Italy vs Portugal vs Spain for Business 2026: The Honest Comparison Nobody Tells You
- Portugal abolished the Golden Visa in 2023 and replaced NHR with IFICI in 2024: the previous tax advantages are largely gone.
- Spain's Beckham Law (modified 2023) is still attractive for high-income earners but has been restricted with new limits.
- Italy offers the Impatriati regime for qualifying workers and a separate annual substitute tax on covered foreign income for qualifying new residents; the latter is not an Investor Visa benefit.
Every month, at least one client sits in front of me and asks: "Giovanni, between Italy, Portugal, and Spain, where should I move my business?". And the honest answer is: it depends on your profile, your income source, and your life priorities. The three countries are no longer the tax paradise they were 5 years ago. Each has its pros and cons, and the best choice in 2026 is very different from what the international press still claims.
Let me give you the practical comparison, with numbers and current rules.
Index
Why This Comparison Matters Now
Three reasons make the 2026 comparison radically different from the 2018-2022 one:
- Portugal abolished the Golden Visa in 2023 and replaced the NHR (Non-Habitual Resident) with IFICI (Incentivo Fiscal à Investigação Científica e Inovação) in 2024
- Spain reformed the Beckham Law in 2023, restricting access to high-income foreigners
- For workers who transfer tax residence to Italy from 2024 onward, Article 5 of Legislative Decree 209/2023 exempts 50% of qualifying employment and self-employment income produced in Italy, or 60% for a worker relocating with a minor child or having a birth/adoption during the benefit period, with the minor resident in Italy. Relief applies to up to €600,000 of qualifying income per tax period; the excess is taxed normally. It lasts five tax periods (the transfer year and the following four), with no extension and no regional uplift.
If you read an article written before 2023, it's already obsolete. The rules have changed substantially.
Tax Regime: Substitute Tax Options
For transfers from 1 January 2026, Article 24-bis TUIR sets the annual substitute tax at €300,000, plus €50,000 for each included eligible family member. Earlier transfers retain the amount linked to their transfer date. It is not a one-off payment.
| Country | Substitute tax regime | Duration | Cost | Foreign income treatment |
|---|
| Italy | New-resident substitute tax (separate from immigration status) | Up to 15 years | €300,000 annually + €50,000 per included eligible family member for 2026 transfers | Substitute tax on covered foreign income; ordinary tax on Italian income |
| Italy | Impatriati regime (workers) | Five tax periods, without extension | Free | 50% exemption on employment/self-employment income |
| Italy | Regime Forfettario (freelancers) | Up to 5 years (with 5% start-up) | Free | Taxed on Italian-source (typically not relevant for non-residents) |
| Portugal | IFICI (replaces NHR from 2024) | 10 years (renewable up to 20) | Free | 20% flat tax on qualifying Portuguese-source income, foreign income often exempt if not remitted |
| Spain | Beckham Law (modified 2023) | 6 years | Free | 24% flat tax on Spanish-source employment income (capped at €600,000/year from 2024) |
Italy: when it makes sense
Assess the annual new-resident substitute tax if:
- Your ordinary liability on covered foreign income could exceed the recurring annual charge
- You want to be in Italy for 5+ years
- The 50% Impatriati regime is not accessible to you
Portugal: when it makes sense
IFICI is interesting if:
- You have highly qualified activity (scientific research, innovation, tech)
- You are willing to stay 10+ years
- The Portuguese-source income is limited
Spain: when it makes sense
The Beckham Law is interesting if:
- You have €200,000–€600,000/year of Spanish-source income (employment)
- You are a manager or high-skilled professional
- You want the 6-year certainty
Investor / Golden Visa: The Big Change
| Country | Program | Minimum | Status 2026 |
|---|
| Italy | Investor Visa | €250,000 (startup) | Active, subject to revisions |
| Portugal | Golden Visa | €250,000 (immovable) | ABOLISHED in 2023, being phased out |
| Spain | Golden Visa | €500,000 (immovable) | REDUCED, real estate excluded |
Key point: if you are choosing based on a Golden Visa today, Italy is the only major southern European country that still has an active program. Portugal's abolition left many clients stranded, and Spain's reform has narrowed the scope dramatically.
Work Visas and Impatriati vs Beckham Law
| Country | Work visa | Special tax regime | Cost | Conditions |
|---|
| Italy | Self-employment visa (€0 cost but complex) | Impatriati: 50% exemption for 5 years | Free | Must come from abroad, work in Italy, register with INPS |
| Portugal | D7 (passive income) / Tech Visa / Job Seeker | IFICI: 20% flat for 10 years | Free | Must have qualifying activity |
| Spain | Work permit (highly qualified) | Beckham Law: 24% flat for 6 years | Free | Spanish contract, €600k cap from 2024 |
The comparison that matters
Scenario: A senior tech manager from the US, considering relocation.
- Italy (Impatriati): 5 years at 50% exemption on Italian-source income. Works for 5 years, then normal IRPEF.
- Spain (Beckham Law): 6 years at 24% flat. Higher certainty, but on Spanish-source only and capped at €600k.
- Portugal (IFICI): 10 years at 20% on qualifying Portuguese-source income. Longest, but only for qualifying activities.
Illustrative comparison: On €300,000 of qualifying Italian work income, the 50% exemption leaves €150,000 taxable. Gross IRPEF under the 2026 brackets is €56,700 (€28,000 × 23% + €22,000 × 33% + €100,000 × 43%), before deductions, contributions and local surtaxes. The stated Spanish calculation is €300,000 × 24% = €72,000, a €15,300 difference on these limited assumptions, not an overall net-income comparison. Each regime requires its own residence and income conditions; the Italian benefit lasts five tax periods, not indefinitely.
For Freelancers: Regime Forfettario vs Similar
| Country | Equivalent regime | Tax rate | Conditions |
|---|
| Italy | Forfettario | 5% (start-up) or 15% | Turnover <€85k/year, no special requirements |
| Portugal | Simplified regime (Regime Simplificado) | Progressive, lower | Lower turnover thresholds |
| Spain | Estimación directa simplificada | Progressive | Different rules per autonomous community |
Key point: Italy's Forfettario is one of the most favourable in Europe for low-turnover freelancers (5% for 5 years on the first €85,000 turnover, 15% thereafter). But it requires Italian tax residency and an Italian VAT number.
Cost of Living: A Real Comparison
| Aspect | Italy | Portugal | Spain |
|---|
| Rent 2-bedroom city centre (Milan, Lisbon, Madrid) | €1,500–€2,500 | €1,200–€2,000 | €1,300–€2,200 |
| Restaurant meal for 2 | €60–€90 | €35–€55 | €45–€70 |
| Monthly groceries | €350–€500 | €250–€400 | €300–€450 |
| Health insurance (private, family) | €200–€400/month | €100–€250/month | €150–€300/month |
| Internet + mobile | €40–€60 | €35–€55 | €40–€60 |
| Overall cost vs Italy | 100 (baseline) | ~75 | ~85 |
Honest assessment: Portugal is the cheapest of the three (excluding the islands). Spain is intermediate. Italy (especially Milan, Rome, Florence) is the most expensive, but with significantly better infrastructure and services.
Bureaucracy: The Real Italy Disadvantage
This is where Italy loses, fairly.
| Aspect | Italy | Portugal | Spain |
|---|
| Speed of opening a company | 2-4 weeks (SRL online now possible) | 1-2 weeks | 1-2 weeks |
| Tax code / VAT registration | 4-7 days | 1-3 days | 1-3 days |
| Online bureaucracy (%) | 60% | 80% | 75% |
| Complexity (1-10) | 8 | 5 | 6 |
| English in public offices | Rare | Common in Lisbon/Porto | Common in Madrid/Barcelona |
My honest take: Italy has improved dramatically since 2020 (SUAP online, SRL digital, Spid/CIE), but it remains the most bureaucratic of the three. If you have a local commercialista (like me), you don't notice much. Without one, you'll suffer.
Quality of Life: Subjective but Important
| Aspect | Italy | Portugal | Spain |
|---|
| Climate | Variable (Milan cold, Sicily hot) | Mild oceanic | Mediterranean (variable) |
| Healthcare (public system) | Excellent (one of the best) | Good | Good |
| Cultural offer | Outstanding | Good | Outstanding |
| Food | Outstanding | Good | Outstanding |
| Language barrier | Low (Italians learn English) | Low (younger generation) | Low |
| Path to citizenship | 10 years | 5 years (only after 2024 changes) | 10 years |
| Safety | High overall, some urban areas | High overall | Variable by area |
My honest take: Italy wins on healthcare, food, and culture. Portugal wins on cost, bureaucracy ease, and language. Spain is balanced.
Decision Tree: Which Country for Which Profile
| Your profile | Best choice | Why |
|---|
| HNWI with €1M+/year, want to minimise taxes | Assess Italy's new-resident option separately from the visa | €300,000 annually for 2026 transfers; compare the covered income's ordinary tax, not a guaranteed saving |
| Tech manager earning €200-600k, planning 5-7 years | Spain (Beckham Law) | 24% flat for 6 years, very favourable |
| Freelancer with <€85k turnover, want simplicity | Italy (Forfettario) | 5% for 5 years, very simple |
| Investor with €250-500k, want European residency | Italy (Investor Visa startup) | Only southern EU option still active |
| Remote worker, want low cost of living | Portugal | Cheapest, easy bureaucracy, IFICI if qualifying |
| Want EU citizenship in shortest time | Portugal (5 years after 2024) | Fastest path |
| Want to bring family, have them work | Italy (Investor Visa family extension) | Family included in Investor Visa |
| Want to operate across EU, need strategic location | Italy (Milan/Rome) | Strategic, business hub |
| Tech founder building a startup | Italy (Innovative Startup Visa) | 5% flat tax + 50% Impatriati + ecosystem |
Frequently Asked Questions (FAQ)
Is it true that Italy is more expensive than Portugal?
For cost of living, yes. Italy is 20-30% more expensive than Portugal, especially in Milan and Rome. Whether its new-resident option reduces total costs depends on the recurring annual tax and the ordinary liability on income actually covered.
Is the Beckham Law still worth it in 2026?
Yes, but with limits. The 2023 reform introduced a €600,000 cap. Below that, 24% for 6 years is very competitive. Above, the regime becomes less attractive.
Does Italy have anything like Portugal's IFICI?
Not exactly. Italy has a separate new-resident substitute tax on covered foreign income and the Impatriati regime (50% exemption for 5 years for qualifying workers). They cover different profiles; the former is not reserved for Investor Visa holders.
Can I have the Impatriati regime and the new-resident substitute tax at the same time?
No. The two regimes are mutually exclusive. You choose one or the other.
Is it true that Portugal is becoming a "less attractive" destination?
Yes, since 2023-2024. The NHR abolition and Golden Visa end have removed two of the three main attractions. IFICI partially compensates, but only for qualifying activities.
Which country gives the fastest citizenship?
Portugal (5 years of legal residence). Italy and Spain require 10 years.
Which country is best for a tech founder?
Italy, for the combination of:
- Innovative Startup Visa (faster for tech)
- 5% flat tax on the startup's profits (if structured well)
- 50% Impatriati on personal income
- Active ecosystem (Milan, Rome)
Is the Spanish NIE difficult to obtain?
Less than Italy's codice fiscale. Spain is generally faster for foreign paperwork.
Need Help Choosing?
If you want a personalised comparison based on your specific income, profile, and goals, book a consultation. I'll show you the actual numbers for your situation.
[Book a consultation with Giovanni →] (link to contact form)
Legal Sources
- Italy: D.Lgs. 286/1998, L. 232/2016, Italian Budget Laws 2023-2026, Impatriati regime rules
- Spain: Beckham Law modification 2023, Ley de Startups
Giovanni Emmi|June 20, 2026
