Financial Advice for Expats in Italy: How to Work, Retire and Grow Your Wealth

It Can Be Tricky Finding Reliable Financial Advice Tailored To Expats In Italy

The majority of financial advice available in Italy is not of an independent nature. Usually, people will use a bank or asset manager who is licensed to sell a limited range of products (for which they’re paid on commission). Naturally, this model means financial advisers in Italy are working for an institution, rather than YOU.

The benefit of independent financial advice is that IFAs aren’t beholden to any particular product or scheme, and are financially incentivised to maximise your returns rather than partner business profits.

For this reason, we recommend avoiding financial advisers in Italy and instead opting for an international IFA with experience in providing financial advice for expats in Italy (someone just like us.)

What Are The Key Financial Considerations For Expats Living In Italy?

So, this depends on your circumstances.

Retiring in Italy

If you want to retire in Italy, you’ll be able to do so by applying for an elective residence visa. When retirement planning for Italy, bear in mind you’ll need to prove a minimum annual income of EUR 31,000 for an individual, EUR 38,000 for a married couple and an additional EUR 20,000 for each dependent child you want to bring.

Paying income tax in Italy

To attract more people to bring their money to rural South Italy, the government is offering a flat tax rate of 7% on income to those who do. This can apply to retirement income, as well as all foreign-earned income from investments, dividends and employment.

Otherwise, how much tax you’ll pay on your income if you’re living in Italy will depend on your tax status.

Tax will be payable on income earned in Italy and overseas by an individual who meets the test of a “permanent resident” of Italy. A non-tax-resident who is employed in Italy pays tax only on income earned in Italy, and tax on income earned in other countries is irrelevant to the Italian authorities.

Taxation of an individual’s income in Italy is progressive. In other words, the higher the income, the higher the rate of tax payable. In 2022 the tax rate for an individual is between 23%-43%, In addition to direct taxation (IRPEF), there is also a regional tax of 0.7%-3.33% and a municipal tax of 0%-0.9%.

There’s also the option to register as a neo-domiciled individual, where you transfer your tax residency from overseas to Italy but elect for the application of a flat substitutive tax, as a fixed amount of EUR 100,000. The neo-domiciled tax regime applies to all income including foreign investments and real estate and absolves the individual from declaring foreign investments on their tax return. There are also options to include family members on the deal for EUR 25,000 a head.

For high earners, that can represent a lucrative deal – since they’ll be protected under the double taxation treaty.

Current Events And Their Impact On Expats Living Italy

You may remember the headlines regarding the Italian Government crisis of the Summer of 2022. Guiseppe Conte, leader of M5S, revoked support to the coalition government headed by Prime Minister Mario Draghi. The government collapsed, Draghi resigned, and a snap election was called.

The Snap election resulted in an absolute majority for a centre-right coalition headed by Giorgia Meloni, who was appointed the first female Italian Prime Minister. Meloni also happened to head up a right-wing party with neo-fascist roots and a hard anti-immigration stance.

There was a large amount of trepidation amongst expat communities, and some alarmist headlines surrounding the intention of many to leave if Meloni’s government were elected. However, following the first budget approved in December 2022, it seems that it’s so far so good for expats living in Italy – and that Meloni’s anti-immigration stance doesn’t transfer to migrants who offer economic benefits to Italy.

More information about residency issues for expats in Italy can be found in this guide.

Investment Advice For Expatriates Living In Italy

For expats looking to invest in Italy, there are plenty of options. You can buy stocks, bonds and mutual funds. The easiest way to invest in the Italian stock market is to invest in a broad market index. This can be done at low cost by using exchange-traded funds (ETFs). ETFs track an index or sector and trade like a stock on a stock exchange. If you’re looking for long-term growth potential at a low-risk level, ETFs are your best bet.

Investing in Italian real estate is another option for expats who want to grow their wealth. There are no restrictions on buying, selling or renting out properties – and property prices in Italy increase by 1% every quarter, so it’s one of the most liquid assets around.

Investing in platforms is another way to grow your wealth. Platforms are a great way for investors to spread their risk and diversify their portfolios. They offer investors access to markets and opportunities that they otherwise wouldn’t have access to – as well as providing them with the tools needed to make educated decisions about where, when and how much money should be invested in order to achieve optimal results. In this guide you’ll find a detailed breakdown of the best online brokers and trading platforms in Italy.

Where Can You Turn For Reliable Wealth Management Advice?

As an expat living in Italy, it’s important to have access to reliable financial advice. That way, you can confidently plan for your retirement years with strategies that fit your goals and values. An independent international financial advisor specialising in Italy and the EEA will have all the know-how to ensure you can work, retire and grow your wealth to its highest potential.

With Proper Planning, Expatriates Can Look Forward To A Comfortable Life And A Fulfilling Retirement In Italy

We hope this guide has given you a better understanding of the financial considerations for expats living in Italy. If you’re still working on your financial plan, then we recommend starting by identifying your goals, determining how much risk you can tolerate and researching potential investment opportunities. Remember to keep in mind that there are many factors that influence investment performance including market conditions, management practices and fees. These are some of the most important factors when deciding on an investment strategy; they should all be considered before making any final decisions.

We’d be delighted to help you with your financial planning. Get in touch to get started finalising your Italian adventure.