When the boost to economic growth comes from abroad

The attraction of Foreign Direct Investment (FDI) always constitutes a key goal for policymakers, due to its undisputed relevance in fostering local economic development. As a matter of fact, FDI improves the productivity levels of an area and/or of a sector, creates employment, generates knowledge transfer in terms of technological, organizational and managerial expertise, as well as increasing the local export capacity.

In the Lombardy region alone, “active” internationalization (namely the foreign subsidiaries of companies from Lombardy) accounts for 33,5% of the foreign subsidiaries of Italian companies, while “passive” internationalization amounts to 46,8%. According from a study carried out by the Milan Chamber of commerce based on data provided by Reprint-r&p and Politecnico di Milano, Milan is the Italian province with the highest number of Italian multinational corporations and Italian companies with stakes held by foreign multinational corporations (4.556 companies, employing 255.600 people and generating a €59,7bn turnover).

From now on, investing in an Italian company is going to be much easier and more advantageous, thanks to the “Residence Visa for Investors”, a new entry visa and residence permit that allows free movement within the Schengen Area. In addition, the owner will benefit from heavy tax reliefs that will be accessible through fast and certain procedures.

The measure is conceived for non-EU citizens who will finalize an investment for at least €1 million in the equity of an Italian company, or €500.000 if the recipient is an innovative startup. However, it will not pertain exclusively to productive activities, but it will offer the same benefits also to those who will invest at least €2 million in government bonds (provided that they retain the investment in their portfolio for no less than two years) or in philanthropic deeds, in order to contribute to the preservation and valorization of the Italian cultural heritage.

In addition, those who decide to transfer their residence in Italy will be entitled to opt for a €100.000 flat tax on foreign income. This fiscal treatment is effective for 15 years and its benefits can be extended to the applicant’s relatives as well, allowing them to pay only €25.000 per year even when their income is higher than €1 million.

These are the new measures on FDI attraction introduced by the Consolidated Law on Immigration. In order to apply for the visa, foreign investors will have to send the required documents online to the Secretariat of the Committee, which will grant the authorization within 30 days. The beneficiary will then have to apply for the visa at their Consulate and, within 8 days from his/her arrival in Italy, require an investors’ residence permit at the central police station. Starting from this moment, the investor has 3 months to send to the Secretariat of the Committee the documents concerning the investment or the donation. The visa is valid for two years and can be extended for an additional three-year period upon request.

Thanks to this innovation, foreigners will find it even more convenient to invest in the “Bel Paese” and in Lombardy, homeland of the Italian SMEs.