skills required in running a successful business in Italy. 

3. Digital development

According to the Digital Economy and Society Index (DESI), Italy ranked 20th out of 27 in the EU’s digital competitiveness in 2021. With the acceleration of digitalisation being one of the top three trends that are shaping the world of international trade, the huge digital gap can prove detrimental for e-commerce businesses. However, although broadband access in the country is below the EU average, the expanding presence of Italian companies in e-commerce marketplaces remains promising. In fact, reports show Italian e-commerce customers being more open to making purchases from foreign e-commerce websites.  

Make doing business with Italy easier with DHL Express 

This PDF guide is your introduction to exporting to Italy from Australia. You’ll discover which product categories are doing well and find out more about Italian import duties and regulations.   

Download the DHL Express Country Guide to Italy and discover:

  • Why Italy is a strong e-commerce market — and which products are in demand

  • Why Italy is showing signs of steady growth

  • What you need to know before you start exporting to Italy

The Italian e-commerce sector is slowly improving despite the effects of the pandemic. With Italian e-commerce developing in many sectors over the years, capitalising on its robust manufacturing base and strategic location can prove beneficial to businesses in Australia. Ride the cross-border e-commerce wave with DHL Express and be a big player in the Italian market. For more business insights and access to country guides, open an account with us.