Mauro Marzocchi is Secretary-General of the Italian Industry and Commerce Office in the UAE, which was established in 1999 as a Piedmont Region-ICE-CNA program agreement. Ten years later it was recognized as the Italian Chamber of Commerce Abroad (CCIE).
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InvestorVisa.it: After almost twenty years of activity, what are the main objectives achieved?
Marzocchi: Since 2009, the year of recognition as the Italian Chamber of Commerce abroad, we have been able to assist over ten thousand Italian companies, mostly small and medium-sized enterprises, but there was no shortage of projects involving big Italian players (Pininfarina and Casagrande just in 2017, to give two examples). Since last year, the Chamber has begun to focus on already established Italian businesses in the United Arab Emirates, founding “Club Italia” which, to date, already has fifty registered companies: thanks to this initiative, the Chamber got in touch with several Italian companies in the UAE whose existence was not known. Club Italia, and the Chamber of Commerce as a whole, is at complete disposal of Italian companies operating in the UAE, assisting them in establishing new business relationships or satisfying any of their needs: the meeting that CCIE Dubai arranged together with Ariston at the ESMA headquarters, Emirati Government Agency responsible for Standardization and Metrology, is an important example. Therefore, we can say that our Chamber is an essential reference point, both for Italian SMEs who want to approach and find their space in the competitive Emirati market, but also for Italian companies already operating here.
The UAE experienced enormous economic growth, in trade and finance alike. In the course of this process when was that the Italian interest for the Emirates started or surged? Which sectors will be chiefly interested and what future will there be for investments in the UAE?
We can say that Italy has begun to open up towards the Emirati market since 1998 when Italian exports to the UAE exceeded one million and four hundred thousand euros; the trend has always been positive, except for the 2009-2011 period, when, due to the crisis, export values decreased by about 29% compared to 2008. To date, according to the latest ISTAT data (December 2017), Italian exports started growing again, and at the end of 2017, they reached a value of over 5 million. When we look at individual sectors, the United Arab Emirates continue to be a destination for Italian excellence in the living, food & beverage and clothing sectors; compared to previous years, the composition of Italian exports to the UAE has changed since the jewel industry, the main Italian export for many years, gave way to machinery and mechanical equipment, and now has been registering negative export values for some time. In the future, everything points to the fact that that Made in Italy main sectors will continue to be the driving force behind the commercial relations between the two countries, but we must not forget that with the Universal Exposition coming to Dubai in 2020 other Italian excellences coming from different areas will be able to find their space. Specifically, alternative energies production and related services, or the accommodation sector, just to mention a few.
In recent years, the UAE has shown a growing interest in the investment opportunities offered by Italy. Among the most important operations, we can mention Etihad Airways, which secured control of 49% of Alitalia; Mubadala investment fund getting control of Piaggio Aero; Hamed Al Ahmed, who acquired control of the Perla Ionica tourist-congress complex (Acireale). Except for this kind of large operations, are, in your opinion, private investors showing interest in the investment opportunities in Italy? If that is the case, which are the most favoured sectors?
Emirati operators have a special link with Italy and this is shown by the data of our country’s export to the UAE. Historically, private small to medium-sized businesses that have attracted Emirati investors are, in chronological order, certainly jewellers, particularly near Valenza, a small Piedmontese town and one of the world’s most important centres of high-quality jewellery and gold craftsmanship, since the late 90s. They have followed and are following a diverse assortment of sectors, each one strongly oriented towards technological innovation, a great asset for Italian companies. The last few years have also seen some investments in the Agri-Food sector, stemming basically from the medium to long-term relations between the Italian supplier and the UAE distributor. Also in recent months, the Chamber is assisting with an investment by an Emirati company in a Salerno oil mill.
The investor visa is one of the new measures that Italy has adopted in 2017 to attract non-EU investors. In your opinion, can it also be an important incentive for the average Emirate investor/entrepreneur?
Certainly, it can be of interest and, based on our experience, can also appeal also to foreign investors residing in the UAE, who know these procedures better.
A second measure is a fiscal one: foreign investors who will transfer their fiscal residence in Italy will be able to pay to the Revenue Agency a flat tax amounting to 100 thousand euros per year on income produced abroad, for 15 years. This tax is reduced to 25 thousand euros per year on the taxable income of family members following the investor. The tax system of the UAE is extremely favourable to businesses and entrepreneurs. Is it possible that this new measures on fiscal matters created by the Italian State to attract foreign capital may be attractive to an Emirati investor?
Certainly, the complexity and the level of taxation have certainly not favoured foreign investments in the past, even more so for Emiratis not accustomed to these bureaucratic obstacles and complexities.
Of course, if we are talking about establishing and maintaining their own industry and not just making a portfolio investment in an existing Italian company, it is a little more complicated for Emirati businessmen, as the industrial development of the country is relatively recent, unlike the historical commercial tradition.
Going back to the Chambers of Commerce abroad: their chief activity is to provide support to Made in Italy and to companies’ internationalization process, especially to SMEs. What will be their role in the next few years to support investment attraction policies?
When it comes to the analysis of investments from the United Arab Emirates to Italy, the role of the Chamber of Commerce is more limited than that of the ICE. If the latter, in collaboration with Invitalia, is in charge of attracting foreign investments and elaborating and carrying out the grand strategy of actions and initiatives (in the past few days the ICE Dubai Office attended the Annual Investment Meeting in Dubai), the Chamber works mostly with SMEs. In this regard, over the years, we have recorded a positive trend: in fact, several operators and local distributors have acquired shares in the suppliers’ companies with whom they had consolidated working relationships, increasing (although in small amounts) the flow of foreign investments to the Bel Paese, while facilitating trade between the two countries.