NHR Portugal: Ultimate Guide to the Non-Habitual Resident Tax Regime

7 min read
October 24, 2022
The Baseflow Team

Are you considering moving to Portugal for work? Are you curious about what the Non-Habitual Resident (NHR) tax regime is all about? In this guide, we'll break down everything you need to know about the NHR tax regime in Portugal, including how to qualify, benefits and restrictions, and more. So whether you're just starting your research or are ready to take the plunge, keep reading for all the information you need on the NHR tax regime in Portugal.

What is the Portugal NHR program, and who is it for? ๐Ÿ‡ต๐Ÿ‡น

The Portuguese NHR program, also known as the Non-Habitual Resident program, is a special tax regime designed to attract highly skilled individuals and families to Portugal. This Portuguese government initiative offers a range of tax benefits to qualified individuals who are willing to relocate to Portugal. The program offers a number of benefits, including a reduced tax rate on foreign income, pension and investment income, and property income. The program is designed to attract top talent from around the world, and it is open to both European and non-European citizens who have not been resident in Portugal in the past 5 years and who meet certain other criteria.

If you are thinking about moving to Portugal, the Portuguese NHR program may be right for you โ€“ the NHR program is an excellent opportunity for entrepreneurs, freelancers, and expats to enjoy a tax burden similar to that of a tax haven while living in one of Europe's most beautiful countries.

How does NHR work in Portugal?

NHR, or Non-Habitual Resident, status is a special tax benefits program available to individuals who move to Portugal from another country. To qualify, you must prove that you have not been a resident of Portugal in the last five years and that you will be living in Portugal for at least six months out of the year. Once you have been granted NHR status, you will get a tax exemption on your foreign source income for a period of 10 years. This can be an extremely attractive option for retirees or others who are looking to benefit from Portugal's low tax rates. NHR status can also be very beneficial for professionals who are looking to relocate to Portugal. With NHR status, relocating to Portugal can be a great way to reduce your overall tax burden.

What are the benefits of NHR in Portugal? ๐Ÿ’ธ

The NHR (Non-Habitual Resident) regime was introduced in Portugal in 2009, and updated in 2020, as a way to attract highly skilled workers from abroad. The main benefit of the NHR regime is that it offers a special tax regime for new residents, allowing them to pay a reduced rate of income tax on their worldwide income for a period of 10 years.

Once you have been granted NHR status, you will be taxed at a flat rate of 20% on your personal income tax (IRS), employment income (i.e., as a freelancer), and pension income. Considering the general tax rate for those making over โ‚ฌ25,076 is 37% and for those making over โ‚ฌ39,968 is 45%, this is an astronomical tax benefit. If you are self-employed, you will also benefit from an exemption on social security contributions during the first year.

You will also not pay any wealth tax or inheritance tax, and sources of income like dividends, cryptocurrencies, interest, royalties, capital gains, rental income and real estate income outside of Portugal, and income from employment in another country are not taxable. These will be paid in the source country if your country has a tax treaty (a Double Taxation Agreement or DTA) with the country.

The NHR regime has been designed to make Portugal an attractive destination for highly skilled workers, and it is already having a positive impact on the economy. If you are thinking of moving to Portugal, the NHR regime could provide you with significant tax savings.

How how do you qualify for Portugalโ€™s Non-Habitual Residence program? These are the eligibility requirements to get NHR status.

Portugalโ€™s Non-Habitual Residence program is an attractive option for many retirees and digital nomads. The program offers a number of benefits, including a flat tax rate of 20% on foreign pension income and a 10-year period exemption from taxes on certain types of income. To qualify for the program, you must meet the following requirements:

  • You must be registered as a Portuguese tax resident and have a residence certificate and Portuguese Tax ID number (NIF). To do this, you will first need a residence permit if you don't hold a non-EU passport (by getting a residence permit like the Digital Nomad Visa or the Portugal Golden Visa Program if you're willing to buy real estate).
  • You must not have been considered a Portuguese tax resident in the last five consecutive years.
  • You must submit your NHR application before filing your tax returns by the 31st of March, of the year following the tax year when you become a tax resident.
  • You must be employed or self-employed in an eligible activity considered as high added-value, like dentists, stomatologists, linguists, programmers, or ICT (information and communication technologies) related activities.

If you meet all of the above criteria, you can apply for non-habitual tax resident status by submitting a form to the Portuguese tax authorities (Finanรงas) โ€“ or just let Baseflow handle it! Once your application is approved, you will be granted NHR status for a period of 10 years.

Can a Portuguese citizen get NHR?


How to apply for residency in Portugal under the NHR program. ๐Ÿ›ฌ

If you're looking for a European residency that offers sunny weather and a low cost of living, Portugal's NHR program may be right for you. Here's what you need to know about how to apply for NHR residency in Portugal.

First, you'll need to demonstrate that you have enough financial resources to support yourself during your stay in Portugal. This can be done by showing proof of income, assets, or private health insurance.

Once you've gathered the required documents, you can submit your application online or through the Portuguese embassy or consulate in your home country. Once your application has been reviewed and approved, you'll receive a residency permit that allows you to stay in Portugal for up to one year.

If you're looking for a hassle-free way to live in Europe, the NHR program in Portugal may be right for you. With its low cost of living and welcoming vibe, Portugal is an ideal place to call home. That's why so many people from countries like Spain or the United Kingdom are moving there.

What is the process of getting NHR in Portugal?

Non-habitual resident status in Portugal confers several important tax benefits on individuals who relocate to Portugal. The NHR program is designed to attract highly-skilled workers and retirees to Portugal, and as such, provides a number of tax advantages. NHR status holders are exempt from paying income tax on foreign source income and are also eligible for a reduced rate of taxation on Portuguese source income. In addition, NHR status holders are not subject to wealth taxes, such as the annual property tax known as the Imposto Municipal sobre Imรณveis (IMI). To apply for NHR status, individuals must first submit an application to the Portuguese Tax Authorities. Once the application is approved, individuals will be issued an NHR certificate, which must be renewed every five years. NHR status can be a valuable way to reduce your tax burden when moving to Portugal and can help make relocating to Portugal more affordable.

What documents do you need to provide?

You will need to provide several documents, such as personal information, bank account statements, residency certificates, or proof of income. But if you use Baseflow, you won't have to worry about this, as we will guide you through the process.

What is the fee for NHR?

The Portuguese government will request a small fee to process your NHR application. Again, if you use Baseflow, you won't have to worry about it as it is covered by our membership.

What Portuguese taxes will you be required to pay as a non-habitual resident, and how can you minimize your tax rate in the country under the NHR tax regime?

NHR Portugal is a tax regime for non-habitual residents who move to Portugal. It offers certain tax benefits, including a flat 20% income tax rate on eligible incomes. While NHR status is granted on a case-by-case basis, you may be eligible if you can prove that you have not been a resident of Portugal in the five years before your application. To receive NHR status, you must first register as a Portuguese taxpayer. You can then submit an application to the Portuguese Tax Authorities. Once your application is approved, you will be granted NHR status for a period of 10 years. NHR status can be renewed after 10 years, provided you meet the eligibility criteria. NHR status offers many tax advantages, including a reduced income tax rate. However, it is important to note that NHR status does not exempt you from paying taxes in Portugal. You will still be required to pay taxes on your worldwide income, though you may be eligible for certain tax deductions and credits. NHR status can provide significant tax savings for those moving to Portugal. However, it is important to consult with a qualified tax advisor to ensure that you take advantage of all the benefits available under the NHR regime.

What happens after 10 years of NHR in Portugal? How to maintain your status as a tax resident under the Non-Habitual Resident Program in Portugal. ๐ŸŒŽ

The NHR program in Portugal offers many benefits for those looking to relocate. However, it is important to remember that the NHR status is not permanent. After 10 years, you will need to re-apply for NHR status if you want to continue enjoying the benefits of the program. Luckily, the process is relatively straightforward. As long as you can demonstrate that you meet the program's requirements, you should be able to reapply for NHR status successfully. To increase your chances of success, be sure to keep detailed records of your income and expenditures. With a little preparation, you can ensure that you maintain your NHR status and enjoy the benefits of the program for years to come.

What tax obligations do you have, and how can you stay compliant with Portuguese law?

As a foreigner living and working in Portugal, it's important to be aware of your tax obligations. Whether you're a resident or a non-resident, you'll be required to pay taxes on your income. The good news is that Portugal has a number of tax incentives for foreigners, including the Non-Habitual Resident (NHR) program. This program allows foreigners to benefit from special tax treatment on their income for a period of 10 years. To be eligible for the NHR program, you must meet certain criteria, such as being employed in an eligible profession or having made a significant investment in Portugal. While there are some complex tax rules to navigate, staying compliant with Portuguese law is relatively straightforward if you're aware of your obligations โ€“ and optionally use a platform like Baseflow.

Frequently asked questions about the NHR Portugal program. ๐Ÿคจ

NHR Portugal is a government-sponsored program that offers opportunities for foreign nationals to invest in Portugal and receive residency status in return. The program is open to investors of all nationalities, and there is no minimum investment amount required. Investors can choose to invest in a number of different ways, including purchasing property, investing in a business, or making a financial contribution to a Portuguese company. In return for their investment, participants receive a residency permit that allows them to live and work in Portugal. The NHR Portugal program has been widely successful, with over 4,000 applications approved since its launch in 2012. For many participants, the program has been a way to realize their dream of living in Portugal. If you are considering applying for the NHR Portugal program, here are some frequently asked questions that may help you make your decision.

โ— What is the minimum investment amount required?

There is no minimum investment amount required under the NHR Portugal program. Investors can choose to invest in a number of different ways, including purchasing property, investing in a business, or making a financial contribution to a Portuguese company.

โ— How long does it take to get approval for the NHR Portugal program?

The application process for the NHR Portugal program can take up to four months. Once your application has been approved, you will receive a residency permit that allows you to live and work in Portugal for an initial period of one year. After that, your residency permit can be renewed indefinitely.

โ— Are there any risks associated with the NHR Portugal program?

Although the NHR Portugal program is generally considered to be safe and reliable, there are always risks associated with any investment opportunity. Before making any decisions, you should always consult with a qualified financial advisor to ensure that you are making the best possible choice for your individual circumstances."

โ— How can I find out more about NHR in Portugal?

You can subscribe to our newsletter to stay updated on any news or changes regarding the NHR laws in Portugal.

Final thoughts on the NHR Portugal program โ€“ is it right for you or not?

The NHR program in Portugal is a great opportunity for those looking to move to Europe and enjoy a low-cost, high-quality lifestyle. If you're interested in moving to Portugal and taking advantage of the NHR program, Baseflow can help you make the transition smoothly. With our support and expert connections, we'll help you every step of the way so that you can focus on enjoying your new life in Portugal.


Share on Twitter
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Related articles