Italy 2026: the least internationalised large EU economy is still your strongest nearshoring lever

The current Istat report 'L'apertura internazionale dell'economia' (via ANSA) puts the average of inbound FDI in Italy and Italian outbound FDI at ~24 % of GDP — up from 5 % in 1990. France and Spain sit above 40 %, Germany higher still. Italy remains the least internationalised of the four large EU economies despite a fivefold increase in 30 years.

Istat is explicit about the cause: the dominance of small, often regionally rooted firms (the 'district' model). These export a lot but rarely set up their own foreign subsidiaries and structurally attract less foreign capital. Italy participates in globalisation mainly through goods, less through capital.

For foreign companies that's a paradoxical message: the market is under-invested relative to its size — meaning less competition for talent, sites and M&A targets than in France or Spain.

If Italy absorbs comparatively little FDI, competition for specialists, executives and industrial sites in the Northern Italian corridor (Lombardy, Veneto, Emilia-Romagna and Trentino) is less overheated than in Catalonia or Île-de-France. Trentino / Trentino-Alto Adige regularly tops Italy's regional productivity ranking on Eurostat data (GDP per capita up to ~135 % of the EU average).

Combined with Eurostat labour costs (well below DACH levels, in parts below Spain) and dense industrial clusters in machinery, automotive and medtech, the nearshoring case is real — not just for production, but increasingly for sales and service hubs.

The bottleneck isn't the market. It's operational execution: finding local leaders, choosing the right CCNL and payroll setup, staying compliant in a country whose rulebooks often move faster than the reaction speed of foreign HQs.

Italy has converted the so-called 'Decreto del 1° maggio 2026' (Decreto Lavoro) into law. For foreign employers, four topics matter most:

1) The 'fair salary' principle: access to certain employment incentives requires that total compensation be aligned with the sector CCNLs signed by the most representative unions. Choosing the wrong CCNL means losing the incentive AND risking back-payments.

2) New/reinforced incentives for hiring young workers, disadvantaged women, workers in the ZES areas (Southern Italy) and for converting fixed-term into open-ended contracts. Often materially changes the business case.

3) Clarifications on staff leasing and temporary agency work: certain restrictive clauses that prevented direct hiring by the end user are now considered null and void — increasing operational flexibility in try-and-hire models.

4) Additional areas: platform work, automated decision-making, collective agreements, internships, TFR obligations, experimental rules on secondment. Full text in the Gazzetta Ufficiale.

1) Decide the CCNL before your first hire: the wrong collective agreement costs more later than any upfront legal advice. Retail, industry and services follow different CCNLs with different supplements, notice periods and TFR rules.

2) Choose the payroll model: own S.r.l., tax representation, Employer of Record or PEO — each has different tax and compliance implications. For the first 3–5 heads, EoR/PEO is often fastest; beyond ~10 FTE a proper entity is usually more economical.

3) Staff leadership locally: an Italian country lead or Head of Operations with chamber network, CCNL experience and sales depth is the only real accelerator. Remote-managed Italy projects usually break at the first CCNL change.

4) Prioritise the location: Lombardy/Veneto/Emilia-Romagna for industry and B2B, Rome for public sector, Naples/Bari (ZES) for tax-supported investments. Milan is not always the right answer.

Italy is the large European market with the most attractive ratio of size, industrial density and relative competitive intensity — provided you know the rules. The Istat data shows: the market is more open than its reputation suggests, but operationally more demanding than Spain or France.

Anyone wanting to establish operations in Northern Italy in 2026 wins on three things: quick CCNL clarity, a locally anchored leadership team and a clean handling of the new Decreto Lavoro rules. That corridor is where I've been working bilingually for years (DE/IT, C1 EN/ES).