Among the different roles they played in the Ottoman Empire during the early modern period, the capitulations (ahdname in Ottoman Turkish) were also charters regulating legal and economic privileges and duties of members of European mercantile communities residing in Ottoman cities. The privileges included tax exemptions, consular jurisdiction, inheritance rights, and specific procedures in Ottoman courts. The individuals enjoying them were called müstemin (“protected foreigners”) in Islamic legal terminology. Most of the historiography of the Ottoman capitulations treats these documents as a purely Islamic/Ottoman institution with historical precedents in the medieval period without considering analogous instruments devised by contemporary Mediterranean powers to host communities of foreign merchants. Similar to the Ottoman sultans, in the sixteenth century the Italian city-states of Ancona, Venice, and Florence strove to attract groups of Ottoman merchants (mostly Sephardic Jews, Orthodox Greeks and Muslim Turks from the Balkans) in order to benefit from their commercial activities and to establish peaceful relations with the Ottoman sultans. Consequently, they issued charters (called with different terms like condotte, livornine) bestowing legal and economic privileges on merchants from the Ottoman Empire in order to benefit from their expanding commercial activities in the eastern Mediterranean. This paper will provide a comparative study of the Ottoman capitulations and the charters granted to Ottoman subjects by the three aforementioned city-states. It will deal with the legal and economic status of the “protected foreigner” in the documents in order to show how similarly or differently Ottoman and Italian authorities regulated the sojourn of foreign merchants and their interplay with the host society. In particular, it will focus on residence regulations, taxation, communal organization, and interaction between the foreign merchants and local legal institutions. Overall, this paper will argue that, despite substantial differences in the political, legal, and economic systems of the Ottoman Empire and Italian city-states, the Ottoman capitulations and Italian city-states’ charters should be considered as similar solutions devised to cope with a common historical challenge: how to incorporate growing communities of individuals belonging to different political and religious communities into the socioeconomic system of the aforementioned polities in a century of substantial expansion of the Levantine trade and intensive migrations in the eastern Mediterranean.