Posts

How undeclared funds are legalised using Italy’s Golden Visa Programme

Italy is the largest country in Europe suffering major economic and fiscal problems. Meagre growth, troubled banks and enormous debts have made Finance Minister Pier Carlo Padoan turn to “creative” solutions.

A new flat-rate tax is attracting droves of wealthy foreigners that take advantage of Italy’s new Golden Visa Programme. The Italian authorities are not asking any inconvenient questions about assets in foreign countries. Nobody cares about it. Undeclared funds can be legalised easily and with immediate effect by simply paying the new flat-rate tax. All it takes to settle the entire tax bill for foreign-source income is a one-off flat-tax payment of EUR 100,000.

“Wealthy foreigners establishing residence in Italy are not required to disclose their foreign assets. Nobody cares about it in Italy.“

Foreigners are offered a very swift and convenient process, they are not questioned personally, as is the case in Switzerland’s flat-rate tax system. It only takes a few weeks to be issued with an international tax number, which is what all bankers ask for in the age of the automatic exchange of information. The effect is that all assets located in a foreign country are legalised immediately, including bank accounts in Switzerland holding undeclared funds.

How much income is needed to make the programme worthwhile?

A flat-rate tax of EUR 100,000 appears to be a lot of money on first glance. But it’s not. Those earning EUR 300,000 and more in one of Europe’s high-tax countries can quickly end up paying a 40% tax rate. This would amount to EUR 120,000 in income tax payable, which is already EUR 20,000 more than Italy’s flat-rate tax of EUR 100,000 would cost them. The Golden Visa Programme allows income millionaires to save massive amounts of taxes.

How are the undeclared funds legalised?

In Italy, the ordinary disclosure requirements for assets in a foreign country are complicated and time-consuming. They have to be reported meticulously using the dedicated form “RW Doppio”. My Italian partners, my “Commercialisti”, were close to giving up on trying to decipher the Italian process for making a voluntary self-disclosure using the RW Doppio form due to the complexity in the reporting obligations for bank accounts in Switzerland holding undeclared funds.

Luckily, the law on the Golden Visa Programme explicitly abolished the “RW Doppio” form. Under no circumstances are wealthy foreigners, who are committed to the Italian way of life and who want to wipe the slate clean in terms of undeclared funds, to be hassled with red tape when applying for the Golden Visa Programme.

I contacted the Director of the Italian tax authority ‘Agenzia delle Entrate‘, Mrs. Gabriella Lusi, who confirmed to me personally that the authority does not want to know about any undeclared funds sitting in the bank accounts of wealthy foreigners.

A Russian national with undeclared funds in Switzerland who transfers his residency to Italy under the Golden Visa Programme can rest assured that the Italian tax authority will not inform the Russian tax authority about his Swiss bank accounts, simply because nobody in Italy has any interest in them. Italy currently has other problems to tend to.

The Automatic Exchange of Information (AEI) between Switzerland and Italy is the earliest point at which Italy will learn about the existence of money in Switzerland, but by that time the funds have already been legalised. Who is to say today whether the automatic exchange of information will work as smoothly as envisaged by the OECD?

Advantages of the “flat-tax Italy”

When compared with the Golden Visa Programmes offered by Portugal, Spain, Malta and Cyprus, the Italian Golden Visa Programme offers some unique advantages:

  • One of them is that it allows an extended group of family members, such as a brother, father-in- law or cousin of the applicant, to also be granted Italian residency against payment of an additional fee of only EUR 25,000.
  • The programme does not require wealth in the double-digit millions to be evidenced, as is the case for those wishing to benefit of Switzerland’s flat-tax programme.
  • There is no inheritance or gift tax for assets located outside of Italy. Taxation hardly comes with a smaller price tag. Berlin is of course enraged about Italy’s “tax dumping”. The tax dumping by Italy is purported as a negative development for all European countries. “Italy would be well advised to drop this nonsense”, states Markus Feber, a finance expert and MP for the
    conservative CSU.
  • The international tax number is usually issued within 2 to 3 weeks. It enables the applicant to instantly legalise all accounts with undeclared funds. He also has the certainty of knowing that Italy cannot inform the authorities at his previous residence, as it stated that it does not want to be informed about
    assets in a foreign country.
  • The Italian Golden Visa Programme even provides for a “tax ruling”. Applicants can use the ruling prior to submitting the official application to make a binding request to the “Agenzia delle Entrate” for making a final determination about any remaining doubts concerning specific issues. The applicant will be issued with a legally binding written advice. The applicant
    can then use this binding written commitment issued by the tax authority to protect himself against any future changes in the Italian law.
  • He remains entitled to the tax benefits for a term of 15 years. and can become a naturalised Italian citizen in this period. Italy’s passport is among the highest rated passports worldwide.

Further information on the Italian Golden Visa Programme are available for download free of charge here.

Bankers and wealth advisers with foreign clients that may be interested in the Golden Visa Programme will quickly find informative YouTube clips in English, Arab and Chinese they can forward to their clients.

The Russian community in Forte dei Marmi (Tuscany, Italy) has attracted many new residents in the past months, thanks to the new flat-rate tax. Forte dei Marmi has
already made preparations for the new Russian residents.

A large Chinese community that made Prato their new home is also experiencing rapid growth. Australia used to be the destination of choice for Chinese immigrants.
More and more are now choosing Italy as their new home. As the immigration criteria have become more stringent in Australia, making it virtually impossible to obtain an
Australian permanent residency visa, Chinese relocation agencies have discovered the Italian Golden Visa Programme and asked for assistance.

Over the last five years, the relocation market with products like Golden Visa and Citizenship-by- Investment programmes has developed into a gigantic market. Families and global citizens have become more inclined to relocate their residence and to purchase passports that allow for easier and more convenient travelling.

Despite strong criticism from the German Federal Government in Berlin, which is accusing Italy of tax dumping and endangering all other OECD countries, Golden Visa Programmes are here to stay because they are the manifestation of a strong international trend. The reasons behind that are manifold. Asset protection and international tax optimisation are only a few of the many goods reasons why global citizens are taking advantage of these kind of services.

The Italian Flat Tax fiscal regime is tailor-made to the needs of a nomad capitalist with international business looking for tax-efficient solutions and asset protection.

If you are interested to discuss all the options you have with the Italian Flat Tax, do not hesitate and give me a call now on my private number:
+41 79 543 85 93 or, write me online or by email to my private email address: enzo.caputo@swiss-banking-lawyers.com

Enzo Caputo
Caputo & Partners AG

Golden Visa Spain – Gaining Residency through Real Estate Investment in EU

The Spanish government through Law 14/2013 introduced a program known as Golden Visa Spain which gives entrepreneurs the opportunity to become Spanish residents by investment. With an investment of €500,000 and above, you gain permanent residency in Spain with home purchase. The investment can either be individually or through a legal entity.

While the Spain Investor Visa Temporary Residence Permit is granted indefinitely, you will need to visit Spain at least once every two years to have it renewed. One of the reasons why people prefer the Spain golden visa citizenship program is because it gives them a passport that allows for Visa-free access to more than 175 other countries. After holding the temporary residence status for 5 years, you are eligible to gain permanent residency and after 10 years, qualify for citizenship.

Why Spain Citizenship by Investment was Launched

The main reason why this program was established in September 2013 was to woo investors into the country to help strengthen the economy. The Spanish real estate sector is one of the key industries in Spain and any investment targeted at this sector is likely to have a ripple effect to other industries.

The choice of €500,000 minimum investment was arrived at after considering the investment climate both in Spain and globally as well as the willingness of investors from other countries to invest here.

Important Spain Investor Visa Statistics

Golden Visa SpainSince its inception in 2013, the Investor Residence Visa Spain program has attracted 2,236 foreigners. This has brought over €2 billion to the Spanish economy. A huge percentage of the investment inflow (72%) was absorbed into the real estate sector with Russian and Chinese millionaires making up 59.4% of the total investors.

A total of €716 million came from 714 Chinese nationals who took advantage of the golden Visa Spain scheme. Russians followed closely with an investment of €567 million.

The Spain citizenship by investment program not only allows you to keep your tax residence outside Spain, but also authorizes you to work and live in Spain.

Limitations of the Spain Golden Visa Program

The expectations of the program to attract Chinese citizens have largely gone unmet because the Spain investor Visa requirements are considered unfriendly and unpopular. It targets the wrong audiences because most Chinese migrants are coming under small and medium-sized enterprises especially in the services sector, others come as students.

Looking at golden Visa Spain vs Portugal citizenship by investment program, you will clearly see that Spain has a long way to go. As a country, Spain is not as popular and attractive. Its laws are badly designed and too bureaucratic.

Italy Golden Visa Program – The Best Alternative

Against a backdrop of a strong and large economy in the eurozone, Italy launched its very own golden Visa program. In the world, Italy’s economy is the eighth largest and fairs on well in all metrics including net wealth per capita, low level of debt, high levels of asset holding, impressive employment levels, and high levels of family savings.

Thanks to the diversified nature of the Italian economy, holders of Italy golden visa permits will have an opportunity to enjoy a much better lifestyle and a high return on their investments. The real estate sector is more dynamic and luxurious compared to its Spanish counterpart. If you would invest in a golden visa program, think Italy!

Are you looking for more information on how you can take advantage of Golden Visa programs? Contact us for free consultancy.

 

 

 

Golden Visa Portugal – A Gateway to Living and Working in Portugal

Golden Visa Portugal – A Gateway to Living and Working in Portugal

Every country requires investments for it to move forward and guarantee quality life for its citizens. Portugal is a good example of those countries.

Back in October 2012, it launched a Portugal Golden Visa Citizenship program in a bid to fast-track foreign investment from non-EU countries.

The program grants citizens from other countries apart from the EU, the opportunity to invest and obtain a residency permit in Portugal. With the Portugal investor visa, investors together with their family members can enter and live in Portugal at will. The Portugal investment immigration status also gives the opportunity to travel freely in any of the 26 European countries covered by the Schengen Agreement.

Eligibility for the Golden Visa Program Portugal

Any individual or company qualifies for the Golden Visa Portugal arrangement to the extent that they meet the legal and financial requirements. For you to apply for the Residence Permit for Investment, you must fulfil at least one of the following Golden Visa Portugal requirements.

  • You must create 10 job opportunities in Portugal on the minimum
  • You must do a capital transfer valued at €1,000,000 and above • Buy real estate property valued at €500,000 and above
  • Purchase real estate property that was constructed over 30 years ago or one located in urban renewal areas with a value equal to or over €350,000.
  • Invest €350,000 in research activities conducted by either private or public research institutions in the area of technological or scientific systems.
  • Invest or support arts with a value of €250,000 and above.
  • Invest in venture capital funds or investment funds which are dedicated to the capitalisation of companies.

The citizenship by investment Portugal program requires that investments made should come from abroad and held in Portugal for a period of not less than 5 years. When the Golden Visa Portugal is finally issued, it is valid for an initial duration of 12 months after which it is renewed for periods of 2 years each into the future.

Limitations of Portuguese Citizenship by Investment Program

Golden Visa PortugalOn paper, the Portugal Golden Visa citizenship arrangement looks enticing, but truly it is not without its pitfalls.

For instance, the officials at the immigration unit have made the Golden Visa Portugal processing time unnecessarily lengthy. This means even after committing loads of money you may have to wait a little longer to get your documents processed.

Golden Visa Portugal scheme is seen as a costly way to gain residency in Portugal. There are other ways you can follow apart from the citizenship by investment Portugal route such as getting married to an EU citizen who declares themselves a resident of Portugal. The processing fee for the Golden Visa Portugal is also inhibitive and it is largely seen as a scheme to take advantage of wealthy investors.

All these coupled with the fact that the Portuguese economy is not really in good shape casts doubt on the attractiveness and efficacy of the Portugal investment immigration program. The cases of corruption and suppressed legal systems leave the Portuguese citizenship by investment with little to hang on in terms of investor safeguards and security.

The better alternative: Italian Golden Visa

The best alternative to the Portugal investment immigration is the Italy Golden Visa. This was launched in 2017 under the Budget Law. It banks on the strength of the Italian economy, the amazing lifestyle, and level of innovation. The Italian economy is growing at an impressive rate and its real estate market is more dynamic and convenient compared to that of Portugal.

If you have been looking for an equivalent of Golden Visa Portugal that gives you unfettered access to the European Union region, contact us for a free consultancy. We are experts in Golden Visa programs!

Contact us, we can provide full-advice and find the best solution for your needs.

The first Italian Non-Dom Status granted to a British HWNI taxpayer

 

In March 2017, Italy has introduced a new non-dom regime (Flat Tax) giving the opportunity to get a golden visa to wealthy individuals willing to relocate in the Bel Paese.

Consequently, in August, Italy has granted a non-domiciled status (non-dom) to a British taxpayer for the first time. Probably, this is a natural consequence of Brexit, as many British taxpayers and companies are relocating abroad in EU to keep the benefits of the common market and Schengen area.

According to Withers, who represented the taxpayer, the individual has decided to move to Italy to take advantage of the new status and to establish a new hub for his family.

The Italian Revenue Agency stated that such a favourable tax regime is available for new residents in Italy who – regardless of their nationality or domicile – have been non-tax resident in Italy for at least 9 years out of the 10 years preceding their transfer to Italy and, very important, the tax incentive can be extended to the family members.”

High-net-worth individuals (HNWI) who transfer their tax residence to Italy are enabled to apply a substitute tax to their foreign income and gains, amounting to EUR 100,000 for each fiscal year, in lieu of the Italian Income Tax. Therefore, this taxation represents an alternative to the application of the ordinary taxation and the option is valid for a maximum period of 15 years. Any extra family member will ‘cost’ an extra EUR 25.000 per year.

You can be the next. Get in touch with us to get your free consultation.