Portugal or Italy in 2026: residence permit, taxes, citizenship and life

The main thing in a minute: how these two countries differ

Portugal and Italy are often on the same list for those planning a move to Southern Europe. Climate, sea, culture, leisurely pace of life - at the level of image they are similar. But if you look at immigration mechanics, these are two different strategies, and you need to choose between them not according to the picture, but according to your specific task.

Briefly the balance of power in 2026:

• Italy is a country for the wealthy and for entrepreneurs. The main magnet is an investor visa and a flat tax of 300,000 euros on all foreign income. This is a tool for people with large capital, for whom it is important to fix a predictable tax instead of a progressive scale.
• Portugal is a country with a lower entry barrier. There is a residence permit for passive income D7 for rentiers and pensioners (income from ~870 euros per month), a digital nomad visa D8 and Golden Visa funds. There is simply no analogue of the cheap D7 in Italy.
• Citizenship is now long in both countries. Both Portugal and Italy raised the basic naturalization qualification to 10 years in 2025-2026. The era of the “five-year Portuguese passport” is over.

That is, the choice comes down to a simple question: what is more important to you is tax optimization of large capital (then look at Italy) or an accessible and understandable path to life in the EU with an eye on a passport (then pay close attention to Portugal). Below we analyze each block in detail.

EU, Schengen and what it gives in practice

Let's start with where the countries are equal, so as not to go back further. Both are full members of the European Union and both are part of the Schengen area. This is a fundamental advantage compared, for example, with Cyprus, which is in the EU but not yet part of Schengen.

What does the EU plus Schengen bundle give to the holder of a residence permit from any of these countries:

• Freedom of movement within Schengen. With a residence permit from Portugal or Italy, you move throughout the entire zone without internal borders - you can live in one country and travel on business and leisure to the rest without visas.
• EU passport perspective. Naturalization in any of these countries leads to full EU citizenship - with the right to live, work and study in any EU country, and not just the one where you received your passport.
• Unified legal field. Consumer protection, banking standards, recognition of diplomas and qualifications within the EU work the same way.

The difference begins at the level of national rules: how to obtain a residence permit itself, what taxes to pay and how many years to live before getting a passport. This is where Portugal and Italy diverge, and this is what the rest of the material is about.

Residence permit in Italy: investor visa for large capital

Italy does not offer a cheap residence permit for passive income in the same way as Portugal does. The main tool for a foreigner with capital is an investor visa (Investor Visa for Italy), which is often called the Italian golden visa. It is designed for people who are ready to invest a significant amount in the country.

Investment options in 2026:

• 250,000 euros - into the capital of an innovative startup in Italy (the lowest entry threshold).
• 500,000 euros - into the capital of an existing Italian company.
• 2,000,000 euros - in Italian government bonds.
• 1,000,000 euros - a non-refundable charitable donation for a project of public importance (culture, education, science, migration).

The mechanics are convenient in that Nulla Osta permission (preliminary consent) can be obtained even before the money is deposited: first approval, then investment. The primary residence permit is issued for 2 years and can be extended without the requirement to live permanently in Italy - this is important for those who are not ready to immediately move the center of their life. The review period is approximately 3-6 months. If you are considering the investment route, it makes sense to compare it with other EU programs - we provide a detailed analysis of the stock route in Guide to Portugal Golden Visa.

Portugal residence permit: D7, D8 and Golden Visa funds

Portugal wins in terms of diversity and accessibility of entry. There are routes here for people with a small passive income, and for remote workers, and for investors.

• D7 - passive income visa. The main democratic option. Suitable for pensioners and rentiers: you need a stable passive income (pension, rent, dividends) from approximately 870 euros per month for the main applicant plus housing in Portugal. This is the way for those who do not have a million to invest, but have a stable income. Details are in the material about Portugal D7 visa.
• D8 - digital nomad visa. For those who work remotely for foreign customers. An income of approximately 3,040 euros per month (approximately four times the minimum wage) and a contract or business with clients outside Portugal are required.
• Golden Visa (ARI). Here is a fundamental difference from previous years: the routes for the purchase of real estate and the simple transfer of capital have been abolished since October 2023 (Mais Habitacao Law). What remains are investment funds from 500,000 euros, support for science from 500,000 euros, cultural heritage from 250,000 euros and job creation. Minimum presence - about 7 days per year.

It turns out that entry into Portugal is more flexible: you can enter by income, by remote work or by investment - depending on your situation. In Italy, without large capital, an investor visa is not available, and only general reasons remain (work, business, family reunification), which are more complex.

Residence permit head-on: table “criterion - Portugal - Italy”

Let's summarize the ways to obtain a residence permit in one table. This will help you understand which country is in your profile before going into details about taxes and passport.

The conclusion from the table is simple. If there is no budget for a large investment, but there is passive income or remote work, the only real way is through Portugal. If you come with capital, both countries are open, and then the issue shifts to the level of taxes.

Italian taxes: flat tax 300,000 euros on global income

This is Italy’s main trump card in the fight for wealthy residents - and at the same time the point on which important changes took place in 2026. We are talking about a special tax regime for new residents (flat tax / regime per i neo-residenti).

The essence of the regime: instead of a progressive scale (in Italy it reaches 43% plus local surcharges), a person who transfers tax residence to Italy pays a fixed amount per year on all his foreign income - regardless of its size. Italian income is taxed on a general basis.

Key figures for 2026:

• 300,000 euros per year - a fixed payment for those who transfer their residence after the entry into force of the budget law for 2026. The rate was raised from the previous 200,000 euros (which, in turn, increased from 100,000 euros in 2024).
• 50,000 euros per year - additional payment for each family member joining the regime.
• Up to 15 years - maximum duration of the regime.
• 9 out of 10 years - the applicant must not have been a tax resident in Italy for at least 9 of the previous 10 years.

An important fair disclaimer about grandfathering: those who entered the regime in 2024 continue to pay 100,000 euros, and those who entered in 2025 - 200,000 euros until the end of the validity period. The new rate of €300,000 only applies to those who transfer their residence after the 2026 law comes into force. Therefore, phrases about “Italian flat tax 100,000 euros” in 2026 are already history for latecomers; for new applicants, the benchmark is exactly 300,000 euros.

Taxes in Portugal: IFICI instead of closed NHR

Portugal has its own tax logic, and here, too, the old model has been broken. The famous NHR (Non-Habitual Resident) regime, which has been attracting retirees and remote workers to the country for a decade, will be closed to new applicants from 2024.

He was replaced by a regime IFICI - a tax incentive for research and innovation, often called “NHR 2.0”. Its conditions:

• 20% flat rate on qualified income from employment and self-employment in Portugal (instead of a progressive scale up to 48%).
• Exemption of most foreign income from tax in Portugal - dividends, interest, income from abroad are largely exempt.
• Duration - 10 years.
• Narrow conditions for the profession. The regime is addressed to highly qualified specialists, scientists, workers in strategic sectors (technology, science, healthcare, green energy). A bachelor's degree plus experience or a doctorate is required.

The difference in philosophy is obvious. Italy says to the wealthy: “Pay us a large fixed sum and don’t think about the structure of your global income.” Portugal tells a qualified specialist: “Work in the right sector, pay a preferential 20%, and we largely exempt foreign income.” The first mode is about the amount of capital, the second is about profession and activity. A detailed analysis of the tax part is in the material about Portugal tax regime.

Who benefits from what: we count on our fingers

In order not to drown in bets, let’s figure out which system is suitable for whom. This is not tax advice, but the logic of choice - the exact calculation is always individual.

Italy (flat tax 300,000 euros) is profitable if:

• you have large foreign income - from several million euros per year. Then the fixed 300,000 euros may be a multiple of less than the progressive tax on this amount in the usual regime.
• Predictability is important to you: you know the final figure in advance and do not depend on income fluctuations.
• the income structure is complex and scattered around the world - the mode eliminates the need to deal with each source.

Portugal (IFICI 20%) is profitable if:

• you are an active specialist or entrepreneur in the technology or scientific sector with income that is comfortable being taxed at 20%.
• The bulk of your income is foreign and is exempt.
• You're not willing to pay a six-figure flat fee and want a lower cost of living overall.

The rough divide is this: with a very large world income, the Italian flat tax is mathematically more likely to win, with a moderate income and a desire to live cheaper - the Portuguese IFICI or general regime. The progressive scales of the countries are comparable (Italy up to ~43%, Portugal up to 48%), therefore, without special regimes, both countries are full-fledged European taxation, and not a “tax paradise”.

Citizenship: both Portugal and Italy are now 10 years

Here is the main news for 2025-2026, and it breaks many outdated articles on the Internet. Both states have tightened naturalization, and the usual picture of “Portugal - passport in 5 years” no longer applies.

Portugal. Organic law Lei Orgânica 1/2026 came into force on May 19, 2026. The basic naturalization qualification has been raised from 5 to 10 years; for citizens of countries of the Portuguese-speaking CPLP community - 7 years. The period is now counted from the date of issue of the first residence permit. Added requirements: language at level A2 and a test of knowledge of the history, institutions and social life of Portugal. Important and fair: applications submitted before May 18, 2026 are considered according to the old rules (protection of applicants - grandfathering). Detailed analysis - in the guide Portuguese citizenship.

Italy. Standard naturalization for a foreigner from a third country is 10 years of legal residence (for EU citizens - 4 years, if married to an Italian - faster). That is, in terms of length of residence, both countries are now at the same point.

The bottom line on naturalization: with an equal qualification of 10 years, the choice shifts to the quality of life, taxes and where you really feel more comfortable spending these years. Time itself is no longer an advantage for any country.

Summary conditions 2026: numbers and thresholds in one table

A final summary of key parameters to keep everything in front of your eyes. All figures are for 2026, based on investment and tax programs of both countries; For sensitive items, please refer to them as indicative and check the relevance before submitting.

This table is not a verdict, but a map of the area. There is absolutely no “best” country: there is one that is better for your capital, income and lifestyle.

An expert's view: typical mistakes when choosing and verifying facts

In practice, we see that people are let down not by the complexity of procedures, but by outdated information and incorrect initial settings. Let's look at what to check before making a decision.

• Reliance on old terms of citizenship. Half of the articles on the Internet still write “Portugal - passport in 5 years.” From May 19, 2026, this is 10 years (7 for CPLP). A decision based on the old figure is a no-brainer.
• The myth about the “Italian flat tax 100,000 euros”. For new applicants in 2026 this is €300,000. One hundred and two hundred thousand are reserved only for those who entered the regime in 2024 and 2025, respectively.
• Waiting for the Golden Visa of Portugal “for real estate”. This route has been canceled as of October 2023. What remains are funds and intangible options.
• Hope for an Italian passport from my great-grandfather. After the reform of 2025 and the decision of the Constitutional Court in 2026, the limit is two generations. Distant ancestors are no longer suitable.
• Ignoring compliance. For applicants from Russia and the CIS, both countries require a transparent source of funds, everything is strictly within the framework of the law and sanctions rules, without gray schemes.

The latest official rules of Portugal should always be checked on the state portal gov.pt, and in Italy - on the websites of relevant departments and consulates. Programs and thresholds change quickly, and decisions should be made on the latest data, and not on an article three years ago.

Result: to whom Portugal, and to whom Italy

Let's boil it down to a practical choice. Both countries give the same thing at the finish line - life in the EU and Schengen and, after 10 years of naturalization, an EU passport. The route and cost of entry vary.

Portugal is right for you if:

• you have stable passive income or remote work, but do not have large capital for investment - then D7 or D8 opens the door;
• you want a lower cost of living and a mild, equable coastal climate;
• you are a qualified specialist in technology or science and IFICI with a rate of 20% is suitable for you;
• What is important to you is a clear and relatively inexpensive entry into Europe.

Italy is right for you if:

• you have a large global income, and a fixed flat tax of 300,000 euros per year is mathematically more profitable than a progressive scale;
• you are an investor or entrepreneur ready to enter through an investor visa from 250,000 euros;
• you have an Italian parent or grandparent - then the path through the roots is real;
• You care about the diversity of Italy's regions and cultural environment.

bottom line: “better” depends on your numbers. For most families with average capital and a desire to live cheaper, Portugal is more logical; for wealthy people with large foreign income - often Italy. The right step is not to choose based on emotion, but to calculate both models to suit your income and task.

Citizenship by roots: Italian jure sanguinis after the 2025 reform

Italy has a special path that Portugal does not have on this scale - citizenship by blood (jure sanguinis), for the descendants of Italian emigrants. This used to be a famous route: one could obtain an Italian passport through a great-grandfather or even a great-great-grandfather by proving an unbroken line of Italian citizenship. But in 2025, the rules were sharply tightened, and this needs to be discussed .

What has changed:

• Decree-Law 36/2025 (transformed into Law 74/2025) introduced a limit of two generations. Now recognition requires an Italian-born parent or grandparent - great-grandparents and more distant ancestors no longer qualify as before.
• Additional terms: either the parent has lived in Italy for at least two years, or the grandparent was born in Italy.
• The new rules apply to applications submitted from March 28, 2025.
• Constitutional Court in March 2026, it rejected the complaints and recognized the restrictions as consistent with the Constitution - that is, it was not possible to roll back the reform through the courts.

What does this mean in practice? If you have an Italian parent or Italian-born grandparent, the path to your roots can be real and quick. If the connection is further (the great-grandfather was an emigrant of the early 20th century), this door is most likely already closed by the new reform. Portugal does not have a direct mass analogue of such origin, so for the majority of those moving to both countries, this is a path through a residence permit and naturalization, and not through ancestors.

Cost of living and climate: where is nicer and cheaper?

When the deadlines for naturalization are equal, the banal comes to the fore - where is it more comfortable and how much will life cost? And here there are noticeable differences between countries.

Cost of living. In terms of total expenses, Portugal is on average cheaper than Italy by approximately 13-21% (estimates from different sources differ, but the direction is the same). Eating out, groceries and everyday expenses are generally lower in Portugal. Rent is a controversial parameter: in large cities like Lisbon and Porto, prices have increased significantly in recent years and in some places have caught up with Italian prices, while in small Italian cities housing may be cheaper. Therefore, the general principle “Portugal is cheaper” works at the cost basket level, but the picture may differ in a particular city.

Climate. Both countries are stretched from north to south, so the climate inside each is different. But in general, Portugal has a milder and more even oceanic climate on the coast - fewer sudden changes, mild winters, which reduces heating and air conditioning costs. Italy provides greater diversity: from the alpine north to the hot south and islands.

Language. Both languages ​​are Romance and can be learned from scratch in a comparable manner. For future naturalization, you will have to learn the language in any case - Portugal requires A2 for a passport, Italy also tests knowledge of Italian. There is parity here.

More details on the moving budget can be found in the article about cost of living in Portugal.