Obtaining Residency in San Marino: Options and Opportunities for Foreign Entrepreneurs

San Marino is an independent Republic, the oldest in the world, and it is not part of the European Union or the Schengen Treaty. However, regular entry into the Schengen area is also considered valid for San Marino.

 

There are several laws regarding residency in San Marino, and I think that those of articles 16-bis and 16-ter are the most interesting for the American entrepreneur who is married and has children under 25 years old:

 

  1. Law on residence permits for entrepreneurial reasons (2010): less competitive compared to other provisions on residency, it provides a longer process and the presentation of a business plan with employment commitments.
  2. Residence for economic reasons (2017): aimed at those who start an economic activity in a corporate form with at least 51% ownership of the share capital, and it requires hiring a certain number of workers from the employment initiation lists.
  3. Elective Residence (art. 16-bis, 2017): requires the purchase of a property for at least 500,000 euros or a secured deposit of at least 600,000 euros in bonds issued by the Sammarinese State or in a fund established by the Most Excellent Chamber. There are charges and limitations.
  4. Elective Residence 2020 (art. 16-ter): reserved for those who have never been fiscally resident in San Marino and earn income abroad. The duration is 15 years, and it involves the payment of a substitute tax on foreign income. 


Residence for economic reasons 

The residence referred to in point 2) concerns those who start an economic activity in a corporate form with at least 51% ownership of the share capital. In the case of business activities in sectors to be incentivized, at least one permanent employee should be hired from the employment initiation lists. In the case of hiring a larger number of workers, including those hired for a fixed term, at least 50% of these must be hired from the employment initiation lists. If the business activity is in a sector not included among those to be incentivized, at least three permanent employees should be hired from the employment initiation lists. In the case of hiring a larger number of workers, including those hired for a fixed term, at least 50% of these must be hired from the employment initiation lists. The sectors to be incentivized are listed below. An additional requirement is the establishment of a real guarantee on a bank deposit or other financial instrument in favor of the Most Excellent Chamber, worth €75,000.00 

 

Elective Residence art. 16-bis

This is a residence that is acquired through an investment in the Republic. To obtain this type of residence, one of the following two options is necessary:

  1. Purchase for a price not less than 500,000 euros of a building to be used as one's own residence or that of one's family, whether already completed, to be renovated, or in a raw state; the purchase can also take place through the signing of a real estate lease.
  2. A non-interest-bearing deposit, bound for 10 years, not less than 600,000 euros in securities issued by the Sammarinese State or in a fund specifically established by the Most Excellent Chamber. Fees: tax of 10,000 euros, rights for 1,000 euros. In the first 10 years, holders of elective residence: a) cannot access any type of dependent work relationship in the Broad Public Sector and in entities that, public or private law, are participated by the Most Excellent Chamber; b) do not have the right to receive benefits, grants, checks and public disbursements of any kind linked to the possession of residence, nor to the contribution of Law 31 March 2015 n.44; c) are required to take on at their own total expense the costs of health care, through private insurance covering all related risks.

Elective Residence 2020 art. 16-ter 

Another type of elective residence, introduced in 2020, is that of art. 16-ter, reserved for those who: a) have never been fiscally resident in the Republic of San Marino and generate income outside of RSM. The duration is 15 years. The applicant must demonstrate that they have sufficient resources. Regarding income generated abroad, a substitute tax is due for the general income tax of individuals equal to 7% on the "net border" as defined by article 13, paragraph 3 of Law n. 166/2013 and its 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 residence's validity. Until the consolidation of residence, the holder of atypical residence and secondary applicants: a) cannot access any type of dependent work relationship in the Broad Public Sector and in entities that, public or private law, are participated by the Most Excellent Chamber; b) do not have the right to receive benefits, grants, checks and public disbursements of any kind linked to the possession of residence, c) are required to take on at their own total expense the costs of health care, through private insurance or with the Institute for Social Security, in the ways established by the Institute itself, to cover all related risks.

There are other forms of residence, for start-ups, retirees or companies, which I don't think are of interest to the potential client. The one for start-ups is interesting for the company's tax treatment (zero for ten years). You will know that there is a convention against double taxation between Italy and San Marino and that the small Republic is outside any type of fiscal list as well as being perfectly collaborative and compliant for Moneyval. The IGR (personal income tax) is tiered and over 75Ke the rate is 32%. The IRPEG (corporate income tax) is 17%, with reductions to 50% (newco) or 100% (Start up) depending on the case. Of course, we are able to assist in every phase the person who wishes to acquire residence.

Rules for movement within Italy and UE

Main rules for movement within the EU for residents of San Marino San Marino, while being a sovereign and independent entity, has a series of agreements with Italy and the European Union that facilitate movements between these regions. Generally, a resident of San Marino (with the obligation to reside at least 183 days in the Republic) would have the right to enter and stay in Italy or other European Union countries for short periods without the need for a visa. However, residence in San Marino does not automatically confer the right to long-term stay or to settle in a European Union country, such as Italy. These rights are regulated by the laws of the European Union and individual member nations. A non-European citizen residing in San Marino may need a residence permit to live long term in a European Union country. As for the issue of identity cards, San Marino issues identity documents to its residents, but these are not equivalent to a European identity card. Therefore, while an American citizen residing in San Marino could use the Sammarinese identity document to travel, living long term in another EU country, like Italy, might require additional documents or permits.

The concept of "short-term stay" generally refers to the 90-day rule in the Schengen area. This rule stipulates that a non-EU citizen can stay in a Schengen area country for a maximum of 90 days within a 180-day period without the need for a visa. The Schengen area includes most of the European Union countries, as well as some non-EU member countries, including Norway, Iceland, Switzerland, and Liechtenstein. The 90-day count includes entry and exit from the Schengen area, as well as travel between Schengen area countries. For example, if an American citizen stays in France for 30 days, then in Germany for another 30 days, and finally in Italy for 30 days, they would have used up their 90 days in the Schengen area. If an individual wants to remain in a Schengen area country for a longer period, they generally need to apply for a long-term visa or a residence permit. It should be noted that negotiations for San Marino's entry into the EU are in a very advanced state.

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