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Italy – Relocation of business activities

Written by
Toffoletto de Luca Tamajo, working in employment law since 1925.
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A Decree came into force on 14 July 2018 stating that if a company (Italian or foreign) that has received state aid to allow investment moves to a non-EU country within the five years of making the investment, it loses the aid and must pay an administrative sanction of two to four times the amount of the aid received plus accrued interest. The same rule applies where part of the business activity is moved.  If the company moves to another workplace within Italy or the EU, it loses the aid it has received, but without the administrative sanction.

In addition, Italian and foreign companies benefitting from public aid would lose the aid if, within five years following the investment, they reduce the workforce by more than 10%. Repayment of the aid is proportional to the percentage reduction of workforce.

Reductions in the workforce exceeding 50% would lead to full return of the aid.

However, it must be noted that the Decree still needs to be converted into law by mid-September and so may be subject to amendment. It could also expire if not converted in time.

Valeria Morosini
Valeria Morosini
Partner - Italy
Toffoletto De Luca Tamajo