Antonello Corrado

Emanuele Cretaro

 

This legislative provision (for further details see Dr. Simone Maria d'Arcangelo's newsletter), aimed to attract and encourage the transfer of residence in Italy of individuals with high earning potential, provides that, as an alternative to the ordinary legislation (regulated by Article 24 of the Consolidated Income Tax Law)¹ , is applied to the alien a special tax regime and in some cases particularly favorable.

The optional regime, accessible also to persons who have not resided in Italy at least nine of the ten tax periods preceding the beginning of the validity period of the option and also those of the so-called "black list" countries, allows to pay a tax of Euro 100,000.00, in lieu of the income tax on individuals for incomes produced abroad (except for capital gains on transfers of qualified participations to foreign subjects, made within five years from the transfer in Italy).

For the income produced in Italy, however, ordinary income tax rates and rules apply.

Taxpayers who meet the requirements can join the new regime at the time of submission of the tax return, related to the tax period in which the fiscal residence was transferred in Italy or in the period immediately after.

The indispensable prerequisite for applying the rule is to obtain the tax residence in Italy

The tax residence in Italy is "in fact", where the alien is present in the Italian territory for at least 183 days during the solar year or it is "lawfully" obtained, if the alien is registered in the register of the resident population held by the municipality at which the alien set his domicile. In both cases, the party concerned with the tax benefit will have the duty of fulfilling the declaratory obligation in Italy and will send an application for a request allowing a prior assessment by the Financial Administration about the eligibility under the preferential scheme.

The registration as a resident is granted to EU citizens who have a home in Italy based on the principle of free movement and establishment.
For non-EU foreigners, residence can be obtained following a residence permit in Italy of a duration of more than 90 days, "Long-stay Visas or National long-stay Visas".

It is clear that the subjects interested in the tax benefit consisting in paying a substitute tax of Euro 100,000.00 and therefore having a particularly significant income abroad, will be "wealthy" persons and in the most of cases interested in entry and residence in Italy for high profile reasons, business or professional activities, to make investments or to set up in Italy the elective residence, requirements that correspond to the following categories of National long-stay Visas:

• Self-employment for:
  (i) working as a freelance professional, or
  (ii) carrying out a business activity, or
  (iii) Hiring of company figures (also Start Up);
• High-profile employment or for particular cases;
• Significant investments in various economic sectors;
• Choice of Italy as an elective residence.

Visa for "self-employment"

The self-employed visa allows entry for long-term, fixed-term and renewable stay, to an alien who intends to pursue a professional or non-employment activity.

The stay in Italy of non-EU foreign workers who intend to conduct a non-occasional self-employed activity in the territory of the State may be allowed if the exercise of such activities is not reserved by law to Italians, or citizens of one of the Member States of the European Union.

An alien intending to conduct an industrial, professional, craft or commercial activity in Italy, or to constitute companies or partnerships or access to managerial positions, must demonstrate (a) that he has adequate resources to carry out the activity he intends to undertake in Italy; (b) possess the qualifications laid down by Italian law for the exercise of the single business, including, where required, the qualifications for registration in professional associations and registers, (c) have an attestation of the competent authority on a date not earlier than three months declaring that there are any grounds for obtaining the authorization or license foreseen for the exercise of the activity the alien intends to carry out.

To obtain this type of visa, a foreign citizen must prove:

• The availability of suitable housing;
• The perception of an income derived from legitimate sources of an amount higher than the minimum required by law;
• The temporary entry clearance, issued by the territorial competent Police.

Additional documents are required for each categories of Visa:

• In the event that the entry visa is intended for the office of President, member of the Board of Directors or a statutory auditor of companies limited by shares, limited liability or limited partnerships with share capital already in operation for at least three years, furthermore, are requested:
  (i) the company's registration certificate in the business register;
  (ii) a copy of a formal statement of liability, previously issued or sent by the legal representative of the company to the competent Provincial Labor Office;
  (iii) a statement by the legal representative of the company who assures, in favor of the applicant, an amount exceeding the minimum level provided for by law for the exemption from participation in healthcare expenditure.

In such cases, no attestation is required regarding the financial parameters referred to in paragraph 3 of art. 39 of Presidential Decree No. 394/1999².

• As regards foreign athletes who are required to carry out sports performances of self-employment, professional or amateur sporting activities, the presentation of a nominative declaration of consent by the Italian National Olympic Committee is required.
• As regards the entertainment sector, the entry visa for self-employed work is granted only in favor of foreign artists of highest repute, or with high level and well-known professional qualification, and artists or bands engaged by famous theaters, the national public broadcasting company of Italy known as RAI, private television broadcasters or public institutions of particular relevance.
  The requirements and conditions for obtaining a visa in this case are:
  (i) the deposit of a copy of the self-employment contract;
  (ii) the issue of a copy of a formal responsibility statement indicating that no subordinate employment relationship will be established under the contract;
  (iii) obtaining a provisional authorization for the purposes of entry issued by the territorial competent Police;
  (iv) the availability of suitable housing.
• With regard to Startups, they may apply for a visa for self-employment Startup, non-EU foreign nationals who intend to set up and start in Italy an innovative Startup company as defined by Art. 25, paragraph 2 of Law Decree 179/2012 - also using the reception services offered by the certified incubators in Art. 25, paragraph 5, of the same Law Decree.
  The procedure for issuing a visa is light and simple and is based on the assessment of the efficiency of Startup initiatives by a Technical Committee established by the Ministry of Industry and Economic Development, which also takes into consideration the reception services offered from the certified Startup Business Incubators, hosting and supporting the business ideas that have a high potential of economic return.
  Among the requirements for getting Startup Visa, in addition to the basic need to make an innovative Startup, there is an obligation to demonstrate the availability of financial resources of not less than 50,000.00 Euro (through funding from venture capital funds or other investors, or obtained through crowdfunding, or still issued by governmental or non-governmental Italian or foreign bodies).
  Special facilities are also provided for aliens who have received the availability of a certified incubator to receive them at their facilities for the creation of an innovative Startup.

Visa for "subordinate employment"

The visa for subordinate employment allows entry to an alien who is called to work in subordinate employment in Italy for a short or long term stay, fixed or indefinite.
For the purpose of issuing the visa, the Single Desk for Immigration will communicate to the competent diplomatic - consular representation, its authorization.
This authorization must be used for the purpose of issuing a visa within six months of the date of issue.
In order to obtain a clearance, the foreign subordinate worker must submit the following documentation:³

• The nominal request for work authorization;
• Suitable documentation showing the availability of housing;
• The residence permit proposal specifying the relevant conditions, including the payment commitment by the same employer for the return costs of the foreigner to the country of origin;
• Declaration of commitment to communicate any variation concerning the employment relationship.
• For managers or highly qualified staff of companies with head offices or branches in Italy or representative offices of foreign companies having their main business offices in the territory of a Member State of the World Trade Organization or headquarters in Italy of Italian companies or companies of other Member States of the European Union, the work authorization is replaced by a notice by the employer of the proposal for a subordinate employment contract⁴.
  The notice is presented at the single desk for immigration, which verifies if there is any reason to deny the entrance of the alien.
  Within eight days of arrival in Italy, the alien goes to the single desk for immigration, together with the employer, to sign a residence contract and to apply for a residence permit⁵.
• For employees who are regularly paid by employers, natural or legal persons, resident or having their own overseas offices and paid directly to them, who are temporarily transferred from abroad to natural or legal persons, Italian or foreign, resident in Italy, in order to carry out in the Italian territory certain services contracted between the aforementioned natural or legal persons, in the case of employees of natural or legal persons resident in a Member State of the European Union, the work authorization is substituted with a communication by the contractor of the contract under which the service is provided.
  Together with that communication, the employer must issue a statement attesting to the regularity of their situation with reference to the conditions of residence and employment in the Member State of the European Union in which the employer is domiciled.
• The visa to work in Italy in the field of health professions is subordinated, in addition to satisfy all the above mentioned requirements, even by the prior recognition of the qualification by the Ministry of Health.
• For workers employed in diplomatic or consular representations or international law bodies with headquarters in Italy or diplomatic officials, visa applications must be made by verbal note for diplomatic channels, and the granting of a visa is always subordinated to the acquisition of prior authorization of the Ministry of Foreign Affairs.
• For the purpose of issuing a visa for teachers of foreign schools and universities operating in Italy, the single desk for immigration shall inform the competent diplomatic-consular representation of its clearance.

Visa for "elective residence"

The visa for elective residence allows entry into Italy for the purpose of stay, to an alien who intends to settle in our country and is able to support himself without any work.
To this end, the alien must provide adequate and documented guarantees about the availability of a house to be resident and of large autonomous, stable and regular resources, which can reasonably be expected to continue in the future.

Entry and stay for investors

Entry and stay for periods of more than three months are also allowed to aliens who intend to carry out:

• an investment of at least Euro 2,000,000 in bonds issued by the Italian Government and maintained for at least two years;
• an investment of at least Euro 1,000,000 in equity instruments of a company incorporated and operating in Italy maintained for at least two years or at least Euro 500,000 in the case of such company is an innovative start-up included in the special section of the business register;
• a philanthropic donation of at least Euro 1,000,000 in support of a public interest project in the areas of culture, education, immigration management, scientific research, cultural and landscape heritage recovery.

Procedural details

The alien applying for the visa must, usually, personally address to the Diplomatic Representative - consular jurisdiction in the country where he is habitually resident, in order to be heard about the reasons and circumstances of the stay and to lodge all the documentation required, briefly described above.

In order to complete the application, most of documents and certifications will be required to be prepared in Italy and they may change depending on the type of visa you are requesting. An example list indicated here below:

• the approval of the Police;
• the full registration certificate of the company in the business register;
• a statement by the legal representative of the company who provides for the applicant an amount greater than the minimum level prescribed by the law for exemption from participation in healthcare expenditure;
• approval of the conferral of corporate and relative emoluments;
• a contract for the purchase or lease of a building; or a statement concerning the availability of a property made pursuant to art. 2 and 4 of Law No. 15/1968;
• the documentation attesting the availability of a sufficient income to self-support for the year preceding the visa application;
• the statement relating to the identification of the resources necessary for the business, commercial or crafts to be undertaken, issued by the Chamber of Commerce competent for the territory in which the business is carried out;
• a certificate attesting the enrollment to Registries;
• pending proceedings and criminal record of the potential employer.

All the complex and bureaucratic proceedings described require a strong and constant coordination between the applicant for visa, the Italian authorities in the place of residence of the applicant and the Italian authorities present on the Italian territory, competent for issuing the documents required for the granting of the visa. The know-how of the subject and the overall view of the proceedings and its phases and aims requires a proper assistance and advice, both before and during the conduct of the proceedings.

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¹Which provides that in respect of non-residents, the tax is calculated by applying the rate on the total income generated by them.

²"Even for activities that do not require the issue of a qualifying or authorizing title, the alien is required to acquire at the competent Chamber of Commerce, Industry, Craft Trades and Agriculture for the place where the self-employed activity must be carried out or at the competent Professional Order, the attestation of the benchmarks regarding the availability of the financial resources required for the exercise of the activity".

³The work clearance is dismissed if the employer is sentenced in the past five years for: (i) facilitating illegal immigration or for crimes concerning the recruitment of people to be prostituted or exploited by prostitution or children to be employed in illicit activities; (ii) illicit brokering and labor exploitation; (iii) offenses involving the use of third-country nationals whose stay is irregular.

⁴This contract is drawn up pursuant to Article 5-bis of Law Decree No. 286/1998 which provides that:

Residence contract for subordinate employment.

• The subordinated employment contract drew up between an Italian or foreign employer who is regularly resident in Italy and a employee who is a citizen of a non-EU Member State or stateless person contains:
  • the employer's guarantee of the availability of housing for the employee who falls within the minimum parameters provided for by the law on public housing;
  • the employer commits to pay the travel expenses for the return of the employee in the country of origin.
• The contract that does not contain the declarations referred to in points (a) and (b) of paragraph 1 is not valid for the issue of a residence permit.
• The employment residence contract is signed in accordance with Article 22 in the single desk for immigration of the province in which the employer resides or has his registered office or where the job is to take place according to the modalities provided for in the Implementing Regulation.

⁵These provisions apply only to employers who have signed with the Ministry of the Interior a special memorandum of understanding with which the same employers guarantee the required economic capacity and compliance with the requirements of the collective agreement stipulated by the Italian law.