Law no. 232 of 11 December 2016, known as the “2017 Budget Law,” introduced a new reason for entry and long-term residence in Italy, adding Article 26-bis to the Consolidated Act on Immigration (“TUI,” legislative decree 286/1998). This new provision, known as the “Investor Visa for Italy,” was officially named in November 2017.

The Italian Government designed the Investor Visa for Italy as both a reward and an incentive.

The visa is only issued in circumstances that are considered to be of public interest. These circumstances include making a large investment in medium/long-term Government bonds, providing equity financing to an Italian limited company, particularly focusing on new high-tech enterprises (i.e., innovative start-ups referred to in decree-law no. 179/2012), or making a philanthropic donation in key areas for the present and future of Italy, such as culture, research, protection of the environment, and management of migratory flows.

An investor visa can only be issued for a single investment falling into one of the types described below. Combining investments directed to different subjects or different types of investment with a nominal amount below the minimum threshold provided for each of the aforementioned cases is not allowed. Investments made, wholly or partially, before the visa application is submitted by the investor do not qualify for an investor visa.

1. The duration of the permit:

The investor visa is a two-years residence permit, renewable for further three-years, issued to investor visa holders after their arrival in Italy.

2. The conditions for issue and maintenance of the permit:

• The execution of the investment or donation declared in the visa application within three months of the date of entry into Italy.
• The maintenance of the original investment for the entire period of validity of the permit.

3. The type of investments for the issue of the permit:

3.1. Government Bonds issued by the Italian Republic [2 million Euro investment required]:

• Treasury Certificates (CCT/CCTeu)
• Zero-coupon Treasury Bonds (CTZ)
• Long-term Treasury Bonds (BTP)
• Long-Term Treasury Bonds index-linked to Eurozone inflation
• BTP ITALIA.2
• For each type, a minimum residual maturity of no less than two years is required.

3.2. Companies incorporated and operating in Italy [500k Euro investment required]:

• Stakes or shares of limited companies incorporated and resident in Italy pursuant to article 73 of the TUIR (DPR 917/1986).
• A company is considered “operating” (as provided for by Article 26-bis, Article 1, lett. b, TUI) if it is in an active state and has already filed at least one balance sheet at the date of the visa application. The recipient company may be either listed or unlisted. Its name and tax code are substantial and mandatory pieces of information and must be indicated at the time of application.

3.3. Innovative startups [250k Euro Investment required]:

• Stakes or shares in innovative startups, i.e., companies referred to in Article 25, paragraph 2, of decree-law no. 179 of 18 October 2012, converted with amendments by law no. 221 of 17 December 2012 and subsequent amendments.
• The official list of innovative startups, updated every week and accessible free of charge, is available on the portal startup.registroimprese.it, administered by the Italian Chambers of Commerce system.

3.4. Philanthropic donation [1 million Euro investment required]:

• A donation supporting a project of public interest in the fields of culture, education, immigration management, scientific research, or preservation of cultural and natural heritage.

4. The documents for the issue of the permit: The application is deemed complete when it includes the following elements:

• Contact details:
  • Copy of passport.
• Brief curriculum vitae of the applicant’s main academic and professional experience.
• Selection of one of the following three investment types:
  • Investment in Government Bonds.
  • Investment in limited companies, including innovative startups.
  • Donation in the area of preservation of cultural and natural heritage, education and research, or immigration management.
• Documentation in which the applicants demonstrate:
  • The ownership of the sum to be allocated to the investment/donation.
  • The transferability and licit origin of the financial resources used.
  • The absence of final criminal convictions.
  • Description of the characteristics of the investment/donation and proof of consent from the recipients.
• Declaration of commitment to use the funds, validated with an electronic signature, including an indication of the amount that the applicant is willing to invest and the municipality where he/she wishes to settle.

1) The 100,000 euro flat tax regime for new residents (“Res Non Dom Regime”)

Individuals who transfer their residency to Italy can benefit from a substitute tax on income produced abroad, by paying a fixed tax of 100,000 euro for each tax period in which the option is valid, regardless of the amount of income received (income produced in Italy by new residents are subject to the ordinary Italian Tax rates)

The regulation is applicable with a specific option for individuals who acquire tax residence in Italy, on condition that they have not been tax residents in Italy for at least nine tax periods during the ten preceding the start of the option’s period of validity and can be extended to family members of the individual with an addition of 25,000 euro for each tax period. Of course, also the family members have to transfer their residence to Italy.

The Res Non Dom Regime is of a temporary nature and ceases after 15 years from the first tax period of effectiveness, without the possibility of renewing.

Further benefits are granted to the main applicant and to the family members to whom the regime is extended:

• Reporting requirements: Exemption regarding foreign assets and investments;
• IVIE: This tax is due on the value of real estate located abroad and held as property or other real right by individuals residing in the territory of the Italian State, regardless of their use. Individuals benefitting the Res Non-Dom Regime are exempted from the payment of the IVIE.
• IVAFE: This tax is due by Italian residents on financial assets, current accounts and savings accounts held abroad as property or other real right; Individuals benefitting the Res Non-Dom Regime are exempted from the payment of the IVAFE.
• INHERITANCE AND GIFT TAXES: Those who have exercised the option are granted exemption from inheritance and gift taxes for assets and rights held abroad. In case of transfer by inheritance or gift during the period of the substitute tax regime, the inheritance and gift tax will have to be paid only for assets and rights held in Italy. The exemption also applies to the family members who have joined the scheme.

2) Inbound workers

Under this tax arrangement, individuals relocating their tax residency to Italy will only be liable for Italian individual income tax on 30% of their income derived from activities performed within Italy. However, if they choose to relocate to one of Italy’s southern regions (Abruzzo, Apulia, Basilicata, Calabria, Campania, Molise, Sardinia, or Sicily), the taxation is further reduced to 10% of the Italian-source taxable income. This substitutive taxation replaces the regular progressive tax rates, which can go up to 43%.

The special tax regime remains in effect for the initial 5 years after the relocation to Italy and to be eligible the following criteria must be met:

• The primary work activity must be carried out predominantly within Italy.
• The individual should not have been a tax resident in Italy for at least 2 years before the relocation.
• The individual must declare their intention to be an Italian tax resident for 2 years from the date of relocation. If they leave before this period expires, the special tax regime will be revoked, and regular taxation will be retroactively applied.
• Moreover, individuals who have at least one underage or dependent child, or those who purchase residential real estate property in Italy within 12 months before or after the relocation (this also applies if the purchase is made by their spouse, partner, or children), can benefit from an extended reduction in the individual income tax base, which lasts from 5 to 10 years.

The special tax regime is generally available regardless of the nature of the individual’s work activity. However, there is one exception: professional athletes relocating to Italy, for whom the reduction in the individual income tax base is limited to 50%, regardless of the specific Italian region of relocation. These professional athletes are subject to certain limitations if they wish to extend the special tax regime for an additional 5-year period.