San Marino residence: elective residence for investors and preferential atypical tax regimes

San Marino regulates the residence of foreigners through Law 118 of 28 June 2010, as repeatedly amended. Elective residence under article 16-bis is the investment route: the applicant either buys a property for the family home for at least EUR 500,000, of which up to EUR 150,000 of completion or renovation works may count, or makes a non-interest-bearing deposit of at least EUR 600,000 for ten years in San Marino state securities or a fund established by the State, which also carries a one-off tax of EUR 10,000. Applications are filed with the Department of Foreign Affairs against a EUR 1,000 fee and approved by the Congress of State, with a cap of 50 new elective residences per year. The investment must be completed within three months of approval.

Residence in San Marino means genuine habitual residence. Until the status consolidates, ten years after registration in the population register, elective residents must maintain private health cover, cannot take employment in the extended public sector and do not receive State benefits linked to residence. Absences of more than six months, other than for recognised reasons, can lead to revocation. After ten years the residence converts into ordinary registered residence with the related rights. Family members may be added for a one-off payment of EUR 20,000 each, and a provisional permit of up to six months is available while registration is completed.

Ordinary residents pay general income tax (IGR) on worldwide income. Two atypical residences offer alternatives. The regime under article 16-ter applies a 7% substitute tax to foreign-sourced income net of foreign tax, with a minimum of EUR 10,000 and a maximum of EUR 100,000 per tax year, for up to 15 tax periods and within a quota of 100 a year; the September 2026 ratification of Delegated Decree 115/2026 confirmed that the 7% applies even where a tax treaty would otherwise leave the income untaxed. Pensioners from EU countries, Switzerland and listed states can use article 16-quater, with a 6% substitute tax on pensions for ten renewable years. The financial thresholds for pensioners were revised by decrees in November 2024, February 2025 and May 2025, so the figure in force is confirmed at filing.

Entrepreneurs can apply for economic residence. Following the 2026 amendments, the applicant must own at least 51% of a San Marino company and hire one full-time San Marino resident, and must provide a EUR 75,000 guarantee that rises to EUR 150,000 within two years, which can be satisfied through a property purchase, within a quota of 50 a year. Citizenship is a distant prospect: the 2026 reform of Law 114/2000 requires 20 years of continuous residence, Italian at B1 level and a test on San Marino's history and institutions, while removing the former obligation to renounce other citizenships.