As global mobility becomes a defining feature of modern work, companies expanding into Europe face a growing challenge, how to stay competitive on salaries while keeping overall employment costs under control. Across Europe, several countries have introduced targeted tax regimes designed to attract skilled international talent and the companies that hire them.

These programs don’t just lower the cost of hiring, they reshape the economics of expansion. By combining fiscal incentives with strong quality of life, innovation ecosystems, and tech-friendly environments, a handful of European nations are emerging as clear winners in the race to attract international professionals. 

Below, we explore five of them: Portugal, Spain, the Netherlands, Romania, and Italy, and what makes each uniquely positioned to support business expansion and international hiring. 

 

🇵🇹 Portugal - The IFICI+ (NHR 2.0) Program

Portugal has long been known for its relaxed lifestyle, safety, and thriving tech scene, but in 2025, it will reinforce that reputation with a new tax regime designed specifically for qualified foreign professionals and returning Portuguese talent: the Fiscal Incentive for Scientific Research and Innovation (IFICI+).

Commonly called NHR 2.0, the program introduces a 20% flat tax rate on income for up to 10 years, with no wealth tax and exemptions on most foreign-sourced income. There’s also no minimum stay requirement, and transfers of funds into Portugal are free from remittance tax.

The IFICI+ aims to attract people in innovation-driven sectors and strengthen Portugal’s position as a European tech hub. For businesses, that means being able to pay globally competitive salaries while still benefiting from one of the lowest effective tax burdens in Western Europe.

Add in Portugal’s cost-effective operations, English-speaking workforce, and safe environment, and it’s easy to see why cities like Lisbon and Porto have become magnets for startups and remote-first companies expanding into Europe.

 

🇪🇸 Spain - The Beckham Law

Spain’s Beckham Law remains one of Europe’s most famous expat tax incentives, and for good reason. Introduced in 2005 and refined over time, it allows newcomers to be taxed at a flat 24% rate on employment income for six years, covering earnings up to €600,000. Income earned abroad is fully exempt from Spanish taxation, and dependents can also qualify.

Beyond the numbers, Spain offers something just as valuable: lifestyle. Ranked by the OECD as the 4th country in the world for work-life balance, Spain combines high quality of life with competitive living costs compared to its Western European peers.

Major hubs such as Barcelona and Madrid are now central to the continent’s startup ecosystem, and the country’s cultural and linguistic ties to Latin America create a natural bridge for global companies seeking bilingual talent and international reach.

For businesses, the Beckham Law makes it easier to relocate employees, recruit senior managers, and build nearshore teams, all while maintaining predictable, moderate tax exposure.

 

🇳🇱 The Netherlands - The 30% Ruling

Few European countries have embraced international talent as strategically as the Netherlands. Through its 30% Ruling, qualifying employees recruited from abroad can receive up to 30% of their salary tax-free for five years.

To qualify, employees must earn over €46,107 per year (2024 figures) and possess specialized skills that are scarce in the Dutch labor market. For employers, this regime means they can offer higher net salaries without increasing total payroll costs, a clear win-win.

The Netherlands also stands out for its advanced digital infrastructure, English-fluency, and international corporate culture, hosting global players such as Philips, Airbus, and Booking.com. It’s no surprise that tech companies see it as an ideal place to centralize European operations or launch regional headquarters.

 

🇷🇴 Romania - Income Tax Exemption for IT Professionals

Romania might not be the first country that comes to mind for international expansion, but in the IT sector, it has become a hidden gem. With a 10% income tax exemption for software and IT professionals and a 16% corporate tax rate, Romania offers one of the most favorable fiscal environments in Europe for Tech Employers.

The exemption now covers employees in both private and public institutions working in eligible IT roles, with companies able to apply the tax benefit directly, without prior approval from tax authorities, making administration fast and predictable. 

Pair these savings with a highly educated, multilingual workforce and relatively low cost of living, and Romania becomes an increasingly appealing option for software development, shared service centers, and nearshoring operations in Eastern Europe.

 

🇮🇹 Italy - Inbound Worker Tax Exemption

Italy’s Inbound Worker Regime offers another powerful incentive: a 50% reduction in taxable income for up to five years for professionals relocating to the country, with the exemption increasing to 90% in certain southern regions such as Albruzzo, Molise, and Sicily.

This benefit applies not only to employees but also self-employed individuals and business owners who establish new ventures in Italy. By lowering the effective income tax burden, Italy aims to attract both qualified workers and entrepreneurial talent, especially in sectors like technology, design, and hospitality. 

For companies, it’s a compelling blend of lifestyle appeal and fiscal advantage, ideal for teams looking to combine business growth with cultural richness. 

 

Comparing the Five

When we compare these five countries using a €90,000 annual salary as a benchmark, the results show that tax incentives can significantly reduce overall employers costs while increasing the employee’s net take-home pay.

While Spain and the Netherlands offer immediate savings through flat-rate or partial exemptions, Portugal’s IFICI+ stands out for its long-term horizon, a full ten years of benefits, promoting retention and stability. Meanwhile, Romania provides the lowest overall costs for IT companies, and Italy’s inbound program combines flexibility with strong regional incentives.

Each country’s scheme serves a different business strategy: 

• Portugal for sustainable expansion and talent retention.

• Spain for lifestyle and short-to-mid-term relocations.

• Netherlands for centralizing skilled international staff.

• Romania for cost-efficient IT operations.

• Italy for creative and high-value sectors seeking cultural hubs.

 

Building a Smarter Expansion Strategy

Choosing where to expand in Europe is no longer just a matter of cost, it’s a question of long-term alignment. Tax incentives, quality of life, and access to talent all play a role in defining where your company can thrive.

At Softlanding, we help global companies hire and grow in Portugal and Spain, providing full support through Employer of Record (EoR), Professional Employer Organization (PEO), and Legal Entity Setup solutions. Throughout the years, we have built a strong network across the Iberain tech and business ecosystem, helping clients minimize risk and maximize the advantages of European expansion.

Meet us at Going Global Live at stand G2422 in London, or download the full eBook “How to pay more salary with less costs? 5 European countries with the most favorable tax incentives for expats” to explore detailed comparisons and cost breakdowns. 

Because global growth starts with local insight, and the right landing makes all the difference.

Download the full eBook here: https://softlanding.works/ebook-how-to-pay-more-salary-with-less-costs/