Trading with Italy - Top Advice & Tips

The Trading with Italy – Overview

Trading with Italy – Italy is the European Union’s third-largest economy and its second-largest manufacturer of products. It was one of the founding countries of the European Union. Italy is regarded as one of the “Mediterranean Countries” within the European bloc. Last year, it made up 1.85% of world Gross Domestic Product (GDP) (source: Statista). In 2023, the Italian economy has fallen to become the 13th largest economy in the world.

Italy is a democratic republic with legislative, executive, and judicial structures. Its population is 60.9 million, with 64.5% between the ages of 15 and 64 (source cia.gov).

As part of the EU, Italy makes its international trade deals via the European Union. It is the third largest producer within the European Union and accounts for 12.29% of the European Union’s GDP in 2023 (source: Statista)

Italy can be roughly broken into two sections, the industrialized North (Turin, Milan, Venice), which accounts for most Italian GDP, and Mezzogiorno (South Italy), which is less well developed.

Trading with Italy – Italian Business Culture

Italian is, naturally, the language of Italy. Before attending a business meeting in Italy, it would be a common courtesy to confirm in advance if the attendees can speak English. If not, then an interpreter may be required. It is important to make appointments for meetings.

In Italy, formal titles and surnames are used in initial meetings and correspondence; however, as relationships develop, they may become more informal.

Relationships are essential in Italy; this should be one of the critical initial priorities of any firm wishing to trade in Italy.

Dress and presentation play an important role in Italian culture. Formal attire is generally expected for business meetings, and, most importantly, dark colors are expected for businessmen. Businesswomen tend to wear elegant and modest pants or skirt suits, accessorized with simple jewelry and makeup.

Business deadlines are less sensitive in Italy than in other countries, and work plans are often not taken too seriously, so some flexibility can be built into a deadline. Where a deadline must be firmly met, make it very clear to your Italian counterparts.

Business cards are exchanged quite soon after the commencement of a meeting. Avoid double-sided business cards.

Setting up in Italy

Invitalia is the National Agency for Inward Investment and Economic Development. The Italian Ministry of Economy runs it.

Firms wishing to enter into the Italian market have a variety of options, including:

Using a sales agent. Firms should verify that any agreements which they make are under EU laws – Council Directive 86/653/EEC.
Establishing a local Italian representative office. It is recommended for some industries to set up a regional office in Italy.
Franchising is growing in Italy, which is the fourth largest market in Europe for franchises. However, this is primarily concentrated in the northern half of Italy. For more information about franchising in Italy, please visit Assofranchising: the Italian Franchising Association.
Joint venture or strategic alliance. European Union rules and regulations need to be taken into account when considering this strategy.
eCommerce. Italy is lagging in terms of eCommerce development. In part, this is due to Italy being a mature market and the high number of small businesses. However, post-COVID-19, there are signs of eCommerce starting to evolve in Italy.

Sourcing from Italy

Italy’s primary exported commodities include:

Engineering products,
Textiles and clothing,
Production machinery,
Motor vehicles,
Furniture,
Chemicals;
Foodstuffs,
Beverages

When sourcing from Italy, conduct Quality Control Inspections and Seller Verifications at the supplier’s firm. Goodada’s Italy Supplier Verification & Quality Control Inspection Services offers these services across all of Italy.

If you are buying furniture from Italy – Goodada has a dedicated Italy Furniture Inspection Service. If you are looking to find Italian Furniture Suppliers or are seeking Furniture Quality Control Inspectors, please visit Goodada’s Italian Furniture page.

Banking and Finance

Italy’s legal tender unit is the Euro (€ EUR).

Italy has a well-developed banking and credit system. While there are numerous banks across Italy, recent counts indicate approximately 580 banks. Twelve banks are classified as “significant.” According to their assets, the top six banks in Italy are Unicredit SpA, Intesa Sanpaolo, Cassa Depositi e Prestiti, Banco BPM, Banca Monte dei Paschi, and UBI Banca.

Italy’s banking industry is undergoing significant reform, and there is a political will to consolidate the banking sector.

Trading with Italy – Tariffs and Non-Tariff Barriers

Tariff

European Import agreements and rules apply to products exported to Italy. To learn more about the trade agreements of European Union countries, please visit the EU’s Negotiations & Agreements page.

Tariffs and duty rates frequently change and can be revised without notice. To determine if you can export your products to Italy and to calculate any import duties or taxes, please visit Italy’s Customs Service website.

Non-tariff barriers

Italy imposes restrictions on the sale or use of certain products, including:

Agricultural products.
Chemical products.
Cultural goods.
Food products.
Fauna and Flora.
Ores and Alloys.
Pharmaceuticals products.
Products for Torture.
Weapons and Explosives

Product labeling, certification, and packaging

Product labels in Italy are governed by European and Italian regulations. Labels must be in Italian. Information on the labeling of products in the interest of consumers and compliance procedures is available at Summaries of EU Legislation.

Food information and labeling legislation must comply with EU legislation. Please click on Food Labelling Information to learn more. EU legislation requires that producers of imported organic food from non-EU countries (third countries) meet the same standards as those in the EU. For more information, visit Trade in organic products.

The CE mark is a mandatory conformity marking for certain products sold within the European Economic Area (EEA).

The EU may also require certain marks for specific products. A mark is a symbol or pictogram that appears on a product or its packaging. These marks range in scope from signs of danger to indications of proper recycling and disposal methods.

Such marks intend to provide market surveillance authorities, importers, distributors, and end-users with information concerning a product’s safety, health, energy efficiency, and environmental issues.

Certification

As Italy is part of the European Trading Bloc, all exporters who wish to export products to Italy, such as food products, must adhere to EU regulations. Information on EU food requirements can be found here. Also, check whether Italy has additional certification requirements.

Packing

It would be best to have your packaging approved by the importer in Italy as their market might have some specific preferences. Goods should be marked according to European Union requirements.

Methods of quoting and payment

Cash sales are common in Italy, but many Italian companies still request credit. Due to the high costs, businesses in Italy tend to avoid using letters of credit.

Agree on payment terms in advance, including 30, 60, or 90-day options. Some Italian firms request up to two years for certain types of products or projects. Ensure all parties understand the payment terms and that your client, representative, or contact signs a mutually agreed document.

Trading with Italy – Documentary & Clearance Requirements

Documentation required:

Customs authorities use the Single Administrative Document (SAD) for declarations in the EU, Switzerland, Norway, Iceland, Turkey, the Republic of North Macedonia, and Serbia. It consists of eight copies, each with a different function.

All companies established outside the EU must obtain an EORI number. For more information on EORI numbers, please visit the EU EORI’s page.

Customs process:

Submit an entry summary declaration before moving goods into the Union’s customs territory. Customs primarily use this declaration to conduct a risk analysis for security and safety purposes. Distinguish the entry summary declaration from the summary declaration for temporary storage, which serves as a notification of presentation to customs and registers the goods.

Exporters to Italy can find information about the import requirements on the Italian Customs website.

European Union Customs procedures for import and export can be found here.

Trading with Italy – Business Risks

It is recommended that you get insurance for your products. Goodada Insurance provides clients with online insurance facilities.

Businesses wishing to operate in Italy or any European Country should commit to the highest level of corporate behavior and familiarise themselves with Italian and European laws on bribery and the penalties for officials’ corruption.

Intellectual Property Protection

The Directorate-General for the Protection of Industrial Property Italian Patent and Trademark Office in the Ministry of Economics is one of Italy’s key offices concerning patents and IP protection.

Dispute resolution

Italy has a well-established legal system closely aligns with the European Union’s legal framework. Therefore We highly recommend hiring legal experts.

Trade with Italy – About the Author

So, Aidan Conaty, MBA ACMA GCMA, founded TCI China and Goodada.com. Aidan has spent over 15 years assisting companies in trading internationally. TCI China provides trade support services for China. Goodada helps companies to sell globally. Aidan received the Seamus McDermott MBA scholarship from Trinity College Dublin.

For additional information please email at aidan@goodada.com or at: