Updated: January 6, 2023
The Non-Habitual Resident (NHR) Tax program in Portugal is a popular tax scheme that provides foreign residents or investors residing in Portugal lower tax rates and exemptions on certain taxes. Launched in 2009, and later updated and improved in 2020, the tax regime aims to attract foreign investors from all across the world to become a resident in Portugal and invest in the country.
Over the years, more than 10,000 citizens from various countries have already applied for this program and are currently enjoying the benefits of the scheme. So, if you are looking to optimize your tax planning and investments, you can apply for the Portugal NHR scheme. In this article we will guide you through the following:
- NHR Portugal 2022
- Eligibility requirements for Portugal NHR
- Who can apply
- Portugal NHR application process
- Portugal Golden Visa
NHR Portugal Tax Regime
The Portugal Non-Habitual Resident Tax regime is designed to appeal to foreign high net worth individuals across the globe. The tax scheme aims to boost Portugal’s economy in return for offering reduced tax rates. The regime in Portugal was first initiated in 2009 and ensures considerable tax benefits for eligible applicants. In certain cases, this scheme grants a 20% tax rate on income and also allows tax exemptions for private-sector pensioners. Owing to its benefits and popularity, there are more than 10,000 NHR residents in Portugal. Visit our article: Cost of Living in Portugal to learn more about the lifestyle that the country has to offer.
NHR Portugal – Benefits
- You become a tax resident in Portugal (white-listed EU country)
- You enjoy special tax benefits for ten years
- There is no wealth tax
- Free remittance of funds to Portugal
- Tax exemption on all foreign income
- 20% flat rate on some Portuguese income
- Tax exemption on gifts for family members
- There is no minimum stay requirement
Portugal NHR and double taxation agreements
Portugal’s NHR relationship with Double Taxation Agreements (DTAs) is one of the key highlights of the Portugal NHR program. Under DTAs, most categories of your income are taxed in the country of the source of income. However, in most cases, countries do not levy income tax on non residents as they want to make their jurisdictions open for foreign investments.
Similarly, Portugal, under the NHR tax regime, does not tax foreign source income of non-habitual residents as their income is already taxed in the source country. This makes it lucrative for foreign investors to invest in Portugal as they can obtain foreign income tax-free.
Currently, Portugal has signed Double Taxation Agreements with 79 countries. In other circumstances, the Organization for Economic Co-operation and Development (OECD) model tax convention can be used to determine the application of taxes.
Here is a list of countries that have DTA with Portugal:
|São Tomé and Príncipe||Saudi Arabia||Senegal|
|South Africa||South Korea||Spain|
|Tunisia||Turkey||United Arab Emirates|
|United States of America||United Kingdom||Ukraine|
NHR Portugal – Eligibility
In order to be eligible for the Portugal NHR Tax regime, an applicant needs to meet the following criteria:
- The applicant must be a resident in Portugal. This can be either through the Portugal Golden Visa program or by being an EU/EEA/Swiss citizen, or by having a D7 Visa, amongst other valid visa types.
- The applicant must not have been a Portuguese tax resident in five years before obtaining a residence permit in Portugal.
- Applicants must note that to maintain his/her residence permit in Portugal, the individual must have a place to stay in Portugal as of 31st December of that year. The home also must be habitual.
Tax under NHR Portugal tax regime
Under the Portugal NHR tax regime, highly-valued professionals are given special tax exemptions as they are valued highly in Portugal.
The following list mentions the professionals who are considered of high value in Portugal:
- Medical physiatrists
- University lecturers
- Biologists and life science experts
- Computer programmers
- Software consultants
- Computer consultants and related services
- News agencies
- Other information and service activities
- Scientific research and development
- Research and experimental development on natural sciences and engineering
- Research and development in biotechnology
- Higher management
Tax on foreign source income under the NHR tax regime
Owing to DTAs, NHR residents in Portugal are fairly exempted from taxation. If a resident is receiving income from a country that has a double taxation agreement with Portugal, then he/she will not be taxed in Portugal.
Employment income tax
Under the NHR tax regime in Portugal, foreign source income is exempted from tax or is taxed at a low rate of 20% if it comes under the list of qualified professions.
Self-employment income tax
- The income is taxed at a normal progressive rate unless it comes under the eligible profession category.
- This income is subjected to social security contributions unless the resident already contributes to another social security system.
- It is optionally taxed at a flat rate of 20%. Residents can choose to pay the usual progressive rate if the amount is less than this.
- Tax-exempted if the money earned is from an eligible profession and comes from a foreign country with a DTA with Portugal.
Royalties and income from financial assets
- You will be exempted from tax if your income source is from a country that has a a DTA with Portugal.
- You will be exempted from tax if your foreign source income is not from a country with a DTA but is not blacklisted tax haven.
- If your foreign source income is from a country which is blacklisted tax haven then tax will be levied at 28% or 35%.
Tax on Real estate income and capital gains
- You will be tax exempted if your real estate income or capital gains comes from a country with a DTA.
- You will be exempted from paying tax if your real estate income/capital gains is from a country without a DTA but is not a blacklisted tax haven.
Capital gains from the disposal of securities
- Tax is levied on capital gains from the disposal of securities like shares, bonds, etc. at an optional rate of 28%, or 35% if the source of gain is from a blacklisted tax haven.
Pension income Tax
- Since March 2020, pension income is taxed at a flat rate of 10%.
Tax on Portuguese source income under the NHR tax regime
Employment income Tax
If your employment falls under the eligible professions category, then tax is payable at usual progressive tax rates.
If your employment is categorized under one of the qualified NHR tax regime professions, then you will need to pay an optional tax rate of 20%. Otherwise, you can also pay the usual progressive tax rates, which are less.
Self-employment income tax
If your employment falls under the eligible professions category, then tax is payable at usual progressive tax rates.
If your employment is one of r the qualified NHR tax regime professions, then you need to pay an optional tax rate of 20%. Otherwise, you can also pay the usual progressive tax rates, which are less.
Real estate income and capital gains
You need to pay a rental income tax that is charged at an optional rate of 28%, or you can pay by the usual progressive tax rates.
Net capital gains are taxed at 50%, which is charged as per the usual progressive rates.
Pension income tax
This type of income is usually taxed at 10%.
Portuguese tax table for 2022
|INCOME (€)||TAX RATES (%)||BAND (€)||TAX ON BAND (€)||CUMULATIVE TAX (€)|
|0 – 7,091||14.5||7,091||1,028||1,028|
|7,092 – 10,700||23||3,608||830||1,858|
|10,702 – 20,261||28.5||9,561||2,725||4,583|
|25,001 – 36,856||37||11,655||4,386||10,627|
|36,857 – 80,640||45||43,783||19,702||30,329|
NHR Tax Regime – Application process
Here is a step-by-step guide on the application process of the NHR tax regime in Portugal.
Step 1 – Proof of residency
As a first step, you need to first prove that you have the legal right to reside in Portugal.
If you are a citizen of the EU/EEA or Switzerland, you can register without a visa. You can complete your registration for residency in your region’s city hall (municipality). Make sure to bring your passport and European Health Insurance Card (EHIC) card for the procedure.
If you are a non-EU citizen, you must first obtain a residence permit so that you are able to reside in Portugal. You can either obtain the permit through the Portugal Golden visa Program or through the route of Passive income (D7 Visa). You can obtain residency online or you can contact your country’s Portuguese embassy.
Step 2 – Obtain NIF number (Portuguese tax identification number)
If you are planning to initiate a business in Portugal or any other legal activities, you need to then obtain the NIF number. The NIF number is a nine digit tax identity number that non-residents can get through their representative/lawyer in Portugal. If you are a resident in Portugal, then you can obtain it directly in a local tax office. You need to carry your ID card/passport and proof of residency.
Step 3 – Register as a tax resident in Portugal
Once you obtain your NIF number, you should register yourself as a tax resident in your nearest Finanças (finances office).
Step 4 – Application for NHR tax regime
After you complete all the processes, you must register at the corresponding government website. For your registration process, you will require a NIF number, email address, phone number, and fiscal address. Once your registration is done, you will get a password by post within two weeks. You can then visit the application site to complete your application. You will need to share the following documents:
- A document that mentions that you were not a tax resident in Portugal in the last five years.
- Your last five years’ tax returns.
- Your rental agreement or a deed of a property in Portugal.
Things to keep in mind
In order to apply for the NHR regime in Portugal, you need to first register yourself as a resident of Portugal.
- Applicants for the NHR Portugal tax regime must have proof of habitual residence by December 31 and the application needs to be submitted before March 31.
- You need to wait for around two weeks for the approval/rejection of your application.
- The NHR status in Portugal is granted for a period of 10 years. You are considered as a non-habitual resident from the date on which you become a resident of the country.
NHR regime for UK residents
Since Portugal has a double taxation agreement with the United Kingdom, the taxation for British citizens remains the same under the NHR tax regime. The Portuguese government has mentioned that British citizens living in Portugal as residents will continue to exercise all their rights after Brexit.
NHR regime for US citizens
If you are a citizen of the United States, then you can definitely apply for the NHR Tax regime. To obtain NHR tax status, you need to live abroad, you should not have been a resident in Portugal within the last five years and you should want to live in Portugal. To register yourself as a resident in Portugal, you will need to stay in the country for 183 days in a year or should have a primary home there.
Portugal Golden Visa Program
The Portugal Golden Visa program was launched in 2012 and remains one of the most popular and attractive residency by investment programs in the world. This five year residency permit program offers non-EU residents residency in the country in return for an economic investment.
Portugal Golden Visa – Benefits
- You can travel visa-free to more than 172 countries with a Portugal Golden Visa.
- You can obtain residency in return for a minimum investment of 250K.
- You can qualify for an European passport after five years of residency.
- The country has a thriving economy and offers a lucrative real estate market.
- You have the option to become a non-habitual resident and enjoy tax exemptions.
- The stay requirement is very short.
- You can include your family in your Golden visa application.
Benefits for family members
One of the most attractive benefits of the Portugal Golden Visa program is that you can include your family members while applying for the resident permit in Portugal. The Portugal Golden Visa offers a second residency in Portugal and provides an array of benefits to the applicant as well as his/her family members.
You can include the following family members in your application for the Portugal Golden Visa:
- Your spouse or your legal partner.
- Your children under the age of 18.
- Dependent children under the age of 26 as long as they are single and enrolled as full-time students or can prove that they are financially dependent on the parents.
- Parents of either spouse, if over the age of 66 (or 55 and dependent to the applicant).
- Siblings under the age of 18 from either spouse or the partner if they are legal guardians, as determined by the courts.
Portugal Golden Visa – Requirements
An applicant needs to meet the following criteria to be eligible for the Portugal Visa Program:
- The applicant needs to be either non-EU, non-EEA citizen, or non-Swiss.
- The applicant should make a minimum investment of €250,000. He/she can choose from the various investment routes that are available.
- The applicant should have no criminal record.
- The applicant should spend a minimum of seven days in Portugal for the first year, then no less than 14 days each subsequent two-year period – this is the minimum stay. requirement for Portugal Golden Visa Program.
Portugal Golden Visa Processing Time
The processing time for your Portugal Golden Visa application is relatively short.
Year 0 – Portugal Golden Visa is issued, which is valid for two years
Year 2 – The residence permit needs to be renewed. After renewal, it is again valid for two years
Year 4 – Residence permit needs renewal and is valid for the next two years
Year 5 – You can request for both permanent residence or citizenship or you can renew your Golden Visa on year 6
Portugal Golden Visa application timeline
Step 1: Onboarding
After you decide on your route of investment for the Portugal Golden Visa, you must start collecting the necessary documents both for yourself and the paperwork of dependents included in your application.
Step 2: Bank account and NIF
You will need to get your NIF number (Tax Identification Number) in Portugal. Note that you will need to have a fiscal representative to get a NIF number in Portugal.. Once you obtain your NIF number, you can proceed to open your bank account. You can get a NIF number and open your bank account remotely with the help of an immigration agent.
Step 3: Make the investment
You can make your investment through your preferred investment route. Your agency can help you collect and submit all paperwork for your investment to ensure a smooth investing experience.
Step 4: Online application
You need to submit your Golden Visa application online.
Step 5: Pre-approval
If you meet all the requirements, your application will be pre-approved.
Step 6: Biometrics
After you book your interview, it will take you around two months to attend a biometrics session in person. Note that this process can take longer in certain situations.
Step 7: Issue of Golden Visa
Once your biometrics are collected, it takes around four months to get your Golden Visa approved by SEF. After you pay the government permit issue fee, you can then obtain your residence permit.
Portugal Golden Visa – Investment options
To obtain a residence permit in Portugal, you need to make an economic investment in the country. The thriving economy of the country attracts foreign investors from all around the world to invest in Portugal. Investment options include the following:
Residential real estate
You can purchase residential real estate in designated interior areas of Portugal that cost a minimum of €500,00,0 or €350,000 if you are investing in a rehabilitation project. If your residential property is located under the ‘low density’ area category, then a 20% discount will apply. You can learn more more by reading our article: Low Density & Interior Eligible Areas for the Portugal Golden Visa 2022
Commercial real estate
You need to invest a minimum of €500,000 if you are planning to purchase a commercial real estate. There are no location restrictions if investing in commercial property. If you are investing in a rehabilitation project, you need to invest a minimum amount of €350,000. If your commercial property is located under the ‘low density’ area category, then a 20% discount will be applicable.
Buy real estate on Madeira or Azores
You can invest a minimum of €500,000 if you are planning to purchase a real estate in the islands of Madeira or Azores. If you are investing in a rehabilitation project, you need to pay a minimum amount of €350,000.
Read our article: How to Buy a Property in Portugal to know more.
You can make a minimum contribution of at least €500,000 in a qualified investment fund.
You can choose to make a capital transfer of a minimum amount of €1.5 million.
You can contribute a minimum amount of €500,000 in Science and Technology research.
Company incorporation and creation of ten jobs that will amount to value of at least €500,000.
You can support the arts or reconstruction of national heritage by making a donation of minimum €250,000.
Important note: Recently, Portugal updated its Golden Visa Program and rolled out certain changes, especially in the investment criteria section. To know more about the changes, you can read our article: Understanding the Portugal Golden Visa Changes 2022
Portugal Golden Visa – Documents required
- Portuguese Golden Visa application form.
- Your copy of a valid passport and travel documents.
- Deed or contract of the purchased property or signed promissory contract with proof of your deposit payment.
- Declaration from your bank in Portugal authenticating the transfer of funds.
- Health Insurance proof in Portugal (only required if you reside in Portugal).
- Certified copy of your criminal certificate or a police clearance letter from your country of origin.
- A completed form allowing SEF (Serviço de Estrangeiros e Fronteiras) to get a copy of your Portuguese criminal records.
- Declaration from you confirming compliance with the investment requirements.
- Documents showing a good relationship with the Portuguese Tax and Customs Authority and Social Security system. These can be issued 45 days prior to your online application.
- A receipt as proof that you paid the application processing fee.
An applicant must note that the certificates of criminal records or police clearance letters should have been issued no more than 90 days before submitting your application. For all other certificates for submission, the timeline is 180 days.
Legalizing Portuguese Golden Visa documents
All your Portugal Golden visa documents and application form must be legalized and translated into Portuguese with the help of a certified translator. You must note that your documents can be legalized either by the Portuguese Consulate or by the Apostille of The Hague Convention.
Translation of Portugal Golden Visa documents
In addition to your original documents, you also need to submit a copy of your documents translated in Portuguese. This can be done through the following ways:
- It can be translated by a translator who is accredited by the Portuguese Consulate.
- By getting the translation certified by a Portuguese lawyer.
- By the issuing country’s consulate in Portugal.
Portugal Visa Free countries
|Angola||pre-visa on arrival|
|Antigua and Barbuda||visa-free/180 days|
|Bahrain||visa on arrival / eVisa/30 days|
|Bangladesh||visa on arrival/30 days|
|Bosnia and Herzegovina||visa-free/90 days|
|Burkina Faso||visa on arrival/30 days|
|Burundi||visa on arrival/30 days|
|Cape Verde||visa-free (EASE)/30 days|
|Central African Republic||visa required|
|Comoros||visa on arrival/45 days|
|Congo (Dem. Rep.)||eVisa/90 days|
|Costa Rica||visa-free/90 days|
|Cote d’Ivoire (Ivory Coast)||pre-enrollment/90 days|
|Cuba||tourist card/30 days|
|Egypt||visa on arrival / eVisa/30 days|
|El Salvador||visa-free/90 days|
|Equatorial Guinea||visa required|
|Ethiopia||visa on arrival / eVisa|
|Gabon||visa on arrival / eVisa/90 days|
|Guinea-Bissau||visa on arrival / eVisa/90 days|
|Hong Kong||visa-free/90 days|
|Indonesia||visa on arrival/30 days|
|Iraq||visa on arrival/60 days|
|Jordan||visa on arrival|
|Laos||visa on arrival / eVisa/30 days|
|Lebanon||visa on arrival/30 days|
|Madagascar||visa on arrival / eVisa/90 days|
|Malawi||visa on arrival / eVisa/30 days|
|Maldives||visa on arrival/30 days|
|Marshall Islands||visa-free/90 days|
|Mauritania||visa on arrival|
|Mozambique||visa on arrival/30 days|
|Nepal||visa on arrival/90 days|
|New Zealand||eTA/90 days|
|Nigeria||pre-visa on arrival|
|North Korea||visa required|
|North Macedonia||visa-free/90 days|
|Oman||visa on arrival / eVisa/14 days|
|Papua New Guinea||visa on arrival / eVisa/60 days|
|Russian Federation||visa required|
|Rwanda||visa on arrival / eVisa/30 days|
|Saint Kitts and Nevis||visa-free/90 days|
|Saint Lucia||visa-free/90 days|
|Sao Tome and Principe||visa-free/15 days|
|Saudi Arabia||visa on arrival / eVisa/90 days|
|Seychelles||tourist registration/90 days|
|Sierra Leone||visa on arrival/30 days|
|Solomon Islands||visa-free/90 days|
|Somalia||visa on arrival/30 days|
|South Africa||visa-free/90 days|
|South Korea||eTA/60 days|
|Sri Lanka||eTA/30 days|
|St. Vincent and the Grenadines||visa-free/30 days|
|Suriname||eTourist card/90 days|
|Tanzania||visa on arrival / eVisa|
|Togo||visa on arrival/7 days|
|Trinidad and Tobago||visa-free/90 days|
|United Arab Emirates||visa-free/90 days|
|United Kingdom||visa-free/180 days|
|United States of America||eTA/90 days|
|Viet Nam||eVisa/30 days|
|Zambia||visa on arrival / eVisa/90 days|
|Zimbabwe||visa on arrival/90 days|