NHR Portugal
In 2025, Portugal introduced the Tax Incentive for Scientific Research and Innovation (IFICI), commonly referred to as NHR 2.0, replacing the previous Non-Habitual Resident (NHR) tax regime. This new framework aims to attract highly qualified professionals and entrepreneurs to bolster the country’s innovation and scientific sectors.
Key Features of NHR 2.0 (IFICI):
Flat Tax Rate: A 20% flat tax rate on income derived from eligible employment and self-employment activities within Portugal.
Tax Exemptions: Exemption from Personal Income Tax (IRS) on most foreign-sourced income, including dividends, interest, capital gains, and rental income. Notably, foreign pension income is in many cases excluded from this exemption and can be fully taxable in Portugal.
Duration: The benefits apply for a period of 10 consecutive years from the date you become a tax resident in Portugal.
Eligibility Criteria:
To qualify for the NHR2.0 regime, applicants must:
1. Tax Residency: Become tax resident in Portugal.
2. Prior Residency Status: Not have been tax resident in Portugal in the previous five years.
3. What Professional Activity is eligible?
• Teaching and Scientific Research: Roles in higher education institutions and scientific research centers.
• Qualified Professions: Positions in sectors such as extractive and manufacturing industries, tourism, information technology, agriculture, aquaculture, forestry, research and development, high-tech industries, audiovisual and multimedia production, defense, environment, energy, telecommunications, and shared service centers.
• High-Value Activities: Employment in companies recognized for their significant contributions to the national economy, particularly those involved in productive investment and regional development.
• Startups: Positions in certified startups as defined by Portuguese law.
Taxation of Entrepreneurial Activities:
Entrepreneurs establishing businesses in Portugal under the NHR 2.0 regime can benefit from the 20% flat tax rate on income derived from eligible activities. This includes profits from sectors such as manufacturing, information technology, research and development, and other high-value industries. Additionally, dividends received from foreign sources may be exempt from Portuguese taxation, provided they are not sourced from blacklisted jurisdictions. It’s important to note that income from entities located in blacklisted jurisdictions is subject to aggravated taxation at a rate of 35%.
As always, we urge investors to seek individual tax advice. Portugal has a complex tax code and general information is not applicable to every applicant.
