The personal situation also affects the entry ways into a country and can represent an important variable for individuals who intend to move their residence to another country.
Considering the current difficulties of the system that regulates immigration in Italy, the possibility of obtaining Italian citizenship thanks to the principle of ius sanguinis or the possession of a passport from another European Union country represents an undoubted advantage. In this situation, in fact, individuals who wish to move to Italy have full freedom, regarding both the duration of their stay in the national territory (without limits), and the activities they can carry out there.
In addition to the standard process, depending on flows, NHWIs with non-EU passports have three main alternatives to enter Italy: i) obtain the Investor Visa, ii) opt for the elective residence visa or iii ) enter the country as a seconded employee.
The Investor Visa is particularly worth mentioning. It was introduced in 2017 and it allows obtaining a two-year (renewable) visa via an accelerated procedure. This procedure is conditional on making and maintaining an investment in Italian assets (2 million Euros in Government Bonds, 250 or 500 thousand Euros in shares, 1 million Euros as donations). Among the various secondary conditions required to obtain an Investor Visa, there is the need by the concerned individuals to demonstrate that they have, before entering the country, suitable accommodation in Italy.
The same condition is required to obtain an elective residence visa, which, however, does not allow the individual to carry out any working activity in Italy.
The main tax aspect attracting HNWIs in Italy is the beneficial tax regime for new residents (so-called “Neo Residenti”), regulated by art. 24-bis of TUIR (the Italian consolidated law on income tax). This law, in force since January 1, 2017 and unchanged since then, provides the opportunity for HNWIs, regardless of their foreign income, to pay an annual flat tax of 100,000 Euro (plus 25,000 Euro per each family member). The possible transfer of money to Italy is irrelevant.
The sole exception to the application of this tax benefit is provided for capital gains from the sale of qualifying equity interests realised in the first 5 years of residence (more than 20% of participating interests with voting rights – 2% in case of listed companies), which remain subject to the ordinary tax rate (usually a 26% or personal income tax if the foreign country is considered a “Black List country” for Italian tax purposes).
In addition, the special tax regime provides for the exemption from all forms of wealth tax on assets held abroad, as well as from all monitoring obligations, inheritance and gift taxes.
The tax benefits above are granted for 15 years, upon condition that the new residents maintain their residence for tax purposes in Italy, without prejudice to the possibility waive the application of the regime at any time.
People wishing to apply this beneficial tax regime can file a request for a ruling with the Italian Revenue Office; it can take from 3 to 7 months to obtain an official confirmation.
The regime also provides a beneficial tax treatment of possible implication for the residence of foreign companies or vehicles (trust) controlled by the new residents: these are actually not considered as subject to Italian taxation further to the (mere) presence of the new resident in Italy. This is not the case when new residents regularly work from Italy for their foreign entities (this activity might actually lead to a permanent establishment’s challenge in Italy). The permanent establishment risk can also be considered and investigated with the Italian Tax Authority in the above-mentioned tax ruling.
Providing for a standard tax rate on income from domestic sources, the regime is particularly beneficial for recipients of foreign passive income, whereas situations involving the sale of significant shareholdings or the provision of activities in Italy must be carefully assessed.
The fact that the recent “downsizing” of the special tax regime for inbound workers - with a reduction of the tax benefit to 50% and up to 600,000 Euro and a duration limited to 5 years - was not extended to the regime for new residents seems to suggest that Italy intents to maintain this tax benefit.
There are currently approximately 1,000 individuals who opted for the new resident regime (957 individuals in 2022). A 46% of these individuals generated income in Italy for a total amount of 75 million Euro, mainly form employment income (86% of the total amount). An additional reason to believe that the new resident regime should remain unchanged for the next few years.