NHR in Portugal: The guide for 2024

Portugal’s Non-Habitual Resident (NHR) tax regime, introduced in 2009, offers significant tax benefits for expatriates and foreign investors. As of late 2023, the original NHR Portugal program is concluding, with a new NHR 2.0 regime set to take its place. The new regime maintains many benefits but focuses on employment in scientific research and innovation, reflecting Portugal’s commitment to fostering a knowledge-based economy while still providing attractive incentives for qualified individuals.

What is the Non-Habitual Resident (NHR) Tax Regime?

The NHR scheme helps individuals to alleviate their tax burden in Portugal. It allows individuals to become tax residents of a white-listed jurisdiction and benefit from a favourable tax status for a period of 10 years.

Benefits of the Portugal NHR regime

The NHR tax regime in Portugal offers several significant benefits that make it an attractive option for expatriates and foreign investors.

1. Taxation of global income

Under the NHR status, many types of income earned abroad are excluded from Portuguese taxation if they are taxed in the source country or covered by a Double Taxation Agreement (DTA) with Portugal.

2. Fixed rate on income from employment

Income derived from employment or self-employment in Portugal, provided it is from a high-value activity, is taxed at a flat rate of 20%. This is significantly lower than the standard income tax rates in Portugal, which can go up to 48%.

3. No taxes on gifts, inheritance and wealth

Individuals are not subject to inheritance or gift taxes on assets transferred to their heirs or recipients.

Eligibility and requirements for NHR status in Portugal

To qualify under Portugal’s NHR regime starting January 1, 2024, individuals must meet specific criteria.

• Obtain a residence permit or permanent residence in Portugal before December 31, 2023.
  • Applicants who meet this deadline can apply for NHR Portugal status until March 31, 2024.
  • Proof of intent to move to Portugal in 2024 can allow applications until the end of 2024, including:
    • Employment contract signed before December 31, 2023.
    • Lease, purchase, or sale agreement conducted before October 10, 2023.
    • Enrollment certificate for a child or dependent relative in a Portuguese educational institution issued no later than October 10, 2023.
    • Valid residence visa or permit by December 31, 2023.

Until December 31st, 2024, it is possible to apply for the NHR Portugal status. There are, however, some exceptions among specific specialists. This means that new residents of Portugal have no longer a chance to apply for Portugal NHR status, unless they fall under the following categories of workers:

• Professors, scientists, and researchers
• Employees working for, or leading, startups that:
  • Are operating for 10 years or less
  • Have fewer than 250 employees
  • Have a turnover under €50 million
  • Are not affiliated with a larger company
  • Are based in Portugal or have more than 25 employees
  • Are innovative and attract investment from Banco Português de Fomento.
• Highly qualified professionals in entities benefiting from tax incentives for substantial investments (€3 million+)
• Workers in companies exporting at least 50% of their turnover
• Employees in entities of significant value to the Portuguese economy
• Research and Development workers benefiting from SIFIDE (R&D tax incentive system)
• Employees in or leading entities benefiting from tax incentives registered with IAPMEI or AICEP

These criteria ensure that the regime attracts individuals who can contribute significantly to Portugal’s economy and intellectual capital.

How to apply for the NHR Portugal status?

It only takes four steps to apply for the status.

1. Get a residency visa
   • Obtain a long-term residency visa, such as the Portugal Golden Visa, the D7 Visa, or the D2 Visa. This visa allows you to live in Portugal and is necessary for applying for NHR status.
2. Obtain a Portuguese Taxpayer Number (NIF)
   • To obtain a Portuguese taxpayer number (NIF), you can visit a Portuguese tax office in person, apply by email, or use a representative. Non-EU/EEA residents are required to have a tax representative, such as a lawyer or a law firm, with a Portuguese address. You will need to submit the necessary documents, including proof of identity and address. The registration process typically takes between 30 minutes and five business days.
3. Register as a tax resident
   • To register as a tax resident in Portugal, you need to either live in Portugal for more than 183 days in a calendar year or own residential property in Portugal and establish it as your primary residence. You must then declare your intention to become a tax resident at the local tax office.
4. Submit the NHR Application
   • Apply no later than March 31st of the year following the year you become a tax resident. Register with the online financial portal (Portal das Finanças) and a password will be sent by post. This could take up to two weeks.
   • Submit the application on the Portuguese tax office website. Click Serviços tributários à Entregar Pedido à Inscrição Residente Não Habitual.

Include the year of obtaining tax residency in Portugal and the country of previous tax residence. The decision on the application will appear in your account as an official document in PDF format.

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