Italy, an attractive destination for foreign investment and large donations
Here are a few reasons why people should consider starting their own business or investing in Italy in 2023.
First, Italy is one of the world’s top economies and markets. It is the 3rd largest economy in the Eurozone and the 8th largest in the world, with a population of more than 60 million and a GDP per capita of more than 30,000 dollars. Its domestic market has great potential: it offers countless business opportunities to expand businesses in strategic sectors such as logistics, tourism, renewable energies, green-tech and biotech projects. Italy is commonly known as one of the most industrialized countries in the world. Their reliable and developed production industry makes them a prime location for manufacturing. A key global player in manufacturing and export. For over 30 years, Italy has been the 2nd largest manufacturing economy in Europe, surpassed only by Germany, and is the 7th top manufacturer in the world, with 2.1% global manufacturing output.
According to the Global Attractiveness Index 2023, Italy reached 17th place, in the medium-low attractiveness range. In first place is, once again, Germany, with a score of 100, followed by the United States (94.7) and the United Kingdom (92.7). The positioning of Italy has improved significantly, recording the largest change in the ranking of the country since the creation of the Index.
A strategic logistics hub connecting global markets. Its strategic position, located in the heart of the Mediterranean Sea, makes Italy the main crossroads linking all of Europe. For this reason, it represents a key gateway to the European Market as well as to the close Northern African and Middle Eastern countries.
Primary exports for Italy include things such as metals and metal products, clothing and footwear, and motor vehicles. This industry alone contributed $314 billion to the national economy in 2018.
From a more sectoral point of view, according to the European Commission’s Report on economic, social, and territorial cohesion published in Dec 2021, Italy is the European country with the highest percentage of recycling of all waste (79.3%, double the EU average of 39.2%), as well as one of the most sustainable agriculture in Europe.
A highly competitive machinery sector and a strong ‘Made in Italy’ brand. Made in Italy is a driving force of the Italian economy: to invest in Italy means having access to its unique export know-how in sectors such as machinery and automation, fashion, design, and food. Italy has also opened up to foreign investment in sensitive sectors such as energy, networks, telecommunications and transport in recent years.
Excellence in R&D. Italy claims a strong network of research institutes, technological hubs, and innovative incubators, often linked to universities. An example is the big project that is being developed in the ex-Expo area, which is called Human Technopole, and will collect research groups, research centers, and core facilities focused on Genomics and Data Science.
An unparalleled cultural offer and the country brand. Italy is gifted with traces of a cultural heritage formed over 2,500 years. All of this, combined with its world-famous art, music, and food culture, gives the ‘Bel Paese’ an unrivalled quality of life. In fact, Italy is ranked 1st at a global level for UNESCO World Heritage sites (53), and it is one of the world’s top tourism destinations, with over 50 million visitors each year.
Finally, Italy is firmly open to foreign investment: Italy’s open economy welcomes investors. The country has implemented significant reforms to gain investor trust and confidence, including forming a high-level committee within the MISE. The Italian Trade Agency offers a “one-stop shop” for pre-investment information, business set-up support, and ongoing after-care for incentives and contracts.
Moreover investing in a genuine Italian company would allow you to gain experience in trading a Made in Italy product, which represents an incomparable added value to the investment, independently to the sector you will invest in.
Worldwide interest in Italy: why do people choose to live in Italy?
Italy covers 0.5% of Planet Earth, and 0.83% of human beings live there. Bio-climatic conditions are unique, and for this reason, Italy is the first country in the world in terms of biodiversity:
• It has 7,000 different plants, followed by Brazil with 3,000 plants;
• 58,000 animal species, followed by China with 20,000;
• 1,800 spontaneous grape varieties, followed by France with 200;
• 997 honey types, we have 1,227 globally;
• 140 wheat types, the United States has 6.
Italy has 70% of artistic and humanitarian heritage, while the remaining 30% is spread all over the planet. In conclusion, we dwell in the Garden of Eden, but not all Italians recognize and respect it.
Visa for investors and favorable tax break
This is the right time for investing in Italy! The 2017 Budget Law introduces in the Immigration Law a new “entry visa for investors” which will entitle foreign investors to an advantageous treatment, only provided that they will carry out a durable investment in Italy or a large donation involving benefits for Italian culture and research. The decree-law 19 May 2020, n. 34, reduced the minimum investment amount in the capital of an ordinary company from EUR 1,000,000 to 500,000, and from EUR 500,000 to 250,000 if in the capital of an innovative startup, respectively.
Investors and golden donors seeking to conduct their business activity in Italy will be allowed to enter and stay in Italy, initially for two years with the possibility of a three more years extension. The visa is also extendable to family members.
Moreover, if you move your fiscal residence to Italy you’ll also have a very favorable tax break applied only to the income earned abroad. This treatment is valid for a fifteen-year-long period.
Getting your visa is easy and quick: InvestorVisa.it is the service created to help you select the best investment or donation opportunity and manage all the bureaucratic procedures for visa and residence permits.
A ten-year tax reduction for non-EU entrepreneurs and investors ready to move to Italy to invest and work
Good news for non-EU entrepreneurs and investors willing to move their fiscal residence to Italy.
Those people’s incomes made in Italy as entrepreneurs, employees or working investors will contribute to the personal revenue only for 30% of the amount. For example, assuming an annual income of € 100K earned in Italy, the new resident will pay tax such as his income would be like € 30K!!!
This taxation preferential treatment will be even more favourable (it will drop from 30 to 10%) if the new residency is taken in one of the following areas: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicilia.
This tax break will be in place for 5 years of residency but it will be extended for 5 years more if the new resident has an underage child (including overage children if unemployed) or in case the new resident has bought his own flat or house during his staying or even a year before his transfer. In the last case, the percentage increases to 50% but it might even decrease to 10% if the new resident has at least 3 kids.
The following conditions are required for the applicant to access the favourable taxation plan, therefore the applicant:
1) will have to demonstrate residency outside of the Italian borders in the last two taxation periods before moving and has to plan to live in Italy at least for two years;
2) will practice his main job from Italy;
3) needs to be coming from a Country that has a “no double taxation deal” with Italy or an “exchange of tax information deal” with Italy (those countries are: Albania, Algeria, Saudi Arabia, Argentina, Armenia, Australia, Azerbaijan, Bangladesh, Barbados, Belarus, Brazil, Canada, Chile, China, Congo, South Korea, Ivory Coast, Ecuador, Egypt, United Arab Emirates, Ethiopia, Russian Federation, Philippines, Georgia, Ghana, Japan, Jordan, Hong Kong, India, Indonesia, Israel, former Yugoslavia, Kazakhstan, Kuwait, Lebanon, Macedonia, Malaysia, Morocco, Mauritius, Mexico, Moldova, Mozambique, New Zealand, Oman, Pakistan, Panama, Qatar, Senegal, Singapore, Syria, Sri Lanka, United States of America, South Africa, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, Uganda, former Soviet Union, Uzbekistan, Venezuela, Vietnam Zambia)
4) has to hold at least a Bachelor’s Degree and needs to be an employee, a self-employed or an entrepreneur abroad in the last 24 months.
7% tax only, for 10 years, for non-EU retirees willing to move to Southern Italy
Italy also attracts foreign retirees who want to choose a country other than their own to spend their old age. How? With a sharp tax reduction on all income generated abroad; not only on pensions but also, for example, on real estate income, equity profits, annuities, etc.
The tax on all these incomes will be 7% for ten years.
These advantages are also expected by Italians who want to return to Italy and EU citizens, but here we only look after non-EU citizens. Let’s see in detail the conditions that must be satisfied by a foreign pensioner who wants to move to Italy:
– he must hold a pension paid by a foreign state;
– his last tax residence has to be in a State which signed a no double taxation agreement with Italy (the TIEA – Tax Information Exchange Agreement or subscription of the Council of Europe/OECD Convention on Mutual Administrative Assistance in Tax Matters);
– he must not have had a tax residence in Italy in the past five years;
– he must obtain an entry visa for Italy (e.g. investor visa, elective residence);
– he must transfer his tax residency to a Municipality with less than 20,000 population in one of the following Southern Regions: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, and Puglia. This means that he must reside in the chosen municipality at least 183 days a year.
This tax break is established by Article 24 of the Consolidated Income Tax Act which, indeed, declares a substitute tax regime for all income produced abroad at a rate of 7%. The rule also provides an exemption from any bureaucratic fulfillment related to activities held abroad.
Moreover, it should be remembered that the newly resident pensioner who receives income from different states will also be able to choose the states for which he wants to apply for the benefit.
Please note: all those conditions need to be observed to access the above tax break. The non-EU entrepreneur and investor, to move the fiscal residency to Italy, needs an entry visa as employed or self-employed and practice from Italy, because the tax break is available in this case only. People with elective residency or business permit only, for example, are not eligible for it.
Visa for self-employment/business owner and “ITC” visa
Investor Visa Italy extends the “investor visa” program to the new proposals for the purchase of industrial, artisanal, and commercial properties.
This type of investment is aimed at:
1) Non-EU entrepreneurs (individuals) who want to set up their own business in Italy and obtain an entry visa and a residence permit for “self-employment/entrepreneur”;
2) Non-EU companies that want to establish an office or a branch in Italy and obtain an entry visa and an “ITC” residence permit for their managers or partners.
There are more than 100 properties which are located in all regions of Italy.
Investment amounts range from a minimum of EUR 500,000 and, in some cases, may exceed EUR 10 million.
LIVING AND DOING BUSINESS IN ITALY
A Guide provided by the Italian Notariat