France is running out of other people’s money, and the euro makes it your problem
Pupils block the schools, the debt hits 119% of GDP and Paris pays more interest than Athens. What that costs savers and founders across the euro area.
Italy
Italy’s standard taxes rank among Europe’s highest, and its entry regimes among the most generous: 50% off qualifying work income for new residents, a fixed €300,000 a year on all foreign income for the very wealthy, and 7% for foreign pensioners in small southern towns. The trick is arriving with the right kind of income.
Our verdict
Great if you’re a highly qualified professional or founder who can pay yourself a salary (impatriate regime), a very wealthy family with large foreign income (flat tax), or a pensioner heading south. Skip it if your money comes as dividends from your own company – no regime rescues those – or if you want a light-touch company and have no patience for Italian bureaucracy.
Great for
- Highly qualified founders and professionals moving their work income to Italy (50% exempt)
- Families with well over €1 million a year of foreign income (€300,000 flat tax)
- Foreign pensioners happy in a small town in the south (7% for 10 years)
Skip it if
- Owners who live on dividends – 24% IRES plus IRAP, then 26% on the payout
- Anyone hoping for a cheap company with little admin – that’s not Italy
- Non-EU nomads without a degree or 5 years’ experience
Key numbers at a glance.
- Corporate tax
- 24% + 3.9%
- IRES plus IRAP (standard regional rate, different base)
- Dividend WHT
- 26%
- to non-residents; treaties and EU rules can reduce it
- Personal income tax
- 23–43%
- 2026 brackets, plus regional (1.23–3.33%) and municipal (0–0.9%) surcharges
- Impatriate regime
- 50% exempt
- qualifying work income, cap €600,000, 5 years
- Flat tax on foreign income
- €300,000/yr
- for new residents from 2026, up to 15 years
- VAT
- 22%
- Setup time
- 1–3 weeks
- notary deed, then registration
- Running cost
- from ~€4,000/yr
- commercialista, chamber fee, PEC, book stamps
- Minimum stay
- 183 days
- tax residency; flat tax needs Italian residence too
- Currency
- EUR
The Nerdy Index.
15 criteria, each scored 0–10 by a published formula or rubric. Pick who you are – the index re-weights what matters for you.
52Nerdy IndexFounder, moving with the company
50Company
54Residence
CompanyResidence
Company 50/100
Tax on distributed profits46.6% 0/10
Corporate tax plus dividend withholding on €100,000 profit paid out to a non-resident owner. Transparent entities (US LLC) pay nothing at company level – the owner pays at home, so they get a neutral 5.
Tax on reinvested profits27.9% 2/10
Tax while profits stay in the company (Estonia and Georgia: 0%).
Running cost~€4,000/yr 7.3/10
Typical yearly cost to keep a small trading company compliant: registered office, accounting, tax filings, audit if mandatory, government fees. Excludes local staff and office rent.
Context: A commercialista for bookkeeping, VAT, IRES/IRAP returns and the annual balance sheet (typically €2,000–6,500 a year for a small SRL), plus chamber of commerce fee, book stamp duty, PEC and digital signature.
Setup speed & remote formation~10 working days 6/10
Typical working days from signed documents to a registered company. +1 point (max 10) if it can be done fully remotely.
Context: Notary deed first, then registration with the Business Register, tax office and chamber of commerce, usually within one to three weeks. Foreign shareholders need an Italian tax code first.
Banking accessNerdy assessment 6/10
How easy it is for a foreign-owned company to open and keep a business account (local bank or regulated EMI) that works for international payments.
Our assessment: Accounts for an SRL are standard once you have a tax code and the notary deed, but Italian banks are paper-heavy, slow with foreign shareholders and expect a visit in person.
Reputation & treaty network90+ treaties, no lists 10/10
Number of double tax treaties in force, minus penalties for blacklists that make banks and tax offices nervous: EU list of non-cooperative jurisdictions (Annex I), EU watchlist (Annex II), FATF grey list.
Context: Italy has one of the widest treaty networks (94 treaty countries in the PwC table) and sits on no EU or FATF list.
Substance burdenNerdy assessment 7/10
How much real presence (director, office, staff, board meetings) the company needs locally to be respected as tax resident there and to keep the bank happy. Higher score = lighter burden.
Our assessment: A resident director and a registered office are normally enough for a small SRL. The flip side: a foreign company managed from Italy is presumed Italian (esterovestizione).
Residence 54/100
Personal tax for a new resident~15% (impatriate) 6.7/10
Effective tax a newly arrived resident pays on €100,000 of income from their own (foreign or local) company, using the best regime realistically available to an entrepreneur (non-dom, flat tax, territorial, special regime). Social security excluded.
Context: Qualifying founder paying themselves €100,000 as director salary under the impatriate regime: €50,000 taxable, about €13,700 IRPEF plus ~€1,300 regional/municipal surcharge in Milan. As dividends it would be 26%.
Residency accessNerdy assessment 5/10
How realistic it is for a non-EU entrepreneur to get a residence permit that also gives tax residency: requirements, cost, time, approval odds. EU citizens usually have it easier – noted in the reason.
Our assessment: EU citizens just register. Non-EU entrepreneurs face narrow options: the nomad visa needs high qualifications, elective residence forbids work, and self-employment visas depend on small annual quotas.
Minimum stay183 days 4/10
Days per year you need to spend there to keep your permit and your tax residency (whichever is stricter, using the most flexible programme).
Context: You’re Italian tax resident if, for most of the year, you’re registered, domiciled or physically present in Italy; the special regimes all require that residence.
Cost of living74.7 (Milan) · Milan 3.3/10
Numbeo Cost of Living Index (excl. rent, New York = 100) for the city most expats choose.
Context: Numbeo Cost of Living Index excluding rent, Milan, 2026 – where most flat-tax and impatriate movers go. Rome is cheaper (59.7), southern towns much cheaper.
Safety45.8 (Milan) · Milan 4.6/10
Numbeo Safety Index for the same city (0–100, higher is safer).
Context: Numbeo Safety Index for Milan, 2026 – petty crime around stations and nightlife areas drags it down; smaller cities score much better.
Rule of law & stability70th percentile 7/10
World Bank Worldwide Governance Indicators, Rule of Law percentile rank (0–100). Measures how predictable courts, contracts and property rights are.
Context: World Bank WGI Rule of Law 2025: Italy ranks around the 70th percentile – solid rights on paper, famously slow courts.
English in daily life & businessEF EPI 513 4.5/10
EF English Proficiency Index score. Countries where English is an official or everyday business language count as 700.
Context: Italy scores 513 (“moderate”) in the EF EPI 2025. Fine in Milan business circles, but offices, notaries and accountants work in Italian.
Mobility & long-term optionsNerdy assessment 7/10
What the residence gives you beyond the country: Schengen/EU access, permanent residence and citizenship path, passport strength of a future citizenship, dual citizenship allowed.
Our assessment: EU residence with Schengen access and dual citizenship allowed, but naturalization takes 10 years for non-EU nationals (4 for EU citizens); the 2025 referendum to cut it to 5 failed.
Numbers checked October 2026. Click any row for the formula, our reasoning and the source. How the Nerdy Index works
Residency & visa routes.
Impatriate regime (Art. 5 Legislative Decree 209/2023)
Tax status for highly qualified workers who move their tax residence to Italy after at least 3 years abroad: 50% of employment and self-employment income exempt (60% with a minor child), capped at €600,000, for five years. You must stay resident for at least four years or repay the benefit.
Flat tax for new residents (Art. 24-bis TUIR)
For people not Italian tax resident in 9 of the previous 10 years: a fixed €300,000 a year on all foreign income for moves from 2026 (€200,000 for moves from August 2024 to 2025), plus €50,000 per family member, for up to 15 years. Also exempts foreign assets from IVAFE/IVIE and reporting.
7% regime for foreign pensioners
Pensioners moving to a town of up to 30,000 inhabitants (since April 2026; 20,000 before) in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia (or small earthquake-hit towns in central Italy) pay 7% on all foreign income for ten years.
Digital nomad visa
For highly qualified remote workers (degree or 5 years’ experience) employed or self-employed outside Italy: about €28,000 a year, health insurance and accommodation.
Elective residence visa
For non-EU nationals living on passive income (consulates expect about €31,000 a year for a single person); no work of any kind allowed.
Why Italy5
- Impatriate regime: half your qualifying work income tax-free for five years
- Flat tax buys full certainty on foreign income – and no foreign wealth taxes
- 7% regime for foreign pensioners in the south
- EU and Schengen, dual citizenship allowed
- Quality of life, culture and food that no spreadsheet captures
Watch out for5
- Company level is expensive: ~28% plus 26% on dividends
- The flat tax tripled in two years to €300,000
- Bureaucracy, certified email and Italian-only administration
- Citizenship takes 10 years for non-EU nationals
- Special regimes change often – almost every budget law rewrites them
Italy’s tax system has two faces. The everyday one is brutal: 24% IRES plus IRAP on companies, up to 43% income tax plus surcharges, 26% on dividends. The other face is a set of entry regimes that rank among the most generous in Europe – if you arrive the right way, with the right kind of income. Arrive the wrong way and you’re just funding the pension system.
This guide sorts out who benefits, who doesn’t, and what the 2026 budget changed this time. Checked September 2026; general information, not tax or legal advice.
Is it for you?#
Italy works when your income fits one of three regimes. If it doesn’t, you’re paying some of the highest rates in Europe for the privilege of excellent coffee.
Who wins:
- Highly qualified founders and professionals. Move your tax residence after three years abroad, pay yourself a salary or earn self-employed income, and half of it is tax-free for five years (60% with a minor child). On €100,000 that’s roughly 15% tax instead of about 40%.
- Very wealthy families. The flat tax replaces Italian tax on all foreign income with €300,000 a year (for moves from 2026). With several million of foreign income, that’s a bargain with full certainty, and no Italian wealth taxes on foreign assets.
- Pensioners. Retire to a small town in the south and pay 7% on all foreign income for ten years.
- Anyone valuing lifestyle. Food, culture, scenery, family-friendly cities. Hard to price, easy to love.
Who loses:
- Company owners living on dividends. €100,000 profit in an Italian SRL becomes about €53,000 after IRES, IRAP and 26% on the payout. No regime fixes that – and a foreign company you run from Italy counts as Italian.
- Mid-level wealth. The flat tax only pays off from roughly €700,000 of foreign income a year. Below that, you’re overpaying for peace of mind.
- Non-EU nomads without formal qualifications. The nomad visa needs a degree or years of experience; the elective residence visa forbids work.
The company#
Short version: an Italian company is where good profits go to get taxed twice. The regimes reward people, not SRLs.
Entity types that matter#
- SRL (società a responsabilità limitata). The standard limited company. Ordinary SRLs need €10,000 capital on paper (at least 25% paid in); the simplified SRL can start with €1.
- Innovative startup. An SRL registered in the special section of the Business Register: lighter formation costs, investor tax credits, and a route to the Italia Startup Visa.
- Sole trader with the forfettario regime. Not a company, but important: 15% flat tax (5% for the first five years of a new activity) on a lump-sum share of revenue, for revenue up to €85,000. Great for smaller freelancers, useless above the cap.
How €100,000 profit is taxed#
| Step | Amount |
|---|---|
| Profit | €100,000 |
| IRES 24% | −€24,000 |
| IRAP 3.9% (on value of production, roughly profit here) | about −€3,900 |
| Available for dividends | ~€72,100 |
| 26% on dividends | −€18,746 |
| Net to you | ~€53,350 |
That’s an effective 46–47%. The state becomes your biggest shareholder without putting in a cent. Paid to a non-resident, the 26% withholding usually drops to 5–15% under a treaty. Dividends to EU/EEA companies pay 1.2% or nothing.
The impatriate route beats the dividend route for most founders: pay yourself a €100,000 salary as director. Only €50,000 is taxable: about €13,700 IRPEF at the 2026 rates (23% to €28,000, 33% to €50,000) plus regional and municipal surcharges – around 15% overall. Social contributions come on top, so compare both with the tax calculator.
Setup and running costs#
A notary drafts and files the deed; registration with the Business Register, tax office and chamber of commerce usually follows within one to three weeks. Foreign shareholders need an Italian tax code (codice fiscale) first; a power of attorney works if you can’t travel.
Running costs beat Portugal or Spain, and not in a good way: a commercialista for bookkeeping, VAT and IRES/IRAP returns (roughly €2,000–6,500 a year for a small SRL), plus chamber of commerce fee, book stamp duty, certified email (PEC) and a digital signature. Yes, there’s a stamp duty on your accounting books. Call it €4,000 a year.
Banking and substance#
Italian banks open SRL accounts routinely, but expect paper, patience and at least one visit to a branch that closes for lunch. A resident director and a registered office are enough substance. Watch the reverse case: Italy presumes a foreign company is Italian-resident if it’s effectively managed from Italy (esterovestizione). Our guide to place of management explains why that matters.
Living there#
The residence permit decides which regime you can even reach. Pick the route first, the town second.
Residency routes compared#
| Route | Who it’s for | Money test | Work allowed? |
|---|---|---|---|
| EU registration | EU/EEA/Swiss citizens | Work, self-employment or means | Yes |
| Digital nomad visa | Highly qualified remote workers | ~€28,000/year | For foreign employers/clients |
| Elective residence visa | Passive income | ~€31,000/year | No |
| Italia Startup Visa | Innovative startup founders | €50,000 in funds for the project | Yes, in the startup |
| Self-employment visa | Freelancers, entrepreneurs | Depends on activity | Yes, but tied to small yearly quotas |
Personal tax regimes#
- Impatriate regime. 50% of employment, director and self-employment income exempt (60% with a minor child or a child born during the regime), cap €600,000 a year, five years. You need high qualifications, three years of non-residence before the move and four years of residence after it – leave early and you repay. Business income (as a trader) isn’t covered.
- Flat tax (Art. 24-bis). €300,000 a year for moves from 2026, €50,000 per family member, up to 15 years. You must not have been Italian resident in 9 of the last 10 years. Italian-source income is taxed normally, and you can exclude specific countries (and pay normally on their income) to use treaties.
- 7% pensioner regime. Foreign pension recipients moving to a town of up to 30,000 inhabitants (since April 2026) in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia: 7% on all foreign income for ten years.
- Standard. 23% up to €28,000, 33% up to €50,000, 43% above (2026), plus 1.23–3.33% regional and up to 0.9% municipal surcharge. Investment income 26%.
Days, healthcare and daily life#
You’re Italian tax resident if, for most of the tax year, you’re registered with the municipality, have your domicile or habitual abode there – and since 2024, physical presence for most of the year also counts.
Milan is where most regime users land: Numbeo puts its cost-of-living index (excluding rent) at 74.7 and its safety index at 45.8 – pricey and not Italy’s calmest city. Rome, Bologna, Turin or the lakes cost less and sleep better. Registered residents join the national health service (SSN); many add private cover for faster appointments.
Expect Italian in every office, certified email for official correspondence and a bureaucracy with an international reputation it has fully earned. Budget time and a good commercialista – the second saves you most of the first.
The catches#
Italy gives generously and takes back just as fast. Know where the trapdoors are.
What can go wrong
01
Wrong kind of income.
Dividends from your own Italian company get no regime relief – 26% after roughly 28% company tax.
02
Esterovestizione.
Your foreign company, managed from Italy, can be treated as Italian-resident. Italy also applies CFC rules to low-taxed foreign companies.
03
Foreign wealth taxes and reporting.
Ordinary residents pay IVAFE (0.2% on foreign financial assets) and IVIE (1.06% on foreign property) and must report foreign assets. The flat tax exempts you; the impatriate regime doesn’t.
04
Moving targets.
The flat tax went from €100,000 to €200,000 to €300,000 in about two years. Existing users keep their amount, but plan for more change.
05
Exit tax at home.
Leaving Germany with 1%+ of a company can trigger exit tax – see the exit tax guide.
06
Quotas for non-EU entrepreneurs.
Self-employment visas depend on the yearly quota decree and can take months.
Step by step#
From decision to Italian resident
Match your income to a regime
Salary or self-employed income → impatriate. Big foreign portfolio → flat tax. Pension → 7% regime. None of these → compare with Portugal or Spain.
Sort the visa (non-EU) or registration (EU)
Nomad, elective residence or startup visa from the consulate; EU citizens register with the municipality.
Get a codice fiscale and a home
You need both for almost everything, including the residence registration.
Register residence and claim the regime
Impatriate relief is claimed via your employer or tax return; the flat tax via the tax return (an advance ruling is possible and wise).
Set up the SRL if needed
Notary, registration, commercialista, bank, PEC.
Close the old chapter properly
Deregister at home, handle exit tax and move the management of your existing companies. Our leaving Germany guide covers the German side.
FAQ#
Is the flat tax worth it at €300,000?
Only with high foreign income – as a rough rule, from about €700,000 a year, depending on the mix. It also buys certainty, no foreign wealth taxes and no reporting.
Can I combine the impatriate regime with the flat tax?
Only if you move your tax residence to Italy by the end of 2026. A ruling by the Revenue Agency of 19 December 2025 allowed it: the flat tax covers your foreign income, the impatriate regime your Italian work income. Parliament then closed the door: Decree-Law 38/2026 (converted in May 2026) bans the combination for anyone who becomes tax resident from tax year 2027. Rulings bind only the case they answer, so get your own confirmation before relying on the combination.
Do I need to speak Italian?
Not for the tax regimes. For daily life, offices and eventually citizenship (B1 level), yes.
How long until an Italian passport?
Ten years of legal residence for non-EU nationals, four for EU citizens. Dual citizenship is allowed.
Our take: Italy is a regime country. Fit one and it’s among the best deals in Europe; fit none and you’re better off elsewhere. Wondering whether Italy or a neighbour fits your numbers better? Start with the Jurisdiction Finder or book a strategy session. General information as of September 2026 – not tax or legal advice.
Sources#
- Agenzia delle Entrate
- Gazzetta Ufficiale – Budget Law 2026
- Ministry of Foreign Affairs – visas for Italy
- PwC Worldwide Tax Summaries – Italy corporate
- PwC Worldwide Tax Summaries – Italy individual
- PwC Worldwide Tax Summaries – Italy withholding taxes
- Arletti Partners – impatriate regime 2026
- Hogan Lovells – ruling on combining flat tax and impatriate regime
- Fisco Oggi (Agenzia delle Entrate) – conversion of Decree-Law 38/2026
- SRLonline – SRL accountant costs
- Numbeo – Milan
- World Bank – Worldwide Governance Indicators
Sources & fact check.
Every number on this page comes from one of these. Last checked October 2026. Tax law changes – confirm with a licensed advisor before acting. Nothing here is tax or legal advice.
- Official Agenzia delle Entrate – Italian Revenue Agency tax residency, impatriate and flat-tax regimes agenziaentrate.gov.it
- Official Ministry of Foreign Affairs – visas for Italy nomad and elective residence visas vistoperitalia.esteri.it
- Official Fisco Oggi (Agenzia delle Entrate) – conversion of Decree-Law 38/2026 no flat tax + impatriate combination for arrivals from tax year 2027 fiscooggi.it
- Law Gazzetta Ufficiale – Budget Law 2026 (Law 199/2025) €300,000 flat tax, IRPEF 33% bracket gazzettaufficiale.it
- Advisor PwC Worldwide Tax Summaries – Italy corporate IRES and IRAP taxsummaries.pwc.com
- Advisor PwC Worldwide Tax Summaries – Italy individual IRPEF brackets, flat tax, 7% regime taxsummaries.pwc.com
- Advisor PwC Worldwide Tax Summaries – Italy withholding taxes dividend WHT, treaties taxsummaries.pwc.com
- Advisor Arletti Partners – impatriate regime 2026 impatriate conditions arlettipartners.com
- Advisor Hogan Lovells – ruling on combining flat tax and impatriate regime flat tax + impatriate combination (Dec 2025 ruling) hlc.com
- Index Numbeo – Milan cost of living and safety cost of living, safety numbeo.com
- Index World Bank – Worldwide Governance Indicators rule of law worldbank.org
Similar to Italy: the closest alternatives.
EU€€€
Spain
A high-tax country with a six-year discount: 24% flat on work income under the Beckham law – now also for remote workers and startup founders.
Corp. tax25%Dividends19%Residency
Open the guide
EUEasy residency€€€
Portugal
EU base with reachable visas and IFICI: 20% flat for 10 years – if your work qualifies.
Corp. tax19%Dividends25%Residency
Open the guide
EU€€€
Greece
A high-tax country with excellent side doors: half your income tax-free for seven years, 5% on dividends – or €100,000 flat on all foreign income.
Corp. tax22%Dividends5%Residency
Open the guide
Read before you decide.
Citizenship & visasCitizenship by descent 2026: ancestry routes comparedItaly, Ireland, Poland, Hungary, Portugal, Lithuania, Germany and more: who qualifies for citizenship by descent in 2026 and what changed. 9 min · checked September 2026
Citizenship & visasDual citizenship rules 2026: who lets you keep bothWhich countries allow dual citizenship in 2026, when you lose your first passport by naturalising, and the tax, military and consular side effects. 9 min · checked September 2026
Citizenship & visasFastest naturalisation 2026: years to citizenshipHow many years of residence you need for citizenship in 2026 – Argentina to Sweden, dual-citizenship rules, language tests and the 2025–26 changes. 8 min · checked September 2026
Flag theory in 2026: the flags that still fly (and the ones CRS shot down)
Five flags, zero secrets: what’s left of PT after CRS, FATCA and substance rules – plus a legal starter setup for founders from Germany and beyond.
Best residency countries 2026: pick by profile, not by brochure
Nomad, founder, retiree or wealthy family? Taxes, visas and daily life in Europe’s and the Gulf’s favourite bases compared – find your match.
Ready for Italy?
Tell us what you want to set up and where. You get one fixed quote for the work of a vetted, licensed partner in that jurisdiction – no bidding war, no surprise fees, no “that’ll be extra” in month three. Not sure yet? Book a Strategy Session first – it’s credited if you go ahead.
- Free and non-binding
- Reply within two working days
- One contract, one invoice
- We never sell your data. Not even to banks.