To increase the flow of investment and new capital from abroad, measures have been taken to improve the environment for foreign companies and investors.
- Judicial system:
Specialised courts for commercial disputes were made operational (2012), new instruments were introduced to facilitate out-of-court mediations between debtors and creditors (in particular with reference to the reform of corporate bankruptcy law). Law 206/2021 reformed the civil process with the aim of simplifying the requirements and speeding up the deadlines imposed on the parties and the judge. This reform aims to achieve a 40% reduction in case lengths, as envisaged in the National Recovery and Resilience Plan (NRPP).The values as of 30 June 2023, compared with those of 2019, indicate a reduction of trial time to 19,2% in the civil sector. (source: Ministry of Justice Newpaper)
- Tax system:
It went in two directions: a) improving dialogue with the taxpayer and encouraging voluntary tax compliance; b) reducing the tax burden, stimulating investment and innovation.
- Under the first profile, the Revenue Agency’s (Agenzia delle Entrate) aim has been to move away from the view of being a mere ‘tax collector’ and to ensure a consensual and participatory dialogue with taxpayers, thanks to the implementation of three main tools: preventive agreements for companies with international activities, a collaborative compliance regime, and an interpello on new investments.
- Under the second profile, instruments were introduced to promote growth and foster investments, especially innovative ones. Among the main measures: the Patent box regime (tax incentives linked to intellectual works and industrial patents) and Tax credit for investments in capital goods (incentives for the technological and digital transformation of enterprises), a facilitating tax measure aimed at supporting and incentivising enterprises that invest in new, tangible and intangible capital goods functional to the technological and digital transformation of production processes.
- Under the second profile, the Revenue Agency’s (Agenzia delle Entrate) has set up a special tax regime for new residents with the aim of stimulating investment in Italy by attracting wealthy individuals. Individuals who transfer their tax residence to Italy can apply a substitute tax to their foreign income, amounting to €100,000 for each tax year, in lieu of Italian income tax. The option is valid for a period of 15 years and can be extended to family members by paying a substitute tax of €25,000 per member on their foreign income. Taxpayers can access the regime by submitting a prior appeal to the Agency or by exercising the substitute tax option in their tax return. (The Revenue agency – Tax-incentives-for-attracting-human-capital-in-italy)
- Industrial System:
The National Transition 4.0 Plan, an evolution of the Industry 4.0 Programme, was the first brick on which the Italian Recovery Fund was founded. The investment consisted of some EUR 24 billion for a measure that has become structural and that has seen the strengthening of all deduction rates and an important anticipation of the timeframe. The National Transition 4.0 Plan has two fundamental objectives: Stimulate private investment; Give stability and certainty to companies with measures that take effect from November 2020 to June 2023.
With the Budget Law 2023 (L.n.197/2022), it was confirmed to refinance a series of measures related to the Transition 4.0 Plan and to extend investments to facilitate the technological and digital transition of businesses until 31 December 2025 and, in some cases, until 30 June 2026.
In particular, the Plan foresees an increased focus on innovation, green investments, and design and aesthetic conception activities.
Main actions:
– Tax credit for investments in capital goods
To support and incentivise enterprises investing in new tangible and intangible capital goods functional to the technological and digital transformation of production processes destined for production facilities located in the territory of the State.
– Research, development, innovation and design tax credit
To stimulate private expenditure in Research, Development and Technological Innovation to support the competitiveness of enterprises and to favour the processes of digital transition and in the circular economy and environmental sustainability.
Decree-Law 39 of 29 March 2024 approved the New Transition 5.0 Plan, which aims to support investments in digitisation and the green transition of companies through an innovative tax credit scheme. The Plan provides for an automatic tax credit for companies, without the need for a preliminary assessment, with the aim of incentivising investments in tangible and intangible assets, provided that a reduction in energy consumption of the production unit of at least 3 per cent (or 5 per cent if calculated on the process involved in the investment) is achieved. In addition, investments in new capital goods necessary for the self-production of energy from renewable sources and expenditure on employee training aimed at acquiring or consolidating skills in technologies for the digital and energy transition of production processes will also be eligible.
At the centre of attention is the need to facilitate as much as possible the approach of foreign investors to the Italian market, through a visa policy that provides specific and dedicated tools. Among the various measures set up to this end are entry visas dedicated to foreign entrepreneurs. (See also: Entry and stay in Italy and Facilitations for attracting foreign investments).
– Business visa: allows the holder to stay in the Schengen Area for up to three months in order to conduct negotiations and develop economic-commercial relations. With regard to the processing time for business visa applications, the Farnesina has set a service quality standard of 48 hours.
– Investor Visa (Investor Visa for Italy): introduced by Interministerial Decree 21 July 2017 is one of the most recent innovations in this field. This new type of visa, with a two-year duration renewable for three years, is dedicated to foreign citizens from non-EU countries who intend to make a significant investment or philanthropic donation in strategic assets for the development and competitiveness of the Italian System. Decree Law no. 34 of 19 May 2020 halved the minimum investment thresholds in innovative companies and start-ups required to access the programme. The visa procedure is centralised, digitalised and accelerated. Applications are screened by the Investors Visa Committee, which is responsible for verifying the suitability of the substantive and formal requirements regarding the nature and effectiveness of the entrepreneurial activity to be launched. Following the Committee’s approval, consular offices abroad ascertain the remaining requirements for issuing the visa.
Regulatory references:
– DECREE-LAW no. 34 of 19 May 2020, art. 38, paragraph 10
– LEGISLATIVE DECREE no. 286 of 25 July 1998, art. 26-bis, paragraph 1, letter b)
– Investor Visa for Italy: how it works
– MIMIT website – Investor visa
– LAW 26 November 2021, n. 206
– LAW 29 December 2022, n. 197
– Decree-Law n. 39 of 29 March 2024
Useful links:
https://www.incentivi.gov.it/it
https://www.agenziaentrate.gov.it/portale/web/english
The will to make Italy an increasingly attractive country for foreign investment and to facilitate the investors’ approach to the Italian market is accompanied by the need to protect strategic sectors from predatory takeovers through the exercise of special powers by the Government in defense of sectors of national interest.
For more information on the Golden Power rules
http://www.governo.it/it/dipartimenti/dip-il-coordinamento-amministrativo/dica-att-goldenpower/9296