Portugal’s Non-Habitual Residency (NHR) scheme was a hugely popular tax regime that offered favorable tax policies over 10 years for expats who established tax residency in Portugal.
Launched in 2009, the scheme was ended by the government in late 2024, with a transition phase lasting until March 2025. A new tax regime, called the Tax Incentive for Scientific Research and Innovation (IFICI), has been introduced and is often referred to as the Portugal NHR 2.0.
In this article, you’ll learn more about the new NHR and who can apply.
What was the NHR?
Portugal’s Non-Habitual Resident (NHR) regime provided reduced tax rates and exemptions on foreign income for new residents for up to ten years.
It was designed to attract entrepreneurs, remote workers, and retirees looking for a stable European base with a competitive tax environment and high quality of life.
The NHR Portugal tax regime is no longer available as the transitional phase after the regime’s official discontinuation has ended. It was still possible to apply for NHR before the 31 March 2025 cut-off, but only if you met specific requirements. It has been replaced with IFICI.
Anyone already registered under the program will continue to benefit from the same tax benefits available to them under the existing terms for the entire 10-year period.
Advantages of the old NHR
- Special personal income tax treatment for ten years
- Exemption on almost all foreign-source income
- 20 percent flat rate for certain Portuguese source incomes
- Become part of a white-listed tax environment
- Tax exemption for gifts or inheritance to direct family members
- No wealth tax
- Tax exemption on passive income from outside Portugal
- Free remittance of funds to Portugal
What is the Tax Incentive for Scientific Research and Innovation Program?
IFICI is Portugal’s new tax regime designed to attract highly qualified professionals working in scientific research and innovation. It offers a favorable IRS (personal income tax) reduction to individuals who relocate to Portugal and work in designated high-value scientific or innovative sectors.
IFICI is intended for people who become tax residents in Portugal, have not been tax residents in the previous five years, and perform activities that are defined and recognized by entities such as IAPMEI and AICEP.
This includes skilled roles in research, technology, and innovation.
Benefits of IFICI
IFICI offers a single, targeted set of tax advantages, but the benefits are meaningful for anyone relocating to Portugal to work in scientific research, innovation, or other designated high-skill fields.
According to government information, the benefits of the new Portugal NHR 2.0 include:
- Reduced IRS rate on eligible Portuguese-source income: Instead of being taxed under Portugal’s progressive income tax brackets (which can reach 48%), beneficiaries are taxed at a flat 20% rate on net employment (Category A) or self-employment (Category B) income earned in qualifying activities. This is the regime’s core fiscal advantage.
- Most foreign income is exempt, with two exceptions. Foreign employment income, self-employment income, investment income such as dividends, interest, and royalties, rental income, and capital gains are exempt from Portuguese tax under the regime. You still declare this income, and it is taken into account when determining the rate applied to your remaining income. Foreign pension income is not covered. It sits outside the exemption and is taxed at the standard progressive rates, which is one of the clearest differences between IFICI and the old NHR. Income paid by entities based in a jurisdiction on Portugal’s list of clearly more favorable tax regimes is also excluded. That income is taxed at 35%, whatever category it falls into.
- Benefit lasts for up to 10 consecutive years: Once granted, IFICI remains valid for ten years. The regime may also be paused and resumed if the taxpayer temporarily leaves Portugal and later returns.
- Applies to employment and self-employment: IFICI is not limited to salaried workers. Freelancers, independent researchers, professors, startup founders, and professionals in recognized high-value sectors can also qualify as long as their activities fall within the eligible categories defined in Article 58-A and the associated Portarias.
Who qualifies for IFICI?
IFICI is not open to everyone who moves to Portugal. Eligibility rests on two separate tests: your own position as a taxpayer, and the activity you carry out once you are resident. You need to satisfy both, and you need to keep satisfying the activity test every year you claim the benefit.
To qualify, individuals must meet all of the following core conditions, in addition to the activity-based criteria that determine eligibility:
- Become a tax resident in Portugal
- Not have been a tax resident in Portugal in any of the five preceding years
- Earn income from an activity listed in one of paragraphs a) to g) of Article 58.º-A of the Estatuto dos Benefícios Fiscais (EBF)
- Have not benefited from the old NHR regime
- Not opt for taxation under Article 12.º-A of the IRS Code, the regime for former residents
- Not have benefited from IFICI previously
- Request registration through the Portal das Finanças within the applicable deadline
Registration deadline
You must request registration by 15 January of the year following the year in which you become tax resident. If you become a resident in 2026, your deadline is 15 January 2027.
Missing the deadline does not close off the regime, but it shortens it. A late registration takes effect in the year you register and applies only to the remainder of the original 10-year window.
If you became a resident in 2025 and only registered in January 2029, you would benefit for six years, from 2029 to 2034, because 2034 is when the period would have ended had you registered by 15 January 2026.
Qualifying activities
Each activity category is assessed by a different body, which determines what evidence you need to provide.
- Higher education teaching and scientific research, including scientific employment, at higher education institutions or entities within the national science and technology system. Assessed by the Fundação para a Ciência e a Tecnologia (FCT)
- Qualified job positions and board memberships in entities holding contractual tax benefits for productive investment. Assessed by AICEP
- Highly qualified professionals listed in Portaria n.º 352/2024/1, carried out either in companies benefiting from the investment support tax regime, or in industrial and service companies with an eligible CAE code that export at least 50% of turnover. Assessed by the Tax Authority
- Qualified job positions and board memberships in companies whose economic activity is recognized by AICEP or IAPMEI as relevant to the national economy. Assessed by AICEP where the company had consolidated turnover of €75 million or more in the previous financial year, or where the work forms part of a Project of Potential National Interest (PIN) or an Investment Project for the Interior (PII). Assessed by IAPMEI in all other cases
- Research and development roles generate personnel costs in entities benefiting from SIFIDE. Assessed by the Agência Nacional de Inovação (ANI)
- Job positions in scientific research or innovation, and board memberships, in companies certified as startups. Assessed by Startup Portugal
- Job positions and other activities for residents of the Azores and Madeira, subject to regional legislative decree
The regional rules for the Azores and Madeira have not yet been issued. If you live in either region, you can still apply under any of the other categories, provided you meet the requirements for it.
Academic and professional requirements
The qualification threshold depends on which category you apply under.
- Highly qualified professionals under the Portaria: a doctorate, a bachelor’s, or a master’s degree with at least three years of professional experience
- Qualified job positions recognized by AICEP or IAPMEI: a post-secondary non-higher qualification, at a minimum
- Research and development roles under SIFIDE: a secondary-level qualification, with direct involvement in research and development work
Company directors, managers, and general managers count as qualified job positions in their own right.
Employment contracts and board positions
Where a category refers to a job position, an employment contract is required. A service provision contract does not qualify, even if the company itself meets all other conditions.
Board membership is a separate route with its own logic. If you are appointed to a corporate body, you can qualify on that basis without an employment contract. This extends to managing partners of single-shareholder companies, who are eligible in their capacity as members of a corporate body.
Keeping the benefit
The regime runs for 10 consecutive years, and you need to earn income from an eligible activity in each of them. If your qualifying activity ends, you keep the benefit provided you take up another eligible activity within six months.
You then report the change on the Portal das Finanças by 15 January of the following year and submit a fresh registration request. The 10-year period does not restart.
If you stop meeting the requirements altogether, you report that by 15 January of the year following the change. The benefit ends on the date the requirements are no longer met.
If you leave Portugal and later return, you can resume the regime for the years remaining in the original period, provided you are once again tax-resident and earning eligible income.
How to Apply for IFICI
Step 1: Obtain a Portuguese tax identification number
You need a tax identification number in Portugal (NIF) before any other step. Non-residents can obtain one through a fiscal representative.
Step 2: Become a tax resident
You become tax resident by spending more than 183 days in Portugal within a 12-month period, or by maintaining a home in Portugal in circumstances that indicate an intention to keep it as your habitual residence.
Step 3: Update your tax address
Register your Portuguese address with the Autoridade Tributária so that your residency status is reflected in your tax records. Your registration request will be assessed against the year in which this change takes effect.
Step 4: Begin the qualifying activity
You need income from an eligible activity in the year you claim the benefit. Where the category refers to a job position, this means an employment contract. Where you qualify as a member of a corporate body, it means a valid appointment recorded in the commercial register.
Step 5: Submit the registration request
Submit the request through the Portal das Finanças by 15 January of the year following the year you became tax resident. Late submission does not disqualify you, but the benefit will then run from the year of registration for whatever remains of the original 10-year period.
What happens after submission
The body responsible for your activity category communicates its assessment to the Tax Authority by 15 February.
If you are applying on the basis of a highly qualified profession in an industrial or service company, the company itself confirms in its own area of the Portal das Finanças that it meets the CAE and export conditions and that you carry out the relevant activity.
The Tax Authority makes the status of your registration available in your reserved area of the Portal das Finanças by 31 March.
If your submission is incomplete, the registration is not canceled. You will be notified to supply the missing elements within a stated period.
Reduced withholding while your application is pending
Employment or self-employment income from the qualifying activity can be subject to withholding at 20% rather than the standard rates. To apply the reduced rate, give your paying entity proof that you have submitted the registration request.
Required documents
What you are asked for depends on which body assesses your application and which activity you rely on. The general set is:
- A copy of your employment contract, where you qualify through a job position
- An updated certidão comercial permanente, where you qualify as a member of a corporate body
- A copy of your grant contract, where you qualify through scientific research
- Proof of the relevant academic qualifications
- A declaration from the company, where applicable
- Proof that you were not a tax resident in Portugal in any of the five preceding years
The FCT may additionally require proof of your social security registration by the employer and a declaration from the employer setting out your functions in detail. The ANI may require a declaration from the contracting company covering the project name, start and end dates, objectives, your work plan, and your role.
Record keeping
You must retain evidence of the activity carried out and the income earned for every year in which you claim the benefit, and the Tax Authority can request it at any point. The company or entity where you carry out the activity is required to keep the relevant documentation for 10 years.
Difference Between NHR and IFICI
As the name suggests, the main difference between the Tax Incentive for Scientific Research and Innovation and the NHR program is that the new scheme requires applicants to earn income in certain professional categories.
NHR offered broad tax breaks to almost anyone who moved to Portugal, with few conditions on profession or activity. It allowed a flat 20% tax on Portuguese income and full or partial exemptions on most foreign income, including pensions.
IFICI, by contrast, is more selective. It’s only for highly qualified professionals working in specific fields like science, innovation, tech, and education. You must actively work in one of the approved activities each year to keep the benefit.
It still offers the 20% flat rate on local income and exemptions on eligible foreign income—but only if you meet stricter eligibility rules.
Another significant change is that, while the NHR program had uniform policies across Portugal’s entire national territory, the Tax Incentive scheme makes special provisions for the islands of Madeira and the Azores to define their own jobs or activities that the regime will apply to under their jurisdiction.
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