San Marino’s tax residency programme offers something relatively rare in Europe: zero income tax on foreign-sourced income. For high-net-worth individuals with international income — investment returns, pension distributions, business income earned outside San Marino — this is a significant structural advantage.
Here’s exactly how it works.
San Marino’s Tax System: The Basics
San Marino operates a territorial tax system for residents in qualifying categories. Foreign-sourced income is not subject to San Marinese income tax. San Marino-sourced income (from employment or business activity within the republic) is taxed at progressive rates up to 35%.
For most expat tax residents — whose income comes from investments, pensions, and businesses outside San Marino — this means effectively zero income tax on their primary income streams.
Additionally: San Marino has no wealth tax, no inheritance tax, and no capital gains tax on most foreign gains.
The Atypical Tax Residency Programme
The primary vehicle for high-net-worth expats is the Atypical Tax Residence category. This is San Marino’s answer to Andorra’s passive residency and Monaco’s carte de séjour — a structured pathway for individuals who want to establish San Marino as their primary tax domicile for the specific purpose of accessing the favourable tax treatment on foreign income.
Key Features
- No San Marino tax on foreign-sourced income (investment income, foreign pensions, foreign business distributions)
- No wealth tax
- No inheritance tax for qualifying assets
- No CGT on foreign capital gains
- A lump-sum treasury contribution is required (amount confirmed during consultation — varies by case)
- Physical presence of approximately 6 months per year required
- Must maintain primary residence in San Marino
Who This Is For
San Marino’s tax residency makes most sense for:
- European nationals (especially Italians, Germans, French, and UK citizens) who want to shift tax residence without moving far from their cultural and social networks
- Retirees with pension income from high-tax countries — a British retiree with a UK pension, for example, is subject to UK tax on that pension unless non-residency is properly established; with the right structure, moving to San Marino can form part of that exit strategy
- Investors with significant foreign income — capital gains, dividends, interest income that would otherwise be taxed at 25–45% in most European countries
- Business owners with offshore/non-San Marino company income — distributions from foreign companies are generally not taxed in San Marino
The Important Caveat: Exit Taxation
Leaving your home country to establish San Marino tax residency doesn’t automatically end your home-country tax obligations. Several key issues to address:
- Exit taxes: Germany, France, the Netherlands, and several other countries impose exit taxes on unrealised capital gains when you cease tax residency. Proper planning before departure is essential.
- Residency cessation rules: The UK, Canada, and Australia have specific rules about when you cease to be tax resident — it’s not automatic when you move. You must formally sever ties.
- US citizens: The US taxes citizens on worldwide income regardless of where they live. San Marino residency does not change a US citizen’s US tax obligations. However, the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit can reduce double taxation on some income types.
- Controlled foreign corporation rules: Many countries have CFC rules that attribute income from foreign companies back to domestic residents. If San Marino residency is not properly established first, these rules may still apply.
This is why professional guidance is essential — tax residency changes are not simple, and the wrong sequence of steps can create expensive problems.
How San Marino Compares on Tax
| Jurisdiction | Tax on Foreign Income | CGT | Wealth Tax | Inheritance Tax | Physical Presence |
|---|---|---|---|---|---|
| San Marino | 0% | 0% (foreign) | 0% | 0% | ~6 months |
| Monaco | 0% | 0% | 0% | 0% | 21+ days |
| Andorra | 10% flat | 0% | 0% | 0% | 183 days |
| Malta GRP | 15% on remittances | 0% (most) | 0% | 0% | 90 days |
| Portugal NHR | 20% on qualifying income | 28% | 0% | 0% | 183 days |
| Italy Flat Tax | €100k/year flat | 26% | 0.2–0.76% | 4–8% | 183 days |
The comparison with Italy’s own flat tax regime is worth noting: Italy offers a €100,000/year flat tax on foreign income for new residents — a fixed sum that makes sense only above a certain income threshold. San Marino’s approach is proportional and potentially better for very high incomes where €100k is a small fraction of total tax.
CRS Reporting
San Marino participates in the Common Reporting Standard (CRS) — the OECD’s automatic exchange of financial information. San Marinese banks report account information to the relevant authorities in account holders’ countries of tax residence. San Marino is not a secrecy jurisdiction.
Once you establish San Marino as your primary tax residence (and exit your home country’s tax system properly), reporting shifts to San Marino. Your home country stops receiving automatic reports about your foreign accounts.
The Process
- Step 1: Consultation to determine which category fits your situation and income profile
- Step 2: Pre-departure planning with your home country advisor (exit taxes, tie severing, timing)
- Step 3: Secure accommodation in San Marino (rental or purchase)
- Step 4: Document preparation by MLL’s San Marinese advisors (proof of income, accommodation, background)
- Step 5: Application submitted to the Secretary of State for Internal Affairs
- Step 6: Residency permit issued (4–6 months typical processing)
- Step 7: CASS (social security) registration and bank account setup
Interested in San Marino Tax Residency?
Have questions? Book a consultation call →
Frequently Asked Questions
Is San Marino tax residency legitimate or a tax scheme?
It’s a sovereign country with a fully legal residency programme. It is listed by the OECD and participates in CRS. Legitimately establishing San Marino as your primary tax residence is entirely legal — the same as establishing residency in Portugal, Malta, or any other country for tax reasons.
Does San Marino have tax treaties?
San Marino has signed tax treaties with Italy and several European countries. These treaties prevent double taxation and define where different types of income are taxable. Confirm whether your country has a treaty with San Marino during your consultation.
What income is taxable in San Marino?
Income sourced within San Marino (employment, business activity, rental income from San Marino property) is taxable. Foreign-sourced income is exempt for qualifying residency categories. Most expat tax residents have little to no San Marino-sourced income.
Is there a minimum annual fee or contribution?
The Atypical Tax Residence category requires a contribution to San Marino’s treasury. The exact amount is confirmed during the application process and depends on circumstances. Contact us for current figures.
Related: Living in San Marino · Cost of living in San Marino · Territorial tax countries
