Italy’s flat tax appeals to global rich

‘There is a lot of competition globally for such people, and tax is just one part of the package,’ says Pasquale Salvatore, a partner at PwC in Milan, a city that has become a top location for wealthy émigrés. ‘But Italy has been seeing a solid, linear increase in demand. For high-net-worth individuals with significant assets outside Italy this is a very, very friendly system.’

The result has been a boon for the Italian economy, he argues. ‘People who relocate often invest, start businesses and become part of the community. It’s a net gain for Italy, not just in capital but in talent and ideas.’

Response to Brexit

Italy’s flat-tax regime isn’t new. The system was introduced in 2017, shortly after Brexit, as part of a strategic effort to compete with the UK for wealthy residents. Designed to rival the UK’s non-dom system, which at the time offered indefinite tax exemption on foreign income and no UK inheritance tax on offshore assets, the Italian scheme promised simplicity, certainty and discretion.

‘What Italy put on the table was a clean, predictable deal,’ says Michele Lauriola, a tax manager and avvocato tributarista at Grant Thornton in Milan, with a client base that includes high-profile athletes and sports professionals, particularly football players.

The regime allowed eligible newcomers – those who hadn’t been tax-resident in Italy for nine of the past 10 years – to pay a fixed annual levy on all foreign-sourced income, regardless of how much they earned. Although this levy has increased from €100,000 to €200,000, the rest of the rules remain unchanged. There’s no need to declare offshore assets, no wealth tax and no Italian inheritance tax on non-domestic holdings.

‘This is not a burdensome regime,’ says Salvatore. ‘Once a client is in, they can rely on it. And for people with complex international structures, that’s gold.’ While there’s no official wealth threshold, advisers say the regime becomes compelling for clients with at least €5m–€10m in offshore assets, particularly those exiting less predictable tax systems. ‘We’re seeing people from Brazil, the Middle East and the UK, all asking the same question: can I bring my family here and simplify things?’ Lauriola says. ‘The answer is often yes, but it takes planning.’

Global contest

Although Italy is drawing growing interest, it remains part of a broader global effort to attract mobile wealth – and nowhere is this more visible than in the UAE, which is currently the leading destination worldwide for millionaire migrants. The Henley Private Wealth Migration Report 2025 estimates the UAE will see a net inflow of 9,800 high-net-worth individuals this year, ahead of the US and far above any European country. Even more impressively, the nation has almost doubled its number of millionaires over the past decade, attracting around US$63bn of wealth.

Dubai’s appeal lies in its zero personal income tax, long-term residency visas, business-friendly infrastructure and international schooling. As the Henley report notes, the UAE ‘retains its crown as the world’s leading wealth magnet’. For many internationally mobile individuals – particularly from regions such as the UK, India and the Middle East – it has become a default relocation choice.

Italy, by contrast, offers a more balanced proposition, argues Lauriola. ‘Dubai may offer zero tax, but Italy offers lifestyle, legal certainty and proximity to core markets,’ he says. Rome and Milan are increasingly positioning themselves as lifestyle-driven alternatives for clients who prioritise predictability and integration over zero-tax status.

Homegrown exodus

But while Italy has been leading Europe in seducing foreign wealth, the country is struggling to retain its own emerging talent. The Bank of Italy estimates that more than 146,000 university graduates aged 25–34 left the country between 2014 and 2023 – many in fields such as accounting, finance and law. In a recent speech, Bank of Italy governor Fabio Panetta described the outflow of educated young professionals as ‘one of the greatest obstacles to innovation and growth’.

In 2023 alone, more than 21,000 Italians aged 25–34 emigrated, over half with university degrees, according to Istat, Italy’s national statistics agency. Some leave for higher pay; others seek more defined career paths or international experience.

That outflow adds to the challenge for Italy’s accounting firms of attracting skilled young professionals, especially as demand increases to meet the needs of an influx of wealthy foreign clients.

‘I struggle to hire junior people,’ says Salvatore. ‘The media says they leave for work, but for well-trained individuals, there is a lot of work here.’ While firms are adapting – through internal training, international secondments and hybrid models – the skills gap remains a structural challenge in capturing the full economic potential of this new client base.

Still, Salvatore believes that mindset is a major hurdle. ‘Young Italians love foreign experiences; it’s part of the culture. Even when good jobs are available at home, many still want to leave to explore,’ he says. ‘If Italian firms want to keep them, they need to offer more international exposure early in careers. That’s what makes people stay loyal.’

With geopolitical and tax changes accelerating, advisers in Italy may see further growth in inbound private client work. But serving this new demand requires skilled professionals and a long-term commitment to developing talent. ‘It’s a dynamic moment,’ says Lauriola. ‘The profession is evolving, and so must the firms that support it.’