1. 1 Doing business with Italy – An operative guide for foreign enterprises Milan, May 31 st 2012

2. 2 Topics: Italy & Lombardy: economic outlook Trade with Italy How to export to Italy – Operative programme for economic operators

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4. 4 Italy at a glance

5. 5 Population: 60.624.442 (2010) GDP: € 1,548 billion (2010) GDP growth: 2010: 1.1% 2011: 0.4% 2012-2013: negative forecasts Export: € 338 billon (2010). Import: € 367 billon (2010) Main Trading Partners: Germany, France, China, Netherlands, Spain, Russia, Belgium, USA.

6. 6 Export: Machinery, Luxury goods, Chemical products, Processed food, Textile products, Car engines, Design and fashion, Shoes. Import: Industrial machines, Chemicals, Transportation vehicles, Oil, Metals, Food, Agricultural products. Natural resources: Mercury, marble, sulphur, natural gas, fishing, carbon, agriculture.

7. 7 Number of companies 5,281,934. Agriculture 16.1% Industry 26.3% Trade and Services57.6% Source Istat, Year 2010

8. 8 Italian Economic Environment 9th major exporter, 8th major importer, 11th major investor, 13th destination of investments. Diversified industrial economy. The great strength of the economy lays in its vibrant small and medium firms, specializing both in high quality consumer goods and in high tech design and engineering products. Presence of industrial clusters. Expected GDP growth low due to restrictive measures to reduce public debt and to international crisis. Strict control on inflation and public expenditure to comply with EU parametres.

9. 9 Since the introduction of Euro economic growth and commercial exchanges slowed down. Import and export trends grew but Italy is losing positions in world trade ranking. Internal demand has decreased consistently after 2009 world crisis to 2000 levels. Italian products (with the exception of luxury goods) are suffering cheaper competition from Asia. Italian Economic Environment

10. 10 Main trading partners: IMPORT Year: 2010 – Source: Istat RankValues (€ mil.) Total Share Germany158,53115.9% France230,5278.3% China328,7907.8% Netherlands419,6115.3% Spain516,6604.5% Belgium613,3703.6% Russia713,0533.6% UK812,1473.3% Switzerland911,9083.2% Libya1011,8643.2% USA1111,1403% Austria129,0542.5% Algeria137,9142.2% Poland147,1922% Azerbaijan155,3381.5% Turkey165,1581.4% Iran174,7451.3% Romania184,5311.2% Czech Republic194,3481.2% Japan204,2881.2%

11. 11 RankValues (€ mil.) Total share Germany143,89713% France239,07911.06% USA320,3336% Spain419,5815.8% UK518,0685.3% Switzerland616,0414.7% Belgium78,6652.6% China88,6102.5% Poland98,5422.5% Netherlands108,3592.5% Austria118,0692.4% Turkey128,0032.4% Russia137,9082.3% Greece145,4631.6% Romania155,1701.5% Japan164,0321.2% Brazil173,8801.1% UAE183,6851.1% Hong Kong193,6101.1% Czech Republic203,5801.1% Main trading partners: EXPORT Year: 2010 – Source: Istat

12. 12 Trade with Albania Italy is the first trading partner of Albania. Import 2010: 577.646.000 € 2011: 657.464.000 € (+13.8%) Export 2010: 965.892.000 € 2011: 1.145.803.000€ (+18.6%) Main products Import: shoes, garment, tools, engines, paper products, meat Export: oil products, garment, leather, shoes, tools, textiles, electric engines

13. 13 Trade with Bosnia Herzegovina Import 2010: 457.005.000 € 2011: 494.284.000 € (+8.1%) Export 2010: 551.396.000 € 2011: 585.730.000 € (+6.2%) Main products Import: shoes; chemical products, metal products, garment Export: oil products, shoes, leather products, metal products, plastic products, machinery

14. 14 Trade with Croatia Italy’s the first trading partner of Croatia. Import 2010: 1.506.248.000 € 2011: 1.502.103.000€ (-0.3%) Export 2010: 2.072.898.000 € 2011: 2.247.811.000 € (+8.4%) Main products Import: garment, knitwear, chemical products, metal articles Export: oil products, metal products, chemical products, machinery, plastic products, garment

15. 15 Trade with Macedonia Import 2010: 281.667.000 € 2011: 309.835.000 € (+10%) Export 2010: 205.608.000 € 2011: 229.098.000 € (+11.4%) Main products Import: garment, shoes, electric energy, leather articles Export: shoes, leather articles, electric energy, textile products, machinery

16. 16 Trade with Montenegro Import 2010: 26.667.000 € 2011: 38.456.000 € (+44.5%) Export 2010: 108.456.000 € 2011: 111.638.000 € (+2.8%) Main products Import: garment, tools, metal articles, shoes Export: garment, shoes, furniture, cosmetics, cars, machinery, TLC equipment

17. 17 Trade with Serbia Import 2010: 802.257.000 € 2011: 854.847.000 € (+6.6%) Export 2010: 952.357.000 € 2011: 1.159.473.000 € (+21.7%) Main products Import: shoes, garment, knitwear, metal products Export: machinery, leather articles, cars, car spare parts

18. 18 Lombardy: a region in the heart of Europe

19. 19 Lombardy: General Economic Data Year 2010 – Source: Istat Area23,862 Km2 Population9,939,000 Density416.55 Labour force4,152,000 Unemployment rate 5.6% (Italy 8.4%) GDP per capita33,647€ (Italy 26,277€)

20. 20 Lombardy: General Economic Data Source: Istat In 2010 Lombardy GDP represented 24% of Italian GDP. Lombardy imports 31.9% of total Italian import and represents 27.8% of total Italian export. Lombardy is considered amongst the 4 most economically developed European regions along with Catalunya (Spain), Rhone-Alpes (France) and Baden-Wuttenberg (Germany).

21. 21 Lombardy: Foreign Trade Source: Istat LombardyItaly% Total import 201011736731,9 Total export 20109433827,8 (billion of Euros) In 2010 Milan Province imported € 65 billion and exported € 36 billion. Negative trade balance. Italy is changing from a manufacturing and exporting economy to an importing and trading one.

22. 22 Origin of Lombardy import: Europe 72.4% - Asia 18% America 5.4% - Africa 4% Oceania 0.1% Destination of Lombardy export: Europe 69.8% - Asia 15.5 % America 8.6 % - Africa 4.8 % Oceania 1% Foreign trade is mainly concentrated within European borders. Lombardy: Foreign Trade Source: Istat – Year 2010

23. 23 Lombardy: Economic Structure Source Istat - Year 2010 Number of companies in Lombardy: 823,620 (Italy 5,281,934), of which - Agriculture6.3% - Industry31.4% - Trade and Services62.3% Lombardy: 84.1 companies every 1,000 habitants. More than 94% of companies have less than 9 employees

24. 24 Lombardy and Balkans: trade LombardyImportExport Albania73.219.307€116.499.479€ Bosnia – Herzegovina146.485.598€ 129.384.062€ Croatia181.766.203€436.623.402€ Macedonia20.841.992€36.691.801€ Montenegro6.191.632€19.099.805€ Serbia324.593.289€374.720.190€ Year: 2011 - Source: Istat

25. 25 Lombardy: most important sectors Industry:- Engineering - Metallurgy - Textile, Footwear - Chemical - Packaging - Agriculture and Food - Furniture - Pharmaceutical Services: - Finance and Insurance - Fashion - Design - ICT - Logistics

26. 26 Cooperation Programme with Italy

27. 27 Business development programme Aice developed a programme to foster business between Italy and foreign countries that consists in 3 phases: 1.Business guide 2.Presentation of the programme and selection of the companies 3.Incoming mission in Italy and follow up The duration of the programme is approximately 1 year.

28. 28 Index Chapter I Italy - Outlook Chapter II Italy and its economy Chapter III Trade relations with EU and Italy Chapter IV Customs: general aspects Chapter V Incoterms Chapter VI Conditions to access the Italian market Chapter VII Business with Italy Chapter VIII Tax system Chapter IX Establishing enterprises in Italy Chapter X Final considerations The guide is developed by AICE in accordance to the needs of the partner country. Phase I - Business guide

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30. 30 Phase II - Presentation -Road show in the hosting country to present the project and the business guide -Meetings between AICE experts and companies to discuss about trade possibilities in Italy -Company visits -Selection of the companies for the trade mission to Italy

31. 31 Exporting to Italy: composition of the price Selling a t-shirt to Italy CIF price 100 Import duty on CIF price 9.6% 109.6 VAT 21% (base 109.6) 132.6 Distributor’s charge 50% 200 Retailer’s charge 50-100%300 - 400 Plus: Certification costs, labelling costs etc. Advertising costs, training, etc.

32. 32 Exportable products: T-shirts code 610910 Italian Import - 2010 - €9,040 million Main suppliers:China, France, Romania, Tunisia, Bangladesh, Turkey Custom duty: 12% Albania, Bosnia Herzegovina, Croatia, Macedonia, Montenegro, Serbia 0% with EUR1 VAT:21%

33. 33 Phase III – Incoming mission Aice will organize -Business matching with Italian companies -b2b meetings in Milan -company visits -Follow up of the meetings

34. 34 Associazione Italiana Commercio Estero Italian Association of Foreign Trade

35. 35 Aice is a non-profit entrepreneurial association which, for over 60 years, has been working to promote international business relations, representing companies that are committed predominantly to commercial activities abroad as well as the services related to such activities. What is Aice?

36. 36 Aice represents Italian companies dealing with foreign trade: -Trading companies - Exporters - Importers - Distributors - Agents - Export houses - Buying Offices - Services for FT - Manufacturers (mainly SMEs) wishing to improve their business abroad. Aice members

37. 37 Main sectors of activity: Export: - Machinery - Industrial supplies - Consumer products (linked to “Italian lifestyile”, like fashion, food, furniture etc.) Import: - Agri-food - Raw materials - Electrics, Electronics - Machinery - Consumer products Aice members

38. 38 - From very small (individual) companies, to very large (multinational) groups - 80% of our members located in Lombardy - Markets of interest: Eastern Europe, North and South America, Far East, Middle East, Africa Aice members

39. 39   Representation  Consulting  Training  Information  Business opportunities abroad  Promotion on foreign markets Aice services for the members

40. 40 Aice has a web portal dedicated to the items of foreign trade in order to: - assist Italian companies in their internationalization process. - be the gateway to Italian market for foreign companies with interesting sections available in English (members’ db, international marketplace, b2b sites, information on Italian market). www.aicebiz.com

41. 41 Aice is a member of:  Confcommercio Milan, Local Confederation of Trade, Tourism and Services (about 35,000 companies)  Confcommercio - Imprese per l’italia, Italian General Federation of Trade, Tourism and Services Confcommercio (about 800,000 Companies)  CITHA - Confederation of International Trading Houses Associations Aice direct relationships

42. 42 to get in touch with the right Italian partners (distributors, agents, clients, suppliers etc) to receive assitance in organizing business meetings in Italy to promote requirements/offers on the Italian market through Aice pubblication “Il Commercio con l’Estero” (Foreign Trade) and Aice website www.aicebiz.com www.aicebiz.com Why a should foreign company/organization contact Aice?

43. 43 Aice aim is to create new business opportunities between its members and foreign companies, thus contributing to the development of international trade. Through Aice, any company interested in the Italian market and/or products will be able to expand into Italy. Aice: gateway to the Italian market

44. 44 Furthermore Aice works to develop collaborative relationships with international institutions and promotional bodies, as well as with entrepreneurial associations world wide, with the aim of increasing international trade and fostering a balanced development of economies in all countries. Aice: gateway to the Italian market

45. 45 Our motto Aice - Associazione Italiana Commercio Estero Italian Association of Foreign Trade Corso Venezia 49, 20121 Milan Tel +39 027750320/1 Fax +39 027750329 aice@unione.milano.it www.aicebiz.com “Free Trade in a Free World”