How does the UK 'Non-Dom' regime compare to other European jurisdictions? Part 1

22 November 2023 | Applicable law: England and Wales | 4 minutes

Following on from our recent articles about the UK's non-dom regime, and the changes that might be coming in respect of it, a number of individuals may be looking to relocate or indeed not come to the UK in the first place. Given this, what options could be open to them? International relocations driven by a combination of tax and lifestyle have long been popular with high-net-worth individuals. For many professionals, the Covid-19 pandemic opened up previously unseen opportunities for remote and hybrid working and showed that, with the powers of video conferencing, physical distance need not be the barrier it once might have been.  As a result, increasing numbers of individuals have been seeking opportunities to live and work in countries which may better match their desired lifestyle.  

This two-part article explores some of the more popular choices within Continental Europe, and the tax regimes which may apply, whilst also highlighting some of the key planning considerations to take into account. Part 1 looks at Italy, Switzerland and Portugal and Part 2 will focus on the relatively newer regimes offered by Spain and Greece.


Italy operates an 'Investor Visa' scheme which is a two-year visa (extendable for a further three years) for non-EU citizens who invest significantly in Italian government bonds, Italian resident companies (including start-ups) or make large philanthropic donations to support projects of public interest.  Individuals must hold the relevant investments for at least two years and demonstrate that they have sufficient resources to make the investment and support themselves during their time in Italy. 

Once a visa has been obtained, two potentially beneficial tax regimes exist in Italy for individuals in different situations: 

  1. Non-domiciled regime – individuals (of any nationality, including, therefore, Italian nationals), who have not been tax resident in Italy for at least 9 of the previous 10 years, can pay a flat annual fee of €100,000 so that all non-Italian income and gains are not subject to further tax, creating significant potential savings for those with significant non-Italian assets. Income and gains from Italian assets are taxable in the normal way. 

  2. This regime exists for a maximum of 15 years and if the individual ceases to be Italian tax resident during that period or decides not to elect into it for a year, the regime ends and cannot be restarted.  It can be extended to family members for an additional €25,000 flat annual fee.

    Gains on the disposal of 'qualified shareholdings' are not automatically sheltered by the flat annual fee in the first five years of tax residency. Instead, such gains are taxed under ordinary rules (ie, subject to tax at 26%). 'Qualified shareholdings' are shareholdings in foreign companies representing more than 2% of the voting rights or 5% of the capital, in case of listed companies, or 20% of the voting rights or 25% of the capital, in case of non-listed companies. It may however be possible, under specific circumstances, for gains realised on such shareholdings to be sheltered by the regime, subject to certain conditions being met. 

  3. Impatriate tax regime – if an individual has been non-tax resident for at least 2 years prior to applying and commits to being tax resident in Italy for at least two years and mainly works in Italy, this regime will reduce tax on Italian-source employment income to 30% for the tax year in which they become resident and the next four years. All other non-Italian income and gains are taxed as normal. 


For many years, various Swiss Cantons have offered a favourable regime known as the 'forfait' regime (although notably this is not available in Zurich, but Zug is within easy commuting distance). This regime is available to an individual who (i) is not a Swiss citizen, (ii) has not been ordinarily resident in Switzerland within last 10 years and (iii) does not engage in gainful activity in Switzerland (activity outside Switzerland is permitted). Residence under the forfait is typically negotiated with the Swiss authorities in advance.  If married, the taxpayer's spouse must also meet these criteria.

Under the forfeit regime the individual's tax base (the amount on which the individual will be taxed at ordinary rates) is agreed by the tax authorities in advance, usually as a multiple of the rental value of the taxpayer's property.  There is no further income or capital gains tax, but individuals on forfaits are subject to inheritance tax in the same way as ordinary residents. Fortunately, most cantons do not charge inheritance tax on legacies to close family members and those that do, do so at very low rates.

In terms of immigration, an approach is made to the cantonal authorities and to the immigration authorities for a residence permit. For non-EU citizens, the immigration side is usually more of an issue than agreeing the basis of taxation under the forfait. For the forfait negotiations, information regarding annual expenditure will need to be provided but the level of information required varies from canton to canton. Obtaining Swiss citizenship is a notoriously convoluted process requiring the applicant to demonstrate their integration into Swiss society after 10 years of residency.


Portugal's 'Golden Visa' scheme, which granted individuals visas in return for investments into Portuguese investments or purchase of real estate, is a victim of its own success and is being withdrawn in an effort to alleviate the overheating of the housing market (though no end date has yet been fixed).  

For many years, the Golden Visa has offered a route to an EU passport for many non-EU citizens.  However, the Portuguese government recently announced that it is looking to close down this scheme and, in particular, at the end of 2022 the government announced that purchasing residential property in major cities such as Lisbon or Porto, or in coastal towns on the mainland, will no longer qualify for the purposes of the scheme. For the moment, existing holders of Golden Visas can have them renewed (until the new law is in force) so long as the individual satisfies conditions around their real estate, which include letting on a long-term basis. Future renewals after the law is published will convert into an Entrepreneurs Permit.  

EU nationals can still freely immigrate to Portugal and certain work permits can still be applied for by non-EU nationals, including a digital nomad visa, which grants rights to live and work in Portugal depending on the nature of the employment. 

Portugal offers a special 'non-habitual resident tax regime' which is attractive for high net worth individuals relocating to the country. The principle advantages of this regime are (i) any foreign (non-Portuguese) source income is sheltered from tax in Portugal providing it is taxed in the source country under a double tax treaty; and (ii) employment or self-employment income is taxed at a flat rate of 20% when working in certain 'high value-added' fields. Note, however, that gains realised from a company located in a 'black-listed' jurisdiction will be taxed under the usual rules in Portugal (i.e, not under this regime).  

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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