Moving to Portugal is exciting, but the legal side can feel uncertain at first. Questions about when you become a tax resident, how your global income will be treated, or whether you can qualify for NHR2.0 often come up early in the process.
This story from our Tax Planning team shows how timing and structure can quietly shape your experience. It’s about more than taxes, it’s about starting your new life in Portugal with clarity and confidence.
What Is the Fresh Portugal Tax Plan?
AtFresh Portugal, ourTax Planning serviceis designed to help expatriates and globally mobile professionals understand how their worldwide income streams will be taxed in Portugal — and how to make the most of the country’s generous fiscal benefits.
We base our work on thePortuguese tax code,international double-tax treaties, and the latest Autoridade Tributária (AT)rulings, offering strategies that ensure:
- Compliancewith Portuguese and international tax law.
- Mitigation of riskssuch as retrospective taxation or missed deadlines.
- Optimisation of benefitsunder regimes likeNHR / NHR2.0.
- Accurate reporting, which can save clients thousands of euros each year.
In short: we translate complexity into clarity, giving you peace of mind that your move to Portugal won’t come with unexpected fiscal surprises.
Case Study: An American Couple Relocating Under the D7 Visa
Background
A U.S. couple, recently approved for theirD7 visasthrough the VFS Centre in San Francisco, reached out to us for support.
- Thewifehad a formalW-2 salaryfrom a U.S. employer.
- Thehusbandheld a substantialinvestment portfoliogenerating dividends, interest, and capital gains.
- TheirD7 visas were approved in October 2024, and theirAIMA appointment in Portugal was scheduled for February 2025.
- They planned toarrive in Portugal in early December 2024, after selling their property in California and purchasing a new home in the Algarve.
Like many newcomers, they believed they could only becomePortuguese tax residentsafter their AIMA appointment and residency card issuance in 2025.
Our Analysis and Recommendation
During a detailed video consultation, our tax lawyers reviewed all their income sources and relocation timeline.
We identified that under Portuguese tax law and internal AT guidance, the couple could triggerPortuguese tax residency upon arrival in December 2024, even before their AIMA meeting.
Why?
Because theATallows theaddress on the NIF (Portuguese Tax Number)to be changed from abroad to Portugal when the taxpayer can prove:
- Avalid visaapproved by the VFS,
- Afuture AIMA appointment date, and
- Physical presence and clear intentto reside in Portugal.
This meant they couldlegally become tax residents in 2024, without needing to stay 183 days in the country.
We prepared the necessary powers of attorney and updated their fiscal address with the Tax Office on 3 December 2024, the day they arrived in Portugal. From that moment, they were officially recognised as Portuguese tax residents.
Why Timing Is Critical and the Risk of Audit
TheNHR2.0regime — Portugal’s updated non-habitual resident incentive — must be met (eligibility criterion)in the same year you become a tax resident.
If the couple had waited until 2025 to trigger residency, they would havemissed the NHR2.0 application window, since anyretroactive reclassificationby the Tax Authority could backdate their residency to 2024.
This risk is real.
The Portuguese Tax Authority (AT) hasaudit powersto cross-check residency information through various channels — such as the NIF system, real estate registries, utility bills, vehicle registrations, gym memberships, telecom contracts, and even restaurants/supermarkets invoices issued under your Portuguese NIF.
In this case, because the couple would already be:
- Living in theirnew Algarve home,
- HoldingPortuguese NIFsused in day-to-day purchases,
- Havingbank accounts, mobile numbers, and evena car registered in Portugal,
— the AT could easily determine that they had establishedfactual residencein December 2024.
If the couple had only registered their tax residency after their AIMA meeting in February 2025, the AT could haveretroactively deemed them tax residents from December 2024. That would triggertwo main consequences:
- Financial Penalty– They could face backdated taxation for December 2024, includinglate payment interest and fines.
- Major Strategic Loss– They wouldlose eligibility for NHR2.0, as the regime must be requestedby the beginning of the year following the first year of tax residence. Missing this deadline means losingten years of potential exemptionson foreign income.
By anticipating theirtax residency trigger date, we not only ensured compliance but alsoprotected them from this retroactive audit risk, locking in their eligibility for NHR2.0.
Structuring Income for Tax Efficiency
The Husband’s Portfolio Income
WithNHR2.0in place, hisforeign passive income— dividends, interest, and capital gains — becameexempt in Portugal for 10 years, instead of being taxed at the standard28% flat rate.
The Wife’s Employment Income
Because income from workperformed physically in Portugalis consideredPortuguese-sourced, we reviewed her W-2 arrangement carefully.
We explained her two options:
- Employer of Record (EOR)arrangement in Portugal, or
- Registration of her U.S. employer in Portugal,
— both of which would lead toPortuguese social security (11% employee + 23.75% employer)andprogressive tax rates up to 48% + (2,5%-5%) solidarity tax.
After consulting with ourFresh Opsteam, she chose a more strategic and compliant solution: sheterminated her W-2 contractand formed aU.S. multi-member LLC, managed entirelyoutside Portugal.
This structure isfully supported by AT binding rulings (2016 & 2024)and, combined with the NHR2.0 regime, allows her to receive incomeexempt from Portuguese taxfor 10 years while maintaining compliance in both jurisdictions.
Outcome
- Both becamePortuguese tax residents in December 2024.
- TheirNHR2.0 applicationswere filed on time in early 2025.
- Thehusband’s investment incomeis exempt from Portuguese taxation for the next decade.
- Thewife’s LLC structureensures compliance, flexibility, and efficiency.
- Fresh Portugalcontinues to handle theirannual filings, coordinating between the Portuguese and U.S. teams for full cross-border compliance.
NHR2.0 Eligibility and Strategic Timing
Many clients assume they can’t qualify for thenew NHR2.0 regime, but our team specialises in analysing timing and structure to make it possible.
In this couple’s case, we had onlyone month — December 2024 — to secure eligibility.
Withintwo weeks, we helped them obtainboard member positionsin Portuguese startups, fulfilling the criteria for the NHR2.0 application.
Today, both are active contributors to Portugal’s tech community, mentoring founders and supporting innovation — turning their relocation into a success story for themselves and for Portugal’s economy.
More Than a Tax Plan — A Life Plan
OurTax Plandoesn’t end at delivery. Every year, duringtax season (April–June), we have our tax return service to meet again with clients to prepare and file their Portuguese tax returns, ensuring all NHR annexes are completed accurately and align with their global filings.
This ongoing support prevents double taxation and keeps clients compliant — year after year.
We take pride in offering:
- Exclusive, personalised service
- A multidisciplinary international team(Portugal, US, UK, and beyond)
- Deep expertisein Portuguese fiscal law and international treaties
- A genuine passionfor helping expats thrive in Portugal
Behind Every Fresh Portugal Tax Plan — Real Expertise You Can Trust
This specific tax plan was crafted by Fresh Portugal’s tax lawyers, both fully licensed in Portugal:Raquel Simões, an experienced tax attorney with an outstanding academic record from one of Portugal’s top law schools and professional experience ata Big Four firm; andHenrique Faria, who holds a Master’s in International Taxation (LL.M.) from theUniversity of California, Berkeley Law.
Every Fresh Portugal Tax Plan is carefully developed by two fiscal lawyers, who combine their perspectives, technical expertise, and experience with similar cases to design tailored, strategic solutions for each client.
You can learn more about our professionals on our website atwww.freshportugal.com.
Thinking About Moving to Portugal?
If you recognise parts of your own situation in this story, such as planning a move, managing income from different countries, or wondering how Portugal’s tax rules will apply, it’s worth taking time to plan ahead.
Getting the timing and structure right early makes settling in Portugal simpler and helps avoid surprises later.
