IFICI Portugal (NHR 2.0): Your Complete Guide to Portugal’s Scientific Research & Innovation Tax Incentive

Portugal continues to position itself as a global hub for talent and innovation, and the Incentivo Fiscal à Investigação Científica e Inovação (IFICI Portugal) is its latest initiative to attract highly skilled professionals. This tax incentive program, introduced in 2024 under Article 58.º-A of the Estatuto dos Benefícios Fiscais (EBF), offers significant tax benefits to eligible expats who relocate to Portugal. Designed as a replacement for the Non-Habitual Resident (NHR) regime, IFICI Portugal is tailored for those working in research, innovation, and high-value-added professions.

Suppose you are considering moving to Portugal or Madeira Island. In that case, this guide will provide you with an in-depth look at IFICI Portugal, including its tax benefits, eligibility criteria, and application process.

What is IFICI Portugal?

The IFICI Portugal tax incentive is a government initiative aimed at attracting foreign professionals with expertise in science, technology, engineering, and other knowledge-driven fields. By offering a favourable tax regime for up to 10 years, the Portuguese government hopes to bolster national competitiveness in research and innovation.

The legal foundation for IFICI is Article 58.º-A of the Portuguese Statute of Tax Benefits (EBF- Estatuto dos Benefícios Fiscais), enacted as part of the State Budget Law for 2024. Complementary regulations include Ministerial Ordinance n.º 352/2024/1 (December 2024) and Ministerial Ordinance.º 52-A/2025/1 (January 2025), establish the procedural framework and clarify eligibility criteria.

The incentive applies to individuals who become tax residents in Portugal on or after January 1, 2024, provided they meet specific professional and educational criteria.

Key Tax Incentives

1. Flat 20% Income Tax on Eligible Income

Expats qualifying for IFICI Portugal benefit from a fixed 20% income tax rate on employment or self-employment income from eligible professional activities. This is significantly lower than Portugal’s standard progressive tax rates, which can exceed 40%.

2. Exemption on Most Foreign-Sourced Income

Under IFICI, specific categories of foreign income may be exempt from Portuguese taxation, depending on the type of income and the source jurisdiction. However, unlike the previous NHR regime, foreign pension income is not automatically exempt under IFICI.

3. 10-Year Benefit Period

The IFICI regime is valid for 10 consecutive years if the individual meets residency and professional criteria. If a participant temporarily leaves Portugal and later returns, they may resume their IFICI status for the remaining eligible years.

Eligibility Criteria

To qualify for IFICI Portugal, applicants must meet the following requirements:

1. New Tax Residency in Portugal

• Must become a tax resident in Portugal.
• Cannot have been a tax resident in Portugal in the five years preceding the application.
• Cannot have previously benefited from the NHR regime or the Programa Regressar.

2. Professional and Academic Requirements

• Must be engaged in a highly qualified profession listed in Portaria n.º 352/2024/1.
• The profession should be in scientific research, technology, healthcare, engineering, or high-value fields.
• Must hold at least:
  • A PhD (Level 8 qualification), OR
  • A Bachelor’s (Level 6) or Master’s (Level 7) degree with three years of relevant experience.

3. Employer or Business Eligibility

• The individual must perform a high-added-value activity in an eligible entity as listed below or as defined under regional law in the Autonomous Region of Madeira or in the Autonomous Region of the Azores (activities eligible to be performed in the Autonomous Regions are yet to be legislated):
  • University Professors and Scientific Researchers must carry out their jobs in Universities or organisations, structures organised for the production, dissemination and transmission of knowledge integrated into the national science and technology
  • Carrying out research and development activities that generate staff costs, and must also have a minimum level 4 qualification on the National Qualifications Framework and be directly involved in research and development tasks at Entities that benefit from the system of tax incentives for research and business development, with personnel costs relating to the activity carried out being eligible under the terms of Article 37(1)(b) of the Investment Tax Code, i.e.:
    • Entities whose operating costs, up to a maximum of 55 % of the costs of staff with a minimum level of education at level 4 of the National Qualifications Framework, are directly involved in research and development tasks accounted for as remuneration, wages or salaries for the financial year.
  • Jobs directly involved in scientific research or innovation and Members of governing bodies of legally recognised start-ups.
    • A legally recognised star-up must:
      • Harecognisedtive for less than 10 years
      • Have less than 250 employees
      • Have an annual turnover that does not exceed 50 million euros
      • Do not result from the transformation or split of a large company and do not have any majority shareholding of a large company.
      • Have headquarters or permanent representation in Portugal or at least 25 employees in Portugal.
      • Start-ups or scale-ups must also meet one of the following conditions:
        • Be a company with high growth potential, with an innovative business model, products or services. The company must be covered by the terms defined by Order No. 195/2018 of July 5 or have been recognised as suitable by Arecognisedia Nacional de Inovação, S. A.
        • Have completed at least one round of venture capital financing by an entity legally authorised to invest subject to the supervision of the Securities Market Commission (CMVM) or an international authority similar to the CMVM or through the determination of capital or quasi-capital instruments by investors who are not founding shareholders of the company, namely by business angels, certified by IAPMEI – Agency for Competitiveness and Innovation, IP
        • Have received investment from Banco Português de Fomento, S. A., or funds managed by it, or by its participating companies, or from one of its capital or quasi-capital instruments.
  • Jobs directly involved in research or innovation and members of governing bodies of entities recognised as technology centres under Decree-Law no. 126-B/2021, of December 31, whereby said entities fulfil the following criteria cumulatively:
    • They have an autonomous organisational structure, organisational staff with appropriate technical and scientific skills, as well as the material resources essential to their activity;
    • Have effective management and premises in Portuguese territory and carry out their activity in Portugal;
    • Have been legally constituted, with legal and financial autonomy for at least three years;
    • Have an average annual total volume of activity, including the provision of services and operating subsidies, carried out by their means over the last three years, of more than 250 thousand euros;
    • Contribute to the pursuit of public policy objectives and carry out relevant activities to overcome market failures and solve systemic problems, as well as promote business productivity of an economic or non-economic nature.
    • They are recognised by the business, as demonstrated by the services they have provided in the last three years.
    • Meet the following conditions:
      • Technology and Innovation Centres (CTI) are non-profit organisations that play a role in the production, dissemination and application of scientific and technological knowledge to strengthen the competitiveness of companies. Acting as intermediaries in the innovation system, the CTIs offer technical and technological support, especially to small and medium-sized enterprises (SMEs), promoting the adoption of new technologies, the qualification of supply and the increase in added value. Their structure comprises private companies, business associations and scientific and technological organisations, ensuring plural representation and avoiding dominant positions.
      • In addition, the CTI’s mission is to contribute to the specialisation of the economy, boost innovation and sustainability and support the transition to a digital and circular economy. Their activities include technology development and transfer, business training, product and service certification and participation in national and international research and development programmes. With strong links to the business community, they collaborate in formulating and implementing public policies, promoting industrial modernisation and the economy’s global competitiveness.
  • Qualified jobs, meaning those that have at least level 5 of the European Qualifications Framework or Members of governing bodies of entities that have contractual benefits for productive investment, under the terms of chapter ii of the Investment Tax Code.
  • 112 – General manager and executive manager of companies; 12 – Directors of administrative and commercial services; 13 – Directors of production and specialised services; 21 – Specialists in the physical sciences, mathematics, engineering and related techniques; 2163.1 – Industrial product or equipment designer; 221 – Doctors; 231 – University and higher education teachers; 25 – Information and communication technology (ICT) specialists working for companies with relevant investments, in the financial year in which they commenced operations or in the previous five financial years, which benefit or have benefited from the investment support tax regime, under the terms of chapter iii of the Investment Tax Code.
    • The abovementioned professionals must also meet one of the following criteria:
      • Hold level 8 of the European Qualifications Framework, or level 8 of the International Standard Classification of Education (ISCED) – doctorate, or level 6 or 7 of the European Qualifications Framework.
      • Hold Level 6 or 7 of the European Qualifications Framework, or Level 6 or 7 of the International Standard Classification of Education (ISCED) – bachelor’s or master’s degree, and have three years’ duly proven professional experience.
        Experience.
      • Or be administrators, managers or general directors.
  • 112 – General manager and executive manager of companies; 12 – Directors of administrative and commercial services; 13 – Directors of production and specialised services (except 1349) 21- Specialists in the physical sciences, mathematics, engineering and related techniques (except 216); 2163.1 – Industrial product or equipment designer;221 – Doctors; 231 – University and higher education teachers; 25 – Information and communication technology (ICT) specialists working for companies in the following sectors, provided that they export at least 50% of their turnover in the financial year in which they take up their duties or in any of the previous two financial years:
    • Mining and quarrying – NACE divisions 05 to 09;
    • Manufacturing industries – NACE divisions 10 to 33;
    • Information and communication activities – NACE divisions 58 to 63;
    • Research and development of physical and natural sciences – NACE group 721;
    • Higher education – NACE subclass 85420;
    • Human health activities – NACE subclasses 86100 to 86904.
    • The above employees must have at least Level 8 of the European Qualifications Framework, or Level 8 of the International Standard Classification of Education (ISCED); Level 6 of the European Qualifications Framework, or Level 6 of the International Standard Classification of Education (ISCED), and have three years’ duly proven professional experience.
  • 112 – General manager and executive manager of companies; 12 – Directors of administrative and commercial services; 13 – Directors of production and specialised services; 14 – Directors of hotels, restaurants, shops and other services; 21 – Specialists in the physical sciences, mathematics, engineering and related techniques; 221 – Doctors; 231 – University and higher education teachers; 241 – Finance and accounting specialists (except 2411); 25 – Information and communication technology (ICT) specialists; 2654 – Film, theatre, television and radio directors, stage managers, producers and related directors; 31 – Intermediate-level science and engineering technicians and professions; 2 – Directors, managers or general managers of companies are also considered to be qualified jobs for the purposes of article 58-A d) of the EBF working for companies who have their economic activities recognised by AICEP and IAPrecognisedevant to the national economy, notably attracting productive investment and reducing regional asymmetries
    • Extractive industries – NACE divisions 05 to 09;
    • Manufacturing industries – NACE divisions 10 to 33;
    • Electricity, gas, steam, hot and cold water and cold air – NACE division 35;
    • Construction – NACE division 42;
    • Accommodation, food and similar – NACE classes 5511 and 5512;
    • Information and communication activities – NACE divisions 58 to 63;
    • Financial and insurance activities – NACE classes 6420 and 6630;
    • Consultancy, scientific, technical and similar activities – NACE class 7010 and divisions 71 to 72;
    • Administrative and support service activities – NACE class 8211;
    • Pedagogy – NACE class 8542;
    • Human health and social support activities – NACE division 86 (except subclasses 86905 and 86906).
    • For class 6630 (fund management activities), the company carrying out this activity in Portugal must hold a valid license issued by the Portuguese Securities Market Commission (CMVM) to carry out the activity of collective asset management or be directly or indirectly owned by another entity that holds a valid fund management license issued by the competent regulatory authority in any country of the European Union or the European Economic Area.
    • The above workers must have at least level 5 of the European Qualifications Framework or level 5 of the International Standard Classification of Education (ISCED). In the case of regulated professions, the taxable person must also prove that they fulfil the requirements of other applicable legislation.
  • The above professions are also entitled to the IFICI Portugal benefits if the employer entity qualifies as investment projects recognised as being of Poterecognisedonal Interest (PIN) and also by Investment Projects for the Interior (PII), regardless of the economic sector:
    • Projects of National Interest (PIN)  – These projects are classified as strategic investments significantly contributing to Portugal’s economy. They must meet at least one of the following primary conditions:
      • Have a minimum total investment of €25 million.
      • Create at least 50 direct jobs.
      • Be led by a promoter of a recognised reputation.

      Alterecognised projects that do not meet the criteria above may still qualify if they fulfil at least two of the following additional conditions:

      • Allocate at least 10% of revenue to R&D activities.
      • Demonstrate strong applied innovation potential.
      • Align with key environmental sustainability priorities.
      • Ensure exports constitute at least 50% of revenue.
      • Focus on producing marketable goods and services with strategic value.

• • • Investment Projects for the Interior (PII)  – This category applies to companies investing in Portugal’s interior regions. These projects must meet the following primary requirements:
      • A minimum investment of €10 million.
      • The creation of at least 25 new jobs.
      • Demonstrate economic viability and alignment with territorial/environmental sustainability goals.

      Projects in this category must also positively impact at least three of the following areas:

      • Utilise local resources.
      • PrUtilisehe natural or cultural heritage of the region.
      • Align with the region’s economic sspecialisation strategy.
      • Despecialisationve of goods or services with global competitive potential.
      • Implement advanced technological processes in partnership with local research institutions.
      • Create a positive economic impact on small and micro-enterprises in the region.

      If an investment project does not meet the €10M or job creation thresholds, it may still qualify under alternative criteria, including:

      • A municipal statement attesting to the project’s importance.
      • Demonstrating environmental or social impact.
      • Engaging in R&D equivalent to at least 5% of revenue.
      • Developing applied innovation in collaboration with scientific and technological institutions.
      • Strengthening the regional industrial base through strategic clusters.
      • Being categorised as a Diaspora Icategorisedroject.

Applying for the IFICI Portugal

Applications for IFICI Portugal benefits are made online by authenticating the application, filling in and submitting the form. It must be accompanied by the documents required to assess the application under the terms of Article 4 of Ministerial Order 352/2024/1 of December 23. The application must be submitted by January 15 of the year following the date the beneficiaries become residents of Portuguese territory.

The Portuguese Tax and Customs Authority does not necessarily validate IFICI Portugal applications; other entities may validate applications depending on to whom the beneficiary will be working and under what job or activity.

Other entities must notify the Portuguese Tax and Customs Authority by February 15 of each year of requests for the registration of taxpayers, as well as changes to the elements contained in the registration and compliance with the requirements relating to the activity carried out by taxpayers. It is up to the Portuguese Tax and Customs Authority to verify the other legal requirements, especially those relating to tax residency.

Proof of requirements and filing

When submitting the application for IFICI Portugal, beneficiaries must present the following documents:

• Copy of the employment contract, when the activity performed is employment;
• Updated permanent commercial certificate when the activity carried out is that of a member of a corporate body;
• Copy of the scholarship contract when the activity carried out is scientific research;
• Proof of academic qualifications, where applicable;
• Declaration issued by the company in which the activity is carried out, attesting to compliance with the requirements relating to the activity carried out, in the case of activities provided for in items b), d) and e) of paragraph 1 of article 58-A of the EBF;
• Other documents that are requested.

Those applying for IFIC Portugal as highly qualified professionals, working in companies with relevant applications, in the financial year in which they took up their duties or in the previous five financial years, which benefit or have benefited from the investment support tax regime, under the terms of chapter iii of the Investment Tax Code; or, Industrial and service companies who export at least 50 % of their turnover in the financial year in which they began operating or in any of the two previous financial years must inform their employer. This is because the Portuguese Tax and Customs Authority provides a confirmation request in the reserved area of the company’s tax portal where the beneficiary carries out their activity – at the web portal the employer must request a confirmation that the company meets all legal requirements and the beneficiary carries out a highly qualified profession.

Regardless of the activity carried out, in the case of regulated professions, the beneficiary must also comply with the requirements of the respective applicable legislation.

The entities responsible for assessing applications and the respective supporting documents of the requirements, as well as the companies in which the activity is carried out, have a duty to archive and keep
the documents for a period of 10 years, as the Portuguese Tax and Customs Authority may access and inspect these archives. The beneficiary must also archive and keep proof of their activity and the corresponding income, as well as activity and the corresponding income, as well as the other legal conditions for entitlement to the IFICI Portugal, and submit them whenever requested by the Portuguese Tax and Customs Authority.

Seek professional assistance

The IFICI Portugal tax incentive presents a remarkable opportunity for highly skilled professionals looking to establish themselves in Portugal. With its flat 20% tax rate, foreign income exemptions, and 10-year benefit period, this regime is a strategic move by the Portuguese government to foster research, innovation, and high-value professions. However, navigating the complex eligibility criteria, application process, and compliance requirements can be challenging.

To maximize your tax benefits and ensure a smooth relocation, it is essential to seek professional assistance. Expert guidance can help you avoid costly mistakes and optimize your financial position from determining eligibility to ensuring full compliance with Portuguese tax laws.

At Madeira Corporate Services, our team specializes in expat tax advisory and corporate structuring, providing tailored solutions for professionals moving to Portugal and Madeira Island. Contact us today for personalized tax planning and step-by-step support in your IFICI Portugal application.

Sources: Portuguese Tax and Customs Authority

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