We explore the Italian Investor Visa, highlight recent developments including the legal changes on the 14th of September 2020 and assess whether the residency by investment programme has any better odds now at channeling FDI into Italy.
Italy is unique and bears undeniable individuality. It is well known for its art, ancient architecture, beautiful scenery, music, balmy weather and its exquisite cuisine. Being the 3rd (most likely 4th now post Covid) largest economy in the Eurozone, the ~8th largest in the world, with a GDP of about 2 trillion dollars (IMF, 2016) and a major center for world trade dealing in exporting world renowned exports like Ferrari, Italy offers excellent investment potential. In May of this year, the Italian Investor Visa was modified and earlier this week on the 14 of September 2020, new legislation was passed on the Italian Investor Visa.
The Italian Investor Visa
Introduced in 2017 the Italian Investor visa and residence permit was brought in to lure foreign high net worth individuals who are seeking residence in Italy thereby creating a breeding ground for investment. Sadly, the programme never truly took off as it was poorly structured and could not compete with more attractive Greek, Spanish and Portuguese golden visa alternatives, so thus far it has had very little traction.
Reductions in the Italian Investor Visa requirements
With Covid19 having taken a toll on economies around the world and with Italy being one of the worst hit, foreign investment into the ‘Bel Paese‘, has been severely impacted.
In a bid to preserve the Italian economy from further damages as a result of the pandemic, the government implemented a Law Decree No. 34 on 19 May 2020 to attract more foreign investment by making changes to the Investor Visa.
The decree created a 50% reduction in the minimum investment required from EUR 1,000,000 to EUR 500,000 and from EUR 500,000 to 250,000 respectively. In summary;
- At least EUR 250,000 in equity instruments of innovative start-ups incorporated in Italy; or
- At least EUR 500,000 in equity instruments of companies incorporated and operating in Italy; or
- At least EUR 2 million in Italian Government Bonds; or
- Philanthropic donations of at least EUR 1 million, in the field of culture, education, immigration, scientific research, recovery of cultural assets and landscapes.
In addition, several advantageous tax breaks are offered to foreign investors who decide to move their fiscal residence to Italy. The aim of this is to draw in both investors and entrepreneurs keen to do business in Italy.
When the Investor Visa is granted, the foreign investor is granted rights to enter Italy and may apply for the residence permit on the basis that they fulfill one of the investment requirements above within a timeframe of 3 months from the date of arrival.
Once issued, the permit lasts for a period of 2 years and the foreign investor is eligible to work in Italy as a subordinate or autonomous worker. In the event that the investment has been fully executed and not been withdrawn, the permit can be renewed for 3 years. This permit is also extendable to family members.
After 5 years, if the investor wishes to prolong his/her stay in Italy, he/she can apply for a 3 year permit renewal again or apply for an indefinite residence permit (Permesso di soggiorno UE per soggiornanti di lungo periodo). In the latter case, once approved for an indefinite residence permit, there would be no need to meet any investment criteria or be subject to periodic renewals.
Read more: The Ever Growing Investment Migration Industry
Legal Developments to the Investor Visa as of 14 September 2020
Further to the Law Decree No. 34, the Italian government recently enacted another change to the Investor Visa under Law No. 120/2020. It aims to make the residency by investment programme more attractive and expand the applicant pool for this visa.
Key changes brought about by Law Decree No.34 are:
- Individuals may now invest through a corporate entity established abroad that is controlled by the applicant and which he/she can represent (e.g. as director).
- The applicant no longer needs to sign the integration agreement (accordo di integrazione) under which they undertake to complete specific linguistic, civic and social commitments during the validity of their residence permit;
- There is no minimum amount of time that the investor must reside in Italy in a specific year to uphold their immigration status as Investor Visa permit holders.
Evidently this makes the Italian Investor Visa a comparatively more attractive proposition than it previously was, as it offers a more affordable route to residency in Europe, but investing in start-ups comes laden with risks. Too many risks perhaps?
It is too early to know if the Italian Investor Visa will have any traction versus the other European golden visa programmes on offer to high-net-worth individuals but the mere fact that the recent bout of changes did not amend the program to offer a brick-and-mortar real estate investment option means it will likely continue to be the ‘ugly duckling’ in a room of more attractive residency by investment programmes.
