Southern Europe is openly competing for wealthy and talented movers, and the competition is fought with special tax regimes. Spain has the Beckham law, Italy has its flat tax on foreign income, and Portugal, having wound down the famous NHR, offers a narrower successor. To a person deciding where to land, these are not interchangeable; each favours a very different profile, and choosing by reputation rather than by fit is how people end up in the wrong country for their money.
Spain: the Beckham law
Spain’s regime for inbound workers applies a flat rate to Spanish employment income up to a threshold for a set number of years, while largely leaving foreign income outside the Spanish net, and it has been widened to reach more remote workers and entrepreneurs. It suits the person taking up genuine activity in Spain, an executive, a founder relocating their work, who wants a favourable, predictable rate on what they earn there. We set it out in our note on the Beckham law.
Italy: the flat tax on foreign income
Italy offers new residents the option to pay a fixed annual amount to shelter their foreign income and gains, regardless of how large those are, for a long window. It is built for the person whose wealth and income sit largely outside the country and are substantial: for a large enough foreign income, a fixed annual charge is extraordinarily efficient. We describe it in our note on the Italian flat-rate regime.
Spain rewards the person who earns inside it. Italy rewards the person whose money sits outside it. Portugal now asks what you actually do. The mistake is choosing by fame, not by fit.
Portugal: after NHR
Portugal’s original non-habitual resident regime, which drew so many, has been closed to new entrants and replaced by a narrower incentive focused on certain qualifying activities and roles rather than a broad exemption on foreign income. The country remains attractive, but the sweeping version many remember is gone, and the successor has to be assessed on its actual, tighter terms, as we discuss in our note on Portuguese investors and the NHR.
Match the regime to the money
The right choice follows the shape of the person’s wealth and life. Large foreign income and few local ties point one way; genuine local activity and earnings point another; a specific qualifying profession may point to a third. And the regime is only part of the picture, because the wealth taxes, the succession rules and the ownership of any home all differ by country too, which is why we treat the relocation as one coordinated decision rather than a single-regime comparison, alongside our notes on the Spanish wealth tax and where a wealthy family should base.
Montclare advises international individuals and families on buying, holding and moving to Spain: the structure, the tax, the residence and the succession, handled as one plan. Our services are set out on our services page.
This article is informational and does not constitute tax, legal or immigration advice. Spanish regimes vary by region and change frequently, and treatment depends on personal circumstances. Each engagement is subject to scope and applicable regulation.