Family OfficeFinanceMortgagePropertiesAlternative financing for foreigners who want to invest in Italy

25 October 20230

Investing in Italy as a foreigner has become more feasible thanks to financing options for different types of investments, including real estate, startups, and other business ventures. These financing alternatives can be broadly categorized into leveraging, exploring loan options, and using financing methods. Let’s look at some of these options.

1. Bank loans;

Foreign investors can approach banks to obtain loans for their ventures. However, obtaining a bank loan can be considered a high-risk investment by the lending institution for startups or new businesses. Banks generally require collateral (such as a mortgage on a property) or personal guarantees to minimize risk.

2. Crowdfunding loans;

Crowdfunding is gaining popularity in Italy, as individuals can borrow money from investors instead of relying on a single institution. This method often offers investors higher interest rates than savings accounts, creating a mutually beneficial situation for both parties involved.

3. Facilitated finance;

Facilitated finance refers to initiatives subsidized by entities such as the Italian state, provinces, regions and even the European Union.
These grants are typically aimed at businesses, with the following characteristics. They are not randomly distributed. The low interest rates associated with these grants make them a practical choice for startups or businesses looking to expand their operations.

4. Venture capital;

Venture capital companies offer another avenue for startups with growth potential. These companies invest capital in the startup in exchange for ownership shares. While this can lead to funding, it can also involve giving up some control over the management of the startup.

5. Crowdfunding;

In addition to crowdfunding loans, general crowdfunding platforms such as Kickstarter or Eppela allow individuals or startups to pitch their projects and raise funds from backers. Crowdfunding can be reward-based or equity-based, offering backers a reward or an ownership stake.

6. Bootstrapping;

Bootstrapping is a self-financing approach in which individuals or startups use their own resources or loans from friends and family to finance their venture. This method encourages a sense of responsibility and prioritization. It involves the risk of straining personal relationships if the venture fails.

7. Business financing solutions;

There are also business financing solutions and subsidized finance options designed specifically for investors in Italy, which offer a structured path to securing the necessary financing for business ventures.

8.Programs offered by the European Union;

The European Union offers programs that facilitate access to finance. These programs provide indirect funding, supported by regional and national partners or intermediaries, in Italy.

Each of these funding options has advantages, difficulties and requirements. The decision on which option to choose depends mainly on factors such as the type of investment, the willingness of investors to take risks, and the regulatory rules governing investment in Italy.

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