ITALY – New opportunities for high worth individuals

Italy’s Budget law 2017 has introduced a Golden VISA (Visto Investitori) for non EU citizens and a Tax Incentive for individuals who become tax resident in Italy.

When you think of Italy you have in mind the Italian style of life, beautiful country side and a business world that is truly alive, however, halas, burocracy and taxation also come to your mind. At last, the 2017 budget law has introduced an Investor’s Visa and Tax Incentives that make Italy an attractive doorway to enter the Shengen area and an attractive tax residence. Here are some notes on the new provisions.
Investor’s VISA: art.148 Budget Law 2017 adds to legislative decree July 25th 1998 n. 286 article 26 bis that provides for visas and residence over three months for non EU citizens.

Under the new provisions a non EU individual and his close family members can benefit from a two years VISA and residence permit renewable for a further three years if the applicant makes an investment of no less than €2.000.000,00 in government bonds, or an investment of no less than €1.000.000,00 in an Italian private company or an investment of no less than € 500.000,00 in a innovative start up registered as such under article 25 comma 8 law decree October 18th, 2012 n.179, the investments to be kept for at least two years, or if the individual intends to make a philanthropic donation of no less than €1.000.000 to finance a project of public interest in the area of culture, education, immigration management, scientific research.
The applicant is required to show that he/she actually can dispose of the sum for the chosen investment/donation and to sign a written declaration undertaking to provide for the investment/donation within three months from the date of his/her entrance in Italy; further the applicant will have to show that he/she can disposes of sufficient funds for his/her maintenance during the stay in Italy and will have to submit certification of the lawful source of the investment/donation funds and give details of the investment/donation. The administration must process the file within 15 days.

TAX incentive on world wide taxation: Article 152 Budget Law 2017 adds to Presidential decree December 22nd,1986 n. 917 art. 24 bis that provides for a tax incentive for individuals taking tax residence in Italy.
An individual who has not been tax resident in Italy for nine out of ten tax years preceding the relevant year of tax residency, and becomes tax residence in Italy, as of January 1st 2017 can apply for one off substitute taxation of €100.000,00p.a. covering all foreign income. The incentive can be extended to family members who can benefit of substitute taxation of €25.000,00 p.a. on all foreign income. The benefit can be sought for all foreign income or limiting the benefit to income from certain jurisdictions.
The tax incentive is applied following consent from the competent tax authority, the benefit lasts for 15 years .
TAX incentive on Inheritance and Gift tax: During the fifteen years in which the world wide taxation incentive applies gift tax and inheritance tax is due only with reference to assets situated in Italy.
Conclusions I am sure that reading these few notes many of you realize the possibilities that the new provisions offer to overseas and EU clients and the structures that could be usefully put into place.