Portugal’s non-habitual resident (NHR) tax regime has long been a beacon for international professionals, pensioners, and entrepreneurs seeking a competitive tax environment. With the end of the traditional NHR regime for new applicants in 2024, the Portuguese government has introduced a new chapter: the Incentive for Scientific Research and Innovation (IFICI), widely referred to as NHR 2.0.
This updated framework, now in effect, aims to continue attracting global talent while aligning more closely with Portugal’s strategic economic goals, particularly in science, technology, and innovation.
What Is NHR 2.0?
The NHR 2.0 regime, officially known as the IFICI, is designed to offer tax benefits to individuals engaged in specific, high-value activities within Portugal. It replaces the former NHR scheme for new entrants as of January 1, 2024, and it narrows the focus to residents who actively contribute to innovation and knowledge-based sectors.
Who Qualifies for NHR 2.0?
Eligibility under the new regime hinges on both residency and professional activity. The main categories of qualifying individuals include:
- Researchers and academic staff in public or private R&D institutions.
- Highly qualified professionals working in entities recognised by AICEP (Portugal’s Trade and Investment Agency) or IAPMEI (a support institute for small and medium enterprises).
- Start-up founders or staff, provided the business is certified as a start-up by the relevant authorities.
- Scientific research fellows and those engaged in innovation-related activities.
Eligible business sectors where applicants must work:
Extractive industries (Div. 05–09)
Manufacturing (Div. 10–33)
Electricity and utilities (Div. 35)
Construction (Div. 42)
Accommodation and food (Classes 5511, 5512)
Information and communication (Div. 58–63)
Financial services and fund management (Classes 6420, 6630)
Consulting and R&D (Div. 71, 72 and Class 7010)
Education (Class 8542)
Healthcare (Div. 86, except subclasses 86905 and 86906)
Administrative support (Class 8211)
To benefit from the regime, applicants must become Portuguese tax residents without having been residents of the country for five years prior.
Tax Benefits Under IFICI
Those accepted into NHR 2.0 enjoy a 20% flat income tax rate on eligible employment and self-employment income derived from qualifying activities. This rate is notably more favourable than Portugal’s progressive tax brackets, which can reach rates above 40%.
It’s important to note that some of the benefits from the previous NHR regime, such as foreign pension tax exemptions, are no longer available under NHR 2.0.
Application Process and Deadlines
Applicants must first ensure they meet all eligibility criteria, particularly the classification of their professional activity. Certification from a competent authority (such as AICEP, IAPMEI, or a public R&D entity) is typically required. The applicant must register as a tax resident in Portugal and apply for the regime via the Portuguese tax portal, following guidelines laid out by the Tax Authority.
While NHR 2.0 is open to new applicants from now on, individuals registering as tax residents in Portugal before 2024 might still access the old NHR regime if they met the criteria and applied within the transitional timeline.
Final Thoughts
Portugal’s new IFICI regime signals a strategic pivot. While the previous NHR was broad and attracted many profiles, NHR 2.0 zeroes in on talent that can drive scientific, technological, and economic advancement.
This move aligns with national development goals and European funding priorities, especially under frameworks like Portugal’s Recovery and Resilience Plan.
For global professionals working in innovation, research, and high-skill sectors, Portugal remains an attractive destination, just under a new set of rules.
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