Americans Moving to Italy
Financial Planning and Investing Considerations for Americans Moving to Italy
Italy has always been among the most popular destinations for Americans moving to Europe, thanks to it’s incredible climate, history, culture and cuisine.
Moving to Italy comes with financial planning and investing challenges though, many of which should ideally be considered before you move, or as soon as possible afterwards. Seeking advice as soon as possible can make a significant difference to your financial situation,
The financial challenges that Americans in Italy face include maintaining and opening US brokerage accounts as an expat, retirement planning, how and where to invest, minimizing currency exchange loss, US and Italian tax optimization, and international estate planning.
Download our guide below or schedule a consultation.
What else do US Citizens moving to Italy need to know?
The list of financial factors that Americans making the move to Italy doesn’t end there. You’ll also have to think about where to invest, how to open an Italian bank account, which residency visa to apply for (and how to apply for it), and find out about local and national Italian taxes and how they interact with US taxes for cross-border Americans.
In the video opposite, we provide a very brief overview of some of the factors you should consider.
Download our in-depth guide below, or schedule a consultation to discuss your situation with one of our expat experts.
Our Story
EuroAmerican Financial Advisors is the only independent financial advisory firm specializing in serving Americans in Italy.
We provide investment advice and financial planning services tailored for Americans in Italy. The financial issues faced by Americans in Italy are quite different compared to Americans living within the United States due to cross-border taxation, currency fluctuations, as well as global investment questions.
We are regulated and licensed in Italy, and our advisors are also licensed in the US. We offer Americans in Italy a personalized and optimized service, transparent fees, easy communication, tax efficient investment strategies; and most importantly the peace of mind that comes from dealing with an investment advisory firm that specializes in financial planning in to both the US and Italy.
We’ve created an in-depth guide to the financial planning considerations for Americans moving to Italy, which you can download below.
EAFA Financial Planning Considerations Guide for Americans moving to Italy
Enter you details below to download our guide to financial planning considerations for Americans moving to (or living in) Italy
Our Services
Investment Advice
Most firms use model portfolios that don’t take into account your situation as an American in Italy affected by both jurisdictions’ tax and regulatory regimes, and your withdrawal plans or future needs in Euros and/or dollars. Such portfolios also don’t allow the flexibility to adapt depending on the economic cycle, market volatility, or your cash needs.
At EAFA, we build a personalized investment strategy for you as an American in Italy. We work with our partners and utilize expat-compliant investments and brokerage accounts to implement the strategy and make tactical adjustments when necessary. In this way, we ensure that you remain optimally on track to meet your financial goals.
Financial planning
We have the experience and knowledge to manage cross-border portfolios in a tax efficient manner in both the US and Italy while also mitigating risks arising to your wealth or income from dollar/Euro currency movements. We have advisors with both the US Certified Financial Planner (CFP) designation, and the European Financial Planner (EFP) designation.
At EAFA, our financial planning process encompasses the additional complexities that living as an American expat in Italy entails while maintaining an unwavering focus on your financial goals. We also address non-investment issues such as estate planning, US and Italian taxation, education planning for children or grandchildren, and retirement considerations.
Retirement planning
Most firms don’t have experience working in both Euros and dollars to minimize costs, currency exposure and taxes in both Italy and the US.
At EAFA, we will create a retirement plan based on your plans and aspirations, that will minimize taxes and currency exposure, and which is globally diversified. We understand that you may want to maximize travel and leisure in the early years of retirement when you are most active, and we will stress test our plans using historical scenarios like the global financial crisis, pandemics, and periods of high and low interest rates, to ensure you are prepared and protected for whatever may come.
Why EAFA?
We specialize in providing financial planning and investment advice for Americans living in Italy.
We are independent advisors, licensed and regulated in Italy, and regulated US advisors, allowing us to manage and globally diversify your investments in your best interests, not ours. We have the knowledge and experience to minimize your tax exposure in both jurisdictions as well as risks of losses relating to dollar/Euro currency movements.
We take a holistic approach, learning about your current situation, future plans and investment goals. We are expats ourselves, so we fully understand the issues and challenges Americans in Italy face, as well as the peace of mind that comes from trusting your finances to experts, allowing you to relax and enjoy the great adventure of living abroad.
Ready to Plan your Move to Italy?
Schedule a complementary consultation to discuss your options. We can transfer your existing investments to an expat-compliant US brokerage account without creating a taxable event if necessary.
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When you’re ready, sign our Know Your Client form and advisory agreements online.
A move to Italy can bring opportunities to enjoy its regional culture, food, history, and healthcare system. For some Americans, the financial picture is also shaped by special Italian tax arrangements for qualifying incoming workers or new residents with substantial income from abroad.
However, the investments you bring with you, or purchase after arriving, must be considered under two sets of rules. American tax and reporting obligations can continue throughout your time in Italy, while local taxation and European investment requirements may affect your options. We look at the main points to consider when planning your investments as an American resident in Italy.
Investment challenges and tax rules
US citizens and green card holders generally remain within the American tax system despite living abroad. Becoming resident in Italy can mean that the same investments must also be assessed for Italian income tax, asset declarations, or other local obligations. Meanwhile, European regulations can mean that certain US funds and brokerage products aren’t available to retail investors based in Italy. It can therefore be difficult to identify an account or investment that works equally well in both jurisdictions.
A coordinated approach is preferable to deciding on investments purely by their treatment in either country. A cross-border advisor can review your present holdings, identify potential reporting issues, and recommend a portfolio consistent with your financial objectives. Where income is subject to tax in both countries, the US Foreign Tax Credit may help reduce the overall burden. The available relief and reporting obligations should be considered before making major transactions.
Foreign mutual funds (PFICs)
An investment fund marketed in Italy may be appropriate under Italian rules but less suitable for someone filing an American tax return. The IRS can classify many non-US funds as Passive Foreign Investment Companies (PFICs). This often brings additional filing obligations and can create an unfavorable tax calculation when you receive distributions or sell the holding.
Italian and other European ETFs, foreign mutual funds, and certain insurance-linked investments may all require particular attention. Alternatives could include holding shares and bonds directly, or using US-domiciled investments where access is possible under EU investor rules. The correct approach depends on factors such as tax treatment, costs, diversification, and your future plans. A US expat investment advisor can help you evaluate the practical choices before you commit funds.
Benefits of Italy’s special tax regimes for American expats
Italy offers tax incentives that may benefit some American expats moving to the country. Two important options are the inbound workers regime, often referred to as the impatriati regime, and a separate flat-tax regime for qualifying new residents with foreign-source income. These arrangements have different eligibility requirements and cannot simply be combined. Key considerations include:
1. Relief for incoming workers: Under the rules applying to qualifying arrivals from 2024, 50% of eligible Italian employment or self-employment income may be excluded from taxation, up to an annual income ceiling of EUR 600,000, generally for five tax years. Enhanced relief may apply in certain cases involving minor children.
2. Flat tax on foreign income: Qualifying new residents may elect a fixed annual tax in place of ordinary Italian income tax on most foreign-source income. For people transferring legal residence to Italy from 2026, the amount is EUR 300,000 annually, making it principally relevant to individuals with substantial foreign income.
3. Different eligibility and planning requirements: The inbound workers regime depends on factors including previous residence, professional qualifications, and work performed in Italy. The new-resident flat tax generally requires non-Italian tax residence for at least nine of the previous ten tax years.
These regimes do not exempt Americans from US tax obligations, and the treatment of investments differs substantially between them. Seek guidance from an Italian tax professional experienced with American expats before selecting or relying on either regime.
Italian retirement accounts
Italy’s retirement system includes a public pension administered principally by the Istituto Nazionale della Previdenza Sociale (INPS), alongside employer-related and private retirement savings arrangements. The public system is based primarily on contributions made throughout working life, while supplementary pensions can help provide additional retirement income.
If you are employed in Italy, you may encounter supplementary pension funds, known as fondi pensione, as well as trattamento di fine rapporto (TFR), an employment-related severance benefit. These arrangements can play an important role in retirement planning and may offer advantages under Italian tax rules. However, their US treatment may be different, and some structures or underlying investments can raise PFIC, trust-reporting, or other cross-border questions. Coordinating these benefits with your existing US retirement plans is essential.
IRA contributions
If you continue earning qualifying income while living in Italy, you may still be able to fund an IRA within the US contribution limits. The important distinction is between compensation that counts for IRA purposes and income removed from US taxable income by the Foreign Earned Income Exclusion. Excluded amounts generally cannot support a contribution. Depending on your circumstances, it may be appropriate to examine the Foreign Tax Credit as an alternative way to address double taxation.
The contribution rules are only one part of the decision. Before converting retirement savings to a Roth account or taking payments from an IRA or 401(k), review how Italy will classify and tax the transaction. A favorable result on an American return does not guarantee the same result in Italy.
Tax considerations
US expats may become Italian tax residents if, for most of the tax year, they are physically present in Italy, habitually resident there, or have their principal personal and family connections there. Under ordinary rules, Italian tax residents are generally taxed on worldwide income, including investments, rental income, and pensions. The US-Italy tax treaty helps determine taxing rights, but Americans remain subject to US filing requirements. Key considerations include:
• Investment income and capital gains: Dividends, interest, and gains from many financial investments are generally taxed at a flat 26% rate in Italy, although exceptions and alternative regimes apply. US tax treatment can differ, making coordination important.
• Foreign financial assets: Italian tax residents may be subject to annual foreign-asset reporting, including quadro RW, and a tax on foreign financial assets known as IVAFE, generally levied at 0.2% of the value of relevant investments. Special rules apply to foreign bank accounts and eligible new-resident flat-tax participants.
• US pensions and retirement accounts: US Social Security, 401(k)s, traditional IRAs, and Roth IRAs can have different treatment under Italian law and the tax treaty. Timing withdrawals and confirming the classification of each account can help avoid unexpected liabilities.
Real estate
For Americans living in Italy, buying a property can be a long-term lifestyle choice as well as a possible investment. Rental properties may provide ongoing income, but purchase costs, maintenance, local taxes, and periods without tenants all influence the return. If you are deciding whether to buy or rent, consider how long you intend to remain in Italy and the costs of selling if your plans change. The taxation of any gain can depend on how the property was used and how long you held it; specific exemptions may apply to certain principal residences and properties owned for more than five years. Americans retaining real estate outside Italy should also review the possible foreign-property tax, IVIE, and any related reporting requirements.
Currency considerations
Living in Italy commonly means paying bills in euros while keeping some investments or retirement income in dollars. Our discussion of currency considerations explains how exchange-rate changes can alter the euro amount you receive from US assets. They can also affect the funds available for property purchases and other large transfers, even if the underlying investment value has not changed.
There are several ways to account for this risk in your planning:
1. Diversification: Consider the mix of currencies in your portfolio relative to your anticipated spending. Holding suitable investments across currencies and asset classes can reduce dependence on a single exchange rate, although it will not remove currency risk entirely.
2. Utilize multi-currency accounts: An account or payment service such as Wise may make it easier to maintain euro and dollar balances. It is worth comparing the exchange rates, transfer fees, and practical features before choosing a provider.
3. Engage with a currency broker: For a property purchase or another significant transfer, a provider such as Moneycorp can outline available exchange methods, including options for securing a rate in advance or hedging an exposure.
It can be helpful to discuss the investment side of currency risk with your financial advisor and the execution of larger transfers with a specialist broker. Both decisions affect how efficiently you can use your assets in Italy.
Wrapping up
An American investor in Italy needs to look beyond the performance of individual investments. Local tax on financial income, reporting of foreign assets, retirement account rules, and the eligibility requirements of Italy’s special tax regimes can each change the outcome. The continuing US tax position and the value of the euro against the dollar are also important parts of the picture. Taking account of these factors before making investment decisions, with guidance from advisers experienced in US-Italian financial planning, can help you develop a strategy that remains appropriate as your circumstances change.
If you have any questions about financial planning or investing as an American living in the EU, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.
Americans Moving to Italy Financial FAQs
What financial planning issues should Americans consider before moving to Italy?
Americans moving to Italy should review taxes, residency, investments, retirement planning, currency exposure, estate planning, and banking access before relocating.
Can Americans in Italy keep their US brokerage accounts?
Some US brokerage firms restrict services for Americans living abroad, so expats should confirm account policies before moving to Italy.
How should Americans in Italy manage investments across dollars and euros?
Investment strategies should consider currency fluctuations, income needs in euros, and maintaining globally diversified portfolios aligned with long-term goals.
What retirement planning challenges do US expats in Italy face?
Americans in Italy must coordinate US retirement accounts, Social Security, pension rules, healthcare costs, and cross-border tax considerations.
How do US and Italian taxes affect investment planning?
US citizens in Italy may face complex reporting and taxation rules affecting investments, retirement accounts, and financial planning strategies.
Why should Americans in Italy work with a cross-border financial advisor?
A cross-border advisor can help Americans in Italy coordinate investment management, financial planning, and compliance across both countries.