As European governments face mounting budgetary pressures from slow economic growth, aging populations, and increased defense spending, many are turning to a new source of relief: wealthy foreigners. In a bid to boost investment and tax revenues, several countries are rolling out attractive fiscal incentives designed to lure high-net-worth individuals to their shores.

Italy: A Flat Tax for the Ultra-Wealthy

Italy remains a popular destination, not only for its rich culture and Mediterranean climate, but also for its lucrative flat tax regime. Under this program, foreign residents can opt to pay a flat annual tax of €200,000 on all income earned abroad, regardless of the amount. The incentive is available for up to 15 years and targets individuals who haven’t lived in Italy for at least nine of the last ten years.

“This system eliminates the need for complex tax planning,” said tax advisor David Lesperance, noting that some wealthy individuals see the lump sum as equivalent to what they already spend annually on accounting fees.

Switzerland: Expense-Based Taxation

Switzerland offers a similar scheme, known as the forfait fiscal, which calculates tax based on an individual’s living expenses rather than income. Though only a small portion of taxpayers qualify, those eligible — typically wealthy foreigners with no Swiss business activities — can benefit from lower effective tax rates. Minimum thresholds apply, such as tax based on at least seven times annual rent or CHF 429,100 (€455,000), whichever is higher.

Portugal: A Revised Regime with Limits

Portugal’s tax benefits for expats have stirred domestic controversy, especially amid rising living costs. After criticism and international pressure, the country has revamped its Non-Habitual Residence program. The new version, NHR 2.0, grants a 20% income tax rate to highly qualified professionals for 10 years but excludes foreign pensions, which are now taxed at standard rates.

Shell Companies and Loopholes

The use of shell companies remains a common tactic for the wealthy to minimize taxes. By routing personal income through corporate entities, individuals can shelter wealth in jurisdictions with low corporate tax rates — such as Hungary (9%), Bulgaria (10%), and Ireland (12.5%). While more than 140 countries have agreed to a 15% global minimum tax on large corporations, its implementation is still ongoing.

Balancing Benefits and Backlash

Experts caution that tax planning is complex and must consider broader fiscal factors including inheritance, wealth, and capital gains taxes. While tax incentives can boost property markets and local spending, they also raise questions about fairness and long-term sustainability.

“Countries wouldn’t offer these perks if they didn’t believe the benefits outweighed the costs,” said Jason Porter of Blevins Franks Financial Management. “But the political debate over these trade-offs is far from over.”

Ford Motor Co. has pulled its full-year financial forecast and warned of a potential $1.5 billion (€1.39 billion) blow to its profits this year due to escalating trade tariffs and uncertainty surrounding U.S. trade policy.

In its first-quarter earnings report released Monday, the automaker cited unpredictable market conditions stemming from the Trump administration’s evolving tariff regime as the key reason for suspending its guidance. While Ford is less exposed than some competitors thanks to its strong U.S. manufacturing base, the company acknowledged that the threat to supply chains remains significant.

“Given the potential range of outcomes, updating full-year guidance is challenging right now,” the company said in a statement. Ford had previously projected earnings before interest and taxes between $7 billion and $8.5 billion (€6.2–7.5 billion) for 2025.

CEO Jim Farley emphasized the advantage of domestic production, noting that Ford’s U.S.-focused footprint places it in a stronger position relative to global rivals. “Automakers with the largest U.S. footprint will have a big advantage, and, boy, that is true for Ford,” Farley said during an earnings call. “But it’s too early to gauge the full impact of industry-wide supply chain disruptions.”

Chief Operating Officer Kumar Galhotra pointed to rare earth materials from China as a growing area of concern, noting that “it would take only a few parts to potentially cause some disruption to our production.”

Despite the growing challenges, Ford’s first-quarter results beat analyst expectations. Net income fell sharply to $471 million (€417 million), a drop of nearly two-thirds from $1.33 billion (€1.17 billion) a year earlier. Revenue declined by 5% to $40.7 billion (€35.9 billion), driven by planned plant shutdowns tied to new product rollouts and inventory adjustments.

The automaker’s results surpassed projections by analysts surveyed by FactSet, who had estimated quarterly revenue of $38 billion (€33.5 billion).

Ford’s relatively limited exposure to tariffs contrasts with peers such as General Motors, which last week warned of a potential $5 billion (€4.4 billion) hit from similar trade actions. Tesla and Ford, with larger U.S.-based production operations, are considered better insulated.

Still, Ford does anticipate modest price increases of 1% to 1.5% in the U.S. auto market during the second half of the year as a result of higher costs for imported cars and parts.

The company plans to provide updated financial guidance when it releases its second-quarter earnings later this year.