Italy is currently undergoing a pivotal referendum that could reshape the country’s citizenship policies and labor protections. This development holds particular significance for foreign investors and the migrant community living and working in Italy.
The referendum addresses two main issues: reducing the residency requirement for citizenship from 10 years to 5 years, and enhancing labor protections by making dismissals more difficult and increasing compensation for laid-off workers. The citizenship reform would directly impact approximately 2.5 million foreign nationals currently living in Italy, including many international investors and entrepreneurs who have established businesses in the country.
For foreign investors, this represents a significant opportunity. A faster path to citizenship would make Italy more attractive for long-term settlement, providing access to voting rights, eligibility for public positions, and enhanced freedom for cross-border business activities within the EU. However, the enhanced labor protections may raise personnel costs and reduce flexibility in workforce management.
The referendum faces a critical challenge: low voter turnout. According to Italy’s Interior Ministry, only 15.9% of eligible voters had participated by 17:00 GMT on the first day, significantly lower than the 30.3% recorded during the 2011 referendum. For the referendum to be valid, it requires at least 50% + 1 voter participation, a threshold that appears difficult to reach due to low public awareness, timing coinciding with school holidays, and a passive stance from the current government.
Prime Minister Giorgia Meloni’s decision to visit polling stations but not cast a ballot has been criticized by the opposition as “anti-democratic” for not helping reach the necessary participation threshold. Analysts like Wolfango Piccoli from Teneo consultancy described this as “yet another example of her trademark fence-sitting.”
The political implications extend beyond the immediate vote. Cultural entrepreneur Michelle Ngonmo, who moved to Italy from Cameroon as a child, emphasized the broader significance: “This referendum is really about dignity and the right to belong, which is key for many people who were born here and spent most of their adult life contributing to Italian society.” Italian singer Ghali, born in Milan to Tunisian parents, urged participation, noting the referendum’s risk of failure if turnout remains low.
From an investment perspective, the outcomes could significantly impact Italy’s attractiveness as a destination for foreign capital and talent. A shorter path to citizenship could enhance investor visa programs and influence family investment and relocation decisions. The debate has also highlighted Italy’s ongoing struggle to balance worker protection with economic flexibility, a consideration crucial for businesses operating in the country.
Regardless of the outcome, this referendum has brought attention to fundamental questions about Italy’s approach to immigration and labor rights. It addresses the need to improve integration processes for second-generation immigrants while aligning citizenship policies more closely with other EU countries. Even if the referendum fails due to low turnout, political analysts suggest it could serve as a moral indicator of public sentiment on these critical issues.
The referendum represents more than just a political event – it could fundamentally reshape Italy’s investment and settlement landscape. Foreign investors should closely monitor the results and prepare for potential changes in citizenship and labor policies. Whether Italy becomes a more attractive destination for investment and settlement will depend on how any new policies are implemented and executed in practice, serving as a crucial indicator of Italy’s direction on immigration, integration, and economic policy in the years ahead.
