ZES Southern Italy 2026: Tax Credit for Foreign Investors
The Single ZES for the Mezzogiorno (Zona Economica Speciale unica) was established on 1 January 2024 by Decree-Law 124/2023, converted into Law 162/2023, and today covers ten Southern Italian regions. It does not reduce the corporate income tax rate: the ZES incentive is an investment tax credit governed by Article 16 of Decree-Law 124/2023, extended and financed by the 2026 Budget Law (Law 199/2025). IRES, the Italian corporate income tax, remains 24%.
This guide describes the credit as it stands in September 2026: where it applies, how much it is worth, the minimum and maximum investment, which sectors are excluded, the two communications to the Agenzia delle Entrate, and the separate 2026 hiring bonus. If you are still choosing a legal form, start with our step-by-step guide to opening a company in Italy.
Correction notice — please read first. Earlier versions of this page, and many third-party summaries, claimed that the ZES cuts IRES from 24% to 10% with a €5.4 million annual profit cap, and that applications are filed with the GSE (Gestore Servizi Energetici). None of this exists in Italian law. Article 16 of Decree-Law 124/2023 creates a tax credit for qualifying investments; it creates no ZES-specific IRES rate and no profit cap. The competent authority for the ZES credit is the Agenzia delle Entrate. Any planning built on a "10% ZES rate" should be reviewed.
The Single ZES: what it is and where it applies
A ZES is a delimited part of Italian territory in which businesses already operating there, or establishing themselves there, can benefit from special conditions for investment and business development. Since 2024 the previous separate ZES areas have been merged into one ZES unica for the Mezzogiorno.
The Single ZES covers the territories of these regions:
- Abruzzo
- Basilicata
- Calabria
- Campania
- Marche (added by Law 171/2025)
- Molise
- Puglia
- Sardinia
- Sicily
- Umbria (added by Law 171/2025)
Two qualifications matter for investors:
- It is not the whole regional territory. The ZES credit applies to production structures located in the assisted areas ("zone assistite") identified by the Carta degli aiuti a finalità regionale 2022-2027, under Article 107(3)(a) of the Treaty on the Functioning of the European Union for Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily, and under Article 107(3)(c) for Abruzzo, Marche and Umbria. A generic address in Naples or Bari is not, by itself, proof of an eligible location.
- The ZES also has an administrative side. For setting up or expanding a production plant, the Single ZES provides a simplification channel through the S.U.D. ZES, the single digital desk for production activities. That is a procedural benefit, separate from the tax credit.
The incentive: an investment tax credit under Article 16
The ZES incentive is a tax credit ("credito d'imposta") granted to businesses that acquire new capital goods destined for production structures located in the assisted areas described above. It is a regional investment aid granted under the GBER (Regulation (EU) 651/2014, Article 14).
The credit is used to offset taxes, not to change the tax rate applied to profits. An Italian company that books profit in the South continues to pay IRES at 24% on that profit; if it has made a qualifying investment, it can use the ZES credit to reduce the taxes it actually pays.
A note on a frequent confusion: the only recent reduction of the IRES rate is the separate "IRES premiale" introduced by the 2025 Budget Law (Law 207/2024), which lowered the rate from 24% to 20% for one single tax period (2025 for calendar-year taxpayers) under strict conditions on reserves, investments and employment. It is not a ZES measure.
Key parameters
| Parameter | Rule |
|---|
| Legal basis | Article 16, Decree-Law 124/2023 (converted by Law 162/2023) |
| Extension and financing | Law 199/2025, Article 1, paragraphs 438-443 |
| Investments eligible | Made from 1 January 2026 to 31 December 2028 (for the 2026 tranche: investments realised from 1 January to 31 December 2026) |
| Minimum project | €200,000 |
| Ceiling per investment project | €100 million |
| Land and buildings | No more than 50% of the total eligible investment |
| 2026 spending limit | €2.3 billion for the year (2027: €1 billion; 2028: €750 million) |
| Aid framework | GBER, Article 14 (regional investment aid) |
| Filing authority | Agenzia delle Entrate |
| Anti-relocation | Activity must be maintained in the assisted area for at least 5 years after completion of the investment (Article 16, paragraph 5) |
| Certification | Effective payment of eligible costs certified by a registered auditor |
How much is the credit: 2026 rates
The percentage depends on the region, the size of the business and the size of the project. The rates published by the Dipartimento per il Sud for 2026 are:
| Region | Small enterprise (project up to €50m) | Small enterprise (large project over €50m) | Medium enterprise (project up to €50m) | Medium enterprise (large project over €50m) | Large enterprise |
|---|
| Campania | 60% | 40% | 50% | 40% | 40% |
| Puglia | 60% | 40% | 50% | 40% | 40% |
| Calabria | 60% | 40% | 50% | 40% | 40% |
| Sicily | 60% | 40% | 50% | 40% | 40% |
| Basilicata | 50% | 30% | 40% | 30% | 30% |
| Sardinia | 50% | 30% | 40% | 30% | 30% |
| Molise | 50% | 30% | 40% | 30% | 30% |
| Puglia (Just Transition areas) | 70% | 50% | 60% | 50% | 50% |
| Sardinia (Just Transition areas) | 60% | 40% | 50% | 40% | 40% |
| Abruzzo | 35% | 15% | 25% | 15% | 15% |
| Marche | 35% | 15% | 25% | 15% | 15% |
| Umbria | 35% | 15% | 25% | 15% | 15% |
Two technical points. First, "large projects" are those with eligible costs above €50 million. Second, for large projects the maximum aid intensity for large enterprises is calculated with the "adjusted aid amount" methodology of Article 2(20) of the GBER. The table is the official 2026 table: check the current version before modelling any project, because an incentive package built on an assumed rate is not a binding entitlement.
Which investments qualify
Eligible costs must form part of an initial investment project as defined in Article 2, points 49, 50 and 51 of the GBER, and relate to:
- the purchase (including finance leasing) of new machinery, plant and equipment destined for production structures that already exist or are established in the ZES;
- the purchase of land and the acquisition, construction or extension of buildings instrumental to the investment, actually used for the activity in the production structure.
The following are excluded:
- land and buildings above 50% of the total eligible investment;
- goods destined for sale, goods transformed or assembled to obtain products for sale, and consumables;
- acquisitions between parties linked by control or connection relationships under Article 2359 of the Italian Civil Code, which rules out buying the assets from a related company to generate the credit.
Excluded sectors and businesses
Article 16, paragraph 3 of Decree-Law 124/2023 excludes businesses operating in:
- the steel industry (ATECO 24.1);
- the coal and lignite industry (ATECO 05.1 and 05.2);
- transport, excluding warehousing and transport support (ATECO 49, 50 excluding 501000 and 503000, and 51);
- the production, storage, transmission and distribution of energy and energy infrastructure (ATECO 35.11, 35.12, 35.13, 35.14 and 35.16);
- broadband;
- the credit, financial and insurance sectors (ATECO 64, 65 and 66).
The credit is also unavailable to businesses in liquidation or dissolution, to undertakings in difficulty as defined in Article 2(18) of the GBER, and to businesses in primary agricultural production, fishing and aquaculture.
Who can apply
The implementing decree of 17 May 2024 opens the credit to all businesses, irrespective of legal form and accounting regime, whether already operating in the ZES or establishing themselves there, in relation to qualifying investments in eligible production structures. Foreign ownership is not a barrier: the measure applies to businesses, and nothing in the rules restricts access for a company with non-resident shareholders.
The practical test is therefore not the company's nationality or its registered office, but whether there is a real investment in an eligible production structure in an assisted area, whether the assets qualify, and whether the activity is maintained there for five years.
How to apply: two communications to the Agenzia delle Entrate
The application channel is the Agenzia delle Entrate. It is not the GSE, and it is not the Region.
Step 1 — initial communication (31 March to 30 May 2026). Businesses communicate to the Agenzia delle Entrate the amount of eligible costs incurred from 1 January 2026 and those they expect to incur up to 31 December 2026. For the 2026 tranche, this window is closed.
Step 2 — supplementary communication (3 to 17 January 2027). Businesses that filed the initial communication must send a supplementary communication attesting that the investments have actually been realised. It indicates the amount of the credit accrued on the investments actually made, the related electronic invoices and the details of the certification required by the implementing decree. Failing to send it means rejection of the application, and the investments declared cannot exceed those declared in the initial communication.
Step 3 — using the credit. The credit is used only as an offset ("compensazione"), through the F24 form filed exclusively through the Agenzia delle Entrate's telematic services, with tax code 7034 and year 2026. Use cannot begin before a second receipt, issued after the supplementary communication, confirming that the credit may be used. The credit must be shown in the income tax return for the year in which it is recognised and in subsequent returns until it is fully used.
The 2026 forms and instructions were approved by Provvedimento of the Director of the Agenzia delle Entrate no. 3882 of 30 January 2026. Where investments cannot be documented by electronic invoice (including finance leasing), the certification must be filed through the Agenzia's "Consegna documenti e istanze" service within 30 days of the relevant measure. Electronic invoices are therefore part of the ZES file: see our guide to e-invoicing and the SDI system.
For investments in 2027 and 2028 the statutory framework is the same, but the annual filing arrangements follow the Agenzia's instructions as they are published. Do not assume that the 2026 dates repeat automatically.
Conditions to keep, and the risks of losing the credit
- Five-year rule. Beneficiaries must maintain their activity in the assisted areas where the investment was made for at least five years after completion of the investment. Breach of that obligation leads to revocation of the benefits (Article 16, paragraph 5).
- Assets must enter into operation. If the goods do not enter into operation by the second tax period following their acquisition or completion, the credit is recalculated excluding their cost.
- No early disposal. If the goods are disposed of, sold to third parties, diverted to non-business purposes or moved to production structures other than those that generated the credit within the fifth tax period after they entered into operation, the credit is recalculated. Any credit already used that exceeds the recalculated amount must be repaid.
- Cumulation. The credit can be combined with de minimis aid and with other State aid on the same eligible costs, provided the combination does not exceed the highest aid intensity or amount permitted by the applicable European rules.
- Certification. The effective payment of eligible costs and its consistency with the company's accounts must be certified by a registered auditor.
The 2026 hiring bonus is a separate measure
The ZES credit concerns investments. Employment is covered by a different measure, the "Bonus ZES 2026" of Article 3 of Decree-Law 62/2026 (converted by Law 112/2026), whose parameters are:
- 100% exemption from employer social security contributions, excluding INAIL premiums, capped at €650 per worker per month;
- maximum duration of 24 months;
- private employers with up to 10 employees in the month of hiring;
- hires on permanent, non-managerial contracts between 1 January and 31 December 2026 of workers who are 35 or older and have been unemployed for at least 24 months;
- work actually performed at a site or production unit in one of the ten ZES regions;
- a net employment increase must result from the hire, and the relief cannot be combined with other contribution reliefs;
- application to INPS, within budget limits of €26 million for 2026, €60 million for 2027 and €34 million for 2028.
For the payroll side, see our guide to hiring employees in Italy and the INPS guide for foreign employers.
Regimes that are not ZES benefits
- IRES. The standard rate is 24%. There is no ZES rate.
- Impatriate regime. Tax relief on employment and self-employment income of people transferring tax residence to Italy is a personal measure, entirely separate from the ZES credit. Its legal framework is also changing: Article 5 of Legislative Decree 209/2023, which contained the regime, is repealed with effect from 1 January 2027 by Legislative Decree 117/2026. Any assumption about combining an "impatriate" benefit with a ZES investment must be re-checked against the rules in force at the time of the transfer.
- New residents (Article 24-bis TUIR). The optional substitute tax on foreign income is also personal. For people transferring their tax residence to Italy from 1 January 2026, the substitute tax is €300,000 per year, with €50,000 for each eligible family member. See our guide to the elective residency regime.
- Commercial statistics. Figures circulating online on office rents, processing times or "total savings" in the ZES do not come from official sources. Where a number is not published by the Agenzia delle Entrate, the Dipartimento per il Sud, Normattiva or the Gazzetta Ufficiale, treat it as marketing.
Frequently asked questions
Is there a reduced 10% IRES for ZES companies?
No. IRES is 24%. The ZES grants a tax credit on qualifying investments, which reduces the tax payable but does not change the rate applied to profits. Statements about a "10% ZES IRES" or a "€5.4 million profit cap" have no basis in Article 16 of Decree-Law 124/2023 or in the Agenzia delle Entrate guidance.
Does my company need its registered office in Southern Italy?
The statutory text links the credit to investments destined for production structures located in the assisted areas, and to maintaining activity there for five years. It is not drafted as a benefit of having a registered office in the South, and no provision grants the credit merely because a company moves its registered office. Whether a given project qualifies depends on the investment and the location of the production structure, and should be verified case by case with the regional aid rules in mind.
Can a company with a 100% foreign shareholder use the ZES credit?
Yes. The credit is available to businesses irrespective of their legal form; the rules do not restrict non-resident ownership. The qualifying conditions are those on the investment, the location and the five-year commitment.
Can I still apply for the 2026 tranche?
The initial communication window for 2026 ran from 31 March to 30 May 2026 and is closed. Businesses that filed it must send the supplementary communication between 3 and 17 January 2027. For investments realised in 2027 and 2028, wait for the Agenzia delle Entrate's instructions for those years rather than assuming the 2026 calendar.
What happens if the plant closes before five years?
The five-year maintenance obligation in Article 16, paragraph 5 applies to the activity in the assisted area where the investment was made. Failure to comply leads to revocation of the benefits granted. Separately, if the assets are disposed of or moved within five tax periods after they entered into operation, the credit is recalculated and any excess must be repaid.
Can the ZES credit be combined with other incentives?
Yes, within limits. It can be combined with de minimis aid and other State aid on the same eligible costs, provided the combination does not exceed the highest permitted aid intensity or amount under the applicable European rules. Because the credit is itself regional aid under Article 14 of the GBER, each combination must be checked before the investment is committed.
Does the ZES reduce social security contributions for new hires?
Not through the investment credit. The 2026 relief for hiring in the ZES is the separate Bonus ZES 2026 (Article 3 of Decree-Law 62/2026, converted by Law 112/2026), with its own conditions, its own budget and an application to INPS. It is not an automatic consequence of investing in the ZES.
Which sectors cannot use the ZES credit?
Steel, coal and lignite, transport (excluding warehousing and transport support), energy production, storage, transmission and distribution, broadband, and credit, financial and insurance activities. Businesses in liquidation or dissolution, undertakings in difficulty, and primary agriculture, fishing and aquaculture are also excluded.
Conclusion: a real incentive, but a different one from the legend
The ZES is a genuine investment incentive, and for a foreign investor building a production plant in an assisted area of Southern Italy it can be worth a substantial percentage of the eligible investment. It is also narrower than the "10% IRES" story suggests: the benefit is a credit on new capital goods and buildings, subject to a €200,000 minimum, a €100 million ceiling per project, sector exclusions, a five-year commitment and a two-step filing procedure with the Agenzia delle Entrate inside fixed windows.
If you are planning an investment and want to know whether it can qualify, contact us. Studio Emmi supports companies investing in Southern Italy on the eligibility analysis, the structure of the investment, and the communications to the Agenzia delle Entrate.
Editorial note: Written by Giovanni Emmi, Dottore Commercialista. This edition corrects earlier statements in this article about a ZES-specific 10% IRES rate, a profit cap and a GSE filing channel, none of which exist. Updated 23 September 2026.
Where each statement comes from
| Statement | Official source |
|---|
| Single ZES established on 1 January 2024 by DL 124/2023 (conv. Law 162/2023) | Normattiva; Dipartimento per il Sud |
| Ten regions, including Marche and Umbria from Law 171/2025 | Dipartimento per il Sud |
| The incentive is a tax credit under Article 16 of DL 124/2023 | Normattiva, Article 16 |
| Extension to investments made from 1 January 2026 to 31 December 2028 | Law 199/2025; Agenzia delle Entrate |
| Minimum project €200,000; ceiling €100 million per project | Article 16, paragraph 4 |
| Land and buildings up to 50% of eligible investment | Article 16, paragraph 2 |
| 2026 spending limit of €2.3 billion | Law 199/2025, Article 1, paragraph 438 |
| Communication to the Agenzia delle Entrate from 31 March to 30 May 2026 | Law 199/2025, Article 1, paragraph 439 |
| Supplementary communication from 3 to 17 January 2027 | Law 199/2025; Dipartimento per il Sud |
| Forms approved by Provvedimento no. 3882 of 30 January 2026 | Agenzia delle Entrate |
| Five-year anti-relocation obligation and revocation | Article 16, paragraph 5 |
| Excluded sectors and undertakings in difficulty | Article 16, paragraph 3; Agenzia delle Entrate |
| Standard IRES rate of 24% | Agenzia delle Entrate |
| Bonus ZES 2026: 24 months, €650 per month, DL 62/2026 (conv. Law 112/2026) | Normattiva; INPS Circular no. 56 of 14 May 2026 |
| Substitute tax for new residents: €300,000 from 1 January 2026 | Agenzia delle Entrate |
Official sources
Giovanni Emmi|September 16, 2026
