Non-Habitual Resident 2.0 / IFICI

Commonly referred to as the “Non-Habitual Resident Regime 2.0,” IFICI is a special tax regime introduced in 2024.

It aims to provide tax benefits to highly qualified professionals who transfer their fiscal and permanent residence to Portugal under the terms of the Personal Income Tax Code (“CIRS”).

This regime applies to individuals performing highly qualified and eligible professional activities within Portuguese territory, as defined by applicable legislation and a government ordinance (yet to be published).

Tax Benefits for Foreign Investors in Portugal.

ELIGIBILITY REQUIREMENTS

To qualify for the IFICI regime, the following criteria must be met:

Only taxpayers engaged in eligible professional activities may benefit from the tax incentive for scientific research and innovation.
Taxpayers who become fiscal residents in Portugal from 2024 onwards and were not residents in Portuguese territory during the previous five years.
Taxpayers who have not benefited from or opted for taxation under the Non-Habitual Resident (NHR) Regime or the fiscal regime applicable to former residents.
Employers cannot deduct wage expenses under the Tax Support Regime for Investment (“RFAI”).
Taxation under the regime, for each year of the 10-year duration, depends on the taxpayer being fiscally resident in Portugal and earning income from eligible activities. If a new activity begins within six months of the termination of a previous activity, eligibility is maintained.
Taxpayers must submit a new registration request if the responsible entity or verifying company changes.
Taxpayers must notify the relevant entity by January 15 of the following year if eligibility requirements are no longer met or if there are changes in registration details, including the termination date of the previously performed activity.
The regime may only be used once per taxpayer.

ELIGIBLE ACTIVITIES AND PROFESSIONS

To benefit from this favorable tax regime, taxpayers must meet the above requirements and be employed in one of the following highly qualified roles:

A) Teaching in higher education and scientific research, including scientific employment in entities, structures, and networks dedicated to producing, disseminating, and transmitting knowledge within the national science and technology system, as well as jobs and corporate roles in recognized technology and innovation centers.
B) Qualified roles and corporate positions within the framework of contractual benefits for productive investment (tax benefits valid for up to 10 years for eligible projects with relevant investments equal to or exceeding €3,000,000).
C) Highly qualified professions, defined by an ordinance from government officials responsible for finance and economy, carried out in:

Companies with significant investments benefiting from or eligible for the tax support regime for investment (Chapter III, Investment Tax Code) within the last five years or at the start of the role.
Industrial and service companies, primarily operating under CAE codes specified by government ordinance, exporting at least 50% of their turnover in the current or previous two years.

Highly Qualified Professions include the following Portuguese Classification of Professions (CNP) codes:

112 — CEOs and general managers.
12 — Administrative and commercial services directors.
13 — Production and specialized services directors (excluding 1349).
21 — Specialists in physical sciences, mathematics, engineering, and related fields (excluding 216).
2163.1 — Industrial or equipment product designers.
221 — Physicians.
231 — University and higher education professors.
25 — ICT specialists.

Professionals must possess:

Level 8 qualifications under the European Qualifications Framework or ISCED.
Level 6 qualifications under the same frameworks, with at least three years of professional experience.

D) Other qualified roles and corporate positions in entities recognized by AICEP or IAPMEI as relevant to the national economy, particularly in attracting productive investment and reducing regional disparities.
E) Research and development personnel whose costs are eligible for fiscal incentives (employees with a minimum Level 4 qualification under the National Qualifications Framework, directly involved in R&D tasks).
F) Jobs and corporate positions in certified startups.
G) Jobs or other activities performed by fiscal residents in the Autonomous Regions of the Azores and Madeira (subject to regional legislative decrees).

LEGAL DEADLINE

Taxpayers registered as residents in Portugal must submit their registration requests for this regime by January 15 of the year following the year they become residents.

TAXATION OF INCOME

Portuguese-sourced income from employment and services (Categories A and B) within eligible activities under the IFICI regime is taxed at a flat rate of 20%, instead of the general progressive rates (14.5% to 53%), plus social security contributions.
Other Portuguese-sourced income is taxed at normal applicable rates.
Foreign-sourced income, including income from employment, services, capital, property, and capital gains, is exempt from Portuguese taxation but must be included in determining the tax rate applied to other taxable income.

Exceptions:

Pension income is fully taxed in Portugal under the general progressive rates (14.5% to 53%).
Income from entities in tax havens may be taxed at an increased rate of 35%.

DURATION

IFICI tax benefits are limited to 10 consecutive years from the year of registration as a fiscal resident in Portugal, with no extensions permitted.

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