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1. Introduction
Foreign franchisors planning to start a business activity in Italy are faced with several institutions and regulations ruling the matter of investment attraction in the country and financial support to private entrepreneurial activities.
The EU, the national Government and local institutions provide infact, foreign investors, Small and Medium Sized Enterprises (SMEs) and start up companies with a great number of financial support measures and incentives.
Only part of the above mentioned measures are specifically targeted at franchisors or franchisees.
This document is therefore structured in order to offer a general overview on the financial support measures and incentives for private entrepreneurs in Italy , emphasizing the specific sources of funding provided to franchisors and franchisees.
2. Financing private business 1
The total volume of public financial support to business activities in Italy lays traditionally below the EU average as the country finances private companies considerably less than countries like Germany , France and Spain (see Table 1).
Per capita financial support in selected EU contries/1999-2001
| Country | Per capita financial support in Euros |
|---|---|
| Ireland | 188 |
| Denmark | 186 |
| Germany | 157 |
| France | 109 |
| Spain | 90 |
| Italy | 84 |
| The Netherlands | 44 |
| UK | 42 |
About 48% of total financial support is directed toward SMEs and more than half of it is directed to less developed regions in Southern Italy .
Financial resources are concentrated in the following four strategic areas:
- Investments support;
- Research and Development financing;
- Reduction of regional differences;
- Internationalisation: intended as support to exporting Italian companies and to foreign investors in Italy .
In Italy there are 92 laws providing financial support to business activities but most of the resources are made available under 15 of them.
The Ministry for productive activities offers a general overview of regulations at EU, national and regional level concerning financing and incentives to private enterprises in Italy :
Ministero delle attività produttive
Direzione generale per il coordinamento degli incentivi alle imprese
Via del Giorgione, 2/B
00147 Roma
Contact:
Tel: (+39) 0654927906 or (+39) 065401633
Fax: (+39) 0659601226
3. Financing franchising
Out of the most important 15 laws providing financial support for business activities, only 3 are applicable to commerce and franchising:
I. Law 488/92: under this provision about 50% of all non-returnable funds are financed in Italy .
It is considered by far the most important instrument of investment support in the country for the sectors of commerce, tourism, mining, energy, construction and other services.
In order to apply to the funds provided thanks to this law, the interested franchisors have to take part in a call for tender specifically issued for the sectors of commerce and tourism.
Further information on the application procedure and criteria can be obtained from the abovementioned contact of the Ministry for productive activities.
II. Law 144/99 (art. 45, paragraph 1): it prescribes measures promoting self-employment and self-entrepreneurship in those regions falling under objectives 1 and 2 of the EU structural funds.
In addition to that, laws, legislative measures and regulations give application to the prescription of this law aiming at increasing the rate of self-employment and self-entrepreneurship: the most important of these, giving direct application to art.45, comma 1 of law 144/99 is the Decreto Legislativo 21/04/2000 n.185.
III. Sabatini law ( n.1329/65): it provides financial incentives to the purchase of new machinery and equipment with the purpose of promoting innovation within enterprises. This kind of incentives might primarily concern production franchising systems 2.
The great majority of financial support to franchisees in Italy is provided under this second group of regulations and is managed by Sviluppo Italia Spa , the national agency for business development and investments attraction.
The agency is the main source of information in Italy on financial instruments available to investors and investment opportunities in the country.
In the field of franchising Sviluppo Italia offers its support:
- to franchisors in the search of suitable franchisees in the Italian market;
- to franchisees looking for the appropriate financial support to start their activity.
Sviluppo Italia Spa
Via Calabria 46
I-00187 Roma
Tel. 0039 06 421601
E-mail. info@sviluppoitalia.it
Web. www.sviluppoitalia.it
Sviluppo Italia, recently formed a joint venture, with the ICE, Italian institute for foreign trade (www.italtrade.com), called “Invest in Italy” (www.investinitaly.com), serving as a reference point for foreign investors willing to invest in Italy.
- [back] „Relazione sugli interventi di sostegno alle attività economiche e produttive“, Ministero delle attività produttive, Giugno 2003
- [back] „Guida ai finanziamenti agevolati per le imprese” : AZ Franchising Giugno 2005