(Articles 243 – 249 Regulation (EU) n° 952/2013)

Free economic zones (FEZ), free economic territories (FETs) or free zones (FZ) are well-defined economic zones within a Member State, separated for customs purposes from the territory of the EU and subject to control by the customs authorities.

Generally, free zones develop in port or airport areas, crossroads of trade and exports, since they have an important role in the development of international trade, encouraging the transit, shipment of goods and the progress of economic activities.

The economic operator who holds goods within the free zone for storage, processing and producing reasons is obliged to keep a special register and warehouse accounting in the form provided by the customs authority in order to allow the authorities to identify the goods and its movements (indicating the nature of the goods, the number of packages, brands, customs status, the transport document present at entry and exit). Similarly, in the event of a sale, the transaction must still be invoiced with relevance for the purpose of the turnover, but not for the purposes of the ceiling.

The EU Regulation considers only one type of FEZ system, the enclosed one (article 243 Regulation n° 952/2013), in which the perimeter and the entry and exit points of the area shall be subject to customs supervision. Article 211 Regulation n ° 952/2013 doesn’t consider for this system neither the need of an authorization nor the provision of a guarantee. Article 243 Regulation n° 952/2013 asserts only that member States may designate parts of the customs territory of the Union as free zones. Article 223, paragraph 2, Regulation n° 952/2013 considers that the customs authorities shall authorise the use of equivalent goods also within free zones. This would allow the use of equivalent EU goods instead of non-EU goods stored in the free zone.

(EEC Regulation 1186/2009)

The Council Regulation (EEC) n° 918/83, enacted on the 28th of March 1983, sets out those cases in which relief from import or export duties shall be granted respectively when goods are put into CE free circulation or are exported from the CE. It shall apply excluded for import or export which are justified on grounds of public order or public security, protection of health and life, protection of national treasures and protection of industrial or commercial property. With effect from 1 January 2010, the Council Regulation n° 1186/2009 of the 16th November 2009 (EU Official Journal series n. 324 of the 10 December 2009) contains the codified version of the Community regime of customs duties and replaces the Council Regulation (EEC) n° 918/83 of 28th March 1983 and its subsequent modifications.

The exemption from import duties concerns numerous categories of goods, for a summary of all the product categories involved and the necessary obligations, please refer to EEC Regulation n° 1186/2009 and to Circular 22 / D of 2004 of the Customs Agency which can be consulted and downloaded in the “download area”.

• Steel industry;
• Coal industry;
• Shipbuilding industry;
• Synthetic fibers industry;
• Transport industry and related infrastructures;
• Energy production and distribution industry and energy infrastructure;
• Credit sector;
• Financial sector;
• Insurance sector;
• Agriculture sector;
• Fisheries sector;
• Aquaculture sector.

In addition, companies in financial difficulty cannot apply for the tax break.

The attraction activities are intended for providing and preparing a "multidisciplinary professional platform" aimed at leading and supporting the entrepreneur in strategies for using the incentives and benefits, some of which are listed below.

Article 1 of Decree Law n° 91/2017introduces, in detail,  forms of financing and incentives for young people living in the South of Italy, aimed at promoting the establishment of new businesses in Abruzzo, Basilicata, Calabria, Campania, Molise, Apulia, Sardinia and Sicily.

The measure, called "Resto al Sud", targets young people aged 18 – 35:

• residents, at the time of submitting the application, in the aforementioned regions, or who transfer their residence there within sixty days from the notification of the positive outcome of the preliminary phase, and who maintain their residence in the same regions for the entire duration of the funding. In the case of residence abroad, the transfer deadline , is one hundred and twenty days ;
• that they have not benefited from national public incentives aimed at self-employment in the three years preceding the application for funding;
• that they are not owners of ongoing business at the date of entry into force of the law decree;
• that they are not holders of a permanent employment contract with another entity (both at the time of acceptance of the financing and throughout the duration of its repayment ).

The funding consists of 35% in non-repayable grants and 65% in a zero-interest loan to be repaid overall in eight years, the first two of which are pre-amortization. The cost of the measure will be covered by the resources of the Development and Cohesion Fund (2014-2020 programming) for a total amount of up to 1,250 million, to be divided into annual amounts

Article 2 of Decree Law n° 91/2017, in order to encourage generational turnover and the development of youth entrepreneurship in the agriculture sector in the southern regions, extend the aforementioned measure “Resto al Sud”  to agricultural businesses, through a specific allocation of 50 million in the four-year period 2017-2020 within the resources of the Development and Cohesion Fund.

Essentially similar to that provided for in Article 1, the measure is divided into a non-repayable grant of up to 35% of the eligible expenditure, as well as interest-free soft loan for an amount not exceeding 70% of the eligible expenditure.

Moreover, Article 2 intervenes on agricultural consortia, providing that the pertaining activities can also be carried out through participation in corporation companies in which the consortia have the majority of votes, and providing, as further specified in the Senate, that the activities carried out by the aforementioned companies, in favor of the shareholding members of the agricultural consortia, are in compliance with the mutual aims and purposes of the consortia.

Also in the agricultural sector, Article 2-bis endows the Ministry of Agricultural Policies with a research fund, with the allocation of 200,000 euros, in order to promote actions aimed at contrasting the spreading of pests (such as the ambrosia beetle xylosandrus compactus) affecting the carob trees in Sicily, as well as for the protection from other types of pests in the olive-oil sector and in the wine sector.

Article 3 of Decree Law n° 91/2017, defines an intervention to promote new businesses in the regions of Southern Italy (Abruzzo, Basilicata, Calabria, Campania, Molise, Apulia, Sardinia and Sicily), giving instructions aimed at allowing the municipalities of these regions to give in concession or lease, to persons aged between 18 - 40, land and areas in a state of abandonment. For this purpose, the municipalities must publish the list of assets on their institutional website (i.e. agricultural land abandoned for at least 10 years, land subject to reforestation and then no longer treated, areas built for artisanal, commercial, industrial and tourist-hospitality use in that have been abandoned for at least 15 years or, as specified by the Senate, on which companies haven’t been operating for at least 15 years) which can be granted in concession, for a period not exceeding nine years. The beneficiary must pay the municipality a usage fee which, in the case of private property, is paid to the owner, and will have a right of first refusal on the property if the owner intends to sell the property, within five years following the expiry date of the concession. During consideration of the Senate, further instructions were introduced to include in the concessions for certain agricultural activities in the regions affected by the recent seismic events also the damage resulting from the prolonged drought in progress.

Decree Law n°91 of the 20^th June 2017, Article 3(a)

Article 3(bis) of the aforementioned decree contains instructions concerning the recognition of National Technological Clusters (NTCs), which are considered as support and efficiency structures for the coordination of industrial research policies at national and local level, as well as for linking measures promoted at central and regional level and, with reference to the Southern Regions, also as a facilitating tool for the implementation and use of interventions on the territory. To this end, each NTC will have to draw up a three-year action plan, within which a special section referring to the South is included. For 2017, the law provides for a fix contribution to each Cluster, within an overall allocation for the same year set at 3 million euros.

Decree Law n°91 of the 20^th June 2017, Article 3 ter

Article 3(bis) of Decree Law n° 91/2017 foresees a change in the limits of duration for extraordinary wage integration interventions relating to companies operating in a complex industrial crisis area. For these companies, the regulations in force allow, within a predetermined spending limit, that a further intervention of extraordinary salary integration can be granted, up to the limit of 12 months. This article establishes that the 12-month limit applies separately for each reference year.

Articles 4 and 5 of Decree Law n°91/2017 concern the special economic zones (SEZ), whose the aim, as well known, is to create economic, financial and administrative conditions allowing the development of companies already operating and the establishment of new ones.

The Special Economic Zone must be established within the state government borders, in a clearly defined and identified geographical area; it can also be composed of territorial areas that are not directly adjacent, as long as they have a functional economic link. It must also include a port area, connected to the trans-European transport network (TEN-T), with the characteristics established by EU Regulation n° 1315/2013 of the European Parliament and of the Council, of the 11th December 2013.

The main consequence of setting up a SEZ is that companies to take advantage of important tax breaks and to benefit from significant administrative and bureaucratic simplifications.

In addition, a tax credit proportional to the cost of the goods purchased will be applied to investments made in the SEZ, up to a maximum limit of €50 million for each investment project by 31 December 2020. The Decree Law n° 91/2017 (“South Decree”) considers the creation of at least five SEZs in as many southern regions. It was agreed to establish two for each region. To this end approximately EUR 200 million have already been allocated, to be used between 2018 and 2020. The conditions to grant the recognition of the concessions are basically two: companies must keep their activities in the SEZ for at least 7 years (the term has been extended during the examination in the Senate compared to the original five years) subsequent to the completion of the investment covered by the concession (otherwise the benefits granted will be invalid) and must not be in liquidation or in the process of default.

For this purpose, a Decree of the President of the Council of Ministers would define the procedures and conditions for the establishment in some areas of the country of special economic zones, which are defined as geographically delimited and clearly identified areas, located within state boundaries, also consisting of areas not territorially adjacent, as long as they have a functional economic link, and include at least one area of the port system.

As for the management of the SEZ area, it is expected that it will be entrusted to a Steering Committee composed of the President of the Port Authority, who chairs it, a representative of the region (or, as specified in the Senate, of the regions, in the case of Interregional SEZ) by a representative of the Prime Minister and the Ministry of Infrastructure, respectively.

Each of the less developed and in transition regions can submit a proposal for the establishment of SEZs in its territory, or a maximum of two proposals, in compliance with certain conditions (Article 4).

Simplified procedures and special procedural regimes are also envisaged, which reduce the procedural deadlines for companies already operating or for new ones setting up in the SEZs and simplify compliance with current legislation.

In addition to these concessions, there are tax benefits aimed in particular at companies that make investments within the SEZs: these companies will be able to use the tax credit for the purchase of new capital goods in the South - acquired by the 31st of December 2020 - in the maximum limit, for each investment project, of EUR 50 million.

Furthermore, the concession for these areas is extended until the 31st of December 2020. The postponement to 31st of December 2023 is under discussion in Parliament.