Italy has strengthened its integrated portfolio of financial incentives and fiscal benefits, aimed at creating the best environment for investments. Dedicated multi-year funds, bolstered by substantial allocations from the National Recovery and Resilience Plan, have been activated to fund incentives for various strategic sectors. We are glad to provide a non exhaustive list of countrywide incentives here below but for a personalized assessment and to explore regional incentives please contact us at fdi.canada@ice.it. 

Comprehensive Support on Key Investment Areas

Italy’s incentives and tax benefits maximize opportunities, complying at the same time with the European Union’s State Aid legislation. 

Some of the highest incentive rates in Europe can be obtained in the form of grants and/or subsidised loans in Italian regions which need to accelerate their economic development and  nonetheless offer key advantages and resources. 

1. Tax Benefits

• Tax exemption on capital investments and new hires

• Patent Box

• Tax credits (Industry 5.0, Machinery, R&D, innovation and design)

• Industry 4.0 training

2. Large Investments and Industrial Crisis Areas

• Development Contract

• Law 181 of 1989 for areas in crisis

3. Investments in R&D&I

• Innovation Agreements

• Major R&D projects: Development for digital growth and sustainable industry; Italian New Green Deal and Net Zero Development Contract

4. SMEs and Innovative Startups

• Smart & Start Italia

• New enterprises «Zero interest rate»

5. Single Special Economic Zone (Southern Italy)

From January 1st, 2024, the Single Special Economic Zone for Southern Italy has a single Governing Body with guidance and coordination tasks, and a One Stop Shop (Sportello Unico) that supports settlement and investment processes.

• Simplified administrative and bureaucratic procedures

• Fiscal breaks and tax credits

• Streamlined customs processes

6. Favorable Tax Regime for New Residents

New fiscal residents in Italy have the opportunity to apply for a special tax scheme that lasts for 15 years.

• Foreign-source income will not be taxed at ordinary rates, but at a yearly substitutive lump-sum tax of 200,000 euros

• All foreign assets will be exempted from Italian inheritance taxes

• No reporting obligations to Italian tax authorities on assets held abroad

• No wealth taxes on assets held abroad

• Exemption from Italian CFC rules on foreign companies

• The flat taxation on foreign-source income can also be extended to family members, for 25,000 euros per year per each additional family member

• Should new residents decide to work in Italy, they could apply for a reduction of 50% over their Italian taxable income from employment or self-employment (within an annual limit of EUR 600,000)

• Such reduction is granted for a period of 5 years and can be increased to 60% if moving with a minor

• Applicants should commit to maintaining their fiscal residence in Italy for at least 5 years and should get minimum educational requirements