Offshore Investing in Italy

Invest in one of the most beautiful countries in the world.

Offshore investment is one the most effective ways to diversify one’s portfolio, tap into successful markets, and earn some tax benefits. One country in which investors are focusing their attention is the beautiful European country of Italy.

In this article, we will dive into why you should be thinking about making your next investment in Italy and what kind of assets in which you should invest.

Why Offshore?

One of the biggest draws to making offshore investments is the diversification. According to Modern Portfolio Theory, diversification is one of the cornerstones of a successful portfolio. In fact, diverse portfolios outperform a concentrated one. By owning a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular asset.

Offshore banking is another perk of making investments abroad. Many offshore banks offer high security, privacy, and work with high net worth individuals to make smart investments.  In terms of investment, banking offshore can help diversify your portfolio, protect your assets, and is the first step in moving your assets out of your country. Opening a bank account offshore also plays a key role in forming an offshore corporation, offshore SD IRA, or international trust. Many offshore banks offer investment opportunities, managed investment accounts, and foreign exchange services.

Why Italy?

Previously, Italy was never really a country in which to make a foreign investment. There has been a period of uncertainty towards foreign direct investments but the Italian economy has begun to recover. There has been a steady rise in the amount of investments being made, with investors creating companies in the European country and investing in existing Italian corporations.

Most of Italy’s economy is fueled by small and medium businesses, many of which are in the manufacturing or service sectors. There has been steady growth in the country in the last few years and investment flow has increased to $30 billion USD (€ 26.5 billion) in 2016. That made Italy the 15th largest foreign direct investment recipient in the world. In 2017, Italy was named the 3rd largest Eurozone economy. A lot of this is thanks to foreign investors.

The most attractive investments for foreigners are in real estate, tourism, and the food industry. You can read more about investing in Italian real estate below.

You may be wondering what’s in it for you. Some investors seek out offshore investment for the tax benefits. Some countries boast their title as a tax haven, a country or territory that offers tax incentives for foreign investors. These incentives benefit the investor as well as encourage growth of their own economy by attracting wealth from other countries.

The Italian government has created several tax incentives for foreign investors including tax deductions for investments in research and development. The deduction can reach up to 50% of income tax.

Other tax incentives include tax deductions for creating companies that employ local workers, the creation of intellectual property, and investing in startup or innovative companies.

Looking for Residency?

Many investors use their foreign investment to acquire residency in a new country. With residency, you may gain visa-free travel through the country and, in some cases, visa-free travel to other countries as well. If you are looking to gain residency in Italy, there is a way to gain a permit through an investment. The Investor Visa for Italy program was introduced in 2017 and applies to citizens of non-European Union member states.

There are a few different options for investors. They must meet one of the following requirements:

• Invest €2 million in government bonds
• Invest €1 million as a loan to an Italian limited company
• Make a €1 million charitable donation
• Invest € 500,000 into an innovative startup

To gain residency, the investor will also have to prove they have an annual income of at least €100,000 or €35,000 if the applicant makes a large property investment of around €300,000 to €500,000.

Alpen Partners and Expatriation

Together, with respected law firms in various regions of the world, Alpen Partners is advising its clients on expatriation issues. In a world of increasing tax pressure and professional mobility, expatriation has become one of the most efficient tools for asset protection and estate planning. Moving abroad can come along with an abundance of benefits that can affect your taxes, your investment portfolio, cost of living, and your lifestyle completely. As the cost of traveling becomes cheaper, the benefits of expatriation for financial reasons is more easily obtained.

Taking the leap and leaving your home country can be a big decision with tons of personal and legal steps. The hassle of navigating the legal process of expatriation can be reduced with the guidance of Alpen Partners . Each step requires assistance, including getting the passport, making sure everything is completed correctly regarding taxes, acquiring work permits, making investments, and more. No matter what expatriation route is chosen, it can be a powerful tactic to allow clients to gain better control of their financial and personal lives.

Investing in Foreign Real Estate

Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. In rare cases, immediate citizenship is offered after a high enough investment in real estate. This is especially attractive for those looking to expatriate or those who want to earn a second passport in order to extend the amount of visa-free travel that is possible. This can play a key role in offshore retirement or years of stress-free travel.

There are also a lot of tax benefits that come with investing in real estate offshore. In fact, it is one of the few ways that an American can legally keep some of their money offshore privately. When real estate is held directly in an investor’s name, as opposed to in a trust or LLC, the investment is not reportable.

The Italian real estate market has picked up as economy grows. Property transactions are increasing and prices are lowering. For the most part, Italy is matching with the real estate markets of the rest of the EU. In order to purchase property in Italy, the investors from non EU countries must have a valid residence permit. The exception would be citizens from countries with reciprocity. Citizens of the United States, for example, can purchase property because Italians can purchase real estate in the US.