For years, Portugal has been a fiscally attractive country, thanks to its so-called NHR (non-habitual resident) regime. This regime meant that, for example, European citizens could move to Portugal and not be taxed on their pension or income earned outside Portugal for a period of 10 years. The NHR was a great success.
However, after several years, Portugal abolished the exemption for pensioners, who were henceforth taxed at a rate of 10%. And quite suddenly, at the end of 2023, the NHR was abolished; however, those who were already in the system were fortunately able to continue benefiting from it.
Announcement of new scheme. It was soon announced that a new scheme, known as NHR 2.0, would be introduced. However, politicians and the Portuguese tax authorities continued to muddle through, and it remained unclear whether the new system would be implemented. Now there is clarity! Yes, there is a new NHR 2.0, officially called IFICI (Incentive for Scientific Research and Innovation). And the system looks much more interesting and accessible than we first thought!
The rules of the new NHR. It has been made into a complicated scheme, but with good guidance, it can be fiscally attractive. We will spare you all the technical details and outline the scheme in practical terms.
Also for 10 years. The new scheme also applies for a period of 10 years. Previously, you had to submit your application by April 30; now, it is before January 15. Of course, you must first be a tax resident in Portugal. So renting or buying something is naturally a prerequisite.
Example. If you became a tax resident in Portugal in 2026 and apply for the IFICI before January 15, 2027, you can benefit from the scheme for your 2026 income.
More exemptions than before. As in the old scheme, income earned outside Portugal is now also exempt from Portuguese taxes, except for pensions (!). For example, rental income, salaries, dividends, etc. Previously, profits from the sale of shares, known as capital gains, were NOT exempt. Under the IFICI, they ARE exempt.
What has changed compared to before? Several things are different, of course! The new regulation is initially intended for individuals with higher education, such as scientists and IT professionals. A list of professions that are eligible for the exemption has therefore been drawn up. The list is extensive… For example, a company director is also eligible!
Additionally, you must hold at least a bachelor’s degree and have a minimum of three years of experience.
Portuguese company. You must set up a Portuguese company that is at least 50% export-oriented. In other words, more than half of the consultancy invoices, for example, must be addressed to foreign companies. It must be a business entity, not a sole proprietorship.
You then take a modest salary from the LTD and pay 20% tax and social security contributions on it.
It is interesting to combine this with, for example, an international structure that has substance, and to receive dividends from it that are then not taxed in Portugal.
Or find 20% instead of 50% an acceptable tax rate in most other countries. You can receive a high salary from a Portuguese LTD under the IFICI and pay 20%, as well as social security contributions.
Conclusion. The new NHR is quite complex and requires well-founded legal and tax advice, which we are happy to offer you. Living in Portugal is no punishment, after all, it is a sun-drenched, safe European country. And you can stay for 10 years in a completely legal manner.
As always, please contact us for all details at: info@dehoon-dhp.com.
