Portugal reinforces its position as a destination of choice for qualified professionals with the launch of NHR 2.0, formally designated as the Tax Incentive for Scientific Research and Innovation (IFICI).
What is NHR 2.0 / IFICI?
It is a tax regime aimed at highly qualified professionals—researchers, innovation and technology experts, teachers, executive managers, and other profiles strategic to the country—who become tax residents in Portugal starting in 2024.
It provides for a flat IRS rate of 20% on dependent employment income (Category A) or self-employment income (Category B), for 10 consecutive years.
Foreign pensions do not benefit from exemption and are taxed at the normal progressive rate; income from sources considered “blacklisted” is taxed at a flat rate of 35%.
Most foreign source income (such as dividends, royalties, capital gains, and rents) remains exempt, provided they meet certain conditions and are adequately declared.
Who can apply?
- You must not have been a tax resident in Portugal in the last 5 years.
- You must work in an eligible activity, such as scientific research, innovation, higher education, technology, management in entities with an innovation seal, qualified startups, or other recognized strategic sectors.
How to apply?
The application must be submitted by January 15 of the year following the year of obtaining tax residency (exception: those who became residents in 2024 can apply until March 31, 2025).
The activity’s validation is carried out by entities such as FCT, AICEP, IAPMEI, ANI, or Startup Portugal, depending on the sector.
Why does NHR 2.0 matter to expats?
- 20% Flat Rate: Substantially lower compared to the maximum IRS brackets, which can reach up to 53%.
- Partial Exemption for Foreign Income: Contributes to optimizing the tax burden for expats with eligible foreign income.
- Privileged Access to Critical Professions: Stands out as a driver for attracting international talent aligned with the country’s technological evolution strategy.
- Clear and Defined Requirements: Unlike the previous regime, it is more aligned with public policy goals focused on innovation and science.
Comparative Summary: IFICI vs. Original NHR
| Feature | Original NHR (up to 2023) | NHR 2.0 / IFICI (2024–2025) |
| Duration | 10 years | 10 years |
| Rate on Portuguese income | 20% flat or exempt (depending on the source) | 20% flat |
| Exemption on foreign income | Broad (including pensions) | Limited, excludes pensions; deposits from “blacklist” taxed at 35% |
| Eligibility | Any new tax residency | Highly qualified professionals and strategic sectors |
| Eligible with previous residency (5 years) | Yes | No |
| Activity validator | No specific validation required | Specialized sectoral entities validate eligibility |
Conclusion
The NHR 2.0 / IFICI emerges as a robust, modern, and targeted tax regime—ideal for expats with consolidated careers in strategic areas who wish to move to Portugal with clear and advantageous tax expectations.
At FA Accounting, we help professionals analyze eligibility, prepare applications (documents, deadlines, validations), and compare IFICI with other regimes like the IRS Jovem or Regressar Programs. If you wish to assess what applies best to your case, we are at your disposal!
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