Individual Investment Plans (Piani Individuali di Risparmio or PIR) were launched in Italy in January 2017 in one of the biggest innovations in recent years that also has an important part to play in helping businesses. The aim of these plans is to direct investment towards Italian small and medium-sized firms, in an attempt to boost the domestic economy. Individual Investment Plans are similar to tried-and-tested schemes that were already in existence in other European countries, such as France and the UK.

What is an Individual Investment Plan?

Individual Investment Plans are tax wrappers that can take various forms (bonds, securities accounts, asset management mandates) and contain a variety of investment instruments (equities, bonds, ETFs, deposits and current accounts). The key factor with regard to constructing portfolios is that the following constraints are respected:

• At least 70% of the amount invested must go directly to companies headquartered in Italy, or companies domiciled in the European Economic Area, but with established operations in Italy
• At least 30% of this amount (21% of the total capital) must be invested in instruments issued by companies that are not listed on the Italian stock market’s FTSE MIB index
• The amount invested in a single issuer must not exceed 10% of the total
• Liquid instruments such as current accounts and deposits cannot exceed 30% of the total capital invested

Who can invest in an Individual Investment Plan?

Individual Investment Plans may be offered and managed by Società di Gestione del Risparmio (Italian investment management companies), or can take the form of an insurance policy, be part of “risparmio amministrato” (assets under administration) or be self-built. Most importantly, these plans are only available to individuals: companies and other legal entities are not eligible.

Investors must keep their plans for at least 5 years, and can invest up to €30,000 per year in a single plan and a maximum of €150,000 in total.

(To find out more about Tendercapital Target Italy – Tendercapital’s Individual Investment Plan, click here).

What are the tax benefits of an Individual Investment Plan?

Individual Investment Plans offer some very attractive tax benefits:

• If the investment is kept for more than five years, any capital gains and income earned are tax-exempt
• Individual Investment Plans are also exempt from inheritance tax