Residence Permit for Financially Independent Individuals in Italy

Nowadays, the desire to provide oneself with a dignified old age is not something extraordinary. People with a fairly high income in their country of residence can plan and foresee in advance how they will spend their old age. For this purpose, many choose Italy, which is the cradle of world art, it fascinates with its beauty and good-natured hospitality.

To become the proud owner of a residence permit for financially independent citizens, you need to go through one of the most difficult procedures and comply with all the requirements in accordance with Italian law. The grounds for obtaining a residence permit (permesso di soggiorno) on the grounds of "Residenza elettiva" are contained in the Decree No. 394 of August 31, 1999. It should be noted right away that not everything is as cloudless as it seems at first glance. Before making such an important decision, it is worth weighing the pros and cons.

Conditions for obtaining a residence permit for financially independent persons:

1. Your passive income must be 400% IPREM, which is at least 31,000 EUR in 2020. If the rest of the family members also wish to move to Italy, the amount will increase by 20% + 5% for each child (approximately 7000 EUR for each family member). The applicant should receive passive income in his country consistently and constantly, the income should not depend on daily activities. Passive income can include annuities, royalties, dividends, lifetime pension, rental income, confirmation of bank accounts, membership/shareholder membership of a legal entity, royalties, etc. This amount is not fixed, but as practice shows, the higher the income, the more likely it is to get a positive decision.
2. Presence of a bank account in any bank in Italy. There is no specific amount but in practice, it should start from 40,000 EUR.
3. The law does not oblige you to have your own real estate in Italy but you must have a long-term lease agreement. In fact, many believe that real estate will serve as a kind of basis for obtaining this residence permit, but this is a misconception.
4. Confirmation of a good reputation (there should be no previous convictions, criminal proceedings, problems with migration services, administrative offenses).
5. Availability of international medical insurance (from € 200-600 per year per person). Each family member should have such insurance.

There is also a reverse side of the coin, let's take a closer look at it.

Some nuances of a residence permit for financially independent persons:

1. Having such a residence permit, the applicant is not allowed to work in Italy, as well as to be engaged in entrepreneurial activity. This type of residence permit does not provide access to social insurance and free education. The holder of such a residence permit becomes automatically a tax resident of Italy. Taking into account the fact that there is a progressive tax rate in Italy, the applicant will have to pay the difference to the Italian state treasury. A tax resident in Italy is only required to tax income that is received in Italy.
2. This type of residence permit cannot be converted into another residence permit in Italy, although it is worth considering the fact that when living in Italy for 10 years, this period will be taken into account as necessary to obtain citizenship by naturalization.
3. With this type of residence permit, the applicant cannot apply for permanent residence (carta di soggiorno), even if he/she has lived in Italy for 5 years. Previously, all this could be done, and the percentage of the likelihood of obtaining a visa was quite high.

How to get a residence permit for financially independent persons?

The preliminary stage of obtaining such a residence permit is obtaining a D visa, for which you will need to provide all the necessary documents confirming a good financial condition. Within a week after crossing the border, you must apply for a residence permit, then the applicant and all family members must submit biometric data. Children under 12 years of age are exempt from taking biometrics. The processing time can vary from 1 to 5 months. If the answer is positive, a residence permit card is issued.

It is also worth noting that in practice, there is a very high failure rate, about 50% -60%. The reasons for this can be completely different, ranging from the submission of false data and up to fake documents. Refusal to issue a residence permit can be appealed in court within 2 months from the date of notification. We can say with confidence that this is the most unpredictable program that can play in your favor or cause additional costs.

This residence permit allows you to live in Italy all year round but you should be absent for no longer than 182 days. As a rule, a residence permit is issued for 1 year and is renewed annually by the police department. Any illegal actions (for example, non-payment of taxes) lead to the seizure of all assets that are located in Italy, which leads to a refusal to renew the residence permit. When renewing a residence permit, each time you need to prove the possibility of obtaining permanent passive income in your country to the Italian authorities.

A serious point in obtaining this type of residence permit for financially independent persons is the fact that it cannot be converted into a residence permit of another type, including a residence permit with the right to work. But a residence permit for work or family reasons can be converted into a residence permit of the chosen place of residence. The procedure is very simple, you just need to submit documents for conversion through the post office.

Do not forget that an applicant for this type of residence permit will pay such types of taxes in Italy as IVIE, IRPEF, IVAFE, and other taxes on dividends, shares, securities that he/she declares to obtain a residence permit. Local police departments do not deal with tax issues, as this is not within their competence. These issues are handled by the tax office (Agenzia delle Entrate), which fully controls financial receipts to the state treasury. Any type of residence permit cannot be the basis for becoming a tax resident in Italy. However, it should be noted that the Italian authorities consider the presence of real estate as a sufficient basis for tax residency.

When submitting documents for this type of residence permit, you should not mention income that cannot be confirmed, income from wage labor, or false income. The reasons stated in the letter of motivation must be clearly reasoned and not raise doubts among the authorities.

With this type of residence permit, you can get a discount on the purchase of your first real estate in Italy, facilitate access to a loan from a bank, and also register a car as your property. Each year, a certain number of quotas are established not only for applicants for this type of residence permit but also for those receiving it.

Do not forget that even if you have a sufficient amount of financial resources, you may not need a residence permit so much, as it entails a number of serious consequences. Obtaining this type of residence permit is primarily necessary for foreigners who spend most of their time abroad, who are aimed at moving to another country or living in it for a long period of time.

In fact, it is nothing more than a long-term tourist visa with capital investment. Considering the fact that it does not give any privileges, and even limits the scope of what is permissible, perhaps you should completely abandon this venture. It is better to think about obtaining a residence permit through investment when it is enough to invest 250,000 EUR in an innovative startup, and after 5 years you can apply for a permanent residence permit, and for Italian citizenship after another five years.