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

The Ministry of Foreign Affairs, in order to promote the foreign expansion activities of Italian companies, has recently readmitted the industrial sector under the facilitation provided by Law No. 49/87 - Art. 7. Specifically, this is a regulation that provides subsidized financing to support Italian companies that intend to make capital contributions to joint ventures (defined as “mixed companies”) located in certain developing countries.

Such contributions must be finalized:

• To the establishment of new joint ventures;
• to share capital increases in joint ventures already held by Italian companies in the above countries.

The financing from the Ministry of Foreign Affairs can be up to 70% of the capital contribution to be made by the Italian company up to a maximum of €10,000,000. There is the possibility of requesting a down payment up to 70% of the approved financing subject to the issuance of guarantees in the form of bank sureties: 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 the financing contract is signed with the Managing Entity.

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

• industry, agriculture, animal husbandry, fishing and the processing of their products;
• craftsmanship;
• local services of public interest in the energy, communications, water, transportation and waste sectors;
• microfinance, microentrepreneurship services, local trade, fair trade, sustainable tourism;
• Protection and enhancement of cultural and environmental heritage;
• Provision of public utility medical services and production of medicines;
• vocational training and education.

The investment project must include:

• A local partner with a share of not less than 25% in the capital of the joint enterprise;
• appreciable spin-off in terms of employment and added value for the country in which the investment is to be made;
• the investment must not result in the Italian company relocating and thus reducing its production structure in Italy;
• the application for financing must be submitted after the establishment of the joint enterprise and before the capital contribution of the Italian enterprise into the joint enterprise.

Among the various countries in which the investment can be made are: Albania, Angola, Bangladesh, Bosnia and Herzegovina, Cambodia, Colombia, Ecuador, Egypt, the Philippines, India, Indonesia, Iraq, Kosovo, Laos, Libya, Morocco, Mongolia, Myanmar Nigeria, Nepal, Peru, Sri Lanka, Tunisia, Ukraine, Uzbekistan, and Vietnam.

Companies in the above-mentioned 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 to our phone number: 059.9770184. For more information about the services offered by Octagona click here.

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