INSIGHTS

Focus on NHR regime in Portugal

Why Portugal should be your top tax choice.

The best tax regime for individuals is in Portugal. A special tax regime for new residents allows pensioners, high networth individuals and entrepreneurs to enjoy Portugal’s sunny climate while benefiting from an attractive tax regime. If you have not lived in Portugal in any of the last five tax years, you are planning to retire or you expect to receive interest or dividends, you may benefit from a low tax burden by moving to Portugal

Mediterranean and European lifestyle

Portugal provides an excellent quality of life for the modern investor or businessman. The tax regime for individuals is very attractive, surpassing other regimes in many ways. The low effective tax burden, further enhanced by the regime for non habitual residents, the free remittance of funds, the friendly residence permit regime (allowing for free movement within the Schengen zone) and the possibility to apply for Portuguese nationality and, consequently, a EU passport, make Portugal a very attractive location. As a result of its traditional liberalism and multicultural approach, Portugal maintains very close links with the rest of the world, including Africa (Angola, Mozambique and Cape Verde), Asia (China, including Macao) and South America (Brazil).

What exactly is the NHR ?

The Portuguese Non-Habitual Residency (NHR) status enables those who become tax resident in Portugal, and are accepted as NHR, the opportunity to receive qualifying income tax free both in Portugal and in the country of source of the income.

The NHR regime represents a major step forward in making Portugal a tax-free jurisdiction for individuals in receipt of qualifying non-resident income.

Qualifying income includes pension, dividend, royalty and interest income. Plus, professional income from high value-added activities, which benefit from a special flat tax rate of 20%.

The sole requirement to benefit from this preferential treatment is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. This status is granted for 10 years.

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