Portugal has long been an attractive destination for investors, retirees, and highly qualified professionals thanks to its Non-Habitual Resident (NHR) tax regime.
However, as of January 1, 2024, this regime has been modified, establishing new rules and benefits for those wishing to relocate to the country.
Below, we explain in simple terms what these changes entail and who can benefit from them.
What changes have been introduced to the NHR regime?
The original NHR regime, in place since 2010, offered significant tax advantages to new residents in Portugal, particularly in terms of reduced taxation on foreign-sourced income and certain high-value-added activities. However, this system is no longer available for new applicants as of January 1, 2024, except in exceptional “grandfathering” cases for those who were already registered under the system before that date.
In its place, the Portuguese government has introduced a new tax incentive regime (NHR 2.0 or IFICI), which retains some key benefits but with stricter criteria and a focus on attracting talent and innovation.
Who can benefit from the new NHR regime?
The new NHR regime is designed to attract highly qualified professionals, entrepreneurs, and innovative companies. To be eligible, applicants must meet the following requirements:
- Not have been a tax resident in Portugal in the last five years.
- Practice a highly qualified profession within strategic sectors such as:
- Physical sciences, mathematics, and engineering.
- Information and communication technologies (ICT).
- Medicine and healthcare.
- Higher education and scientific research.
- Business management and administration.
- Work for an eligible company that:
- Operates in key sectors according to Portuguese regulations.
- Generates at least 50% of its revenue from export activities.
- Submit the application within the established deadline, which is generally by January 15 of the year following the acquisition of tax residency in Portugal.
- Annually demonstrate eligibility by providing documentation proving continued compliance with the regime’s requirements.
What are the benefits of the new NHR regime?
While the new regime is more restrictive, it still offers attractive tax incentives for those who qualify. The main benefits include:
- A flat 20% tax rate on income derived from professional activities in Portugal, instead of the progressive tax rate that can go up to 48%.
- Tax exemption on foreign-sourced income, including business profits, employment income, dividends, interest, and rental income (except for pensions and income from «blacklist» jurisdictions).
- Application of the regime for a period of up to 10 years, providing long-term tax stability.
AIM Global helps you obtain the new NHR
Portugal’s new NHR regime represents an interesting opportunity for professionals and entrepreneurs looking to establish themselves in the country. However, the rules have changed significantly, making it essential to assess whether the eligibility requirements are met to benefit from this tax scheme.
At AIM Global, we have a team of experts in international mobility and tax planning, with offices in Chile and Portugal, who can help you analyze your situation and strategically structure your residency.
Contact us today for personalized advice on the new NHR regime and its tax opportunities in Portugal.
