Foreign citizens and companies can establish various types of structures in Italy, including trusts. Even if no specific legislation provides for the establishment of trusts, both local and foreign trusts are recognized in Italy, as this country was one of the first signatory members of The Hague Convention which covers the creation of trusts. Furthermore, the tax authorities have enabled a law which provides for the taxation of trusts. Under the international legislation, trusts are independent entities which can be used for various purposes, one of the most common being estate planning. Our company formation agents in Italy can offer more information on the recognition of trusts in this country.
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Requirements related to the creation of a trust in Italy
The main element of the trust is the document through which the entity is created. Also known as a deed, the document that establishes the creation of a trust must contain information about the person or company setting up the trust, the person in charge with the administration of the trust (also known as the trustee), and the beneficiary or beneficiaries. It should be noted that the estate can refer to various assets including money, real estate, titles of ownership or shares in a company. Our Italian company formation advisors can offer more details on the legal requirements to set up a trust in this country.
Types of trusts in Italy
As mentioned above, under the Italian legislation trusts can be set up by nationals or local citizens, case in which they are called resident trusts, and trusts which are registered by foreign citizens or companies which are not deemed taxable in Italy, case in which they are known as non-resident trusts.
There is another way in which trusts can be categorized in Italy:
- – transparent trusts;
- – opaque trusts.
Transparent trusts provide information about the beneficiaries of the assets administered by the trustees, while opaque trusts do not state clearly who the beneficiaries are. For taxation reasons, Italian trusts are required to register with the authorities, obtain a tax and VAT number.
Other important facts about trusts in Italy
The settlor and the trustee are the main parties involved in the trust. Then the beneficiaries of the trust enter the discussion when it comes to the transfer of properties or other assets. The arrangement between the settlor and the trustee must be signed and authorized in order to be legal and have value. However, a verbal agreement is also accepted. Here are other important aspects referring to trusts in Italy:
- The trustee should be independent in terms of property trust control. Our specialists can be appointed as trustees.
- It is a clear line between the trustee and the beneficiaries, meaning that the transfer of property ownership is made in agreement with the laws.
- Trustees cannot have any direct or indirect advantage from a trust unless allowed.
- Discretion and confidence are provided by trustees who must act in the best interests of settlors and beneficiaries.
In the case of breaches of trust, the management trustees are entirely responsible. Also, it is important to know that professional trustees can be remunerated, depending on the agreement established. For a proper and better understanding of trusts in Italy and the ways in which they can be registered, please feel free to address our team of company formation agents in Italy.
What are the rights of the trust settlor?
The settlor of a trust in Italy has many rights and most of them refer to the ways in which the management is made. All the incomes, expenses or investments must be established in complete agreement with the settlor. If at a certain moment, the trust suffers from breaches or unpredictable problems, the trustee must notify the settlor and give a helping solution. There are also cases of gross negligence if the trust is wrongfully handled. Luckily, our team of consultants has experience in the management of trusts, so you can talk to us and find out more about the entire mechanism.
Can a trust be annulled?
Yes, a trust can be annulled in Italy, if the scope of beneficiaries is not correctly described, if the trustee does not properly manage the trust and if breaches are detected. A set of measures will be rapidly imposed, and until the issues are solved, such a trust can be annulled. You can request the support of our team of specialists to find out more about the cases in which a trust can be dissolved.
Who can set up trusts in Italy?
Both natural persons and company owners can set up trusts in Italy, with complete support offered by our team of company formation agents in Italy. There are many entrepreneurs interested in protecting personal assets and delimitate them from the ones related to the company. This way, the company owners will not be obliged to pay the company debts from their personal assets. Our specialists can help you open a trust in Italy and tell you more about the rights involved. Also, if you are interested in starting a company in Italy, please feel free to solicit our support and guidance.
Do I need a tax code for my trust in Italy?
Yes, a tax code and a VAT number must be assigned to the trust in Italy, and that because trusts are subject to taxation. This is another important aspect that can be explained by our team of specialists.
Making investments in Italy
Italy is a great option for starting a business and making investments and that because of many advantageous options and opportunities. The tourism, food industry, and the real estate sector are quite prosperous in Italy, due to the large number of companies activating in this field, plus the profits generated. The government sustains the foreign investments in Italy through all sorts of tax deductions, incentives, and other encouragements. Also, the following facts and figures highlight a good part of the economic direction of Italy:
- • around USD 445 billion represented the total FDI stock for Italy in 2019;
- • the value of the greenfield investments in Italy was of approximately 6.9 billion in 2019.
- • the World Bank and the 2020 Doing Business report rank Italy 58th out of 190 worldwide economies.
- • USA, France, Germany, and UK are the major investors in Italy.
- • most of the foreign investments are directed to the wholesale and retail trade, financial and insurance activities, and the manufacturing sector.
Opening a trust in Italy is not a complicated procedure, but it is recommended to have an idea about the general rules that apply. This is where our team of company formation representatives in Italy can intervene and provide complete legal assistance and guidance where registering a trust. Our specialists can also act as trustees.
For assistance in setting up a trust in this country, please feel free to contact our company incorporation consultants in Italy.