Investing in Southern Italy: Untapped Potential, Global Opportunity

Breath-taking beaches, amazing weather, incredible food and beautiful architecture. This is what mostly comes to mind when thinking about Southern Italy. What doesn’t usually come to mind, however, is its untapped financial potential. Over the years, Southern Italy has become not only a great place to live, but also a great (and still overlooked) place to invest.

Here are a few reasons why Southern Italy is a place worth considering to expand your investment portfolio:

Public financial support

Financial support from the European Union and the Italian government has been pivotal to the region’s growth in recent years. Programs such as NextGenerationEU and the National Innovation Fund offer non-dilutive grants, long-term, low-interest loans and targeted tax incentives that foster innovation and drive the economic revitalization of the area.

Highly skilled, cost-efficient talent

The area offers a highly skilled workforce for a fraction of what it would cost in other territories, like for instance the United States or Northern Europe countries such as the UK. For instance, the average salary for a Senior Software Developer in the United States is $170,132, while in Italy it is $47,600. This allows for lower operational costs and a greater efficiency in capital allocation.

Strategic position

Situated at the heart of the Mediterranean Sea, the region serves as a gateway to the European, North African, and Middle Eastern markets. Its favorable position, combined with ongoing infrastructure improvements in high-speed rail, port facilities, and digital connectivity, positions Southern Italy as an ideal hub for businesses with international aspirations.

Investor Visa

Investing in Southern Italy unlocks the opportunity to obtain an Investor Visa, which grants the investor and their family the right to live, work and study in Italy. Minimum investment thresholds vary depending on the type of investment, starting at €250,000 for innovative start-ups. This 2-year visa (renewable for 3 additional years) also offers the opportunity to opt for a flat tax regime on foreign income: for 15 years, investors can pay a fixed €200,000 per year on all foreign-sourced income and the regime can be extended to family members by paying an additional €25,000 per person per year.

The area’s potential is starting to get noticed: companies such as IBM, Apple, Accenture and Deloitte have made significant investments in cities like Bari, Naples, and Catania, further contributing to the creation of a vibrant innovation ecosystem.

Despite all the advantages and the interest of some of the world’s leading players in the innovation field, however, Southern Italy’s potential is still relatively untapped by the financial community. This presents a unique opportunity for early movers to invest in a developing market with significant growth potential.

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Chiara Del Giudice is an Investment Analyst at Profondo Capital. Connect with her on LinkedIn here.