Italy: attracting capital without realising it

The EY survey paints a picture of a country that has not yet caught up, but has ceased to be merely an occasional destination. Whilst Europe is slowing down, Italy is losing less ground than its main competitors, consolidating the market share it gained after the Covid crisis and rising in investors’ eyes. The challenge now is to turn this solid foundation into a structural advantage.

The most interesting finding from the EY Attractiveness Survey is not that 206 foreign direct investment projects were announced in Italy in 2025. It is the comparison. Projects are down by 8 per cent, in a Europe that is down by 7 per cent, but France, the United Kingdom and Germany are faring worse: down 17 per cent, 14 per cent and 10 per cent respectively. Italy retains seventh place in Europe and maintains a share of 4.1 per cent, more than double that of the pre-Covid period.

It is neither an economic miracle nor a case of overtaking: the three largest countries still account for 42 per cent of European investment. But the picture disproves the notion that Italy is destined to lose ground when competition intensifies. In a period marked by wars, protectionism and the re-evaluation of value chains, the country is holding up better than the major players. Italy’s appeal no longer seems tied to a single transaction: it is becoming a stable presence on the European investment landscape.

Investor sentiment is also improving. Italy has risen from twelfth to ninth place amongst the most attractive European countries. Fifty-six per cent of respondents expect further progress over the next three years, and 48 per cent say they intend to set up or expand operations in the country within a year. In times of geopolitical uncertainty, the fact that almost one in two companies is ready to invest is a vote of confidence.

Italy’s strength becomes apparent when looking at who is investing. The United States remains the leading investor, accounting for 18 per cent of projects, followed by Germany at 14 per cent; the United Kingdom and France each account for 11 per cent. Japan has increased its involvement from six to eleven projects, whilst the contribution from China and Arab countries is growing. Italy does not rely on a single partner: it attracts capital from the US, Europe and Asia – a valuable diversification as companies seek reliable production bases.

Even more significant is the type of investment. Industrial products and mobility have become the leading sector, rising from 43 to 58 projects. This recognises Italy’s strengths in manufacturing expertise, specialised supply chains and integration with European production. At the same time, the number of data centre projects has quadrupled, from two to eight. Whilst this figure is still small, it demonstrates that the country is capable of becoming part of the new physical infrastructure for artificial intelligence. The combination of manufacturing and technology is the area in which Italy can transform its traditional strengths into a new competitive advantage.

The survey also reveals what investors see: security and quality of life, a skilled workforce, infrastructure and tax competitiveness. They see a country that is more modern and reliable than Italians tend to portray. Even the geographical spread is beginning to widen: the North-East has risen from 14 to 18 per cent of projects and the Centre has reached 13 per cent, although there remains a strong concentration in the North-West.

The issues of energy, slow authorisations, complex regulations, insufficient training and poorly coordinated incentives remain. But the point is another. For years, Italy has argued as if it had to convince the world that it is not hostile to investment. Today, it is starting from a different position: the world has already begun to believe it. The task is not to let it down.

Italy does not need to invent an attractiveness policy from scratch. It must recognise what works and build on it: industry, skills, infrastructure, quality of life and openness to capital. The gap remains, but it is no longer a death sentence. The good news from the EY survey is this: Italy is not yet attractive enough given its stature, but it has become credible enough to achieve that status.