Compared to its European neighbours, Italy attracts little foreign direct investment (FDI) but nevertheless ranks 11th among global investors: focus on the legal status of foreigners in Italy.
The notary, when he is called upon to act in relation to public documents or authenticated private documents involving one or more parties who are not Italian citizens, applies a set of rules – known under the overall name of the legal status of foreigners – which define the limits, now quite broad, under which foreign nationals may enter into legal transactions in Italy.
Italy’s membership of the European Union means that the citizens of EU Member States enjoy in Italy the fundamental freedoms laid down by the European legal system
The legal status of foreigners in Italy finds its primary and fundamental regulation in the Italian Constitution, which states that it is governed by law in accordance with international rules and treaties.
With particular regard to international sources, Italy’s membership of the European Union means that the citizens of EU Member States enjoy in Italy the fundamental freedoms laid down by the European legal system, namely the free movement of capital, the free movement of goods, the freedom to establish economic activities in Italy and to provide services in Italy and the free movement of workers. Based on these freedoms guaranteed by European citizenship, citizens of EU Member States can carry out in Italy, under the same conditions as Italian nationals, all legal acts such as, for example, the purchase of a property or a business, the entering into of a loan agreement or the setting up of a company.
Citizens of countries that are not part of the European Union – and except as will be discussed shortly for non-EU citizens legally residing in Italy – may enter into transactions with legal validity in Italy only if the condition of reciprocity exists, i.e. only to the extent that it would be possible for an Italian citizen to undertake those same legal steps in the State of the foreign national who intends to operate in Italy.
The condition of reciprocity can be met by means of one of the many international conventions stipulated by Italy with many foreign countries for the mutual protection of investments by nationals of the contracting nations. Proof of the existence or otherwise of the condition of reciprocity in relation to acts for which the notary’s services have been requested is entrusted to the notary himself and involves an analysis that must necessarily be conducted on a case by case basis – if necessary with the help of the Italian Ministry of Foreign Affairs – since its outcome depends on the specific type of legal transaction involved as well as the national law of the person who is proposing it.
Apart from the fulfilment or otherwise of the condition of reciprocity, citizens of states which are not EU members but who are residing in Italy may enter into legal transactions if their stay in Italy is legitimate under national law. This condition requires the possession of a valid residency permit or a long-term residency permit, documents which must be shown to the notary prior to the formalisation of the transaction in question.
The possibility for foreign nationals to carry out certain legal activities in Italy having been ascertained under the conditions outlined above, it should nevertheless be noted that the deed in question, even though notarised or authenticated by an Italian notary, will not necessarily be governed by Italian law. The Italian system of private international law – i.e. the system of rules that allows for identification of the jurisdiction and the law applicable in particular legal situations having transnational characteristics – is, in fact, strongly oriented toward openness to foreign legal systems with which such cases may have connections. Italian law and some European
Regulations that uniformly govern certain cases of private international law in fact identify a series of connecting factors, depending on the criteria, so that from time to time Italian law may be applicable or instead the foreign law identified by the connecting factor; in some cases, the choice of legal system may be made by the parties to the transaction.
For example, with regard to the major issues, it may be pointed out that, according to Italian law:
- Personal relations between spouses are regulated by the common national law of the spouses or, failing that, by the law of the state where the marriage is predominantly located;
- Property relationships between spouses are governed by the law which regulates their personal relationships (unless the spouses agree in writing to regulate their assets according to the law of the State of which at least one of them is a national or in which at least one of them resides);
- Contractual obligations are, however, regulated in accordance with the Rome Convention of 1980 which, in addition to providing for a number of connecting factors according to the circumstances involved, allows the parties – except in limited cases – to freely choose an applicable law, even if without any connection with the contract; Companies, associations, foundations and any other entities, public or private, even if they do not have the character of an association, are regulated – as a rule – by the law of the State in which the entity was set up.
With regard to foreign spouses, who may be of different nationalities, it is useful to check with the notary to find the most satisfactory solution for their future succession in case of death or for the needs of their children.
(Source Living and doing business in Italy by Italian Notoriat)