Ministry of Foreign Affairs: new provision for the internationalization of Italian companies

The Ministry of Foreign Affairs, in order to promote the expansion activities abroad of Italian companies, has recently readmitted the industrial sector within the context of the facilitation provided by Law No. 49/87 – art. 7. Specifically, this is a regulation that provides for a subsidized loan to support Italian companies that intend to make contributions of share capital in joint ventures (defined as "mixed companies") located in certain developing countries.

These contributions must be finalized:

• the establishment of new joint ventures;
• to share capital increases in mixed companies already owned by Italian companies in the aforementioned countries.

The funding from the Ministry of Foreign Affairs can reach up to 70% of the capital contribution that will be made by the Italian company up to a maximum of €10,000,000. It is possible to request an advance of up to 70% of the approved loan subject to the issue of guarantees in the form of bank guarantees: the interest rate is fixed and is equal to 15% of the reference rate established by the Ministry of Economy and Finance for transactions pursuant to Presidential Decree 902/1976 in force on the date of stipulation of the loan agreement with the Manager.

The Italian company applying for funding must have been active for at least three years in the sector in which the joint enterprise will operate, which in turn must fall within one of the following sectors:

• industry, agriculture, breeding, fishing and processing of their products;
• crafts;
• local services of public interest in the fields of energy, communications, water, transport and waste;
• microfinance, services for micro-entrepreneurship, local commerce, fair trade, sustainable tourism;
• protection and enhancement of cultural and environmental assets;
• provision of public utility medical services and production of medicines;
• vocational training and education.

The investment project must include:

• a local shareholder with a stake of no less than 25% in the capital of the joint venture;
• an appreciable impact in terms of employment and added value for the country in which the investment is to be made;
• the investment must not lead to a relocation for the Italian company and therefore a reduction of its production structure in Italy;
• the loan application must be submitted after the establishment of the joint enterprise and before the capital contribution of the Italian company in the joint venture.

Among the various countries where it is possible to invest there are: Albania, Angola, Bangladesh, Bosnia Herzegovina, Cambodia, Colombia, Ecuador, Egypt, Philippines, India, Indonesia, Iraq, Kosovo, Laos, Libya, Morocco, Mongolia, Myanmar Nigeria, Nepal, Peru, Sri Lanka, Tunisia, Ukraine, Uzbekistan, Vietnam.

Companies in the aforementioned sectors that are interested in this initiative and need more information and insights on the matter can request a meeting with our consultants by contacting us via e-mail at the following address: [email protected] or at our telephone number: 059.9770184. For more information on the services offered by Octagona click here.

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