Italy Opens the Door for Digital Nomads

Italy is the latest country to create a specific visa category for digital nomads.

To qualify, you need to earn around $30,400 annually from a job or clients located outside Italy. You’ll need health insurance coverage for the duration of your stay, proof of accommodation, and proof that you’ve been a remote worker for at least six months before.

Although the visa is only good for a year, it can be renewed, and you can include your family.

Italian immigration consultants tell me that the visa is being housed under Article 27 of the immigration code, which means that it’s aimed at highly skilled workers.

As with other digital nomad visas that try to specify the type of work involved, this creates a bit of a conundrum. Most “highly skilled” people earn more than $30,400 a year. So, it’s not clear whether the Italian government is after serious techies, or just looking for people to spend their earnings in the country. As with most visa programs, we’ll find out how the Italians are going to define the “skills” once people start applying for it.

There are no tax breaks associated with the new visa, and it’s not clear what the in-country residency requirements will be. Most countries require that you be present at least 183 days out of the year to keep a visa… which conveniently equals the residency requirement to become a tax resident and pay income taxes.

Still, for residents of countries with a tax treaty with Italy, like the US, Canada and most other developed countries, you won’t pay tax twice. Italy will give you credit for taxes already paid to your home country.

The visa launched on April 4, and applications are now being accepted. Note that you must make the application at an Italian embassy or consulate in your home country, not in Italy itself.

If your visa is approved, you can travel to Italy. You have eight days from your arrival to apply for a residence permit, known as permesso di soggiorno. The permit will list the nature of your residency and the length of time you can stay.

Italy already operates a very attractive visa regime for those with passive income. To qualify, you need to bring in at least €32,000 a year in passive income, have €60,000 of health coverage, and accommodation in the country.

For pensioners living in most of the country, you'll pay a flat tax of 26%, less any taxes paid to your government, on passive income.

But for people willing to relocate to the Italian south, including Sicily and Sardinia, you can get an even better deal. As long as you move into a municipality with a population of less than 20,000 people in specific southern regions, you’ll pay a flat tax rate of 7% for the first nine years of your residency. You’ll also be exempt from taxes on property and financial assets.