Residence in Italy

There are only two ways to obtain a residence permit in Italy: an investor visa and obtaining elective resident status.

Investor visa

Foreign citizens became able to obtain a residence permit through investing in the Italian economy back in 2017.

The legislation of the country provides for three options for enrollment in the program:

• Investing in government bonds of at least EUR 2 mln for a period of at least 5 years.
• Investing EUR 500,000 in the assets of Italian companies or in companies that position themselves as innovative startups. In the latter case, the amount of investment must exceed EUR 250,000.
• Donating at least EUR 1 mln to the development of projects that are socially significant for Italy.

A foreign citizen must apply for a visa before obtaining a residence permit. The application is made through the state online portal. The application for a visa is reviewed within 30 days (if a complete package of documents is submitted). The investor receives a letter that permits to obtain an investor visa upon the approval of the application.

The foreign citizen is obliged to register with the police department within 8 days after arrival in Italy. This must be done in order to obtain a long-term residence permit. This permit is called Permesso di Soggiorno, a single legal document confirming legal stay in the country. An investor applying for a residence permit may include their close relatives (spouse, children, and parents) in the application.

The Italian residence permit is valid for 2 years. After its expiration, the permit can be extended for another 3 years (if the investments are maintained).

Elective residence

This status allows non-EU citizens to legally stay in Italy. The elective resident status does not grant the right to employment. To obtain this status, a foreigner has to confirm their financial sustainability.

The procedure for obtaining an elective resident status consists of two stages:

• obtaining an immigrant visa type D;
• registration with the local police department

The consulate of Italy issues a long-term visa. The application is submitted to this state organization.

The application of a foreign citizen is reviewed 90 to 120 days. The procedure cannot be expedited. It is important to understand that the consul can request additional documents from the applicant. Once the type D visa has been issued, the status applicant must register with the police department. This must be done within 8 days from the date of arrival in Italy.

The elective resident status is granted for a year. This status can be renewed if the individual has been in Italy for at least 6 months in a row. If the foreign person has been living in Italy for 5 years or more, they are entitled to apply for permanent residence.

Special tax regime for new residents

Tax residents of Italy (regardless of the way they obtained a residence permit) can benefit from the new tax regime. This regime has a lot of advantages, the main ones being the following:

• profits from transactions with foreign counterparties are not subject to standard taxes. In this case, the resident pays a fixed amount – EUR 100,000 per year;
• foreign assets are exempt from inheritance taxes;
• exemption from Italian CFC rules for foreign companies.

The above tax benefits are valid for 15 years. Solvent and economically active relatives of the main taxpayer may also enjoy these benefits. Another EUR 25,000 must be paid for each adult family member as an annual tax.

There are two ways to take advantage of the tax benefits: before becoming a tax resident or right after this procedure. An application for switching to a preferential tax regime is reviewed within 120 days. However, this period may be extended by a maximum of 60 days if additional information is submitted.