Italy’s Investment Management Exemption Avoids Foreign PE Risk

One of the reasons why jurisdictions attract non-resident investors is the ability to appoint locally-based investment managers without creating a tax risk for themselves. Very few tax authorities are committed to securing this environment by offering the investment manager exemption. Italy recently implemented the Investment Management Exemption (IME) regime which provides a safe harbor to ensure that foreign investment vehicles (and directly or indirectly controlled entities) do not trigger a permanent establishment (PE) due to the vehicles’ investment manager operating in Italy on their behalf or for their benefit if the investment manager can be assumed to be acting independently ...