What is NHR 2.0 in Portugal?

NHR 2.0 in Portugal, also called IFICI, is the new tax benefits scheme for new tax residents and returning Portuguese citizens, offering reduced tax rates or exemptions on specific income.

What are the main benefits of NHR 2.0 in Portugal?

NHR 2.0 offers a 20% flat tax rate on qualifying Portuguese-sourced employment income, full exemption on foreign-sourced passive income, and other benefits for investors and startup founders. Pensions are fully taxable.

How long does the NHR 2.0 status last?

The IFICI/NHR 2.0 status can last up to 10 years, as long as the eligibility conditions are continuously met.

How do I apply for NHR 2.0 in Portugal?

Applications are submitted via the Portuguese Tax Authority portal. Applicants must submit required documentation and report any changes in eligibility.

IFICI / NHR 2.0 Tax Guide
for Expats in Portugal

Q: Who can apply for NHR 2.0 in Portugal?

To qualify, individuals must not have been a tax resident in Portugal in the last 5 years and cannot have benefited from the previous NHR or IRS Jovem schemes.

What is IFICI / NHR 2.0 in Portugal?

NHR 2.0 in Portugal, officially called IFICI (Incentive for Scientific Research and Innovation), is the new tax benefits scheme introduced by the Portuguese government after ending the original NHR regime.

The previous Non-Habitual Resident (NHR) program played a major role in attracting talent, investors, and professionals to Portugal. After strong criticism of its sudden closure, the government launched IFICI, commonly known as NHR 2.0, in Portugal.

NHR 2.0 is designed for:

New tax residents moving to Portugal
Portuguese citizens returning after 5 years abroad

❌ It is not available to:

Anyone who already benefited from NHR
Individuals currently benefiting from IRS Jovem

The IFICI / NHR 2.0 status can be held for up to 10 years, as long as eligibility conditions are met.

Key Benefits of NHR 2.0 in Portugal

The main advantage of NHR 2.0 in Portugal is lower taxation or full exemption on specific types of income.

1. Employment & Self-Employment Income in Portugal

If you work physically in Portugal, qualifying employment or freelance income may benefit from:

✅ Flat tax rate of 20% on eligible income

⚠️ Important:

Social Security contributions are still due
The work must be performed in Portugal

2. Employment & Self-Employment Income from Abroad

Under NHR 2.0 in Portugal, income earned from work physically carried out outside Portugal is:

✅ Fully exempt from Portuguese tax
❌ Not allowed if income comes from a blacklisted jurisdiction

📌 Key rule:

Taxation depends on where the work is done, not where the employer is based

➡️ Remote work performed from Portugal = Portuguese-sourced income

3. Foreign Passive Income (Except Pensions)

Under NHR 2.0 in Portugal, the following foreign income is fully tax-exempt:

Dividends
Interest
Royalties
Capital gains from securities
Rental income from foreign property

✔ As long as the income is not from a blacklisted country

4. Pension & Retirement Income (Important Change)

Unlike the old NHR regime:

❌ Pensions are NOT covered under NHR 2.0 in Portugal

Pension income is taxed at standard progressive rates
Applies to most foreign pension and retirement products

Who Benefits Most from NHR 2.0 in Portugal?

The Winners

Startup founders
Investors
Business owners planning a company exit
Shareholders with foreign securities

Capital gains from foreign securities are fully tax-exempt, even if they are not taxed in the source country.

The Losers

Pensioners relying mainly on retirement income

However, with proper restructuring (e.g. investment portfolios instead of pension products), many individuals can still benefit.

Who Can Apply for NHR 2.0 in Portugal?

To qualify:

Must not have been a Portuguese tax resident in the last 5 years
Cannot have benefited from NHR or IRS Jovem

The eligibility is divided into 5 main routes.

Route 1: Certified Startup Route

Certifying Entity: Startup Portugal

You qualify if you:

Work for a certified Portuguese startup, or
Are a member of its statutory/management body

✔ Any role qualifies
✔ Income does NOT need to come only from the startup
❌ Startup must be officially certified

Options:

Join an already certified startup
Invest as an angel investor and take a board seat
Certify your own startup

Certification paths include:

Investment from a certified VC or angel
Approval by ANI + incubator endorsement
Direct certification via Startup Portugal

Route 2: Export-Focused Companies

Certifying Entity: Portuguese Tax Authority

The company must:

Export 50% or more of its turnover

Eligible sectors include:

Manufacturing (CAE 10–33)
Scientific R&D
ICT (CAE 58–63)
Higher education & advanced healthcare

The professional must:

Hold a bachelor’s degree + 3 years of experience, or
Hold a PhD (no experience required)

Eligible roles include:

Directors and senior managers
Engineers, IT specialists, scientists
Doctors and university professors

Route 3: Companies Relevant to the National Economy

Certifying Entities: IAPMEI / AICEP

Applies to professionals working in companies that:

Attract investment
Reduce regional economic disparities

Eligible sectors:

Manufacturing
Energy
Construction
ICT
Finance & insurance
Scientific research
Health & social care

Requirements:

Qualified role
Minimum EQF Level 5 (post-secondary/bachelor)
Regulated professions must meet legal requirements

Route 4: Madeira & Azores (Coming Soon)

At present:

❌ No defined criteria

Expected outcome:

Likely broader eligibility
Possible NHR-like benefits for residents

📌 We will update this section once official rules are published.

Route 5: Scientific, Research & Academic Roles

Certifying Entity: Fundação para a Ciência e Tecnologia (FCT)

Applies to:

University teaching roles
Scientific research positions
Innovation and R&D leadership roles
Members of the governing bodies of certified tech centers (ANI)

How to Apply for NHR 2.0 in Portugal

Applications are submitted via:

👉 Portuguese Tax Authority Portal

⏰ Deadlines:

Apply by January 15 of the year following tax residency
For 2024 income: March 30, 2025

The Tax Authority forwards the application to:

Startup Portugal
FCT
AICEP
IAPMEI
ANI
Portuguese Tax Authority

Applicants must:

Keep all supporting documentation
Report changes in eligibility annually

Important Reporting Obligations

You must notify the Tax Authority if:

Eligibility conditions are no longer met
Your role or activity changes

✔ Benefits remain valid if a new qualifying activity starts within 6 months

What About Pensioners Under NHR 2.0?

Pensioners should not panic.

While pensions are taxed progressively:

Many expats can restructure assets
Investment income (non-pension) can still be tax-free

📌 Always seek professional advice before relocating or restructuring finances.

Next Steps – Get Expert Guidance

NHR 2.0 in Portugal is more complex than the old NHR, but with the right advice, it can be even more powerful.

Portugal still offers:

Excellent visa options
Strong tax incentives
High quality of life
World-class climate, food, and beaches

👉 Book a consultation to see if NHR 2.0 in Portugal is right for you.