A practitioner's checklist for Italian relationships

Classifying the relationship

The first task in reviewing a book of Italian clients is classification. Each relationship must be assigned to one of the categories that Italian and European law distinguish, because the category determines the permissible channel. A natural person resident in Italy, whether classified as a retail client or as a professional client on request, can be served actively only through an Italian branch or an EU entity with a passport. A per se professional client within Annex II MiFID II, such as a large family holding company, or an eligible counterparty can be served from Switzerland if the Swiss provider holds an authorization under Article 28 paragraph 6 or Article 29-ter paragraph 6 TUF. A relationship of either kind may be served passively from Switzerland where it rests on the client's exclusive initiative. The classification must be reviewed when the client's circumstances change, for example when a client resident in Ticino moves back to Italy or when a holding company falls below the Annex II thresholds.¹

Residence requires particular attention. The reform of Italian tax residence by Legislative Decree No. 209 of 27 December 2023, effective from 1 January 2024, introduced physical presence and a new concept of domicile based on personal and family relations as criteria. A client who has moved to Lugano may thus remain resident in Italy for tax purposes.² For market access purposes the decisive factor is where the client is established or situated when he receives the service. A client who lives in Lugano and is served there receives the service in Switzerland even if Italy considers him a tax resident. The same client, telephoned at his house on Lake Como, receives it in Italy. The bank's records should show where the client was when each service was provided.

The review of a legacy book

A bank that takes over or reviews a legacy book of Italian clients should proceed in a fixed order. It should first establish the tax status of each relationship, which Chapter E.II describes and which the voluntary disclosure programme and the automatic exchange of information will generally have resolved. It should then reconstruct the market access history: how the relationship was opened, by whom, where meetings took place and which services were provided. Where the file shows activity in Italy, the bank should assess the residual criminal and tax risk with Italian counsel, taking into account the limitation periods for the offences under Article 166 TUF and Legislative Decree No. 74/2000. Finally it should decide the future channel of the relationship: passive service from Switzerland, transfer to an Italian branch or EU entity, or termination.

The CRD VI transition adds a deadline. Contracts for core banking services concluded before 11 July 2026 may be managed but not renewed. Contracts of indefinite duration must be transferred or terminated by 10 January 2028, unless the client takes the initiative to continue them.³ A bank should therefore identify, before the end of 2026, all deposit, credit and guarantee relationships with Italian residents, document the client's initiative where it exists and plan the transfer or termination of the rest. A credit line that the bank renews on its own initiative after 11 January 2027 would fall outside the protection of the transitional rule.

Notes

1. Catenacci (above); TUF, Art. 28 para. 6 and Art. 29-ter para. 6 (above). ↩
2. Legislative Decree No. 209 of 27 December 2023, amending Art. 2 para. 2 TUIR with effect from 1 January 2024 (residence, presence including fractions of days, and domicile as the place where personal and family relations mainly develop), Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art2.html; see Chapters E.V and H.II. ↩
3. Legislative Decree No. 208/2025 (above), Art. 4 para. 2. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.