Food is more than just sustenance—it is a powerful driver of economic opportunity and cultural synergy. As both Italy and Thailand are world-renowned for their culinary traditions, they represent thriving sectors for international businesses to tap into. In Thailand, food is deeply intertwined with social interaction, as evidenced by the common greeting, “กินข้าวยัง?” (“Have you eaten yet?”). Similarly, in Italy, food is central to warmth and hospitality, often signaled by the question “Hai fame?” (“Are you hungry?“) especially by a traditional Italian nonna. While food connects cultures, it also opens the door to significant business and investment opportunities.

For Thai and international entrepreneurs, Italy offers a dynamic market for expansion in the food sector. Understanding the legal and regulatory landscape of this industry is crucial for capitalizing on these opportunities.

Italy’s Culinary Tourism for Food Businesses:

Italy’s diverse culinary landscape, with each region offering distinct specialties, presents a dynamic opportunity for food industry growth. The strong demand for authentic, high-quality food products creates a welcoming environment for international food brands to establish themselves. In 2023, Italy’s imports of consumer-oriented food products totaled $35.7 billion, with 85% originating from other EU-27 member states according to the U.S. Department of Agriculture, Foreign Agricultural Service.

With Italy’s food culture deeply rooted in both tradition and innovation, it offers fertile ground for international businesses to thrive. Accordingly, Thai businesses can capitalize on the growing recognition of Thai cuisine, renowned for its artful balance of flavors—sweet, sour, salty, and spicy (Umami)—which is increasingly appreciated in Italy and globally. Consequently, in December 2024, UNESCO recognized Thailand’s classic hot sour soup, Tomyum Kung, as an Intangible Cultural Heritage of Humanity, highlighting the global acknowledgment of Thai culinary traditions. As well as The Thai Trade Center also actively supports initiatives to promote Thai food exports, further opening international markets. However, businesses need to be aware of potential barriers in terms of tariffs, regulatory compliance, and competition from other EU-based suppliers as well.

Business Opportunities in the Italian Market

• Food Export:
  According to Euromonitor International in 2021, Italy, is one of the world’s largest food consumers and has a growing demand for international food products. Food companies can tap into this market by exporting ingredients like Thai spices, sauces, frozen foods, and exotic fruits. Nonetheless, businesses should be aware of Italy’s food import regulations, including required documentation, tariffs, and compliance with EU standards.
• Gastronomic Tourism:
  Italy’s robust tourism industry presents a unique opportunity for Thai and International entrepreneurs to introduce unique food experiences through food festivals, pop-up restaurants, and collaborations with local chefs. The culinary tourism market is projected to grow from USD 44.87 billion in 2024 to USD 117.20 billion by 2032, reflecting a compound annual growth rate (CAGR) of 12.75% reported by the Credence Research in 2023. Furthermore, the Italian Tourism Agency, Food tourism has seen a rise globally, and Italy’s rich gastronomic culture can accommodate global influences, making it an ideal destination for promoting Thai and any unique culinary traditions.
• Food Innovation:
  Italy has become increasingly focused on sustainable and innovative food practices, with a growing interest in health foods, plant-based diets, and sustainable packaging. International companies offering innovative food products such as organic or plant-based foods or sustainable packaging solutions could capitalize on Italy’s eco-conscious food movement according to European Commission in 2020.

Government Incentives for Foreign Entrepreneurs

The Italian government offers a variety of incentives for foreign entrepreneurs looking to invest, particularly in sectors like food and agriculture. One key initiative is the Research & Development (R&D) Tax Credit. This program supports businesses that invest in R&D activities, with a focus on sectors like food innovation. The main program facilitating these incentives is the “R&D Tax Credit” (Credito d’imposta per attività di ricerca e sviluppo).

This program is designed to support businesses investing in R&D activities that aim to develop new products, improve existing ones, or create more efficient processes. It is particularly beneficial for businesses in the food sector focusing on innovation, sustainability, and health-conscious products.

Key Details of the Program:

• Eligibility:
  • The tax credit is available to all companies, including food producers, that invest in R&D. This applies to both large enterprises and SMEs (small and medium-sized enterprises).
• Scope of R&D: The program covers a wide range of R&D activities, such as:
  • Developing new food products (e.g., healthier or more sustainable food options).
  • Improving food production processes (e.g., more efficient or eco-friendly packaging).
  • Innovating new food technologies (e.g., food safety, storage, or packaging).
• Incentive Structure:
  • Standard Tax Credit: Companies can receive up to 12% of eligible R&D expenditures as a tax credit.
  • Increased Tax Credit for SMEs: Small and medium-sized enterprises can benefit from a higher percentage, up to 20%, depending on the type of investment and eligible expenditures.
• Eligible Expenditures: Costs related to R&D activities that are eligible for the tax credit include:
  • Personnel costs directly related to R&D work.
  • Costs of materials, equipment, and software used in research activities.
  • External collaboration costs, such as contracts with universities, research centers, or innovation hubs.
• Additional Benefits:
  • The program is designed to reduce the financial burden of R&D activities and encourage more companies in the food sector to invest in innovation.
  • It can help companies develop new products that meet market trends, such as healthier, plant-based, or organic foods, or create sustainable production and packaging solutions.
• Application Process:
  • Companies must submit detailed documentation to demonstrate that their activities qualify as R&D under the criteria of the program. This involves proving that the activities are aimed at achieving a technological or scientific advance and include the necessary investment in time, resources, and expertise.

Challenges – Navigating Italian Bureaucracy

• Complex Regulatory Environment:
  Italy’s bureaucratic system can pose challenges for foreign businesses. Navigating Italy’s legal requirements, especially around food safety, labeling, and product imports, may require professional assistance. The Italian Chamber of Commerce and Agenzia delle Entrate (Revenue Agency) are vital resources for businesses setting up shop in Italy and dealing with the intricacies of local regulations.
• Taxation and Legal Systems:
  Italy’s tax system can be complex, with high tax rates in some sectors. Businesses must understand the structure of VAT (Value Added Tax) and other taxes. Engaging with local accountants and reliable legal advisors is essential to ensure compliance with Italian tax laws and regulations.
• Language Barriers:
  While many Italians speak English, the Italian language remains central to legal and regulatory matters. Navigating official documentation, contracts, and government forms may require professional translation services and legal guidance, particularly in the early stages of business setup.

Given the complexities of Italy’s regulatory landscape, foreign businesses must prioritize understanding the legal and business environment to ensure successful market entry. Knowledgeable professionals familiar with Italy’s legal framework can help ensure smooth operations and compliance, ultimately allowing businesses to focus on growth and success in the Italian market.

For further detailed information on business opportunities or R&D tax incentives, please contact ALLEGAL