By Uglobal Staff
Foreign high-net-worth investors and entrepreneurs seeking an expedited path to residency and access to Europe now have the Italian investment immigration program to consider. The program seeks to bolster direct investment and startup business activity in the country.
“The Italian government launched the new program in order to join the growing investment migration movement, paving the way for the development of a residence-by-investment program in the country that owns most of the cultural heritage in the world,” said Andrea Parisi, a Milan-based lawyer who is part of the legal network called Legalars.
The Italian government relaxed visa procedures for foreign high-net-worth individuals and entrepreneurs seeking to relocate to Italy to reap the benefits of Italy’s flat tax on foreign income or to launch a startup company. Visa offices in Italy are expected to prioritize and expedite processing applications from qualifying investors for residence permits once they arrive in Italy.
Parisi says the government estimates more than 300,000 applicants by the close of 2017.
While the investment visa program has been an option in countries like the United States and Canada, such programs are gaining momentum in the European Union where the first countries to offer them include Cyprus and Malta and later Portugal and Spain.
One reason Italy is promoting its investment immigration program is because “large capital inflows are believed to develop the country’s economy,” said Salvatore Aprigliano, who heads the Milan-based Aprigliano International Law Firm, which specializes in corporate immigration. The firm provides services to companies, high net worth individuals and businessmen interested in moving or investing in the Italian market.
A second reason, Aprigliano said, is that the absence of an investment immigration program “may lead the foreign investors to invest in a neighboring country, where the program does exist, just to get a residence permit that will allow him or her to enter Europe and then to move to Italy.”
Marco Mazzeschi, an attorney whose Florence-based Mazzeschi firm specializes in corporate immigration, commercial and citizenship law says Italy introduced the new visa with a favorable tax regime. He said individuals who become Italian tax residents can take advantage of a substitute tax regime on their foreign income.
“Regardless of its amount, foreign income will only be subject to a yearly flat tax of €100,000. Moreover, opting for the new regime guarantees full exemption from reporting requirements with respect to financial and non-financial assets abroad and from succession duties on assets outside Italy,” said Mazzechi.
The program covers both high-net-worth individuals who are moving to Italy to take advantage of its tax cap of €100,000 on foreign income as well as those planning on moving to Italy to invest in or create a startup company.
Mazzeschi said the requirements for the investor visa are €2 million in government bonds to be kept for at least two years; €1 million in the share capital of an Italian company, reduced to €500,000 if the company is an innovative start up; €1 million in philanthropic donations, such as culture, education, immigration management, scientific research or cultural heritage.
“The government is hoping to attract investors in companies or start-ups rather than investments in government bonds or donations, that are less attractive and more expensive compared to programs offered by other countries,” said Mazzeschi.
Previous Italian immigration law made it possible to get a residence permit just for work reasons. Those who wanted to invest in Italy, or to buy real estate were not able to get a residence permit, which is why Italy was less appealing than others, said Aprigliano.
“Successful applicants will obtain a residence permit for two years with the possibility of a three-year extension if the foreign investor keeps holding the investment, and after five years the Italian immigration law will allow to convert a temporary residence permit into a permanent one,” said Aprigliano. “Moreover, family won’t be left behind. Without any further investment, all family members, spouse and underage children, will be able to join the investor in Italy.”
Attorney Benedetto Lonato, of Milan-based, LCA Studio Legale said “the real news is not only the new provisions referable to the new investor visa under an Italian immigration law perspective” but also the new Italian resident non-domiciled taxation regime. Lonato said foreign high net worth individuals should properly evaluate the Italian option.
Lonato said that individuals who move their fiscal residence to Italy can opt for a substitute income tax regime on foreign income by a payment of an annual substitute tax of €100,000. He said such regime can be extended to family members through a payment of an additional substitute tax of €25,000 for each family member.
“That’s the real point,” said Lonato. “Then you may combine this with the new investors visa provisions and you have the full path for high net worth individuals; a clear way to obtain a visa without any job or family condition precedent and an extremely appealing taxation regime.”