Italy has long had a well-established commercial gallery system, but a wave of international arrivals is reinforcing its position as an increasingly attractive destination for the contemporary art market. That momentum was strengthened last July, when the country introduced Europe’s lowest VAT rate on art imports and sales, at 5%. It received another lift on 14 April, when Italy adopted a reform to its Cultural Heritage Law raising the value threshold for the permanent export of older works of art, in a move intended to ease their circulation.

So where does the Italian art market stand today? 

Last week, the French art fair Paris Internationale launched in Milan, coinciding with the plucky local Miart, traditionally pegged just before the start of design behemoth Salone del Mobile.Milano. The gallic arrival follows a run of gallery openings in the north of the country, while the mega gallery Hauser & Wirth is set to open in Sicily later this year. It’s tempting to think that a boom in the local market might be the draw for these international players decamping to the Mediterranean nation, but the financial advantages of having a comely Italian perch, it seems, go beyond a gallery’s immediate geographical reach.

The Austrian gallerist Thaddaeus Ropac – who already runs ventures in London, Paris, Salzburg, and Seoul – says the decision to open in Milan, inside the grand Palazzo Belgioioso, last year had to do with the gravitas of the city’s art-historical heritage. ‘Italy is such an incredible country from the point of view of artistic development. As the ultimate European gallery, we couldn’t do this without Italy,’ he says. ‘We looked into Naples, Rome, Florence, Venice, and Milan, and the last was the absolute, clear standout when it comes to art-making over the past few decades.’ 

Ever since the new space’s inaugural show last September, which paired the work of Georg Baselitz and Lucio Fontana, Ropac’s exhibition openings in Milan have become notable events in town, with crowds routinely spilling out onto the street. Sales-wise, though, rather than being a portal to reach prolific local collectors (most of which were already in touch with the gallery through its other iterations and via the international art fair circuit), this location has provided an opportunity to interact with another demographic: expats from the UK, France, Germany, and beyond who have recently found a foothold in town. 

‘Milan is becoming more and more international. Over the past two, three years we’ve seen a boom in arrivals from foreigners,’ says Elena Bonanno di Linguaglossa, the executive director of Thaddaeus Ropac Milan. The city offers generous tax-break schemes for expats, which initially allowed qualifying foreign residents to pay a flat rate of €100,000 in tax each year to cover all overseas income. This has now risen to €300,000 a year.

The British dealer Ben Brown has spoken in the past few years of wanting to establish an office and gallery in northern Italy because of the country’s advantageous fiscal policies. The fact that VAT on art has now been significantly reduced will also help, but other gallerists’ decision to start operating in Italy predates this development.

For Nicky Verber, who co-founded Herald St in London and opened the doors to a new space in Bologna in February, the VAT decrease was a ‘very welcome surprise’ that is ‘helpful for doing business.’ He had started thinking about this project about two years ago, in search of the gallery’s first outpost in Europe after Brexit. ‘The more we looked at it, the more Bologna became interesting. The economics of the city are not like those of London, Milan, or New York, so we took a leap of faith,’ he says. The space the gallery ended up in sits inside a characterful building in the old Jewish quarter, complete with patterned marble floors – and would probably have set them back a different sum if it was based in any other city. ‘It’s not huge, but it’s an ambitious space – artists can create a body of work for it and generate lots of attention,’ Verber says. Crucially, Bologna feels sufficiently close to what he calls the ‘traditional’ art hubs: Milan, Venice, and Florence are all about an hour away by train.

Stand-out real estate could also work in favor of Hauser & Wirth once it opens in the spectacular Palazzo Forcella De Seta in Palermo. The long-abandoned palazzo was briefly accessible during the 2018 Manifesta biennial and is now undergoing extensive restoration ahead of the gallery’s opening. It is a model that has worked for Thomas Dane’s Neapolitan gallery, which launched in 2018 in the historic Casa Ruffo in the Chiaia district. The restored first-floor space features a veranda with views over the Bay of Naples and Vesuvius in the distance.

‘It’s a place that’s sui generis – where artists want to do shows, where you can organize a weekend and invite collectors,’ says Simone Battisti, the gallery’s Senior Director. ‘Naples is a city where people want to come to see exhibitions.’ As for local collectors, Battisti believes the pool of Italian buyers to be relatively contained – though that’s not necessarily a bad thing. ‘Italy has a core of collectors who have been buying for decades, and the beautiful thing is you can find them everywhere in the country – in Turin, in Milan, in the interior of Veneto,’ he says. Their approach, he adds, is also often linked to a cultural propensity for deep intellectual research. ‘Italians have specific taste. They like things they can recognize but will also jump on things before many others who’d rather wait for the approval of the market. There’s an appreciation for the beauty of fruition.’ 

The gallerist Massimo de Carlo – who has run a gallery in Milan for the best part of four decades – agrees that the domestic Italian market has remained fairly constant for years, at what he calls a ‘medium’ level (Italy represents 1% of global art trade). ‘But that “medium” level is compensated by a quality-driven cultural sensibility. Italian collectors never buy haphazardly,’ he says. This is why he is cautious about any immediate effect of the change to VAT regulations: ‘Perhaps it will entice established collectors to buy some extra works, but it won’t impact on the appreciation of contemporary art for those who are not collectors.’ Looking at the tax-regime change from a purely financial perspective, de Carlo believes, is reductive – the measure (which was hard fought for by an association of local galleries) also has cultural value.

For Francesca Kaufmann, who established her venture in Milan in 2000 before opening another location in New York with Chiara Repetto, the change in legislation is an important acknowledgment of the role that commercial galleries have played in building a cultural offering for the Italian public. ‘Many great artists only ever arrived in Italy thanks to galleries – the system creates culture, and it’s great this concept has now been accepted,’ she says. While she hasn’t seen the benefits of a new clientele of relocators to the northern city (who, she believes, frequently make the most of a favorable tax regime but spend little time in town), she hopes the VAT decrease will encourage more Italian collectors to approach the gallery.

And this month, there are plenty of occasions to connect with Italian buyers. The Milan edition of Paris Internationale coincides with the long-established art fair Miart, which takes place April 17–19. For many, its arrival is an indication of the city’s growing art appeal. ‘The system is fortifying – it’s a sign that the city is arming itself,’ Kaufmann says, adding that she hopes even more young galleries will join the scene soon. ‘The more galleries, the more fun for collectors – it’s like the love you have for your children. The love and passion for art can only multiply.’