Portugal's preferential tax regime for new residents — offering reduced or flat-rate taxation on certain income types for ten years.
The NHR — Non-Habitual Residency regime — was Portugal's flagship tax incentive for attracting high-net-worth individuals, retirees, and qualified professionals to the country. Introduced in 2009, it offered qualifying new residents a flat 20% tax rate on Portuguese-sourced income from certain high-value professions, and exemptions from tax on most foreign-sourced income for a period of ten years. The NHR regime was abolished for new applicants from 1 January 2024.
Replacing NHR is the IFICI regime (Incentivo Fiscal à Investigação Científica e Inovação — Tax Incentive for Scientific Research and Innovation), also known colloquially as NHR 2.0. IFICI was introduced by the 2024 Portuguese Budget and applies to qualifying new residents from 2024 onwards. While it is narrower in scope than the original NHR — specifically targeting qualified professionals in technology, innovation, scientific research, and related fields — it retains the ten-year benefit period and a reduced 20% rate on qualifying Portuguese-sourced income.
For those who registered as NHR residents before the end of 2023, existing benefits remain fully in force for the duration of their individual ten-year period. The original NHR also continues to apply to residents of countries with which Portugal has specific double taxation agreements that pre-date the NHR abolition, under certain transitional provisions. The rules are complex and specific to individual circumstances.
For retirees who previously benefited from NHR's foreign pension exemption (which ended in 2020, with pensions subsequently taxed at a flat 10% under NHR), the landscape has changed significantly. Retirement planning that was originally structured around NHR may need to be reviewed in light of IFICI or standard Portuguese personal income tax (IRS) rates.
Qualifying for IFICI requires: not having been a Portuguese tax resident in the previous five years; earning income from qualifying activities (defined categories of technology, R&D, and innovation professionals); and registering with the Portuguese Tax Authority (AT) for the regime within the relevant time window. Tax lawyers in Lisbon, Porto, and the Algarve who specialise in this area can advise on whether your income profile qualifies and how to structure your affairs to maximise IFICI benefits.
No. The original NHR regime is closed to new applicants as of 1 January 2024. New residents can apply for the IFICI regime if they meet the qualifying criteria. Those who registered under NHR before the deadline retain their existing benefits for the full ten-year period.
IFICI targets income from: scientific research, R&D activities, technology and innovation sectors, higher education teaching, and certain other high-value-added activities. The specific qualifying category list is defined by Portaria (ministerial decree) and has been refined since the regime's introduction. Consult a Portuguese tax lawyer for the current qualifying categories.
Portugal has no inheritance tax (imposto de sucessão) for direct family members (spouses, children, parents). There is a stamp duty (Imposto do Selo) of 10% on inheritances to non-direct heirs. This applies regardless of NHR/IFICI status and is worth factoring into estate planning for Portugal-based assets.
→ Read our full guide: Immigration Law Guide Expats Portugal
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