ZES Southern Italy 2026: Tax Benefits for Foreigners Starting a Business
The Single ZES for the Mezzogiorno (Zona Economica Speciale, or Special Economic Zone) was introduced by Decree-Law 124/2023 from 1 January 2024. It is one of the most generous Italian tax incentives for a foreign investor who starts or moves an economic activity to Southern Italy. The zone covers the entire territory of Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily. For a foreign investor, it means a reduction in IRES from 24% to 10% and a significant tax credit for productive investments. This guide explains how the measure works in 2026 and what to check before committing capital.
If you are still comparing legal forms, begin with our step-by-step guide to opening a company in Italy. The ZES rules are particularly relevant to a capital company, not automatically to every person who has a Partita IVA.
What is the ZES
A ZES is a geographical area identified by the Italian legislature in which businesses operating there may use extraordinary tax and social-security incentives. In 2024, the former arrangement of 8 separate ZES areas was unified into one larger area called the Single ZES for the Mezzogiorno. “Mezzogiorno” is the Italian administrative and economic expression for Southern Italy.
The policy has two aims:
- Attract investment to Southern Italian regions that have historically been less developed
- Encourage job creation in areas with a high unemployment rate
Included regions
The Single ZES covers the whole territory of these regions:
- Basilicata (the entire region, excluding the province of Matera, which is included in the PNRR but where the ZES for Matera is limited to specific areas)
- Calabria (the entire region)
- Campania (the entire region)
- Molise (the entire region)
- Puglia (the entire region)
- Sardinia (the entire region)
- Sicily (the entire region)
The ZES does NOT include the rest of Italy: Lombardy, Veneto, Piedmont, Tuscany, Lazio, Marche, Umbria and the other regions. For the territories included, however, the rule covers the ENTIRE regional area: there is no municipal exclusion.
Tax incentives in 2026
The ZES provides three principal incentives. They address company profits, productive assets and new permanent hiring respectively.
1. IRES reduced to 10% (from 24%)
For capital companies—SRL, SRLS and S.p.A., the Italian limited-liability and joint-stock forms—with their registered office and operating office in the ZES:
- IRES is reduced from 24% to 10% for business income produced in the ZES regions
- Valid until 31 December 2029 (after that, the reduction decreases progressively)
- Maximum: €5.4 million per business per year of income eligible for the relief
- Combination with the impatriate regime: yes, it can be combined (10% IRES on ZES income plus 50% impatriate relief on employment income)
IRES is the Italian corporate income tax. For broader context, see our Italian IRES and IRAP guide for foreign companies.
Calculation example
An SRL with its registered office in Naples:
- Annual gross income: €500,000
- Ordinary IRES (24%): €120,000
- ZES IRES (10%): €50,000
- Saving: €70,000 per year
For a small SRL with €50K in profit:
- Ordinary IRES: €12,000
- ZES IRES: €5,000
- Saving: €7,000 per year
2. Tax credit for productive investments
For businesses investing in new capital goods in the ZES territory:
- Tax credit from 10% to 50% of the investment cost, depending on the type of asset and the size of the business
- Up to €100 million of investment per business (for small businesses: no specific limit, but access thresholds apply)
- Eligible assets: machinery, plants, equipment, land and operational real estate
- Excluded assets: vehicles, non-embedded software and luxury goods
3. Contribution reduction for new hires
For businesses hiring employees on permanent contracts in the ZES:
- Social-security contributions are reduced (INAIL insurance premiums excluded) by up to 100% for the first 3 years
- Limit: annual employment cost of €8K–€10K per employee hired
- Valid for hires made by 31 December 2029
Requirements to access the ZES
Subjective requirements
The eligible applicants are businesses resident in Italy that:
- Operate with a permanent establishment in the ZES territory
- Have their registered office in one of the 7 regions (for an SRL or SRLS)
- Carry out a productive activity with a valid ATECO code (not every ATECO code is admitted; for example, retail trade in specific categories is subject to limits)
ATECO is the Italian classification code used to identify the business activity. A non-Italian investor must select a compatible code and document the real ZES location. An Italian tax adviser can check the code before incorporation or transfer.
Objective requirements
- Minimum investment for the tax credit: €500K for small businesses, €1M–€5M for medium-sized businesses, and €5M+ for large businesses (varies by sector)
- Hiring at least 3 new permanent employees for the contribution reduction
- Maintaining employment for at least 5 years under the anti-relocation clause
Excluded sectors
The following businesses are not admitted to ZES benefits:
- Coal sector: coal and related products
- Steel sector: steel production and primary processing
- Shipbuilding sector: shipbuilding and repair of large-tonnage ships
- Synthetic fibres: production of synthetic textile fibres
- Agriculture and fishing (for most regimes, subject to exceptions)
Procedure for applying for the incentives
Step 1: Check the requirements
The commercialista or advisory firm first checks:
- Whether the ATECO code is compatible with the ZES
- Whether the investment is located in a ZES area
- Whether capital is available for the investment and employment
- Whether other incentive regimes—such as research and development or innovation—are compatible
Step 2: Communication to the GSE (Gestore Servizi Energetici)
For the investment tax credit, the application is sent through the portal to the GSE (Gestore Servizi Energetici, the Energy Services Manager, which the source article also identifies as the authority managing subsidised tax credits):
- Pre-completed application form
- Description of the investment
- Timetable
- Business plan including employment
Step 3: Single ZES authorisation
For investments above €5M, the Single ZES Authorisation issued by the Region is required through the regional SUAP desk. SUAP is the Italian one-stop shop for productive activities. The average procedure takes 60–90 days.
Step 4: Complete the investment
The investment must be completed by 31 December of the year after the application. An extension may be possible for force-majeure causes. Keep the timetable aligned with the application and document the completion of the investment.
Step 5: Monitoring and reporting
Every year the business must:
- Confirm that the jobs have been maintained
- Confirm that the purchased capital goods are being used
- Send the IMU declaration to the GSE
- Send an annual communication to MIMIT
IMU is the Italian municipal property tax; MIMIT is the Italian Ministry of Enterprises and Made in Italy.
Combination with other incentive regimes
The ZES coexists with:
- Impatriate regime (Article 5 of Legislative Decree 209/2023): 50% exemption on employment income of workers who transfer to Italy. For a person transferring Italian tax residence from 2024, Article 5 of Legislative Decree 209/2023 provides a 50% exemption for Italian employment and self-employment income, increased to 60% for a worker who moves with a minor child or has a birth or adoption during the relief period, with the minor resident in Italy. The limit is €600,000 of eligible income per tax year; the excess is taxed ordinarily. The duration is 5 tax periods (the transfer year and the following four), with no extensions and no regional increases. Our impatriate regime guide explains the separate person-level relief.
- New-resident regime (Article 24-bis of the TUIR): substitute tax on foreign income. The amount is €100,000/year for transfers up to 9 August 2024, €200,000/year from 10 August 2024, and €300,000/year from 1 January 2026; it is fixed when Italian tax residence is acquired, with €25,000 per eligible family member becoming €50,000 for 2026 transfers. See foreign income and Article 24-bis TUIR.
- Patent Box: 50% exemption on income from the use of intellectual property
- R&S and R&D credit: 10–15% credit for research expenditure
- De minimis aid (EU Regulation 1407/2013): possible combination with the ZES within maximums of €200K/3 years
- EU funds 2021–2027 (POR, ERDF): may be combined with ZES for specific regional calls
Important limit: ZES aid is subject to the GBER Regulation (State aid), which sets maximum amounts of total public aid. In practice, 10% ZES IRES plus 50% impatriate relief and other aid may exceed GBER maximums, creating a risk that aid will be recovered. Check this with the commercialista.
Specific advantages for foreigners
For a foreigner opening a business in the ZES, the advantages are:
- Lower total cost: effective taxation of 10% IRES plus 50% impatriate relief makes the Italian tax rate one of the lowest in the EU
- Access to subsidised credit: local banks often offer products specifically for ZES businesses
- Additional regional calls: each ZES region has its own funds (for example, POR Campania and ERDF Calabria) for investment
- Lower property costs: commercial rents in Catania, Lecce, Cosenza and Potenza are 50–70% cheaper than in Milan. If property is part of your plan, see our guide to buying property in Italy as a foreigner.
- EU cohesion funds 2021–2027: €30+ billion available for the 7 regions
- Growing infrastructure: airports, ports, fibre optics and ZLS (Simplified Logistics Zones) under development
Disadvantages to consider
The ZES also has weaknesses:
- Bureaucracy: the Italian system is slow, and the ZES procedure adds complexity
- Local infrastructure: in some areas, logistics are more complex than in the North
- Professional and commercial networks: the business fabric is less developed
- Public calls often oversubscribed: local SMEs move first
- Average processing time: 90–180 days for authorisations
Application strategies for foreigners
Scenario A: Investor opening a manufacturing SME
An SRL with its registered office in Puglia, 50 employees and a €3M investment in machinery:
- 10% ZES IRES on profit
- 30% investment tax credit
- 100% contribution reduction for new hires
- Potential total saving: €600–€800K in the first 5 years
Scenario B: Self-employed professional moving to Campania
An IT consultant with €80K in turnover moves to Naples:
- SRLS at 22% IRES (not ZES, because it is not an SRL)
- Individual Partita IVA with the impatriate regime at 50%: reduced taxes
- ZES only if the person opens an SRL (not a Partita IVA)
- Combination of impatriate relief and Small Municipalities: €45K of annual income excluded for 5 years if the municipality has fewer than 20K inhabitants
Partita IVA is the Italian VAT/tax number for an individual business or professional activity. It is not the same as a capital company. This distinction is why the scenario must be modelled before choosing the structure.
Scenario C: Real-estate investor
An SRL buys a property in Catania (ZES) to develop it as tourist accommodation:
- 10% IRES on business income (rental revenue)
- 50% investment tax credit for renovation
- IMU reduction if the property is historic/artistic
Frequently asked questions (FAQ)
Can I move an existing SRL from the North to a ZES area?
Yes, transferring the registered office to a ZES area is permitted. You keep the Partita IVA and fiscal code, amend the registered office and obtain the benefits from the transfer. Pay attention to the concept of a “new permanent establishment” if the activity already existed in the North: benefits apply only to income produced after the transfer.
Can I open an SRL in Milan but have production in the ZES?
No. ZES incentives require the registered office to be in the ZES area. Operating in the South without the registered office there is not sufficient.
Can I open an SRL in the ZES with a 100% foreign shareholder?
Yes. ZES incentives belong to businesses, not shareholders. An SRL with a single foreign shareholder, including a non-resident, has full access.
Can I open an SRL in the ZES and also choose the impatriate regime?
No, the impatriate regime applies to employment income (employee or individual self-employment income). Company income is subject to 10% ZES IRES. A shareholder-director may access impatriate relief for their own remuneration as an individual, while the company continues to benefit from the ZES separately.
Can the business property be in a ZES while all customers are elsewhere?
Yes. The ZES concerns the operating site itself, not the target market. A software house in Calabria selling worldwide has full access to ZES incentives.
What happens if I close the business within 5 years?
The anti-relocation clause applies: the GSE recovers the incentives granted on a pro-rata basis. If I obtained a €100K investment tax credit in year 1 and close in year 3, I must repay €60K.
Does the ZES also cover individual Partite IVA?
No. ZES incentives (reduced IRES, investment tax credit and contribution reduction) are only for capital companies (SRL, SRLS, S.p.A. and cooperatives). Individuals with a Partita IVA may choose the impatriate regime or the forfettario regime, but not the ZES.
Can I transfer my existing company to the ZES with the same Partita IVA?
Yes, by a deed transferring the registered office. The company keeps the same fiscal code and Partita IVA, with a new registered and operating office. Some Chambers of Commerce require a “registered-office transfer filing” with a notary. The Camera di Commercio is the Italian Chamber of Commerce and the Registro Imprese is the Business Register.
Are the old regional regimes, such as territorial pacts, still admitted?
No. From 2024, the Single ZES replaced territorial pacts and other similar regional incentives. Some specific regional regimes exist—such as a hiring tax credit in Calabria and a non-repayable grant for innovative start-ups in Sicily—but they complement the ZES.
Can I have ZES and an R&S credit in the same year?
Yes, the two regimes can be combined. The R&S credit is a deduction from IRPEF/IRES; the ZES reduces the IRES rate. They do not directly overlap. Pay attention to the GBER maximum (State aid).
Is the ZES automatic or must I apply?
The investment tax credit requires an application to the GSE and authorisation. 10% ZES IRES is applied automatically in the income-tax return (Quadro RQ), provided the SRL is located in the ZES and meets the requirements. The contribution reduction requires a specific application to INPS, the Italian National Social Security Institute.
Is ZES IRES retroactive if I move to a ZES area in 2026?
Yes, from the tax year in which the registered office is in the ZES. The incentives start on the date of registration in the Business Register with a ZES registered office.
How much can I really save with the ZES?
It depends on the business size. For an SRL with €500K in profit, annual IRES savings are approximately €70K. For a manufacturing SME with €2M in profit, the saving is €200K per year. Adding the investment tax credit and contribution reduction, total savings in the first 5 years may be €500K–€2M, depending on size.
Conclusion: the ZES is worthwhile for those putting down roots in the South
The ZES is one of the EU’s most generous incentives, but it is also one of the most complicated to navigate. For a foreigner who wants to establish a serious company in Italy, it is an important opportunity. For a freelance consultant with €50K in turnover, it is overkill; impatriate relief on an individual Partita IVA is a better fit.
If you want to assess whether the ZES suits your case, contact us. Studio Emmi supports several businesses in Campania and Calabria through the ZES process, from the business plan to approval of the credit.
Editorial note: This article was prepared by Giovanni Emmi, Dottore Commercialista, based on advisory experience with ZES projects for clients intending to open or transfer activities to Southern Italy. Updated 30 June 2026.
Verification checklist
| Data | Source |
|---|
| Single ZES introduced by Decree-Law 124/2023 | ✅ Official Gazette 184/2023 |
| 7 regions included from 1 January 2024 | ✅ Decree-Law 124/2023, Article 9 |
| IRES reduced from 24% to 10% until 31 December 2029 | ✅ Article 16, Decree-Law 124/2023 |
| 10–50% investment tax credit for productive investments | ✅ Article 17, Decree-Law 124/2023 |
| Up to 100% contribution reduction for new hires | ✅ Article 18, Decree-Law 124/2023 |
| Coal, steel, shipbuilding and synthetic-fibre sectors excluded | ✅ Article 9, Decree-Law 124/2023 |
| Investment tax-credit application to the GSE | ✅ Article 17, Decree-Law 124/2023 |
| Anti-relocation requirement: minimum 5 years | ✅ Article 22, Decree-Law 124/2023 |
Giovanni Emmi|September 16, 2026
