Doing Business in Italy
With its glamorous image and interesting investment opportunities undercut by a fragile economy and deeply rooted structural problems, expats will have to navigate serious challenges to make a success of doing business in Italy.
Italy is ranked 45th out of 189 economies in the World Bank’s Ease of Doing Business Survey for 2016. The country came first for ease of trading across borders and also did well in resolving insolvency (23rd) and registering property (24th).
At the same time, Italy’s positions for enforcing contracts (111th), paying taxes (137th) and dealing with construction permits (116th) are cause for concern, and bear testament to the country’s notorious bureaucracy.
It is worth noting however that factors such as corruption, political interference, organised crime, and unemployment manifest differently in the traditionally prosperous northern region and the less-developed south. In addition to the country’s economic realities, expats will also have to navigate the complex practices of business etiquette and business culture in Italy.
Variable. Business hours are usually between 8am and 7pm with a two-hour lunch break, although this might not be the case with larger businesses in major cities.
Italian. While many Italians do speak English, expats should not assume this is the case.
Italians are known for being stylish. La bella figura is a guiding philosophy for many Italians and involves presenting one’s best at all times – from appearance to interactions. Formal, classic dress is usually a safe bet, but expats should make an effort even in casual settings.
Not necessarily expected, especially in the beginning stages of negotiations. It may be best to give a gift in return for receiving one first. Quality and presentation are important, although gifts do not have to be lavish. Sharp objects, chrysanthemums, red roses and black packaging should be avoided. Common gifts include good alcohol, desk accessories, music and books. Gifts are opened right away.
A standard handshake is used when greeting, being introduced and leaving. Close associates and friends may greet each other with a kiss on both cheeks. Use formal titles when addressing associates – signore (Mr) or signora (Mrs) plus surname – until invited to do otherwise.
Women are unfortunately under-represented in the higher levels of business in Italy, although there are notable exceptions to the rule. Expat businesswomen are usually treated with respect and courtesy, and should not be surprised at being complimented on their appearance – flirtation is fairly common.
Business culture in Italy
The general business culture in Italy is somewhat different from what many expats will be used to. Gaining an understanding of how Italians and Italian businesses interact with others will not only aid expats' understanding of their new environment but will also help them overcome some of the obstacles they may face.
The family unit is central to Italian society and this filters into the way Italians do business. In practical terms, many businesses in Italy are family-owned small to medium enterprises, and even some of its biggest corporations are also family owned.
The way this expresses itself in the business environment is that decisions are usually made from the top down by business owners or a small core of decision-makers who are often family.
Seniority is respected in Italian business, although the power of an individual manager often depends on their relationships with those above them. As a result, a lot of time is spent networking and maintaining business relationships in Italy.
The family-orientated nature of business in Italy means that relationships are highly valued, and outsiders should expect to spend a fair amount of time networking and getting to know their associates. For this reason, a lot of time is spent getting acquainted at meetings, especially in the early stages.
Communication in the Italian corporate environment is often highly expressive. Gesturing, emotional debate and rhetoric that borders on the theatrical are all common in business interactions. Italians usually prefer face-to-face, verbal communication to impersonal written exchanges.
Meetings often have flexible agendas and are frequently interrupted. It is not uncommon for decisions to be made before a meeting takes place, so they often serve the purpose of confirming decisions and informing those who are present. While the Italian meeting space might seem informal, expats should still take them seriously and be punctual.
Attitude to foreigners
Given the swathes of tourists that visit Italy, Italians are accustomed to foreigners and normally display a positive attitude towards them. On the other hand, the country has been dealing with waves of illegal immigrants from Africa, Asia and the Balkans, which has led some Italians to develop a negative attitude towards migrants from these areas. This usually has more to do with these new arrivals’ illegal status than their national or cultural origins.
Dos and don'ts of business in Italy
Do have a sense of humour, but avoid being too graphic
Do talk about movies, art, travel and positive aspects of life in Italy
Do dress well and display confidence – la bella figura is about more than just looks
Do stand when an older person enters the room and pay attention to children if there are any present
Don’t talk about the mafia, politics and personal finances
Don’t ask overly personal questions