Italy has introduced new rules to allow non-EU citizens who are “digital nomads” entry into Italy to live and work remotely.
An amendment to the Law converting Decree-Law n. 4/2022 (Sostegni ter) legally defines who is to be considered a digital nomad as a worker from a country outside the European Union who perform “highly professional and digital” tasks.
An entry visa obtainable via the consulate in the country of origin will therefore be sufficient to enter the country. This will allow individuals to come to and work in Italy on condition that on arrival they request a stay permit (“permesso di soggiorno“) and that they have comprehensive health insurance. The stay permit can be renewed and extended after the initial one year period.
Digital nomads will in any case be obliged to comply with all tax and social security provisions. Given that Italy has a couple of favourable tax regimes (see below) for new arrivers, this should not be an overly onerous condition (as regards the tax anyway) as long as new arrivers take advice prior to moving on the timing of the move, check the conditions for the relief, and properly forecast in advance the timing of tax/social security payments.
These new rules will allow non EU citizens to work remotely without needing to apply for one of the (few) working stay permits under the usual annual quotas set by the annual “Decreto Flussi” (pursuant to Legislative Decree No. 286 of 1998 – Consolidated Immigration Code).
Individuals will need to meet a minimum income threshold for themselves and their families, and have no criminal record.
Who is a digital nomad?
The definition of a digital nomad is as follows:
“Citizens of a third country, who carry out highly qualified work activities through the use of technological tools that allow them to work remotely on a self-employed basis or for a business, including those not resident in the territory of the Italian State.”
It is therefore a rather wide definition which seems to cover both the self-employed and people who a work under a contract of employment, either for an employer/client based in Italy or based outside the country. The new category refers to workers who carry out an activity requiring professional/technical skills remotely. For example, web programmers, digital marketing specialists, writers and bloggers or even translators and graphic designers. It does not therefore include manual workers or people who jobs require them to be mainly physically present at their employer’s premises when they are carrying out their duties.
Entry into force
A further decree of the relevant Ministries (Interior, Labour, Foreign Affairs and Tourism) is now awaited (within the next 30 days) to complete details of the visa regime. this will cover implementation matters such as:
- the procedures and detailed requirements for issuing the stay permit (including the categories of highly qualified workers who can benefit from it);
- the minimum income thresholds for applicants/family units;
- the procedures for checking the work activities carried on by applicants and compliance fall within the definition of “digital nomad”;
- procedures for the new stay permit renewal process, evidence of compliance with tax, healthcare and social security requirements.
Tax and Social Security
Italy has two very interesting regimes which can apply to digital nomads:-
- the Regime Forfetario – a 5% flat tax for the first five years on a percentage (typically 78%) of gross billings, for the self employed earning (gross) up to Euro 65,000 per year;
- the Impatriates Regime – a 70%/90% exemption in calculating earned income subject to tax. This relief is available to both the employed and the self-employed.
For many individuals benefitting from the new visa regime, the effective rate of Italian tax on earnings will be extremely low, at least in the early years. Statutory social security contributions to the Italian social security institute (INPS) on the other hand can be expensive. The contributions made will entitle the worker to a pension in future providing the relevant requirements are met. The contributions include also a healthcare contribution and it is hoped that this will enable workers to avoid the need to pay for private healthcare insurance on renewal of their stay permits (although this remains to be seen). Italian social security contributions are compulsory for all workers unless exemption applies, but since compulsory social security contributions are tax deductible, the payment of contributions reduces the tax bill even further.
Relatively few exemptions apply. U.S. and dual U.S./Italian citizens working in Italy may (opt to) remain covered by U.S. social security arrangements by virtue of the treaty between Italy and the US providing they obtain appropriate certification of coverage from the U.S. Social Security Administration. There are no similar facilities under any other of Italy’s other social security treaties. Exemption maybe available under a frontier worker treaty for resident individuals working outside Italy. Limited temporary exemption may, in certain circumstances be available under EU social security regulations (in particular for posted workers) . But on the whole digital nomads while resident in Italy, will find themselves with a relatively low tax bill and a bigger amount to pay in terms of social security, the bulk of which represents a personal pension.
The new digital nomad regime is a welcome addition to the existing measures (tax breaks and investment visas) designed to attract workers able to support themselves and their families to Italy, encouraging them to make a contribution to the social welfare system and the Italian economy generally. The new regime will make Italy an even more attractive location for mobile workers looking to sample La Dolce Vita in person, whilst continuing to work from their laptops.
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Art. 6-quinquies of Law No. 4 of 28 March 2022 published in the Official Gazette on 29 March 2022 – conversion in law, with modifications, of Decree Law 27 January 2022, no. 4. The Law introduces a new sub-paragraph q-bis to para 1 and a new paragraph 1-sexies to article 27 of Legislative Decree no 286 of 25 July 1998, (the Italian Immigration Code).
Click the text image on the right to read the text of the amendment to the Immigration Code.