Non-Habitual Residency

The Portuguese non-habitual tax regime, commonly abbreviated as NHR, aims to attract investors and professionals of high cultural and economic worth, in order to increase the country’s international competitiveness. First implemented in 2009, the scheme has been highly successful and as a result, there are now over 10,000 non-habitual tax regime residents in Portugal.

The NHR status enables those who become tax resident in Portugal, and are accepted as non-habitual residents, the opportunity to receive qualifying income, tax free, both in Portugal and in the country of the source of the income.

• Qualifying income includes private pensions, dividends, royalties, interest and income
• It includes a reduced 20% flat rate for Portuguese (self) employment income from qualifying activities in Portugal
• NHR residents enjoy full tax exemption for gifts on inheritance to spouse, descendent or ascendants. Inheritance or gifts to other individuals will be either tax exempt, or subject to a flat 10% tax rate
• NHR residents are entitled to free remittance of funds in Portugal or abroad. There is no wealth tax and any capital gains emerging from the sale of shares is taxed at merely a flat rate of 25%, but with an exemption of up to €500 per year

The main requirements 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 and also to remain in Portugal for a minimum of 183 days in the qualifying years.

The status is granted for 10 consecutive years.

For more information, please do not hesitate to contact us. We can also help in arranging contact with an accountant or legal advisor fluent in your own language.