MORE INFORMATION ON THE LAWS GOVERNING THE APPLICATION TO OBTAIN A RESIDENCE WITH A FAVOURABLE REGIME IN SAN MARINO

Atypical residence subject to a favourable tax regime is granted to natural persons who, not incurring the cases referred to in article 17 paragraphs 1 and 2 of Law no. 118 of 2010, satisfy the following conditions:

1. have never been fiscally resident in the Republic of San Marino or have not, at the date of entry into force of this article, consolidated their registered residence in the territory of San Marino, as deduced from the documentation requested from the competent Offices of the Republic of San Marino and specifically the Tax Office and the Civil Status Office;
2. produce income abroad.
   With regard to income produced abroad, a substitute tax for the general personal income tax equal to 7% on the “net border” is due as defined by article 13, paragraph 3 of Law no. 166/2013 and subsequent amendments with a minimum amount of 10,000.00 euros and a maximum of 100,000.00 euros for each fiscal year of the period of validity of the residence. The substitute tax is paid in a single solution by the date set for the payment of the balance of general income taxes. For the assessment, collection, litigation and sanctions, the provisions set forth for the general personal income tax shall apply, where compatible. The substitute tax is not deductible from any other tax or contribution.

The applicant for the atypical residence referred to in this article must file a specific application with the Department of Foreign Affairs and pay a tax fee for practical instruction, which absorbs all stamp duties and office fees, in the amount of €1,000.00 to be collected on the relevant budget chapter of the competence of the Registry and Conservatory Office. The following are attached to the application, in addition to the payment receipt:

1. copy of a valid document for expatriation, signed and declared authentic by the public official who receives the application;
2. preliminary contract or promise to purchase buildings or preliminary rental contract subject to the condition precedent of the granting of residency;
3. certificate of residence, general criminal record, certificate of pending criminal charges or equivalent documents (for countries where the same exists), certificate of tax compliance or equivalent documents (for countries where the same exists) issued by the country of last residence;
4. declaration in lieu of a sworn statement, made to the public official who receives the application, regarding the citizenships held, the places of residence in the last 5 years, the absence of criminal convictions, the absence of pending criminal charges against him and regular fulfillment of tax obligations in any country;
5. documentation to demonstrate that the applicant and family members who intend to transfer their residence to the Republic have sufficient resources for their own maintenance.

The Department of Foreign Affairs, having received the application including all the documentation referred to in the preceding paragraph, submits it to the attention of the Congress of State, which deliberates on the same within 60 days. The decision is not subject to appeal in any case. The deed of purchase referred to in letter b) of paragraph 3 is not subject to prior authorization by the Council of the Twelve and pays the current registration tax. The resolution of the Congress of State with which the atypical residence is granted is attached to the deed of purchase for the purposes of transcription and transfer.

The applicant for atypical residence, according to the procedures set out in paragraph 3, may apply for its extension limited to the subjects referred to in Article 16, paragraph 3 bis of Law no. 118 of 2010, in possession of the requirements set out in this law.

Until the consolidation of the residence pursuant to paragraph 14, the holderof atypical residence and the secondary applicants referred to in paragraph 6:

1. cannot access any type of employment relationship in the Enlarged Public Sector and in entities which, under public or private law, are participated in by the Most Excellent Chamber;
2. are not entitled to receive benefits, contributions, allowances and public grants of any kind linked to the possession of residence, nor to the contribution referred to in Law 31 March 2015 n.44;
3. are required to assume full responsibility for the costs of health care, through private insurance or with the Social Security Institute, in the manner established by the Institute itself, to cover any inherent risk.

The preferential tax regime referred to in this article is revocable and in any case ceases to have effects after fifteen years from the first tax period of validity. The effects of the preferential tax regime cease in any case in the event of omitted or partial payment, in whole or in part, of the substitute tax referred to in paragraph 2 in the amount and within the terms established by the current provisions of law. The effects produced in previous tax periods remain intact. The revocation or forfeiture of the regime precludes the exercise of a new request for atypical residence.

The revocation or forfeiture of the tax relief regime of the applicant also extends to family members. The forfeiture of the regime of one or more family members due to failure to pay or partial payment of the substitute tax referred to them does not entail forfeiture of the preferential tax regime for natural persons referred to in paragraph 1.

Upon granting atypical residency by the Congress of State, the Department of Foreign Affairs shall communicate to the applicant the outcome of the application and request the production of the following documentation:

1. in the case referred to in letter b) of paragraph 3 above, a certified copy of the public deed of sale or rental contract of the unit real estate;
2. declaration regarding the place of residence in the Republic.

The Department of Foreign Affairs transmits to the Civil Status Officer the data necessary for the registration of the applicant in the Registers of the resident population and proceeds to initiate, through the Gendarmerie, the appropriate checks also regarding the documentation produced; it also transmits the applicant’s data to the Tax Office for the relevant tax inspections, which reports annually to the Department of Foreign Affairs regarding the maintenance of the requirements.

Violation of the duties set forth in this article shall result in the immediate revocation of the atypical residence of the holder of atypical residence and of the secondary applicants to whom it has been extended. Atypical residence shall also be revoked with immediate effect in the cases provided for in Article 17 of Law No. 118 of 2010. Those who have expressly made false declarations or have produced deeds and documents that have turned out to be false, without prejudice to the criminal sanctions in force, shall be subject to the immediate revocation of their residence.

In particular, in the event of failure to pay or partial payment, in whole or in part, of the substitute tax or in the event of failure to renew the medical insurance, the beneficiary is granted ninety current days to restore the satisfaction of the requirements requested for the granting and maintenance of atypical residence, after which the office, which has ascertained the non-compliance, reports them to the Office of Civil Status, Demographic and Electoral Services for the revocation of the residence. The effects produced in previous tax periods remain intact.

The Secretary of State for Foreign Affairs reports quarterly to the Permanent Council Commission for Foreign Affairs, Emigration and Immigration, Security and Public Order, Information pursuant to Article 1 of the Delegated Decree of 8 May 2020 no. 75. 
A maximum number of residences may be granted, pursuant to this article, equal to no. 100 per year, not counting in this numberthe subjects referred to in paragraph 6 and the subjects, with residence not yet consolidated, who intend to join the preferential tax regime. This number can be modified every year by delegated decree.

After ten years from registration in the register of the resident population, the atypical residence is considered consolidated and therefore the prohibitions, obligations and constraints provided for in this article cease, with the exception of the previous paragraph 8, for the foreigner and for the subjects referred to in paragraph 6 and the general rules on residence apply, as well as the provisions of paragraphs 3 bis, 3 ter and 3 quater of article 16 of Law no. 118 of 2010. 

The prohibitions, obligations and constraints provided for in this article also cease for the foreigner who renounces the atypical residence.