Relocating to Italy offers not only tax advantages but also a complementary relationship with Monaco

Various groups of wealthy individuals are leaving the UK to set up home in Italy, according to Silvio Battista of Battista Law Offices.

Italy seemed to be among the winners from the change in the UK tax regime for ‘non-dom’ residents. However, Giorgia Meloni’s government recently decided to almost double (from €100,000 to €200,000) the flat-rate tax on foreign income for the wealthiest individuals. This tax regime, which aims to attract large estates, whether Italian or foreign, has been in place since 2017. In the 2022 tax year, 1,136 wealthy individuals opted for this regime, according to the authorities.

Will Italy succeed in maintaining its tax appeal? Silvio Battista, Head of Planning at Battista Law Offices, and Robert Boisbouvier of Boisbouvier Law Offices, accompany them.

Is Italy succeeding in attracting wealthy families despite the increase in lump-sum taxation?

The government’s decision came as a surprise to experts, as it was taken without prior consultation. However, although the flat-rate tax has been doubled to €200,000, the other aspects of this tax regime have not been changed. The law can be amended within 60 days and will have to be approved by Parliament.

There have been several governments since 2017, but none has changed the tax system. Italy can therefore boast a degree of fiscal stability. At the beginning of 2024, a change was introduced, but it only affected new arrivals, without affecting those already resident in Italy, who continue to benefit from a more advantageous regime than the new one.

What were the reactions of those benefiting from flat tax?

I was able to speak to some of them. They were obviously surprised by the change, but after making enquiries, they realised that they would not be affected by the new measure.

The question concerns those who are planning to move to Italy in 2025 or 2026. Such a decision often involves several family members and is part of a long process. Despite the increase in the flat-rate tax, it remains attractive for many families to move to Italy thanks to the stability of the other elements of the tax system.

“Relocating to Italy is not only advantageous from a tax point of view”. Why not?

The lump-sum system also extends to family members. It lasts for 15 years and allows them to work in Italy. It also provides an exemption for gifts and inheritances involving assets located abroad. If a person wishes to transfer their assets to their children or other family members, this regime remains attractive.

Relocating to Italy offers more than just tax advantages. All Italian regions offer high-level services with various advantages. Just think of the connections offered by Milan, a city at the heart of Europe, or the quality of its schools, with some Italian universities ranking among the best in the world. All these aspects, taken together, make doubling the tax package a risky decision, but not necessarily an obstacle to relocating to Italy.

What categories of people are prepared to leave the UK to settle in Italy?

There are different categories of wealthy individuals. For example, partners in private equity companies, because the Italian tax system allows them to continue working in Italy, or very wealthy retirees whose assets are partly abroad and who receive stable income via trusts or foreign holding companies. Investors pay a flat annual tax of €200,000, but do not need to carry out administrative tasks (such as reporting) on all their assets. With the changes underway in the UK, many people are weighing up the pros and cons of moving to Italy.

What are the other main tax factors influencing this type of decision?

Wealth tax is the most significant aspect. If you are resident in Italy and own assets abroad, the ordinary regime requires reporting and payment of tax on assets abroad. With flat-rate taxation, however, this is not necessary.

Some people move to Italy without benefiting from lump-sum taxation and opt for the ordinary regime, because transferring a business to Italy is very advantageous. In Italy, business transfers are tax-free if the heirs or beneficiaries decide to continue the business for five years after the gift or inheritance. The authorities are considering explicitly extending this regime to companies located in the European Union.

Is there a synergy to be had with Monaco?

With the ordinary regime, where there is no need to report taxes on assets abroad, the duality between Monaco and Italy makes perfect sense. Not just from a tax point of view, but also in terms of lifestyle. This synergy combines the Italian art of living, with its rich culture and quality of life, with the cosmopolitanism of Monaco, a veritable business centre with flourishing economic interests. Monaco offers a cosmopolitan environment while benefiting from its proximity to Italy, creating a unique combination for wealthy families and entrepreneurs.

“La rilocalizzazione in Italia non offre solo vantaggi fiscali, ma anche una complementarità con Monaco.”

Intervista incrociata tra Robert Boisbouvier e il suo partner Silvio Battista.

Diversi gruppi di individui facoltosi stanno lasciando il Regno Unito per stabilirsi in Italia, secondo Silvio Battista di Battista Law Offices.

Italy seemed to be one of the winners of the change to the UK tax regime for “non-dom” residents. Tuttavia, il governo di Giorgia Meloni ha recentemente deciso di quasi raddoppiare (da 100.000 a 200.000 euro) il forfait fiscale sui redditi esteri per le persone più facoltose. Questo regime fiscale, che mira ad attrarre grandi patrimoni, sia italiani che stranieri, esiste dal 2017. Durante l’anno fiscale 2022, 1.136 persone facoltose hanno optato per questo regime, secondo le autorità.

Will Italy succeed in maintaining its fiscal fascination? Silvio Battista, Head of Planning at Battista Law Offices, together with Robert Boisbouvier of Boisbouvier Law Offices, will guide you.

L’Italia sta riuscendo ad attrarre famiglie facoltose nonostante l’aumento del forfait fiscale?

La decisione del governo ha sorpreso gli esperti, essendo stata adottata senza una consultazione preliminare. Tuttavia, sebbene il forfait fiscale sia stato raddoppiato a 200.000 euro, gli altri aspetti di questo regime fiscale non sono stati modificati. La legge può essere emendata entro 60 giorni e doitvrà essere approvata dal Parlamento.

Diversi governi si sono succeduti dal 2017, ma nessuno ha modificato questo regime fiscale. Italy can therefore boast a certain fiscal stability. A inizio 2024 è stato introdotto un cambiamento, ma questo ha riguardato solo i nuovi arrivati, senza toccare chi già risiede in Italia, che continua a beneficiare di un regime più favorevole rispetto a quello nuovo.

Quali sono state le reazioni di coloro che beneficiano della flat tax?

I’ve had a way of talking to some of them. They were very surprised by the change, but once they had been informed, they realised that they had not been affected by the new measure.

La questione riguarda coloro che stanno pensando di trasferirsi in Italia nel 2025 o nel 2026. A decision of this kind often involves more members of the family and is part of a lengthy process. Nonostante l’aumento del forfait, rimane comunque interessante per molte famiglie trasferirsi in Italia grazie alla stabilità degli altri elementi del regime fiscale.

“La relocalizzazione in Italia non è vantaggiosa solo dal punto di vista fiscale”. Why?

The lump-sum system also applies to family members. Ha una durata di 15 anni e consente di lavorare in Italia. There is also an exemption for donations and estates involving assets located in foreign countries. Se una persona intende trasferire i propri beni ai figli o ad altri familiari, questo regime rimane attraente.

Relocation to Italy does not offer advantages solely from a tax point of view. All the Italian regions offer high-level services with various benefits. Just think of the connections offered by Milan, a city in the centre of Europe, or the quality of its schools, with some of the best Italian universities in the world. All these aspects, taken together, make the reduction in the lump-sum tax a risky decision, but not necessarily an obstacle to relocation to Italy.

Which categories of people are prepared to leave the United Kingdom to stay in Italy?

There are various categories of individuals who are willing. Ad esempio, partner di società di private equity, poiché il regime fiscale italiano consente loro di continuare a lavorare in Italia, o pensionati molto facoltosi con patrimoni in parte all’estero, che possono ricevere redditi stabili tramite trust o holding straniere. L’investitore paga un’imposta annuale forfettaria di 200.000 euro, ma non ha bisogno di svolgere attività amministrative (come il reporting) su tutti i suoi beni. Con i cambiamenti in corso nel Regno Unito, molte persone stanno valutando i pro e i contro di un trasferimento in Italia.

Quali sono gli altri principali fattori fiscali che influenzano questo tipo di decisione?

Asset taxation is the most significant aspect. If you are resident in Italy and own assets in the East, the ordinary regime requires you to report and pay tax on your assets in the East. Tuttavia, con l’imposta forfettaria, ciò non è necessario.

Some people transfer to Italy without benefiting from the lump sum and opt for the ordinary regime, because transferring a company to Italy is highly advantageous. In Italy, the transfer of companies is taxed if the beneficiaries or donors decide to continue the business for five years after the donation or inheritance. Le autorità intendono estendere esplicitamente questo regime anche alle imprese localizzate nell’Unione Europea.

Is there a synergy to be developed with Monaco?

Effettivamente, con il regime ordinario in cui il reporting delle imposte sui beni esteri non è necessario, la dualità tra Monaco e l’Italia ha molto senso. Not solo da un punto di vista fiscale, ma anche in termini di stile di vita. This sinergia unites the Italian art of living, with its cultural richness and quality of life, with the cosmopolitanism of Monaco, a true and proper business centre with major economic interests. Monaco also offers a cosmopolitan environment that benefits from its proximity to Italy, creating a unique complementarity for business families and entrepreneurs.

A strengthening of Monegasque banking law

Établissements Boisbouvier Robert welcomes the adoption of Law no. 263 by Monaco’s National Council on 17 October 2024, which amends and strengthens the legal framework relating to the right to a bank account in the Principality. This legislation, which enhances Law no. 1.492 of 8 July 2020, consolidates the right of access to banking services for both individuals and companies, by providing extended protection against implicit refusal of bank accounts and unilateral cancellations.

1. Implicit refusal to open an account: towards legal notification

Act 263 introduces a presumption of implicit refusal in the event of prolonged silence on the part of a bank. If an application to open an account remains unanswered after 15 working days, this silence is now deemed to constitute a refusal, opening the way for an administrative appeal. The applicant may then refer the matter to the Budget and Treasury Department for the designation of a banking establishment. The aim of this provision is to improve the transparency of refusals and guarantee applicants the possibility of obtaining a bank account, thereby limiting the restrictive practices of financial institutions.

2. Extension of the right to an account: broader legal protection

The scope of the right to an account has been extended. Whereas initially it only concerned applications to open an account, the new law now includes collective accounts and unilateral cancellations. This extension offers twofold protection: not only do individuals benefit from an increased right to an account, but businesses, which often rely on specific accounts for their collective transactions, are also better protected. In this way, the law provides professionals with a safety net in a banking environment that is increasingly constrained by compliance obligations.

3. Accelerated redress : A More Responsive Justice System

Given the economic stakes of a bank refusal, Act 263 introduces a summary procedure before the president of the court of first instance, enabling a rapid judicial response in the event of a dispute relating to the right to an account. This approach offers claimants smoother access to essential banking services and rapid resolution of their disputes. By reducing timeframes, the law promotes agile economic regulation that is adapted to the Principality’s business realities.

4. Safeguarding economic activity: provisional support measures

The new legislation provides for provisional measures to ensure the continuity of business activities in the event of banking difficulties. These measures enable companies to maintain their operations until an irrevocable court decision is made, thereby mitigating the risks of sudden and damaging interruption to their financial flows. This temporary safeguard demonstrates Monaco’s ambition to actively support its economic fabric within a framework of reinforced legal security.

Context and Purpose of the Banking Reform: Between Financial Inclusion and International Compliance

The reform introduced by Law 263 aims to strike a balance between anti-money laundering (AML/CFT) requirements and the need for greater financial inclusion in Monaco. The legislation is inspired by the recommendations of MONEYVAL and the FATF, which advocate increased vigilance on the part of financial institutions while guaranteeing access to banking services for legitimate customers. Monaco aspires to position itself as a model of compliance while ensuring banking accessibility that is compatible with the economic growth and internationalisation of its residents and businesses.

Technical details of Act 263: towards a new banking paradigm in Monaco

• Opening an account: Banking institutions now have a maximum of 15 working days to decide on an application to open an account. In the absence of a response, refusal is presumed, and the customer may refer the matter to the Monegasque authorities for the compulsory designation of an institution.
• Implicit refusal: If no response is received from a bank, the Monegasque Budget and Treasury Department may be asked to designate a bank. This mechanism limits unjustified discretions by banks, while providing an alternative to implicit refusals.
• Temporary measures: In cases of unilateral termination, temporary measures may be granted to keep the account in operation until a final court decision. This measure protects economic activity against sudden interruptions.

Conclusion: A significant step forward for banking inclusion and the protection of economic rights in the Principality.

Law 263 marks a significant step forward in the modernisation of Monegasque banking law, promoting a more inclusive and responsive environment to meet the needs of individuals and businesses. This legislation aims not only to comply with international standards in the fight against money laundering, but also to ensure that banking services are open to all residents and economic players in Monaco.

For further information on this banking reform and its practical implications, contact Établissements Boisbouvier Robert, legal advisers in the Principality of Monaco.