NON HABITUAL RESIDENCY

An attractive tax regime for investors, international talent and pensioners. In Portugal.

The regime

Over the last decade, Portugal has become a target for foreign investment, a prime location to do business and for high-net-worth individuals to live in.

It is a perfect balance between attractive investment opportunities for all types of investors while still maintaining one of the lowest costs of living in Western Europe.

Additionally, a special tax regime for inbounds was designed to offer attractive tax saving opportunities to value added professionals, entrepreneurs and investors who want to reside and do business in or from Portugal.

This program has been incredibly successful as it benefits all parties involved. Many of our clients are extremely happy with the current win-win situation they are benefiting from.

Whether due to favourable tax benefits, safer environment to live in or its strategic location, in recent years many of our clients that were previously benefiting from similar programs have relocated to Portugal.

We work in partnership with local firms in several jurisdictions in order to ensure a full service to our clients, complying with all relevant procedures in transferring tax residency from one country to the other.

 

The requirements

This regime is available to any individual who was not a Portuguese tax resident in the previous five years prior to moving to and becoming a tax resident in Portugal.

Like in most countries worldwide, tax residency in Portugal is enforced on individuals that stay within its territory for more than 183 days in a fiscal year. Other residency testes are available.

The regime is applicable for a period of 10 years.

 

The Benefits

The regime provides attractive tax saving opportunities to value added professionals, entrepreneurs and investors who want to reside and do business in or from Portugal.

In contrast to the taxation regime of ordinary residents, the non-habitual residency regime provides special exemptions and tax rate caps.

Tax exemptions exist for specific types of income, mainly passive income such as dividends and interest.

As a rule, foreign source income will be tax exempt in Portugal if it was taxed at source (regardless of the rate) or might have been taxed at source according to the applicable Treaty to Avoid Double Taxation.

In specific scenarios, the regime allows for the non taxation of pensions both in Portugal and in the source country.

Employees, self-employed individuals and companies

Portuguese source employment and self-employment income derived from high value added activities of a scientific, artistic or technical nature are taxed at a 20% rate (an additional 3.5% surtax applies).

High value added activities include:

  • Architects;
  • Doctors;
  • IT technicians;
  • Engineers;
  • Liberal professions;
  • Senior executives;
  • Investors and managers under certain conditions.

This regime presents several advantages for global companies that want to establish knowledge centers and R&D clusters in a tax efficient manner or for IT consultants to live in a whitelisted low tax jurisdiction in Europe.

Non-qualifying employment or self-employment income paid by a Portuguese source income will be taxed at the standard rates applicable to resident taxpayers.

As a rule, non-Portuguese employment income is exempt in Portugal if taxed abroad and self-employment income derived from a high value added activity is taxed at 20%.

 

Investors

Foreign source investment (such as dividends and interest) income will be exempt in Portugal if such income may be liable to taxation in the country of source according with a Double Tax Treaty, which is the rule provided by most Tax Treaties signed by Portugal.

Portugal has entered into more than 60 Treaties to Avoid Double Taxation.

 

Pensioners

Pensioners may benefit from tax savings or tax exemptions in Portugal and/or in the State of source regarding pension income.

As a general rule, the legal provisions applicable to private pensions (non-Governmental service pensions) paid to non habitual residents allow for nil taxation both in the State of Source and in Portugal.

There is no wealth tax and remittance of funds is tax-free. As no inheritance tax is levied and there is no gift tax on donations made to family members, Portugal is also a great jurisdiction avoid a decrease in estate value through tax leakage.

We advise you secure your benefits as soon as possible.

The place – Portugal

A safe environment to live and do business

Considering Portugal’s incredibly attractive tax regime for newcomers, a relatively low cost of living and a safe and stable social and political climate, Portugal has become a prime location for direct foreign investment, do business and for high net worth individuals to live and benefit from the existing conditions in one of the safest countries in the world.

 

Strategic location

In addition to a favorable business environment, Portugal is located at the convergence of three continents.

Located in the western part of mainland Europe, Portugal is a transatlantic country and the European country that is closest to the USA and Brazil.

Portugal also has developed strong economic and political relations with emergent markets such as Angola, Brazil, Mozambique and all Portuguese-speaking countries.

 

Climate and Gastronomy

In Portugal, everyone enjoys an unparalleled quality of life due to a mild climate, a unique luminosity, different landscapes and a unique gastronomy with a Mediterranean twist.

The climate is mild throughout the year and sunshine is usually present.

 

Golf, Beach and Yachting

Lisbon is the European capital with the highest number of golf courses and golden beaches are located just 15 minutes away from the city center.

For three straight years, Portugal was awarded by the International Association of Golf Tour Operators as the Best Golf Destination of the World and the Best Golf Destination of Europe.

Anchorage for yachts can be found all along the Portuguese coastline of 1,794 km.

 

Infrastructures

With a great network of highways covering the entire country and connecting it to Europe, 7 international airports and daily flights to major cities around the world, Portugal’s infrastructures are ideal to travel and do business in.

Its fiber optic network is considered one of the best in Europe.

 

Working in Portugal – Non EU citizens

Citizens of non EU member countries only need a visa if their stay in Portugal exceeds 90 days.