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An introduction to the NHR tax regime

Updated: Mar 25, 2023

Certainly, the Non-Habitual Residence (NHR) tax regime in Portugal is a favorable tax regime designed to attract foreign professionals and entrepreneurs to live and work in the country.

One of the key benefits of the NHR tax regime is the ability to pay 0% tax on certain types of income, including foreign taxed dividends and wages.

To qualify for the NHR tax regime, an individual must meet the following requirements:
  1. The individual must not have been a tax resident in Portugal in the previous five years.

  2. The individual must establish tax residence in Portugal by staying in the country for at least 183 days per year, or by owning a home in the country and using it as their primary residence.

  3. The individual must register with the Portuguese tax authorities as a non-habitual resident.

Once an individual becomes a non-habitual resident, they are eligible to benefit from the special tax regime for a period of 10 years. Under this regime, income earned from certain activities, such as work as a freelancer or professional, is taxed at a flat rate of 20%.

However, the NHR tax regime also offers several exemptions and exclusions that allow individuals to pay 0% tax on certain types of income, like foreign taxed dividends and wages. If an individual receives a pension from a foreign country, they will only be required to pay 10% tax on that income in Portugal.

Overall, the NHR tax regime in Portugal provides a favorable tax environment for foreign professionals and entrepreneurs who are looking to live and work in the country. It allows them to enjoy a lower tax rate on certain types of income, while also offering a number of exemptions and exclusions that can make living and working in Portugal more attractive.

If you need help with finding a lawyer to get in depth information, register with the tax authorities and apply for the NHR program, don't hesitate to get in touch!


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