The Non-Habitual Resident (NHR) regime is a tax incentive designed for foreign nationals and returning Portuguese citizens who transfer their tax residency to Portugal.

To qualify, an individual must:
• Reside in Portugal for at least 183 days per year;
• Or own a main residence in the country as of 31 December;
• And not have been a tax resident in Portugal in the previous 5 years.

The NHR status is valid for 10 years and offers significant tax advantages. However, it was revised in 2024, with restrictions introduced for new applicants, limiting some of the previous exemptions.

Tax Benefits under the NHR Regime in 2025

1. Employment Income
• A flat income tax rate of 20% applies to employment or self-employment income earned in Portugal, provided the profession is considered of “high added value”.
• Eligible professions include scientific, technological and artistic fields, as defined by Ordinance No. 230/2019.

2. Pensions and Retirees
• A 10% tax rate applies to foreign pensions, only if the country of origin allows taxation in Portugal, in accordance with double taxation agreements.
• As of 2024, new NHRs no longer benefit from full pension tax exemptions, unlike under the previous regime.

3. Foreign-Sourced Income
• Exemption from Portuguese personal income tax (IRS) for foreign-source dividends, interest and rental income, provided that:
• The income is taxed in the country of origin;
• It is covered by a double taxation treaty (Portugal has over 70 agreements, including with the EU, the US and the UK).

4. Inheritance and Gift Tax Exemption
• Portugal does not apply inheritance or gift tax on transfers to direct family members (spouse, children, parents).
• A 10% stamp duty applies to transfers outside the direct family.

Additional Benefits of the NHR Regime
In addition to tax advantages, the NHR regime attracts international residents due to:
• A competitive cost of living, approximately 30% lower than the Western European average (McKinsey, 2025);
• The stability of the euro, which facilitates wealth management and banking operations within the Eurozone;
• Facilitated access to the European market, making it an ideal base for investors, qualified professionals, and expatriates.

The Non-Habitual Resident (NHR) regime is a tax incentive designed for foreign nationals and returning Portuguese citizens who transfer their tax residency to Portugal.

To qualify, an individual must:
• Reside in Portugal for at least 183 days per year;
• Or own a main residence in the country as of 31 December;
• And not have been a tax resident in Portugal in the previous 5 years.

The NHR status is valid for 10 years and offers significant tax advantages. However, it was revised in 2024, with restrictions introduced for new applicants, limiting some of the previous exemptions.

Tax Benefits under the NHR Regime in 2025

1. Employment Income
• A flat income tax rate of 20% applies to employment or self-employment income earned in Portugal, provided the profession is considered of “high added value”.
• Eligible professions include scientific, technological and artistic fields, as defined by Ordinance No. 230/2019.

2. Pensions and Retirees
• A 10% tax rate applies to foreign pensions, only if the country of origin allows taxation in Portugal, in accordance with double taxation agreements.
• As of 2024, new NHRs no longer benefit from full pension tax exemptions, unlike under the previous regime.

3. Foreign-Sourced Income
• Exemption from Portuguese personal income tax (IRS) for foreign-source dividends, interest and rental income, provided that:
• The income is taxed in the country of origin;
• It is covered by a double taxation treaty (Portugal has over 70 agreements, including with the EU, the US and the UK).

4. Inheritance and Gift Tax Exemption
• Portugal does not apply inheritance or gift tax on transfers to direct family members (spouse, children, parents).
• A 10% stamp duty applies to transfers outside the direct family.

Additional Benefits of the NHR Regime
In addition to tax advantages, the NHR regime attracts international residents due to:
• A competitive cost of living, approximately 30% lower than the Western European average (McKinsey, 2025);
• The stability of the euro, which facilitates wealth management and banking operations within the Eurozone;
• Facilitated access to the European market, making it an ideal base for investors, qualified professionals, and expatriates.

The Non-Habitual Resident (NHR) regime is a tax incentive designed for foreign nationals and returning Portuguese citizens who transfer their tax residency to Portugal.

To qualify, an individual must:
• Reside in Portugal for at least 183 days per year;
• Or own a main residence in the country as of 31 December;
• And not have been a tax resident in Portugal in the previous 5 years.

The NHR status is valid for 10 years and offers significant tax advantages. However, it was revised in 2024, with restrictions introduced for new applicants, limiting some of the previous exemptions.

Tax Benefits under the NHR Regime in 2025

1. Employment Income
• A flat income tax rate of 20% applies to employment or self-employment income earned in Portugal, provided the profession is considered of “high added value”.
• Eligible professions include scientific, technological and artistic fields, as defined by Ordinance No. 230/2019.

2. Pensions and Retirees
• A 10% tax rate applies to foreign pensions, only if the country of origin allows taxation in Portugal, in accordance with double taxation agreements.
• As of 2024, new NHRs no longer benefit from full pension tax exemptions, unlike under the previous regime.

3. Foreign-Sourced Income
• Exemption from Portuguese personal income tax (IRS) for foreign-source dividends, interest and rental income, provided that:
• The income is taxed in the country of origin;
• It is covered by a double taxation treaty (Portugal has over 70 agreements, including with the EU, the US and the UK).

4. Inheritance and Gift Tax Exemption
• Portugal does not apply inheritance or gift tax on transfers to direct family members (spouse, children, parents).
• A 10% stamp duty applies to transfers outside the direct family.

Additional Benefits of the NHR Regime
In addition to tax advantages, the NHR regime attracts international residents due to:
• A competitive cost of living, approximately 30% lower than the Western European average (McKinsey, 2025);
• The stability of the euro, which facilitates wealth management and banking operations within the Eurozone;
• Facilitated access to the European market, making it an ideal base for investors, qualified professionals, and expatriates.