Italy remains unattractive for foreign direct investments, equal to 0,7% of gross domestic product, against 2% in Europe. But the reduction in corporate taxes in 2017, from 31,4% to 27,9%, could make Italy more competitive.
This is what emerges from a research by UHY, an international network that brings together auditing, tax and labor consultancy firms. The survey analyzed the incidence of foreign direct investment (FDI) on the GDP of the 44 largest economies in the world in 2015. At the top are Malta (26%), Singapore (22%) and the Netherlands (14%). Italy ranks 36%. Spain (2,1%) stands out among the major European economies, followed by Great Britain (1,8%), France (1,4%) and Germany (1,4%).
Foreign investments in the Peninsula have reached 13 billion dollars against over 50 in Great Britain, 46 in Germany, 35 in France and 25 in Spain. “Countries compete to attract foreign capital to contribute to economic development, the creation of new companies or the strengthening of existing ones”, observes Andrea D'Amico, partner of UHY Italy, “Investments bring with them injections of technologies, skills and infrastructures. And they help the growth of human resources”.
The factors that inhibit foreign investment, underlines the research, are the country's low growth, high bureaucracy, high taxes. “Italy looks much better today than it did a few years ago”, observes D'Amico, “Since 2017 there has been a substantial cut, 3,5%, in corporate taxes. This cut now places us in the middle of the table among the major countries. Then there is an intervention in favor of investments in plant and machinery, with super depreciation. But further reforms and incentives would be useful”. A decisive boost could come from the reform of the labor market (Jobs Act), which brought Italy into line with the major European partners. A favorable factor is the high level of preparation of the young people, who are constantly growing.
Another indicator showing marked improvement - underlines UHY Italy - concerns disputes. The number of pending civil trials has drastically reduced, going from 5,8 to 3,8 million in 7 years (-34%). Times have shortened, also thanks to the "electronic process", which allows documents to be deposited electronically. Numerous bureaucratic simplifications have been introduced in recent years. And many procedures with the Public Administration now pass through the digital channel.
The emerging economies of the BRICS always attract foreign investments, with a flow of 375 billion dollars. Brazil, Russia, China, India and South Africa together boast a ratio of 2,3% of GDP. The mature economies of the G7 stand at 1,7%. The "pluses" of the BRICS are the low cost of labour, the favorable economic environment and the availability of resources.
The UHY network at the service of businesses
Created in 1986, based in London, UHY is a network of independent consultancy firms present with approximately 300 offices in the major cities of 90 countries. In Italy UHY offers services in the field of auditing, tax and labor consultancy. It has offices in Milan, Rome, Florence, Brescia, Novara, Padua and Viareggio.
