Portugal has become one of the top choices for foreigners who want to live and work in Europe.
Beyond its renowned beaches and great weather, Portugal also offers economic programs and benefits that lowers the tax requirements for foreigners who are residents of Portugal, whether working as employees or freelancers with income from Portugal or abroad.
For example, the initial NHR (Non-Habitual Resident) regime and, later, the IFICI+ (an upgrade from the NHR program), which we will explore in this article.
What is IFICI +?
The Fiscal Incentive for Scientific Research and Innovation program (IFICI +), also widely known as NHR 2.0, is a tax incentive that aims to attract a broader range of qualified foreign professionals and companies.
Announced by the new Portuguese Government in July 2024, a 20% tax rate will be applied to designated employment and self-employment income (categories A and B). This measure aims to foster the growth of Portuguese companies and attract talent for a non-renewable period of 10 years, succeeding the current transitional Non-Habitual Resident (NHR) regime.
IFICI+ Eligibility and Requirements:
In order to qualify, applicants must meet specific tax residency criteria and demonstrate professional qualifications in targeted fields.
Tax Requirements
The first step for individuals to be qualified is meeting the following tax requirements:
- Must not have been a tax resident in Portugal for the previous five years.
- Should be a new resident in Portugal and must not have lived in the country during that period.
- Must not have participated in the previous NHR regime.
- If the individual holds Portuguese nationality, they must have emigrated for at least five years
Note: To be considered a tax resident in Portugal in a specific year, one of the following conditions must be met:
- Spending more than 183 days in Portugal within any 12 months linked to the relevant tax year.
- Maintaining a residence in Portugal that indicates habitual living within any 12-month period.
To obtain eligibility, foreigners who are not within the EU/EEA and Swiss area can apply for several long-stay national visas Portugal offers, such as the D3 visa.
Employment qualifications
Once a tax resident in Portugal, the requirements to qualify for the NHR tax regime focus on attracting higher education, research, technology, and innovation professionals. These include:
- Researchers with PhDs or those engaged in R&D projects within Portugal’s scientific network.
- Directors and employees of Portuguese-based organisations in technology and innovation centers.
- Highly qualified professionals working for companies benefiting from Portugal’s investment support tax regime (RFAI) and those in industries exporting at least 50% of their revenue.
- Strategic sector jobs in organisations approved by public agencies like IAPMEI or AICEP.
- R&D personnel whose research expenses qualify for tax incentives under the SIFIDE program.
- Directors and employees of startups accredited under the Portuguese startup law for their potential growth or venture financing.
- Residents of the Azores and Madeira, whose roles are specified by local laws.
High-added value profession
Some professions are regarded as high-value due to their economic and cultural importance. These include:
- General Managers, Executive Managers, Administrative Managers
- Commercial Managers, Production Managers, Specialized Services Managers
- Hospitality, Restaurant, Retail, and Services Managers
- Specialist Physicists, Mathematicians, Engineers, and Technologists
- Doctors, Dentists, and Stomatologists
- University and Higher Education Teachers, ICT Technologists
- Authors, Journalists, Linguists, Creative and Performance Artists
- Intermediate Science and Engineering Technicians, ICT Technicians
- Market-oriented Farmers, Forestry, Fisheries, and Hunting Workers
- Industry, Construction, Handicraft Workers, Plant and Machine Operators, Assembly Workers
Note: A broader set of professions and companies will be announced by the Government.
IFICI+ Eligibility and Requirements:
Individuals who participate in the program can enjoy several advantages, which are:
- 10-Year Tax Incentive: Residents benefiting from the program can enjoy its advantages for 10 years (non-renewable).
- Tax exemption on most foreign income: The IFICI+ offers a favourable tax treatment on foreign-sourced income.
- No minimum stay requirement: Unlike other tax regimes, the IFIC+ does not impose a minimum stay requirement for maintaining tax residency, allowing frequent travelers more flexibility.
- Residence in an EU white-list country: If your country of residence is on the EU white list, you can benefit from additional tax exemptions under the program.
- Free remittance: Funds can be transferred to Portugal without any remittance tax, allowing easy access and management of personal wealth.
With the transition from the NHR regime to the IFIC+ program/NHR 2.0, businesses and professionals can continue to benefit from Portugal’s tax incentives while enjoying an exceptional quality of life.
Whether you’re a remote worker, entrepreneur, or highly skilled professional, the program offers flexibility and attractive tax advantages.
Softlanding provides comprehensive support to help your business land in Portugal successfully. By guiding you through every step, assisting with the visa process, and managing all necessary documentation and requirements, we are here to help. Get in touch with us!
Disclaimer:
Please note that, as of now, individuals can only apply under the Transitional NHR Regime. The IFICI+ program is still under review, with this information being subject to change based on legislative updates.
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