Portugal remains one of the most attractive destinations for expats, investors, and entrepreneurs looking for a favorable tax environment and a pathway to EU citizenship. With recent changes to tax policies, NHR 2.0, officially known as the Tax Incentive for Science, Research, and Innovation (TISRI), has replaced the original NHR regime.
For investors considering the Portugal Golden Visa, understanding the TISRI framework is crucial. The new tax regime offers a strategic alternative that, if utilized correctly, can be even more advantageous.
Who Should Consider Portugal’s Golden Visa?
The Portugal Golden Visa remains one of the best residency-by-investment programs in Europe. However, it’s most beneficial when combined with strategic tax planning under the NHR 2.0 (TISRI) tax regime.
Golden Visa applicants typically fall into three categories:
1. Investors Seeking a Portuguese Passport Without Moving
- Apply for the Golden Visa to secure Portuguese citizenship by investment in five years without becoming a tax resident.
- Requires only seven days of stay per year, making it ideal for those seeking a ‘Plan B’ residency option.
2. Expats Planning to Move to Portugal in the Future
- Many Golden Visa applicants are looking to relocate to Portugal in the future, often concerned about political stability in their home countries.
- Since visa/residency options such as the D7 has strict minimum stay requirements (at least 6 months per year in the country) and may not be available in the future, securing a Golden Visa in Portugal now guarantees a pathway to Portugal citizenship by investment.
3. Those Moving to Portugal Immediately
- If you plan to relocate right away, the Golden Visa is NOT the best option.
- Alternatives like the D7 (for passive income earners), D8 (for digital nomads), or D3 (for highly qualified professionals) are usually more suitable.
Portugal’s Golden Visa: Tax implications
Many applicants do not initially consider tax implications when applying for the Golden Visa in Portugal. However, once they move to Portugal, they must comply with local tax laws. Portugal is known for its high tax rates, but with the right tax benefits, it can be a low-tax jurisdiction.
The key takeaway is:
- If you stay in Portugal for more than 183 days per year, you become a tax resident.
- Tax benefits are crucial for those who plan to eventually reside in Portugal.
- With NHR gone, applicants must explore the new TISRI regime.
What is NHR 2.0 (TISRI)? Understanding Portugal’s New Tax Regime
TISRI is not a direct replacement for the old NHR regime. Instead, it offers targeted incentives based on involvement in Portugal’s innovation ecosystem. Unlike the NHR, which was available to any foreigner who moved to Portugal and had not been a tax resident in the previous five years, TISRI has specific eligibility criteria.
To benefit from NHR 2.0 (TISRI), you must:
- Work in science, research, or innovation in Portugal.
- Be involved in a certified Portuguese startup or economic activity.
- Invest in Portugal’s entrepreneurial and innovation ecosystem.
For those who qualify, TISRI offers significant exemptions:
- Foreign-sourced income (except pensions) is fully exempt from Portuguese taxation.
- Applies to foreign-sourced capital gains, dividends, interest, rental income, employment and self-employment income, provided they are not sourced from tax havens.
- This is particularly beneficial for non-Americans, who previously faced full taxation on capital gains in Portugal.
How Golden Visa Investors Can Access NHR 2.0 (TISRI) Tax Benefits
While Golden Visa does not automatically grant tax benefits, investors can strategically qualify for NHR 2.0 (TISRI) by engaging in eligible economic activities.
- Invest in Certified Startups– Golden Visa investors can structure their investments to support Portugal’s innovation sector, making them eligible for NHR 2.0 tax advantages.
- Negotiate Board or Employment Positions– Some Portugal-based venture capital funds allow Golden Visa investors to take board positions, fulfilling NHR 2.0 (TISRI) requirements.
Given that not all funds are aware of this new structure, it is essential for investors to:
- Work with professionals, such as Fresh Portugal, who understand the intersection of Golden Visa Portugal and TISRI.
- Negotiate with funds to secure a position in a certified startup.
- Ensure compliance with TISRI requirements before moving to Portugal.
A Win-Win for Investors and Portugal Citizenship by Investment
Portugal’s tax policies are evolving, and with NHR 2.0 (TISRI), the focus is now on fostering innovation and strategic investment. This presents a win-win scenario: investors can secure Portuguese residency while benefiting from one of Europe’s most attractive tax regimes, as long as they align their investments with Portugal’s economic priorities.
Fresh Portugal continues to assist investors in navigating these changes, structure their Golden Visa investments and optimize their financial strategy for the best possible outcome.
