Investment in Italy

Investment in ItalyThese European funds have three different objectives:• Convergence: aligning conditions for growth and employment in the least developedMember States and regions (in Italy the eligible regions are Sicily, Campania, Apulia andCalabria - and Basilicata as a ‘phasing-out’ region)• Regional competitiveness and employment: fostering economic and social development,and promoting innovation, entrepreneurship, environmental protection and the developmentof labour markets even in regions not covered by the Convergence objective (in Italy theeligible regions are all the other regions not included in the Convergence objective)• European territorial cooperation: which is aimed at strengthening cross-border,transnational and inter-regional cooperation in the fields of urban development, rural andcoastal development, development of economic relationships and networking of SMEs.The main types of incentives (both European and national) can be classified as follows:• Grants for capital investments: financial aid is granted in two or three tranches andpaid directly to the company, after the presentation of documentary evidence of thecosts of the capital investment• Grants to cover expenses: these benefits are granted to companies to cover specificmanagement or transaction costs• Grants to cover interest expenses: this financial support is intended to reduce (belowthe market rate) the interest rate payable by the recipient for the funding received• Tax credits: available when new investments in tangible or intangible assets are madeor employment levels are increased• Equity injections: given to companies operating in the industrial and service sectors forthe establishment of new plants, and expansions and upgrades of specific business activities• Loan guarantees: issued to lenders in order to allow the borrower to obtain medium- orlong-term loans.2.2Main incentives offered by central government2.2.1Contratto di ProgrammaThis is an agreement between one or more public bodies (regions, provinces or municipalities)to undertake major projects, including industrial ones, and to develop infrastructure. Acontratto di programma is promoted by a ‘proponent entity’, which is responsible for theoverall coherence of the technical and industrial project.The total investment costs of an industrial project should not be less than EUR 40 million,excluding the cost of infrastructure. The investment programme proposed by the ‘proponententity’ must not be less than EUR 25 million, whilst the investment programmes proposedby each beneficiary other than the proposer must not be less than EUR 1.5 million.Investment programmes are eligible if they regard the economic activities listed in thefollowing sections of the 2002 ISTAT classification:• Sections C (mining and quarrying) and D (manufacturing)• Section E (production and distribution of electricity and heat).© 2012 KPMG S.p.A., KPMG Advisory S.p.A., KPMG Fides Servizi di Amministrazione S.p.A., KPMG Audit S.p.A., Italian limited liability share capital companies, and Studio Associato Consulenza legale e tributaria, anItalian professional partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.19