Essential Promotion
What keeps attracting new residents?
Since 2009, the Non-habitual Residents (NHR) regime has significantly enhanced Portugal’s tax competitiveness, attracting thousands of highly qualified professionals, Ultra High-Networth Individuals, and their families. However, it was abolished in January 2024. What does Portugal now offer to those considering a permanent move?
After revoking the NHR regime, Portugal introduced a new special tax regime focused on research and innovation.
The Tax Regime for Scientific Research and Innovation (IFICI, also known as “NHR 2.0”) aims to attract qualified professionals and encourage the establishment of companies in specific sectors in Portugal.
Under this regime, individuals benefit from a 20% tax rate on employment or self-employment income and an exemption on foreign-sourced income (excluding pensions and income from “blacklisted” countries) for 10 consecutive tax years.
This regime applies to individuals who become tax residents in Portugal, provided they were not tax residents in the previous five years and have not benefited from the former NHR or “former residents” regimes.
To qualify, individuals must engage in activities specified in the legislation.
Portugal also offers other tax advantages. It provides a tax exemption for gifts and inheritances for spouses, descendants, and ascendants.
Transfers to other individuals are either non-taxable, due to generous territorial rules, or subject to a flat 10% rate.
Additionally, Portugal does not impose wealth taxes and offers beneficial treatment for crypto assets, stock plans and life insurance products (including unit-linked), which can significantly reduce the effective tax burden.
From an immigration perspective, Portuguese legislation provides various options that cover a wide range of personal circumstances, allowing individuals to apply for a residence permit that suits their life stage or primary sources of income.
These include residence permits for investors (Golden Visa), passive income earners (D7 Visa), or individuals wishing to engage in professional activities (Highly Qualified Activity Visa), among others.
Beyond its attractive tax regimes, Portugal is a vibrant destination often described as “a garden planted by the sea”. As a member of the European Union (EU), the Eurozone, and the Schengen area, Portugal boasts a stable environment, a skilled workforce, and a high quality of life, making it an ideal location for those seeking an appealing EU destination.
Bruno Andrade Alves
Tax Partner | Individual Taxation
PwC Portugal
[email protected]
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