Millenia-old cities, unparalleled gastronomic heritage, and pristine nature have made not just tourists but also expats flock to Italy’s shores.
It’s undeniable that the place has bucketloads of charm, but what it’s lacking is investor appeal.
If you’re about to invest in a country and become its resident, you need to dig deeper than the fact that Italy is Europe’s third-largest economy or some of the other prettied-up facts they put on their investor brochure.
What we mean is this:
Since forever, Italy has struggled with its gargantuan bureaucracy. Just how bad is it?
Italy has approximately 235,000 laws and regulations – both at the national and the regional levels. No one is able to come up with an exact number, because they probably have, literally, lost count.
But the full meaning of this number can only be fully appreciated when compared to another country; in comparison, neighboring France has 7,000 national laws and Great Britain has 3,000.
And it’s not just about the permits that you’d need to add an attic window that we’re talking about.
So many business-related actions take up so much time and money in Italy that it really makes it a highly unfavorable environment to invest and to run a business there.
Recognizing exactly that, the Italian government has focused on remedying the situation and that’s how the Investor Visa – aka the Italian Golden Visa – was born.
In this article, we’ll tell you what the investor visa program entails, how you can apply, and talk about a few of the alternatives that are out there too.
Italy’s Investor Visa
Before we get to the nitty-gritty of Italy’s investor visa, let’s get on the same page as to what it is.
It’s a so-called European Golden Visa program, which is a way to gain residence, initially temporary and later permanent, in a European country.
A handful of European countries have been running their investor residence programs for a while now, so you could say that Italy was late to the European Golden Visa party.
While many other countries, such as Portugal or Ireland, had recognized just how important such programs could be to attract foreign investment, Italy only launched its program in 2017.
That’s part of the reason why it’s not yet gained much traction, but it also has to do with the fact that it wasn’t competitive at all – a commonly agreed-upon opinion in the investment immigration industry.
What we mean is this: while you could become a Greek resident by investing just €250,000 in real estate, Italy’s required sums for investors were at least double that.
However, the country has since halved the required investment sums for two of its investment options, making Italy a much more attractive option than before.
Let’s take a look at the current requirements.
Eligibility for Italy’s Golden Visa
While all non-EEA citizens can apply and receive the Italian investor visa and a subsequent residence permit, any applicant must choose one of the following investments to make:
- A €250,000 investment in an already existing local startup. You can find a full list of startups you’re able to invest in here.
- A €500,000 investment in a local company that’s incorporated and operates in Italy, to be held for a minimum of two years.
- A donation of €1 million to support a public interest project in education, culture, immigration management, scientific research, preservation of cultural and natural heritage, or similar.
- A €2 million investment in government bonds, to be held for a minimum of two years.
While the options are varied, there are two things that are worth paying attention to.
First, there is no real estate option. That can be a real pain for those who just want to buy a seaside villa and forget about the whole visa application process.
Second, all of the investments are pretty high up on the risk scale, except the government bond one. Of course, that’s reflected in the highest required investment sum.
And that’s not to mention that the €2 million investment is comparable to the investment required to obtain Cypriot citizenship. A temporary residence and citizenship for the same price – which one do you think is a better deal?
So, if you want to lower the investment and go with a startup, the risk rises. Such companies are notorious for failing – approximately 90% of them shut down. If that happened, you would be unable to recoup your investment.
Italian companies and shares in them are risky business too.
In a country that’s plagued by bureaucracy, youth unemployment, and a highly unstable political environment, getting your half a million euros back is definitely not a done deal.
Finally, a donation of €1 million is pretty straight-forward but it’s all sunk costs. It’s up to you to determine if the Italian quality of life is worth that much money.
The Italian Visa Application Process
If you’ve made up your mind and would like to pursue the Italian investor visa, here’s how you can apply.
First of all, let us just reiterate that you must be a non-EEA citizen. You must also be an adult older than 18 years and will need to prove that you have no criminal record.
You will also need to show that all of the financial assets that you’re about to invest in Italy to qualify for the investor visa have been obtained legally, are liquid (ready to be transferred), and in your name too.
Then, it’s a three-step process, all carried out via the official investor platform.
1. Obtaining a Nulla Osta
First, you’ll get your nulla osta, a certificate of ‘no impediment’ that’s issued by the Investors Committee for Italy – the legislative body of the investor visa.
The procedure is quite quick, which is not really something you’d expect in this country. You will get the certificate issued within just 30 days of sending in your filled out application.
Plus, it’s free and all of the steps required to obtain it can be carried out online.
Unlike in other countries, you don’t need to make the investment before you’re approved for the visa. A simple declaration saying that you commit to using the funds for the investment is enough to get your application approved.
That’s great because, otherwise, you could be making an investment and end up getting rejected for the investor visa – a situation that no one would like to be in, really.
To apply for this certificate, you’ll complete a bunch of forms online and attach the necessary documents to the platform. You’ll do that by scanning them.
The documents may be in Italian or English, which is great news. If your documentation is all in English, there won’t be any need for official translations or apostilles.
The documents that you’ll need to submit are:
- A passport, for your personal identification.
- A certificate proving that the funds that you’re going to invest in Italy are your own and were acquired legally.
- A CV (a European version of a resume).
- A police clearance, proving that you have no final or pending criminal charges.
- A description of your chosen investment route (maximum 1,000 words) and proof that the intended recipients have given consent, for example, the startup stakeholders have agreed that you’ll invest in their company.
- A declaration that you’re going to actually invest the required minimum sum.
- A declaration of which municipality you would like to settle in once in Italy.
You will need to set up an electronic signature so that you’re able to send off your application. There are instructions on how to take care of the electronic signature on the platform.
Then, the Investor Visa Committee will check out your documents and evaluate your application.
If everything is in order and all of the required documents have been submitted, you will get a decision within 30 days, as we previously mentioned.
2. Obtaining the Investor Visa
The next step is to apply for and get the actual investor visa.
Keeping in mind that the nulla osta is valid for six months, you should apply for your visa within that time frame.
Find your nearest Italian embassy or consulate, and submit the following documents to obtain your investor visa:
- A copy of your nulla osta.
- Proof that you have accommodation in Italy. A confirmed hotel booking is sufficient.
- Proof of income from the previous fiscal year. You need to have sufficient funds for yourself and your family. Currently, the sum per person per year is approximately €8,500.
- A passport picture of yourself.
- Your valid passport.
- Proof of residence in your current country.
Again, all of these documents have to either be in Italian or English. If they’re not, you’ll need to officially translate them and get them certified.
3. Obtaining the Italian Residence Permit
It’s time to make travel plans!
The main goal of the investor visa is to get your residence permit and once you receive your visa, you’re free to enter Italy and apply for one.
The visa is valid for two years, so you should plan to obtain your Italian temporary residence permit within that time.
Once you travel to Italy, you’ll have to visit your local police station called Questura to apply for an Italian Investor Visa Residence Permit. That needs to happen within eight business days after you land.
You’ll need to pay approximately $100, present them with passport pictures, and all the regular identification documents. It’s a straightforward process.
This permit will be valid for two years and the time will start ticking on the day that you legally enter Italy with your visa.
And what about the investment?
Once you apply for your residence permit, it’s time to actually fulfill your commitment and make that investment.
If you fail to do so within three months, your visa will be canceled and you’ll be required to leave Italy.
And what happens after the two years of the permit’s validity are up?
Well, then you’ll need to apply for a renewal, granted that you’ve maintained your original investment in its entirety.
If you don’t, your residence permit will be revoked and it won’t be possible to renew it. You would have to go through all of the motions again.
Once renewed, your permit will be valid for a further three years.
In total, after five years have passed, you would be able to obtain a permanent residence permit. And if 10 years pass, you would technically become eligible for Italian citizenship by naturalization, but that’s a whole different topic.
The Pros and Cons of the Italian Golden Visa
As with everything in life, there are pros and cons of the Italian Golden Visa too.
Therefore, we would strongly advise against making such a big financial decision all by yourself. Talk with an investment immigration professional to have a better grasp of the full picture.
But, as a way to vet the Italian Golden Visa program, weigh up its advantages and disadvantages.
European residence. Since Italy is part of the Schengen area, you would get the freedom to live and travel in all of Europe. This is one of the biggest and most obvious pros of the Italian investor visa. While you won’t be able to settle or work just anywhere, having the whole of Europe at your fingertips, unrestricted, is a great perk.
Considerable red tape cut. Sure, Italy is notorious for its bureaucracy, but it has really made the investor visa process as straightforward as it could be. The application process is fully online, relatively easy, and processing is quick.
Flat tax option. All investors residing in Italy are able to take advantage of the flat tax option. All foreign-earned income is subject to a maximum annual tax cap of €100,000. You must first obtain residence and then apply for the lump-sum tax option.
Bring your family. You can get your spouse, children, and even dependent parents to come along and become residents of Italy. No additional investment is required.
Subsequent citizenship. Eventually, you would be able to apply for Italian citizenship, gaining access to live, work, study and travel all over the European Union.
That dolce vita. Italy offers a lifestyle like no other country in the world. It’s gastronomy, landscapes, and climate really are one of the best on this planet.
High-risk for lowest investments. Even though the minimum investment sum is comparable to some of the other European countries, the risk attached to the types of investments that you’re required to make is considerably higher, e.g. startups.
No diversification options. The Italian investor visa program is very rigid. You need to choose just one investment route and even then, only a single way forward is available. For example, you must invest in just one startup or one company. If investors were able to allocate capital across multiple companies or even allowed to mix financial assets (e.g. buying company stocks and government bonds), Italy would be a much more attractive option in the grand scheme of things.
Unfavorable business environment. We’re not just talking about high tax rates here. Bureaucracy in Italy, just like in the entire region of southern Europe, is a beast and many startups and companies are victims of the antiquated system.
Wobbly economy. An Italian default isn’t unthinkable and the country has one of the highest debt to GDP ratios in the world. Investing in Italy is a riskier affair than it could be. Its economy is also sluggish, growing less than 1% annually.
Alternative Ways to Obtain Residence in Italy
Ever since it first launched, investment immigration professionals weren’t overly keen on Italy’s investor visa program – including Andrew. The required investment amount was simply too high to appeal to most.
But even with the threshold lowered, Italy isn’t the holy grail for all people looking to become a resident by investment.
Luckily, there are three alternatives that you can go for, four of which would still allow you to become an Italian resident.
1. Campione D’Italia – a special program in the Campione region of Italy.
You’ll have to either purchase and own a property or rent one to take advantage of this special tax regime. The main benefit is the aforementioned flat tax regime, but there are a few added benefits too.
Compared to the general Italy flat tax regime, Campione D’Italia allows you to conduct business activities in Italy and Switzerland freely, as well as pay no EU VAT. Your physical presence in the region, while required, is not strictly enforced.
2. Italian Elective Residency – great for those who generate rental income or are retired.
This is a visa program that’s meant as a temporary residence for a period of up to five years, with annual renewals. You must have an annual passive (not active) income of at least €31,200. This can include annuities, pensions, rents, etc. but not salary income. You must also spend at least 183 days in Italy or the European Union per year. Under this visa, you cannot do any business in Italy.
3. Opt for a different Golden Visa – a good alternative for those who aren’t set on living in Italy.
As we already mentioned, there are many other golden visa programs available in Europe, many of which give you more investment options and have lower minimum investment sums. It’s up to you to choose which one you’d like to go for if you think that the Italy-specific options aren’t going to work for you.
Would you like to invest as little as possible, perhaps even share an investment with your friends? Take a Look at Greece’s Golden Visa. Want to invest in real estate? Then Portugal could be a great option.
Tax Benefits for Italian Residents
Once you obtain residence in Italy, you can apply for one of two tax benefits. The first is the Italian flat tax option, which is ideal for those seeking a high standard of living and a tax residency.
If you’re a high-net-worth individual, then the flat tax option (also known as a lump-sum tax regime) could be a great idea. If you move your tax residency to Italy, your tax on worldwide income would be capped at €100,000. Meanwhile, any income made in Italy will be taxed progressively, as per Italian law.
This option is valid for people of any nationality for a period of 15 years. You can also include family members for €25,000 extra per person, per year. Fun fact: Cristiano Ronaldo is an Italian tax resident, taking advantage of the flat tax option and safeguarding his riches.
The second tax benefit you can take advantage of in Italy is the special Italian tax regime for Impatriati – ideal for employees, the self-employed, and retirees.
If you haven’t been a tax resident in Italy for the last two years, you can move to Italy and apply to pay taxes on just 30% of your income, with the maximum tax rate for personal income being approximately 13%.
Investors are further incentivized if they move to many of the southern Italian regions (e.g. Abruzzo, Campania, Puglia, Sicily, etc.) where income tax is only applied to 10% of your income. You can take advantage of this special tax regime for a total of five years.
Italy’s Investor Visa – FAQs
How long is the Italian investor visa valid for?
The Italian investor visa is valid for two years. During this time, you can use the visa to legally enter Italy and get a temporary residence permit.
How can I renew my residence permit in Italy?
If you used the investor visa to enter and start living in Italy, your initial residence permit will be valid for two years. You can easily renew it for another thre years after it expires.
Once you’ve spent five years in Italy, you’ll be able to apply for permanent residence, if you so choose. Otherwise, you can always opt for another renewal of three years.
Can I get Italian citizenship as an investor?
If you wish to become an Italian citizen, you’ll have to spend at least 10 years as its resident. Then, you’ll have to apply to get Italian citizenship by naturalization.
As an Italian citizen, you would be able to travel, live, and work freely in any EU country, vote in elections, and pass this European citizenship to your children.
Can I apply for the Italian investor visa as a legal entity?
No, only private individuals can obtain an investor visa in Italy. In other words, you can only apply as a person and not via a business of any kind.
Can people of all nationalities apply for an Italian investor visa?
Yes, there are no excluded nationalities. Absolutely every non-EEA citizen can apply and potentially receive the Italian investor visa.
What sort of companies can I invest in via the shares option?
The company has to be a limited company that’s incorporated and resident in Italy. It doesn’t need to be listed, but can be if you wish. The company must have been working for at least one year and be currently active.
One option would be to establish a staffing company that would employ your team. This would present some complications with employee visas and transfer pricing, but there are ways to make it work. Best of all, your entire company would not need to move to Italy to use this option.
What types of investments can I make to get the Italian investor visa?
You can either invest in government bonds, company stocks, make a donation, or invest in a startup. The type of investment must be chosen at the time of submitting your visa application and cannot be changed afterward.
Can my family come to Italy with me if I’m an investor?
Yes, spouses and dependent children can accompany you and legally reside in Italy for as long as your residence permit is valid. Dependent children over the age of 18 can also join in special cases (i.e., if they’re disabled), as well as parents over the age of 65 who are financially dependent on the main applicant.
Can I work in Italy while I live there under an investor visa?
Yes. You’re free to hold any employment status in Italy during your time there as an investor. You can be employed or self-employed without any problem.
How flexible is the Italian investor visa?
It’s not flexible at all in terms of investments. Once you’ve chosen your investment when applying for the visa, you won’t be able to change that. You cannot mix and match the types of investments either.
Is the Italian Investor Visa Worth It?
This is a really hard question to answer because it will all depend on your personal circumstances, but you should heed this advice:
Italy might seem like an appealing country to live in (and in many ways, it is), but when it comes to investing or operating a business there, it gets much trickier.
In fact, we almost never direct Nomad Capitalist’s clients to become residents of Italy, despite the country’s new investment initiatives.
Even though the reduction of red tape and the halving of two of the investment thresholds has made Italy much more competitive in the investment immigration world, we still think that it’s really hard to teach an old dog new tricks.
Italy has been set in its bureaucratic ways forever and it certainly doesn’t have a stellar reputation for investors and for entrepreneurship in general. Plus, its investment options are high-risk.
However, sometimes, being successful means taking calculated risks. And there is no denying that Italy offers a second-to-none lifestyle that very few other countries can offer a wealthy individual.
If you would like to take a chance on Italy’s investor visa while it’s still in its infancy and see that the lump sum tax regime could help you achieve your financial goals, chat with us first.
We can help you come up with a holistic financial plan so that you go where you’re treated best and reap the rewards that a Nomad Capitalist lifestyle can offer you.