Latest / IMI Podcasts / 4 Ways to Get Residency in San Marino: Single-Digit Tax in the World’s Oldest Republic

Transcript

4 Ways to Get Residency in San Marino: Single-Digit Tax in the World’s Oldest Republic · IMI Podcasts

• 0:00
  SPEAKER_00: The Republic of San Marino, which is 23 square miles and hosts a population of about 33,000, is located in the center of the Italian peninsula and is less than six miles from the renowned coastline known as the Riviera Romagnola.
• 0:15
  SPEAKER_00: San Marino is a full member of the United Nations, the International Monetary Fund, the International Court of Justice, and the Council of Europe.
• 0:24
  SPEAKER_00: San Marino is also the oldest republic in the world.
• 0:28
  SPEAKER_00: The Grand General Council, which includes 60 members that the population elects for five-year terms, governs the nation.
• 0:35
  SPEAKER_00: The Captain's Regent, the two heads of state, maintain a direct line of communication with the Republic's citizens to ensure continuous, productive dialogue between the population and top decision makers.
• 0:47
  SPEAKER_00: San Marino has a unique tax structure that distinguishes it from many other countries.
• 0:51
  SPEAKER_00: For certain residents, pension taxation is set at 6%, while property owned for over five years is exempt from capital gains tax.
• 1:00
  SPEAKER_00: The country applies a 3% tax rate on foreign source dividends and 8% on dividends and interest.
• 1:06
  SPEAKER_00: Corporate entities face a standard tax rate of 17%, though the government may offer temporary reductions.
• 1:13
  SPEAKER_00: San Marino also offers specific tax rates for certified innovative startups.
• 1:18
  SPEAKER_00: When it comes to profit distribution, the government taxes shareholders at a 5% rate, while non-individual entities enjoy a 0% rate.
• 1:27
  SPEAKER_00: Unlike many European nations, San Marino does not implement a value-added tax system.
• 1:33
  SPEAKER_00: Instead, it uses a single-phase tax that applies specifically to imports.
• 1:37
  SPEAKER_00: The government offers incentives for tax residents as well, especially for retirees, investors, and entrepreneurs.
• 1:44
  SPEAKER_00: San Marino allows foreigners to become tax residents if they meet the government's requirements.
• 1:50
  SPEAKER_00: The Congress of State must approve all applications for tax residents.
• 1:54
  SPEAKER_00: The government limits the quota for new tax residences, so applicants must prepare the necessary paperwork well in advance to apply.
• 2:02
  SPEAKER_00: The government adjusts the number of available places each year based on provisions in the current year's budget.
• 2:08
  SPEAKER_00: Residency types.
• 2:10
  SPEAKER_00: First is the elective residency.
• 2:13
  SPEAKER_00: This option is open to investors who purchase a property with a minimum value of 500,000 euros or who make a 10-year term deposit for bonds that the San Marino government issues.
• 2:24
  SPEAKER_00: The minimum term threshold is 600,000 euros.
• 2:28
  SPEAKER_00: There is also a fee of 10,000 euros.
• 2:30
  SPEAKER_00: Elective residency cardholders are eligible for a 3% tax incentive on dividends.
• 2:36
  SPEAKER_00: Second, residency for entrepreneurs.
• 2:39
  SPEAKER_00: This type of residency is open to entrepreneurs who hold at least 51% of a company's capital stock, hire San Marino employees, and make a guarantee deposit with the state, directors, and partners of companies that the government defines as high tech, or for entrepreneurs who launch an investment project in certain sectors of particular interest to the republic.
• 3:00
  SPEAKER_00: Third, atypical residency with reduced taxation.
• 3:04
  SPEAKER_00: The government grants this type of residency to individuals who have never held tax residency in the Republic of San Marino or who have not yet finalized their registered residence in the country.
• 3:15
  SPEAKER_00: These applicants must generate income abroad, which incurs a 7% general substitute tax on personal income.
• 3:22
  SPEAKER_00: The minimum amount of tax due for a typical residency with reduced taxation is 10,000 euros, while the maximum tax is 100,000 euros.
• 3:32
  SPEAKER_00: Lastly, is the atypical residency for retirees.
• 3:36
  SPEAKER_00: Atypical residency for retirees is for foreign retirees in the private sector who can demonstrate an annual income of at least a gross of 50,000 euros or movable assets of at least 300,000 euros.
• 3:49
  SPEAKER_00: The government taxes pensions at 6% and calculates this tax on the gross pension income.
• 3:55
  SPEAKER_00: If the applicant has served as an executive or official of an international body and demonstrates an annual income of at least a gross of 100,000 euros per year, the government applies a general income tax of 3%.
• 4:09
  SPEAKER_00: Maine applicants can extend their San Marino residence permits to family members, including spouses, dependent children up to age 25, and disabled children.
• 4:19
  SPEAKER_00: This episode first appeared as an article by Valentino Coletto on IMIDaily.com.
• 4:26
  SPEAKER_00: Subscribe for free to the IMI newsletter for breaking news and updates from the investment migration industry, and upgrade your membership to IMI Pro to get access to our exclusive professional community, citizenship catalog, investment migration company Rolodex, private briefings, and more members only content.