Portugal Non-Habitual Residency Regime 2025: NHR 2.0

Table Of Contents:

• Portugal’s NHR Scheme: Updates through Time
• New NHR (Non-Habitual Resident) Tax Regime: NHR 2.0 (IFICI)
• What are the Tax Benefits of the New NHR Program?
• Qualifications for the New NHR Program (IFICI) in 2025
• Eligibility Criteria for the New Foreign Tax Regime of Portugal
• Professions Regarded as High Added Value
• Tax on Foreign Source Income
• Types of Foreign Source Income
• Tax on Portuguese Source Income
• How To Apply for the NHR Portugal
• The Portuguese DTA and The UK
• About Us: Who We Are and What We Do

Portugal’s NHR Scheme: Updates through Time

Portugal’s Non-Habitual Residency (NHR) program has undergone significant updates, culminating in the 2025 launch of NHR 2.0, officially known as the Fiscal Incentive for Scientific Research and Innovation (IFICI). This updated regime reflects Portugal’s commitment to attracting highly skilled professionals, entrepreneurs, and innovators who contribute to the country’s economic and cultural growth.

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New NHR (Non-Habitual Resident) Tax Regime: NHR 2.0

The NHR 2.0 program focuses on attracting individuals in high-value professions to reside and work in Portugal. Its benefits are tailored to those contributing to scientific research, technology, and strategic innovation.

Key Features:

• Flat Personal Income Tax (PIT) Rate: Implementation of a 20% flat Personal Income Tax (PIT) rate on qualifying employment or professional income, valid for a non-renewable 10-year duration.
• Foreign Income Exemptions: Exemptions apply to certain types of foreign-sourced income, provided specific conditions are met.
• Pensions: Progressive taxation structure for pensions, ranging from 14.5% to 53%, marking a departure from previous exemptions.

What are the Tax Benefits of the New NHR Program?

The NHR 2.0 program offers significant financial advantages for eligible individuals. Here’s a closer look:

1. Reduced Income Tax: Advantageous 20% flat rate application for income derived from qualifying professions
2. Foreign Income Exemptions:
   • Employment and independent work income, if taxed abroad or exempt under a Double Taxation Agreement, DTA.
   • Royalties, dividends, and interest from non-blacklisted jurisdictions.
   • Real estate income and capital gains, subject to specific conditions.

Qualifications for the New NHR Program in 2025

To qualify for NHR 2.0, applicants must meet the following criteria:

• Must not have been a tax resident in Portugal for at least five years prior.
• Must not have participated in the previous NHR regime that ended in 2023.
• Must engage in a high-value profession or meet criteria set by Portuguese authorities.

Eligibility Criteria:

• Applicants should work in one of the following sectors:
  • Scientific Research: PhD researchers or participants in R&D initiatives.
  • Technology and Innovation Centers: Employees or directors involved in knowledge production.
  • Strategic Professions: Roles within companies exporting at least 50% of revenue.
  • Startups: Accredited entrepreneurs or employees in high-potential startups.
  • Azores & Madeira: Specific roles defined by regional laws (details forthcoming).

Professions Regarded as High Added Value

Professions

General Managers,

ICT Technologists, ICT Technicians

Executive Managers,

Administrative Managers

Commercial Managers,

Production Managers,

Specialized Services Managers

Hospitality,

Restaurant,

Retail, and Other Services Managers

Specialist Physicists,

Mathematicians, Engineers, and related Technologists

Medical Doctors, Dentists, and Stomatologists

University and Higher Education Teachers

Authors, Journalists, and Linguists

Creative and Performance Artists

Intermediate-level Science and Engineering Technicians and Professionals

Market-oriented Farmers and qualified Agriculture and Animal Husbandry workers

Market-oriented Forestry, Fisheries, and Hunting qualified workers

Industry, Construction, and Handicraft qualified workers

Plant and Machine Operators and Assembly Workers

To qualify, individuals in these professions must meet one of the following criteria:

• Hold at least a Level 4 qualification under the European Qualifications Framework.
• Achieve Level 35 of the International Standard Classification of Education.
• Demonstrate five years of proven professional experience in the field.

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Tax on Foreign Source Income

The NHR regime offers a significant advantage by exempting most foreign-sourced income from taxation in Portugal for ten consecutive years. This exemption applies to income originating from countries that have a Double Taxation Agreement (DTA) with Portugal, ensuring that such income is not subject to Portuguese taxes.

What is a DTA? A Double Taxation Agreement is a treaty between two or more countries designed to prevent the same income or property from being taxed in multiple jurisdictions. These agreements aim to:

• Divide taxation rights fairly between countries.
• Prevent tax evasion.
• Protect the rights of taxpayers.
• Minimize discrepancies in international tax systems.

Countries with DTA Agreements with Portugal:

Algeria, Austria, Andorra, Bahrain, Barbados, Brazil, Bulgaria, Canada, Cape Verde, Chile, China, Colombia, Croatia, Cuba, Cyprus, Czech Republic, Denmark, East-Timor, Estonia, Ethiopia, Finland, France, Germany, Georgia, Greece, Guinea-Bissau, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Ivory Coast, Japan, Kuwait, Latvia, Lithuania, Luxembourg, Macau, Malta, Mexico, Moldova, Montenegro, Morocco, Mozambique, Netherlands, Norway, Oman, Pakistan, Panama, Peru, Poland, Romania, Russia, San Marino, São Tomé and Principe, Saudi Arabia, Senegal, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Qatar, Sweden, Switzerland, Tunisia, Turkey, United Arab Emirates, United States of America, United Kingdom, Ukraine, Uruguay, Venezuela, Vietnam.

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Tax on Portuguese Source Income

For income sourced in Portugal:

• Employment and self-employment income from eligible professions: 20% flat rate.
• Rental income: Taxed at 28% (optional) or progressive rates.
• Capital gains: 50% of gains taxed at progressive rates.

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How To Apply for the NHR Portugal

Applying for NHR 2.0 involves these key steps:

1. Residency Proof: Demonstrate legal residency in Portugal via a residence permit or EU registration.
2. NIF Number: Obtain your Portuguese Tax Identification Number.
3. Tax Residency Registration: Formalize your tax residency at the local tax office.
4. NHR Application: Complete your application with supporting documents, including proof of residence and prior tax status.

Looking to get started with NHR 2.0 in Portugal?

Veyra offers comprehensive support services including:

• Madeira IBC establishment (5% tax regime)
• NHR 2.0 application assistance
• Global tax structure optimization
• Real estate and business setup facilitation

Contact us for personalized guidance through Portugal's tax optimization opportunities and NHR 2.0 program implementation.

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