Italy Looks to Lure UK Asset Management Firms
The city of Milan is stepping up its efforts to become a part of London’s asset management industry after Brexit is complete. A recent plan has been derived for a delegation from the Italian government to meet with UK companies in the next couple of weeks. Milan, the financial hub of Italy, hopes that up to 1,500 asset management and investment banking jobs will move from London to Italy. The initial attempts by the Italian Finance Ministry to entice fund managers in 2016 were unsuccessful after prime minister Matteo Renzi’s failure to finalize and pass through constitutional reforms. These reforms were to deregulate the financial industry, making it more appealing to foreign fund managers.Last year, the Italian government changed its personal tax regime in an attempt to lure high-earning Italians to come back to the homeland. Mr. Pagani, the chief of staff of Italy’s Finance Ministry, said this was designed with the interests of portfolio managers and fund company executives in mind. Some of the new incentives include a 50% reduction of income tax for five years for middle managers and a flat €100,000 annual tax on foreign earnings for wealthy individuals, lasting around 15 years.
According to recent figures from the European Fund and Asset Management Association, Italy’s fund industry is the sixth largest in Europe. This accounts for approximately 5% of the European Financial market share and €1.2tn in assets.
“There is a consensus that London will remain an important player in the European financial sector in the future” said Keith Knutsson of Integrale Advisors.