Italy’s parliament approves clampdown on citizenship by descent claims

The Italian parliament has approved amended legislation regarding citizenship by descent, requiring applicants to have a parent or grandparent who holds or held exclusively Italian citizenship, with some exceptions for dual nationals who resided in Italy for two years after acquiring citizenship or those who gained citizenship under previous rules. Applications filed by March 27, 2025, will be exempt from the new regulations, which aim to curb abuse and streamline procedures, according to the ruling coalition, while opposition parties criticize the restrictions on the rights of individuals of Italian descent.

Analysis

The Italian parliament has enacted revised legislation for citizenship by descent, moving from a broader ancestral claim based on an ancestor alive post-March 17th, 1861, to a more stringent requirement. Under the new rules, applicable to applications submitted after March 27th, 2025, individuals seeking citizenship through ancestry must typically have a parent or grandparent who holds, or held at the time of death, exclusively Italian citizenship. This law amends an initial urgent decree that had focused on the Italian parent or grandparent being born in Italy. The government states these changes aim to curb perceived abuse of citizenship laws and streamline application procedures. Key exceptions to the 'exclusive Italian citizenship' mandate include provisions for dual-national parents who have resided in Italy for at least two consecutive years after acquiring Italian citizenship and before their child's birth, and a window until May 31st, 2026, for individuals who themselves gained citizenship under the previous rules to register their foreign-born minor children, even if holding dual nationality. While the ruling coalition views the reform as creating a fairer and more orderly system, opposition parties have strongly criticized it, arguing that it unduly restricts the rights of individuals of Italian descent without adequate transitional measures.

Key Decisions for Investors

• Investors should note that companies specializing in Italian citizenship and related legal or genealogical services may experience a temporary surge in demand leading up to the March 27th, 2025, deadline for applications under the old rules, followed by a potential market adjustment due to the more restrictive criteria.
• Given the reported low market impact score associated with this legislative change, broad market investment strategies are unlikely to require adjustment; the primary effects are confined to highly specific service sectors rather than the wider Italian economy.
• While not an immediate market-moving event, this reform offers insight into the current Italian government's approach to regulation and national policy, a factor for ongoing qualitative assessment in country-specific risk analysis.