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Basic Information

Area: 301,318 km²

Calling code: +39

Population: 59,619,290

Official Language: Italian

Time zone: CET (UTC+1), Local time: 17:29


The Italian Republic is located in Southern Europe, and covers 301,340km2. The mainland shares its borders with 6 other countries: Slovenia, Austria, France, San Marino, and the Holy See (Vatican city). There are also several islands which are in Italian territory, including Sicily, Sardinia and Capri. It has a total population of 58.1 million, giving it the 4th largest population in the European Union, and the 23rd largest in the world. The capital city of Rome is largest city in Italy, which covers 1,285km2 and has over 2.7million residents living in its urban area.
Italy is divided into 20 regions, 110 provinces and 8,100 municipalities. It is a member of many international organizations, such as the North Atlantic Treaty Organization (NATO), the World Trade Organization (WTO), the Organization for Security and Co-operation in Europe (OSCE) and the European Union (EU). It uses the euro (EUR) for its currency system, which officially replaced the Italian lira (LIR) in 2002.


Italy has the fourth highest GDP (purchasing polarity) figure in the European Union, which stands at $1.76 billion. Italian cities of economical importance include the capital city of Rome, Milan, Naples, Palermo and Florence. The service sector is most important to the economy, generating 72.9% of the total GDP figure, and employing 65% of the workforce. The European Cities Monitor ranks Milan as the 10th best city in Europe to do business in, based on several key factors such as transportation links and the availability of a skilled workforce.

The industrial sector employs a third of the national workforce; several industrial zones are located around the country which produce machinery, automobiles, chemicals and textiles. The automotive industry is particularly strong, creating approximately 8% of Italy's total GDP, and the Fiat Group manufacture 90% of all vehicles in the country.

The tourism sector is profitable, and Italy is ranked as the 5th most visited country in the world after France, Spain, the U.S.A and China. Its rich cultural history, stunning coastline, and numerous landmarks help attract over 43 million international tourists a year.

Milan is known as the creative capital of Italy, with many prestigious fashion houses headquartered in Milan such as Prada, Gucci, Moschino, Valentino and Armani. The city is also home to two international fashion weeks a year, which attract designers and collectors from around the world.


Italy has a well developed and dense transportation infrastructure. There are a total of 132 airports serving the country, the largest being the Leonardo da Vinci-Fiumicino Airport (FCO), which handled over 35 million passengers in 2009. Other large airports include Milan-Malpensa Airport (MXP), Naples International Airport (NAP), Aeroporto Internatzionale Falcone Borsellino Palermo (PMO) and Pisa International Airport Galileo Galilei (PSA).

The public transportation system is vast and spans the entire country; it consists of buses, trams, light rail, trolleybuses, high-speed rail and metro systems. It also has the fourth largest amount of paved roads in Europe (amounting to 497,700km) after France, Spain and Germany, which allow road users to travel to neighbouring countries with ease.

The exporting of goods plays a major part in the economy, and there are numerous ports dotted around the coastal areas of Italy, the largest being the Port of Genoa, which is used for both the transportation of passengers and cargo. Italy currently has 609 merchant marine (2010).


Italy has a total labourforce of 24.9 million - the fourth largest in Europe after Germany, the United Kingdom and France. Roughly 93% of the total population are Italian nationals, while ethnic minorities living in the country include Romanians, North Africans, Albanians, Chinese, Ukrainian and Asians. The official language is Italian, although there are a number of regional dialects - which are not officially recognised. In the northern alpine region French is officially recognised as a minority language, and many people speak English particularly in tourist areas, such as in the larger cities of Rome and Milan.
There is a strong education system in Italy, and attendance is compulsory for all citizens up until the age of 14. There are 94 public, and 77 private higher education institutes such as the Bocconi University, Polytechnic University of Turin, the University of Bologna, the University of Padua and the Sapienza University of Rome. Italy also has a large number of fashion and creative arts related educational facilities, such as New Academy of Fine Arts and Design (NABA).

Business Costs

Highest rental costs in the country are in the Milan CBD, followed by rentals in Rome's CBD where the average costs are $82.49 per annum, and $79.19 per annum respectively. In comparison to other major Western European countries costs for rental space and utility costs are relatively high, with the Cushman and Wakefield 2010 report placing Milan as the 9th most expensive city in the world for office rentals. However cities such as Rome and Milan are still cheaper than Paris, Moscow, Dubai and Hong Kong.

Personal tax rates are based on a progressive scale, which are charged on a federal, regional and municipal level. The main tax rate ranges from 23%- 43%, regional taxes are from 0.9% to 1.4%, and municipal tax rates are 0.1%- 0.8%. The highest tax bracket in the country currently is 45.2%. Corporate taxes are levied at 27.5% with an additional local tax (IRAP) rate of 3.9% which brings the total corporate tax rate up to 31.4%, which is higher than the European national average of 26%. VAT is charged at a standard rate of 20% on most goods and services, while discounted rates of 4% and 10% are available for special items.

There are no national minimum wage rates set by Italy, instead the trade unions go through a process of collective bargaining to set the lowest levels of pay for each sector. It is common in Italy to have what is known as 13th or 14th month payments (sometimes mandatory), which are bonuses that are added to the employees salary in December.
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