The Non-Habitual Resident (NHR) tax regime is one of Europe's most competitive tax scheme, inspired by regimes in countries such as the UK (Non-dom law), Spain (Beckham Law), Cyprus, Malta and others.
It is in place since 2010 and is designed to attract foreign investment by exonerating from taxation for a period of 10 years most foreign-source income, applicable to pension income, dividends, interests, royalties and real estate income of foreign origin.
Income derived from high value-added professional activities are taxed at a flat 20% rate.
It is recognised by successive governments as an instrument contributing to Portuguese prosperity by attracting foreign investment.
The plan applies for free for a period of 10 years.
No requirement to move to Portugal as there is no minimum stay in the country for a Portugal-registered tax resident;
No Wealth or Heritage Tax;
Full tax exemption on passive income in both country of residence and country of source of the income;
Pensions are taxed at 10%;
Employment income from “high value-added activities” is taxed at 20%;
No requirement to be working or have a professional activity in Portugal to qualify;
No investment required to qualify.
Who can apply?
It is open to anyone with the automatic right to live in Portugal (EU/EEA/Swiss citizens, and holders of a residence permit, such as the Golden Visa or D7 Visa) and who has not been a tax-resident of Portugal for the five years preceding the application.
This regime also applies to pensioners and professionals considered as “high value-added activities”, such as researchers, academics, medical doctors, investors, directors, corporate managers, and more.
It should be noted that an unregistered individual will be deemed a tax resident under the law if s/he stays more than 183 in Portugal over a 12-month period.
The recognition of the NHR permit is no automatic and is granted for a period of 10 years following the successful application to the Portuguese tax authorities.