Trusts, Holdings and Family Offices: How to Integrate Existing Structures into Italy’s Flat Tax Regime

For entrepreneurs, investors and families with established wealth structures, the idea of relocating to a new country often raises complex questions. What happens to existing trusts, holding companies or family office arrangements? How can assets remain protected while gaining access to a new fiscal environment?

Italy’s Flat Tax Regime has become a compelling solution precisely because it offers a clear framework for individuals who already have international structures in place. Unlike many tax regimes that require the liquidation or repatriation of foreign assets, the Italian system allows these vehicles to remain operational and confidential — provided that the relocation is planned correctly.

How the Flat Tax Regime Interacts with Trusts and Holdings

Under the Italian Flat Tax, all foreign-source income is subject to a fixed annual substitute tax of €200,000, regardless of its amount or the number of foreign structures involved. This means that income received from trusts, foundations, holding companies or investment entities established abroad is included within the scope of the fixed tax and not subject to Italian progressive taxation.

More importantly, beneficiaries are not required to disclose the underlying foreign assets in their Italian tax filings, nor to pay wealth tax (IVIE/IVAFE) or declare the value of offshore companies and real estate. This creates a powerful combination of fiscal simplicity and confidentiality, while maintaining full compliance within EU and OECD frameworks.

The Role of Trusts in Wealth Protection

For many families, trusts remain the cornerstone of intergenerational wealth planning. Italy’s Flat Tax does not interfere with the structure or governance of foreign trusts; instead, it neutralizes the taxation of income received from them. This ensures that beneficiaries can continue to receive distributions, dividends or gains without triggering additional obligations in Italy.

When properly managed, this approach allows families to maintain their international estate plans intact while benefiting from Italy’s lifestyle, EU access and long-term fiscal clarity. The key is to document the trust’s independence and ensure that the settlor or beneficiaries meet the non-residency conditions for the previous ten years before relocating.

Managing Holding Companies and Active Businesses

Entrepreneurs who own holding companies abroad often face significant challenges when moving between jurisdictions. Italy’s Flat Tax Regime, however, allows them to retain their corporate structures outside Italy without exposing the underlying business income to local taxation.

Whether the holding controls real estate assets, financial investments or operating companies, the profits and dividends distributed from these entities remain covered by the substitute tax. This allows business owners to preserve their global footprint while establishing a reputable EU residency for themselves and their families.

For executives or shareholders who remain active in management, careful planning is essential to define where the effective management of the company takes place, ensuring that no permanent establishment risk arises in Italy. With the right structuring, it is entirely possible to operate internationally while enjoying the benefits of the Italian regime.

Family Offices and Long-Term Coordination

Many families moving under the Flat Tax Regime also manage family offices or fiduciary setups that coordinate investments, philanthropy and governance across multiple jurisdictions. Integrating these structures with Italian residency requires a bespoke approach — aligning legal, banking and compliance procedures while preserving confidentiality and control.

The real advantage of Italy’s system is its predictability over time. With a fifteen-year duration, the regime allows long-term wealth management strategies to be executed without the fear of sudden fiscal changes. It also enables family offices to operate transparently within a G7 jurisdiction, enhancing credibility with banks, institutions and partners.

Why Integration Planning Is Essential

Although the Flat Tax provides a high level of flexibility, pre-move planning is critical. The Italian tax authority focuses primarily on residency and source of income, but any inconsistency between personal and corporate positioning can create unnecessary risk. Before relocating, individuals should coordinate the legal documentation of their trusts, holding entities and family office operations to ensure a coherent fiscal narrative.

A properly managed relocation allows wealth structures to remain exactly as they are — offshore, compliant and efficient — while enjoying a predictable and legitimate fiscal environment in Italy.

A Modern Framework for Established Wealth

Italy has transformed itself into a destination not only for lifestyle and culture, but also for structured, high-level wealth management. Its Flat Tax Regime brings together the discretion of traditional private banking jurisdictions and the credibility of a major EU economy. For families who already have their wealth organized internationally, Italy offers a rare opportunity to combine elegance, legal certainty and fiscal intelligence.

Thinking About Integrating Your Trusts or Holdings into the Italian Flat Tax?

We provide confidential, end-to-end support for entrepreneurs, families and advisors managing international wealth structures. From tax and legal coordination to residency planning, compliance and lifestyle integration, we ensure a seamless transition to Italy under the Flat Tax Regime.

📩 Email: info@knotted.ch

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