Learn About NHR 2.0 Portugal

What is NHR 2.0?

NHR 2.0 (IFICI) is the restructured version of the original Non-Habitual Residency program. While it carries forward the 10-year tax benefit period, it introduces stricter eligibility requirements, focusing on industries and professions that contribute to Portugal’s innovation economy.

The goal is twofold:

1. To attract highly qualified talent to boost the country’s scientific research and innovation sectors.
2. To promote job creation and entrepreneurship in industries critical to Portugal’s economic growth.

Professionals working in qualifying fields like IT, R&D, advanced manufacturing, environmental technology, and entrepreneurship are eligible for special tax incentives under NHR 2.0.

What do I need to know about NHR 2.0 in Portugal?

• 10-Year Non-Renewable Tax BenefitsQualified applicants enjoy reduced tax rates on Portuguese income and potential exemptions on foreign-sourced income for up to 10 years.
• Flat 20% Income Tax RatePortugal taxes income from eligible professions at a fixed 20% rate, which is significantly less than the standard progressive rates of up to 53%.
• Foreign Income Tax ExemptionsCertain foreign income (e.g., dividends, royalties, and capital gains) may remain tax-exempt if taxed in another country or originating from countries with a Double Taxation Agreement (DTA) with Portugal.
• Focus on Innovation and ResearchThe program prioritizes professionals in high-value industries, targeting roles that align with Portugal’s strategic development goals.
• Flexibility for EntrepreneursEmployers in Portugal are not the only options for applicants. Starting your own company or employing yourself through a Portuguese-based entity is also an option.

Who can apply for the NHR 2.0?

To qualify for NHR 2.0, applicants must meet specific residency, professional, and activity-related criteria. Let’s break them down:

1. Residency Requirements

To apply for NHR 2.0:

• You must become a tax resident in Portugal (either as an EU citizen or a non-EU citizen), which is achieved by:
• Spending more than 183 days in Portugal in a calendar year, or
• Maintaining a permanent residence in the country by December 31 of the relevant year.
• In the five years prior to your application, you cannot have been considered a Portuguese tax resident.

2. Eligible professions

NHR 2.0 targets professionals working in key high-value industries. Applicants must derive income from one of the following categories:

A. High-value industries

These include:

• IT and Technology: Software developers, IT consultants, cybersecurity experts, and multimedia professionals.
• Scientific Research and Innovation: Researchers and academics engaged in projects under Portugal’s R&D tax incentive program (SIFIDE).
• Energy, Environment, and Telecommunications: Professionals in renewable energy, environmental technologies, and advanced telecom solutions.
• Advanced Manufacturing: Engineers and specialists in production and industrial services.
• Tourism and Extractive Industries: Directors or employees in sectors vital to Portugal’s economy.

B. Startups and entrepreneurship

• Founders, directors, or employees of accredited Portuguese startups.
• Startups certified under the Portuguese Start-Up Law (companies active for less than 10 years, employing under 250 staff, and generating less than €50 million in turnover).

C. Education and research

• Professors at Portuguese universities and higher education institutions.
• Researchers working in entities certified by the Foundation for Science and Technology (FCT).

D. Regional Specifics

• Professionals working in Madeira or the Azores may enjoy additional regional incentives and benefits.

⚠️ Ministerial decrees will clarify the final list of eligible professions. We advise applicants to research the Portuguese Tax Authority (AT) or keep an eye here at AnchorLess to have the know the latest updates.

3. Employment or business status

One of the current misunderstood aspects of NHR 2.0 is the employment requirement. Here is an overview of what you need to know:

• Create Your Own Company: Applicants can create a new entity in Portugal, such as an IT service provider or an R&D startup, and employ themselves.
• Employer of Record (EOR): Employment through an EOR company is valid if your role falls under one of the eligible professions.
• Freelancers and Consultants: Freelancers working with foreign clients may qualify if they establish a Portuguese-based company and meet the 50% revenue export threshold.

⚠️ With the assistance of a professional consultant, you may find some flexibility to fit your current employment situation. The opportunities for NHR 2.0 are broad enough to attract legitimate talent.

⚠️ Retirees are no longer eligible for NHR.

4. Income requirements

To maintain NHR 2.0 status, applicants must earn income from one of the eligible professions during each year of the 10-year benefit period.

How to apply for NHR 2.0 in Portugal?

Applying for NHR 2.0 involves multiple steps. Here’s a simplified roadmap:

Step 1: Obtain your NIF (Taxpayer Number)

Before anything, you’ll need a Portuguese NIF (Número de Identificação Fiscal). Check here how to get a NIF in Portugal.

Step 2: Register as a Portuguese tax resident

Declare your tax residency by meeting the 183-day rule or registering a permanent residence in Portugal.

Step 3: Determine your eligibility

Verify that your profession and activities align with the requirements of NHR 2.0. Consult a tax advisor or immigration expert if needed.

Step 4: Submit application to the competent authority

Prepare and submit all necessary documents, including the following, to the the assigned governmental Authority. Documents are:

• Proof of tax residency.
• Employment contracts, business registration, or EOR agreements.
• Evidence of qualifications or professional experience.

Submittion must be made, according to your eligibility criteria, to one of the following:

• Tax Authority (Autoridade Tributária e Aduaneira)
• Foundation for Science and Technology (Fundação para a Ciência e Tecnologia, I.P.)
• Portuguese Agency for Investment and External Trade (Agência para o Investimento e Comércio Externo de Portugal, or AICEP, E.P.E.)
• IAPMEI – Agency for Competitiveness and Innovation
• National Innovation Agency (Agência Nacional de Inovação, S.A.)
• Startup Portugal – the Portuguese Association for the Promotion of Entrepreneurship

Step 5: Await approval

Once approved, you will formally join the NHR 2.0 regime and start taking advantage of the tax benefits.

How much does it cost to apply for NHR 2.0 as an expat?

Officially, nothing!

However, as with most tax obligations, you might feel more comfortable hiring an accountant or a tax consultation expert to guide you through—or completely handle—this situation for you. So keep that in mind when planning for NHR in Portugal.

Should I hire a tax consultant to apply for NHR in Portugal as an expat?

If you are not familiar with Portuguese-IRS and are not a Portuguese speaker, we strongly encourage you to hire a professional!

Portugal conducts its tributary service in Portuguese, which can pose a challenge if you are not a native speaker. Besides that, Portuguese IRS rules may seem hard to navigate if you are not fully integrated into the system and its laws and rules.

So, to avoid any fines and make the process easier, consider hiring an accountant or a tax consultant. Here at AnchorLess we have a tax consultation service where a Portuguese bar-associated tax lawyer will guide you through the dos and don'ts of your tax and IRS obligations.

Is NHR 2.0 worth it?

It depends on your situation!

For those outside the eligible fields, or with an income below 28,000 euros per year, it may be more advantageous to use the Youth IRS, a progressive discount program for tax residents in Portugal with 35 years or less. The Youth IRS program spans 10 years, beginning with a substantial 100% discount in the first year of the Portuguese IRS declaration and gradually decreasing to 25% in the 10th year.

For professionals in eligible fields and not eligigle for the Youth IRS, NHR 2.0 offers a pathway to significant tax savings and the chance to live in one of Europe’s most desirable countries. With its focus on innovation and research, the program is an attractive option for those looking to build a future in technology, science, or entrepreneurship.

Whether you’re an IT professional, a startup founder, or a researcher, NHR 2.0 is more than a tax scheme—it’s an opportunity to integrate into Portugal’s growing innovation ecosystem.