New developments in Portugal's NHR tax regime

Portugal has been an attractive destination for investors, pensioners, and highly qualified professionals for years thanks to its Non-Habitual Resident (NHR) tax regime. 

However, from the January 1, 2024This regime has been modified, establishing new rules and benefits for those who wish to move to the country. 

Below, we explain in simple terms what these changes consist of and who can benefit from them.

What changes have been introduced to the NHR regime?

El original NHR regimenThe agreement, in force since 2010, offered significant tax advantages to new residents in Portugal, especially in terms of reduced taxation on foreign income and certain high value-added activities. 

However, this system is no longer available to new applicants since [date missing]. January 1, 2024except in exceptional cases of “Grandfathering”That is, for those who were already registered in the system before that date.

Instead, the Portuguese government has introduced a new tax incentive scheme (NHR 2.0 or IFICI), which maintains some key advantages but with stricter criteria and a focus on attracting talent and innovation.

Who can benefit from the new NHR regime?

El new NHR regime It is designed to attract highly qualified professionals, entrepreneurs, and innovative companies. To be eligible, applicants must meet the following requirements:

1. Not having been a tax resident in Portugal in the last five years.
2. To practice a highly qualified profession within strategic sectors such as:
   • Physical sciences, mathematics and engineering.
   • Information and communication technologies (ICT).
   • Medicine and health.
   • Higher education and scientific research.
   • Business management and administration.
3. Work at an eligible company that:
   • They operate in key sectors according to Portuguese regulations.
   • Generate at least 50% of your revenue from export activities.
4. Submit the application within the established deadline.which is generally up to the January 15 of the following year to the acquisition of tax residence in Portugal.
5. Demonstrate your eligibility annuallyproviding documentation that proves they continue to comply with the requirements of the regime.

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. Key benefits include:

• Fixed rate of 20% on income derived from professional activities in Portugal, instead of progressive taxation which can reach up to 48%.
• Tax exemption on foreign income, including business profits, employment, dividends, interest and rents (except pensions and income from “blacklisted” jurisdictions).
• Application of the regime for a period of up to 10 yearsproviding long-term fiscal stability.

AIM Global helps you get the new NHR

Portugal's new NHR tax regime presents an attractive opportunity for professionals and entrepreneurs looking to establish themselves in the country. However, the rules have changed significantly, and it is crucial to assess whether you meet the requirements to benefit from this tax scheme.

En 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 structure your residency strategically. 

Contact us today to receive personalized advice on the new NHR regime and its tax opportunities in Portugal.