How to obtain residency in Italy

When people think of obtaining residency in Southern Europe they typically think of Portugal, Spain, and Greece but the reality is that one can obtain residency in Italy combined with unique tax advantages. Let’s explore!

Video: How to get Residency in Italy

I interviewed Nicolo, who specializes in helping foreigners obtain residency in Italy and in helping them with local tax strategy.

Nicolo and his team has helped hundreds of clients succesfully move to Italy and benefit from various tax incentives. 

“Nicolo is a great tax advisor who understands expats and their needs […]. He helped me out back in 2022 with regards to property purchase, rental tax schemes, and how to stay in Italy as a non-tax resident.”

John, UK

Why obtain residency in Italy?

  • Live freely across the entire Schengen area – once you have residency in Italy you can relocate freely to any other country in the Schengen community.
  • Become eligible for Italian citizenship – time spent living under the visas detailed below will progress towards Italian citizenship. After 10 years spent living in Italy you can apply for citizenship.
  • Enjoy affordable real estate – Italy often makes headlines for charming, low-cost real estate.
  • Take advantage of a dry, warm Mediterranean climate – the virtues of the weather in Italy do not need much explaining.
  • Healthcare and education benefits – Italian permanent residency will grant you access to Italian public health and education facilities, which can be of particular interest to American retirees or those with younger children.
  • Tax incentives – Italy is traditionally known as a high-tax country but has recently developed specific schemes designed to welcome pensioners, the self-employed, and HNWIs.

How to obtain residency in Italy

Apart from the usual work permit or marriage options, there are several pathways that lead to Italian residency that work for different categories of people. We will go over four principal ways to obtain residency in Italy if you are a non-EU person.

  1. Italian Golden Visa
  2. Representative Company Office option
  3. Elective Residency Visa
  4. Digital Nomad Visa

 

Obtain residency in Italy through Golden Visa

The Italian Golden Visa is obtained through one of the following investment options:

  • €1 million in government bonds or investment funds OR
  • €500,000 into a private company. This requirement is reduced to €250,000 if the company is a startup.

People often overlook the option of investing in an approved Italian government fund. The advantage is that there are market traded funds offering more liquidity for divestment once the five-year holding period has elapsed. These funds can be purchased directly in your name through an investment brokerage account, without the need for company formation. Some of these funds have exposure beyond Italy, so you can buy shares in an Italian fund that invests, for example, in US stocks, precious metals, or other asset classes.

There is only one applicant on the Golden Visa itself, but you can qualify your spouse, your children under 18, and under 24 if in college and parents over the age of 65 to tag along under family reunification or family cohesion.

If you are from a country that has visa waiver with Italy, such as the United States, you can move to Italy as a family on tourist visas, and then within the 90 days allowed by the tourist visa you may apply for family reunification or family cohesion.

After five years of residency, you may divest from the fund or company and convert the visa to an EU permanent residency.

 

Obtain residency in Italy through the Digital Nomad Visa

The Italian digital nomad visa requirements are:

  1. 28,000 euros of annual active income, or self-employment income.
  2. Must prove that your work responsibilities can be achieved remotely.

You will receive a one-year permit that is extendable.

 

Obtain residency in Italy through the Representative Company Office Visa

 

This is an alternate route which consists of a self-employment visa granted to individuals with a registered profession or directorship at the local Italian Chamber of Commerce.

If you own a non-Italian company, you can create a local Italian office and register it with the local Italian Chamber of Commerce. Using this local office, you may then claim a long-term self-employment visa premised upon you moving to Italy to run the Italian office.

The requirements are:

  1. Have a limited company outside Italy which you can use to create the local office. The foreign company must be actively operating for at least one year and must be a limited company earning at least 12,000 euros (because you must pay yourself a minimum salary of 12,000 euros to qualify). It is advised to apply from the country where your business is registered so that the consulate can verify documentation related to your company. Note also that the representative office cannot make money itself.
  2. Establish yourself as the director of the Italian entity.

For immigration purposes this is sufficient to obtain residency. The representative office does not need to be profitable.

 

Obtain residency in Italy through the Elective Residence Visa

This is a visa category primarily intended for people with passive income sources.

Passive income includes pension, rental income, royalties, capital gains, interest, or any income that is not from employment or self-employment activities.

To qualify:

  1. 31,000 euros of passive income for one applicant or 37,000 for two applicants.
  2. Income must be substantiated by income statements and tax returns.

Satisfying these requirements grants you a one-year visa renewable up to 5 years as long as the requisite income is maintained. It is not convertible into an employment-based visa; you must remain under the elective residency category.

What about permanent residency or citizenship?

All of the visas above are convertible to Permanent Residency after 5 years in Italy, and you are eligible to apply for citizenship after ten years in Italy.

What are available tax incentives when you obtain residency in Italy.

100,000 € Flat Tax for Foreigners

Under this scheme, you pay a flat tax of 100,000 € against all your non-Italian income. You can also relocate the taxed income to Italy and spend it without paying further taxes.

You are also able to add family members to this scheme for an additional 25,000 per dependent.

CFC rules do not apply under this scheme – if you pay yourself a dividend through a BVI or UAE company, or other tax haven, you aren’t required to report the non-Italian asset.

This regime lasts up to 15 years. You can leave anytime but if you do so you cannot partake of this scheme again.

7% pensioner scheme

If you have not been a resident of Italy during the five years prior to moving, and you move to a municipality in the South of the country with less than 20,000 inhabitants you can enjoy the 7% tax regime.

For up to 10 years, your pension and all of your non-Italian income is taxed at a 7% flat rate, as opposed to the standard Italian tax bracket. You are not required to report any non-Italian assets.

This is also an option for people who are still working provided they have at least one pension income source.

New provisions of the Inbound Workers Tax Regime

The Italian government recently approved some changes to the Special Tax Regime for Inbound Workers.

Workers that meet a high level of specialization who have not also been a tax resident of Italy during the prior three fiscal years qualify under the new rules. They enjoy a 50% tax exemption on up to 600,000€ of income for a duration of five years. If you leave Italy sooner than four years, you will owe taxes on the income that was previously exempted.

If you move to Italy with a dependent minor and apply for this scheme, the deduction will be 60% instead of 50%.

Contact Nicolo to Obtain Residency in Italy

Immigration and tax strategy should always be planned together, and Nicolo happens to be an expert in both. He has been helping foreigners move to Italy for over a decade and can help you design and implement a cohesive strategy around you, your family and your taxes.