IFICI in Portugal
A Practical Tax Regime for Professionals, Entrepreneurs and Investors
Portugal has introduced a new tax incentive designed to attract highly qualified professionals, entrepreneurs and investors: the Incentive for Scientific Research and Innovation (IFICI). This regime applies from 2024 onwards and reflects Portugal’s strategic focus on innovation, productivity and economic development. Unlike broader incentive frameworks used in the past, IFICI is activity-driven and highly targeted.
If you are thinking about moving to Portugal, or if you are planning to establish or expand a business in the country, understanding IFICI is essential.
What Is the IFICI Regime?
IFICI is a Portuguese tax regime available to new tax residents who perform eligible professional activities for eligible entities in Portugal.
It offers:
- A flat 20% tax rate on Portuguese employment or self-employment income linked to eligible activities
- A broad exemption on foreign-sourced income, subject to specific exceptions
- A 10-year duration, provided the eligibility conditions continue to be met
IFICI is designed to attract talent that actively contributes to Portugal’s economic and technological development.
Who Can Apply for IFICI in Portugal?
You may qualify for IFICI in Portugal if all of the following conditions are met.
New Tax Residency
You must become a Portuguese tax resident from 2024 onwards and you must not have been a Portuguese tax resident during the previous five years.
No Prior Use of Incentive Regimes
You must not have previously benefited from:
- The Non-Habitual Resident (NHR) regime
- The former residents’ incentive regime (“Programa Regressar”)
IFICI may only be used once per taxpayer.
Performance of an Eligible Activity
You must perform a highly qualified professional activity or act as a member of a statutory body and the activity must be carried out in Portuguese territory.
Relationship With an Eligible Entity
You must have a qualifying legal relationship to apply for IFICI in 2026, such as:
- An employment contract
- Appointment as a statutory body member
- In limited cases, a qualifying service agreement
Annual Eligibility
Eligibility is assessed on a yearly basis and you must remain a Portuguese tax resident and continue earning income from an eligible activity.
Registration and Ongoing Compliance
To access IFICI, you must apply by 15 January of the year following the year in which you become a tax resident in Portugal. If the eligibility conditions cease to be met, or if there is any change to the registration details, you must inform the relevant certifying entity by 15 January of the following year.
Eligible Roles and Business Activities
IFICI applies to professionals whose work supports Portugal’s economic growth, innovation and competitiveness and one of the most relevant eligibility routes involves roles in entities certified by AICEP or IAPMEI.
Examples of Eligible Professional Roles
- General and executive managers
- Directors of administrative, commercial, production or specialised services
- Directors in hospitality, retail and other services
- Specialists in physical sciences, mathematics and engineering
- Medical doctors
- University professors and higher education lecturers
- Finance and accounting specialists
- Information and communication technology specialists
- Film, television, theatre and radio directors and producers
- Intermediate-level technicians and professionals in science and engineering
Eligible Business Sectors
The employing entity must operate in at least one qualifying activity, including:
- Manufacturing and extractive industries
- Energy and utilities
- Construction
- Accommodation and food services
- Information and communication activities
- Financial and insurance activities
- Consulting, scientific and technical services
- Education
- Health and social support services
Professional titles alone are not sufficient to determine eligibility.
Both the role and the entity’s economic activity must be assessed against detailed statutory classifications. Members of statutory bodies may also qualify under this route.
Additional Eligibility Scenarios
IFICI also applies to other categories, each subject to specific requirements, including:
- Higher education, science and research roles
- Large productive investment projects
- Highly qualified professionals in export-oriented companies
- R&D personnel benefiting from fiscal incentives
- Job positions and statutory body members in certified startups
- Activities performed by residents in the Azores and Madeira (pending regulation)
In practice, the scope of IFICI is broad and covers a wide range of professional and entrepreneurial profiles.
Tax Benefits Under the IFICI Regime
IFICI benefits apply for 10 consecutive years, starting from the year of registration as a Portuguese tax resident.
Portuguese-Sourced Income
In practice, employment or self-employment income linked to eligible activities is subject to a flat tax rate of 20%. As a result, this regime replaces the standard progressive tax scale, which can reach a nominal rate of 53%. However, social security contributions remain applicable. By contrast, other Portuguese-sourced income continues to be taxed under the general rules.
Foreign-Sourced Income
Most foreign-sourced income is exempt from Portuguese taxation, including:
- Employment income
- Self-employment income
- Dividends
- Interest
- Rental income
- Capital gains
This income must still be reported in the annual tax return. The exemption applies with progression, meaning exempt income may influence the tax rate applicable to income taxed under the general progressive rules.
Important Exceptions
- Pension income is fully taxable at progressive rates
- Income sourced in non-cooperative jurisdictions is taxed at a 35% flat rate.
Correct classification of income is critical and often requires detailed tax analysis.
Is the IFICI Portugal in 2026 for You?
At first glance, the IFICI regime may appear complex. This apparent complexity often discourages potential beneficiaries from exploring it further. We frequently see new residents assuming they are excluded simply because they are not seeking employment in Portugal. That assumption is often incorrect.
If you own your own business, you may still qualify under IFICI. More importantly, your company may become an eligible entity through which you can benefit personally and offer this highly attractive tax framework to your employees. In practice, IFICI is not limited to traditional employment structures. Entrepreneurs, founders and business owners may qualify when the activity and corporate structure meet the statutory requirements.
For this reason, a case-by-case analysis is essential. Only a tailored assessment allows you to fully understand the conditions, structure the activity correctly and maximise the benefits available under the regime.
Why Professional Advice Matters for IFICI
IFICI is one of the most attractive tax regimes currently available in Portugal. However, it is highly technical and compliance-driven.
Professional advice is essential to:
- Confirm eligibility under the correct route
- Manage registration and annual compliance
- Assess foreign income and existing structures
- Ensure alignment with Portuguese anti-abuse rules
The IFICI regime does not override key tax principles, including:
- Place of effective management
- Controlled foreign company (CFC) rules
- The General Anti-Abuse Rule (GAAR)
A structured and informed approach is key to securing the benefits of the regime safely and sustainably.
Raquel Matos Esteves | Partner at RME Legal
Carlos Alcântara Neves | Senior Tax Advisor at RME legal
Disclaimer
This article is not legal advice and does not replace consultation with a qualified professional. Each case depends on its own specific facts, documents, and eligibility conditions. Families should always seek authorized legal guidance to confirm that all legal requirements are met before submitting any application.
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