Why Italian businesses should enter the California market: Unlocking one of the world’s largest economic powerhouses
Christian Scali
USA
by Christian Scali
California, the world’s fourth-largest economy, offers a compelling opportunity for Italian SMEs seeking international growth. With a GDP exceeding USD 4.5 trillion and a population known for valuing quality, luxury, and innovation, California is an ideal destination for Italian businesses in sectors like automotive, fashion, furniture, and food. However, entering this market requires navigating a complex legal, regulatory, and cultural landscape.
Legal and regulatory landscape
California’s progressive regulatory environment is among the most comprehensive in the US, demanding rigorous risk management and compliance strategies. The state enforces detailed labor laws, privacy protections, and consumer safety standards. The Private Attorneys General Act (PAGA) increases employment litigation risks, while the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) impose strict data privacy requirements. Additional obligations under Proposition 65 and industry-specific rules make local legal expertise indispensable.
Economic and tax considerations
California’s layered tax system adds another level of complexity. In addition to federal taxes, the state imposes its own business and income taxes, and some municipalities levy additional surcharges. Certain international tax treaties may not be fully recognized at the state level, affecting tax and tariff obligations. Tariffs on Italian imports currently average 10%, with projections of increases to 20% on consumer goods like apparel and furniture by mid-2025. Italian SMEs should work closely with tax advisors experienced in both Italian and US systems to navigate these challenges strategically.
Strategic partnerships, market entry planning, and cultural nuances
A successful California market strategy requires informed, locally tailored decisions. Italian SMEs typically consider either Brownfield investments (acquiring an existing business) for rapid market access or Greenfield investments (establishing a new operation) for greater operational control.
Building partnerships with local distributors, service providers, and advisors is essential. Partner due diligence is critical to avoid misalignments and operational risks. Italian businesses should also leverage local trade organizations, chambers of commerce, and economic development networks.
It’s equally important to recognise cultural differences: while Italian business culture values personal relationships and long-term trust, California’s environment is fast-paced, transactional, and heavily contract-driven. Adapting to these differences is crucial for effective negotiations, relationship-building, and dispute resolution.
Support resources for Italian SMEs
Several US government and state agencies assist foreign businesses in California, including the US International Trade Administration (ITA) and SelectUSA. These organisations provide market research, regulatory guidance, and introductions to local economic development offices. Utilising these resources can help Italian SMEs mitigate risk and streamline market integration.
Why Scali Rasmussen is the best strategic partner for Italian SMEs
Scali Rasmussen offers a proven track record assisting foreign companies—particularly from Mexico, Canada, and Europe—with US market entry and operations. Our firm is uniquely equipped to support Italian enterprises expanding into California, providing comprehensive legal services beyond market entry and into day-to-day operations.
Our Italian-fluent, California-based team of legal and business advisors understands both US and Italian business environments. Our partnerships with local chambers of commerce, the Italian Trade Agency, local Italian Consulate and knowledgeable professionals from architects to accountants, bankers, and insurance brokers can provide a one-stop shop for expansion in California. Acting as cultural and legal “translators,” we offer strategic market entry planning, assist in identifying key partners and acquisition targets, and manage negotiations, regulatory compliance, employment law, privacy, tax, and intellectual property matters.
With offices in key US cities and deep expertise in litigation, we’re prepared to protect your interests when disputes arise. Our goal is to reduce project and investment risk while ensuring operational success in one of the world’s most dynamic markets.
Conclusion
California represents a dynamic opportunity for Italian SMEs, but success demands more than ambition. A comprehensive understanding of the legal, tax, and business environment — paired with culturally informed strategy and strong local partnerships — positions Italian businesses to thrive in California and establish a platform for broader US and global expansion.
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Christian Scali has a diverse practice that includes advice and counsel and complex and high stakes litigation. His clients are in a variety of industries, including restaurant and hospitality, property management, entertainment, clothing manufacturing and ecommerce, but the majority of them are in the retail automotive industry. Contact Chris.
XLNC member firm Scali Rasmussen, PCLos Angeles, CA, USAT: +1 213 239 5622
