Italy’s new residency programme designed to attract wealthy foreign investors without exposing them to progressive income tax on global earnings is expected to draw an increasing number of applications this year, as awareness of the scheme, and the benefits of owning or renting central European property become more widely known, according to experts.
The New Resident Regime, unveiled by Rome in 2017, charges an annual flat tax of €100,000 (US$114,000) on worldwide income, plus an additional €25,000 per adult family member for foreigners seeking to take up residence in the country.
Olderigo Fantacci, partner at accounting firm Deloitte Asia-Pacific International Core of Excellence (AP ICE), said the flat tax scheme, along with Italy’s other tax schemes, gives high-net-worth individuals the incentive to set up residency in Italy without being subject to its progressive income tax on foreign-sourced income.
“The elective visa has been established for individuals who would like to purchase or rent real estate in Italy with no minimum limit, which is different from the real estate investment visa offered in other countries, and it permits them to move their residency in Italy,” Fontacci said.
Francesco Vitali, tax senior manager at Deloitte AP ICE, said that unlike other “golden visa schemes”, Italy’s visa requirements and beneficial tax regime add up to a better deal, partly because investors don’t need to pay a large upfront sum in the form of a property purchase.
“Another important advantage of purchasing or renting real estate in Italy is that the individual would be holding a valuable asset in the heart of Europe that could be used for personal reasons or general life investment instead of an asset bought merely for other motives and not concretely used over time,” said Vitali. “It could be a regime that attracts Hong Kong and mainland individuals who want to move their residency to a European country to benefit on all the related advantages without incurring heavy taxation.”