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For years, international investors seeking European residency and tax efficiency have focused on a narrow group of jurisdictions – most notably Portugal, and more recently Dubai. Italy, by contrast, has often been overlooked.
That may now be changing.
Quietly, and with far less publicity than some of its European peers, Italy has undergone a notable economic and fiscal turnaround. For globally mobile entrepreneurs, investors, and internationally minded families, this shift is creating a compelling – and still underappreciated – geo-arbitrage opportunity.
Italy’s Economic Repositioning: A Quiet Comeback
A decade ago, Italy was frequently cited as one of Europe’s weakest large economies. High public debt, political instability, and slow growth dominated international commentary.
Today, the picture looks markedly different.
- Italy is the 8th largest economy globally by GDP, and 3rd largest in Europe
- Italian financial markets have outperformed the European average since 2020
- Public debt levels have stabilised relative to GDP
- Exports exceeded €600 billion in 2024, with a substantial trade surplus
- Thousands of high-net-worth individuals have relocated or returned to Italy in recent years
Perhaps most tellingly, major international publications have begun to reassess Italy’s trajectory, noting improvements in fiscal discipline, competitiveness, and reform momentum.
Real Estate: A Contrarian Opportunity
While real estate markets in countries such as Portugal experienced dramatic appreciation over the past decade, Italy’s property market followed a very different path.
In many regions, values stagnated or declined – not due to lack of fundamentals, but rather structural inertia and underinvestment.
For investors, this divergence matters. It suggests:
- Lower entry prices
- Greater upside potential
- A market that has not yet been “priced for perfection”
Southern regions such as Puglia, Sicily, and Sardinia in particular continue to offer lifestyle-driven real estate at valuations that would be difficult to replicate elsewhere in Europe.
Italy’s Competitive Tax Regimes (Often Overlooked)
Italy has quietly built one of the most targeted and flexible tax regimes in Europe, designed to attract talent, capital, and internationally mobile individuals.
Key regimes include:
The Impatriate Regime
- 50–60% exemption on qualifying employment or professional income
- Available for up to 5 years (with possible extensions)
- Designed to attract returning Italians and foreign professionals
The 7% Flat Tax for Retirees
- 7% tax on qualifying foreign income
- Available for up to 10 years
- Applies in designated southern municipalities
The Lump-Sum Tax Regime
- Flat annual tax (currently €200,000) on foreign-source income
- Particularly attractive for high-income individuals
- Predictability and simplicity are key advantages
Researcher and R&D Incentives
- Up to 90% income exemption for qualifying researchers
- Available for extended periods
- One of Europe’s most generous specialist regimes
These regimes are profile-specific, not universal – but for the right individuals, they can materially reduce effective tax rates while offering full access to EU residency and services.
Italy’s Investor Visa: Flexibility Without Immediate Relocation
Italy’s Investor Visa, introduced in 2017, remains one of the more flexible residency pathways in Europe.
Key characteristics include:
- Investment routes starting from €250,000 (innovative companies), with higher thresholds for other categories
- Initial residence permit valid for 2 years, renewable thereafter
- No minimum physical stay requirement to maintain the visa
- Full Schengen mobility
- Access to education, healthcare, and public services
Unlike some competing programs, the Italian framework allows applicants to obtain visa approval before committing capital, reducing execution risk.
Italy vs Portugal vs Dubai: Different Tools for Different Objectives
These three jurisdictions are often compared, but they serve very different strategic goals.
Portugal
- Traditionally favoured for citizenship-focused investors
- Minimal stay requirements
- Longer timelines and evolving legislative uncertainty
- Best suited for those prioritising EU citizenship without relocation
Italy
- Lower investment thresholds for residency
- Strong tax-planning options for those willing to relocate
- Flexible residency without immediate lifestyle disruption
- Particularly attractive for those seeking optionality and quality of life
Dubai
- 0% personal income tax
- World-class infrastructure and ease of doing business
- No pathway to citizenship
- Ongoing visa dependency and private provision of services
In practice, sophisticated families increasingly combine jurisdictions, using each for what it does best.
The Strategic Lens: Why Italy Merits Reconsideration
Italy is not without challenges. Bureaucracy remains real, and certain sectors — particularly early-stage tech — may face friction compared to other hubs.
However, for individuals earning internationally, spending in euros, and seeking:
- EU residency
- Lifestyle optionality
- Long-term tax efficiency
- Geographic diversification
Italy now deserves a more prominent place in strategic discussions.
A Knightsbridge Group Perspective
At Knightsbridge Group, we view Italy not as a “replacement” for Portugal or Dubai, but as part of a broader multi-jurisdictional planning conversation.
The key question is not where is best, but rather:
Which jurisdiction aligns with your objectives, time horizon, and risk tolerance?
Italy’s resurgence — economic, fiscal, and lifestyle-driven — makes it a jurisdiction that serious investors should no longer overlook.
Interested in Exploring European Residency and Tax Planning?
Knightsbridge Group advises clients on:
- European residency and investor visa options
- Cross-border tax planning
- Relocation structuring
- Comparative jurisdictional analysis
For a confidential discussion tailored to your profile, we invite you to contact our advisory team.