Can Iranian citizens buy property in Italy?

The Italian reciprocity rule

Under Article 16 of the Preliminary Provisions to the Italian Civil Code, foreign nationals may generally enjoy the civil rights granted to Italian citizens subject to the condition of reciprocity, without prejudice to special legislation.

There are, however, several circumstances in which an individual reciprocity assessment is not required.

The Italian Ministry of Foreign Affairs and International Cooperation states that, according to the established interpretation, reciprocity does not need to be individually verified for nationals of countries with which Italy has entered into a Bilateral Investment Treaty (BIT), in relation to matters covered by that treaty.

Within its scope, the legislation implementing the international agreement operates as a lex specialis in relation to the general reciprocity rule.

The bilateral investment treaty between Italy and Iran

Italy and the Islamic Republic of Iran signed an Agreement on the Reciprocal Promotion and Protection of Investments in Rome on March 10, 1999.

Italy ratified the Agreement by Law No. 171 of July 11, 2002, published in the Italian Official Gazette No. 184 of August 7, 2002.

The Agreement entered into force on August 8, 2003 and remains in force.

Investments protected under bilateral investment agreements include ownership rights over immovable property and other rights in rem.

The acquisition of Italian real estate by an Iranian citizen therefore falls, as a general rule, within the scope of investments covered by the Agreement.

Buying real estate in Italy

An Iranian citizen may therefore, as a general rule, purchase real estate and acquire other rights in rem over property situated in Italy, without having to establish reciprocity on a case-by-case basis by reference to Iranian domestic law, insofar as the transaction falls within the scope of the bilateral Agreement.

All other provisions of Italian law governing real estate transactions remain fully applicable.

The Italian Notary handling the transaction will therefore carry out the legal checks required for the purchase, including the identification and legal capacity of the parties, title to the property, cadastral matters and all other requirements imposed by Italian law.

Iranian citizens legally residing in Italy

The position may be even more straightforward where the Iranian citizen is legally resident in Italy.

Italian Legislative Decree No. 286 of July 25, 1998 provides for circumstances in which legally resident non-EU nationals are treated in the same way as Italian citizens for the enjoyment of civil rights and are therefore exempt from the reciprocity requirement.

The individual position must be assessed according to the type and validity of the residence permit held by the purchaser.

Dual nationality

Where the purchaser holds Iranian citizenship together with another nationality, the position should be assessed on the basis of the purchaser's official documents and the legal rules applicable to the nationalities concerned.

Iranian citizenship must be established by appropriate official documentation.

Reciprocity and financial compliance are different issues

The legal ability of an Iranian citizen to purchase real estate in Italy does not remove the need for the other checks required under Italian and European law.

Given the international regulatory framework applicable to Iran, a transaction may require specific checks concerning the purchaser, any connected persons or entities, the banks involved, the source of funds and the channels through which the purchase price is transferred to Italy.

These matters are separate from the reciprocity requirement and must be assessed in each individual case according to the legislation and restrictive measures in force at the time of the transaction.

The role of the Italian Notary

Before proceeding with the purchase, the purchaser should provide the Italian Notary with their passport, evidence of citizenship and, where relevant, documentation concerning their legal residence in Italy.

The Notary can then verify in advance:

• the purchaser's legal ability to acquire the property;
• the purchaser's identity and citizenship documentation;
• any implications arising from dual nationality;
• the applicable anti-money laundering requirements;
• the source and transfer of the purchase funds;
• any applicable international or European restrictive measures;
• all other legal requirements necessary to complete the transaction.

In summary: an Iranian citizen may, as a general rule, purchase real estate in Italy. Italy and Iran are parties to a Bilateral Investment Treaty covering investments including rights in immovable property. Each transaction must nevertheless be reviewed in advance by the Italian Notary, including for anti-money laundering purposes and compliance with any applicable restrictive measures.

Main Legal Sources

Article 16 of the Preliminary Provisions to the Italian Civil Code.

Italian Legislative Decree No. 286 of July 25, 1998.

Agreement between the Government of the Italian Republic and the Government of the Islamic Republic of Iran on the Reciprocal Promotion and Protection of Investments, signed in Rome on March 10, 1999.

Italian Law No. 171 of July 11, 2002, ratifying and implementing the Agreement.

Italian Ministry of Foreign Affairs and International Cooperation – Rights and Reciprocity.