IFICI / NHR 2.0 – A Complete Guide to the New Tax Regime for Expats in Portugal

(updated 2025)

March 7, 2025

This article is a practical guide to the new tax regime for people moving to Portugal, called IFICI by the government or in its popular name NHR 2.0. You may have also seen the name TISRI and abbreviation ofTax Incentive Scheme for scientific Research and Innovation. These are all different names for the same regime.
The tax regime has existed in the legislation of Portugal since January 2024 but it has only been fully and properly activated now, in March 2025, as we write this guide, withretroactive effect.

The highlights of this article will also be released in a video and a webinar that we will be creating shortly.

What is IFICI / NHR 2.0 – new a scheme of benefits for people moving to Portugal?

After an announcement of the imminent end of the previous tax benefits scheme, NHR, with a short notice, the government of Portugal has been heavily criticized for removing a scheme that had done so much to support the Portuguese economy.
In response, the government created IFICI, a new scheme which in many ways resembles the previous scheme but with some notable changes. As before, IFICI is a scheme that is meant for NEW tax residents in Portugal, but it is also open to Portuguese people who left the country and came back after 5 years of absence. In other words, the scheme is open to people who were not tax residents in Portugal for the last 5 years. It is not open to people who benefited from the NHR scheme.

The IFICI status can be maintained for up to 10 years so long that the taxpayer continues to meet the qualification conditions. After 10 years, it ends and the taxpayer needs to pay standard tax rates.

What are the benefits of IFICI / NHR 2.0?

The primary benefits of the IFICI are areducedtax rates on certain types of income and afull exemptionon other types.

Employment and self-employment income generated in Portugal

Qualifying employment and self-employment income may elect to benefit from a special tax rate of20%if the income was generated in Portugal (i.e. for work that had been done in Portugal). It is important to remember that social security is still due in addition to income tax.

Employment and self-employment income generated outside Portugal

Under the new scheme, foreign sourced income derived from employment and self-employment (for work done physically outside Portugal) will beexemptfrom tax in Portugal, as long as they do not come from a black-listed jurisdiction. It is important to remember that when we talk about income from work, it isthe place where the work is donethat dictates if the income is foreign-sourced or not, and notthe location of the employer. A remote worker working from Portugal is generating Portuguese sourced income and is subject to tax in Portuga

Foreign-sourced income from passive sources (except pension)

In addition, foreign sourced income (income coming from outside Portugal) from that is not derived from work, including capital gains, capital income (dividends, royalties, interest) and real estate income, arefully exemptfrom tax in Portugal, so long as they do not come from a black-listed jurisdiction.

Retirement income / pension /li]

it is important to note that pension income and many types of income from retirement accounts that fall under the definition of pension in Portugal is outside the scope of IFICI and is fully taxable in Portugal at progressive rates.

What are the benefits of IFICI / NHR 2.0?

The winners– foreigners with capital gains from securities, such as startup founders or service business owners exiting their foreign companies.
IFICI, unlike NHR, does not include a condition for the exemption of foreign income requiring such income to be potentially taxable in the other country. This means that capital gains from a foreign source, including in relation to securities, are fully exempt in Portugal under the legal criteria set out in IFICI.

The primary winners are therefore both investors who hold a portfolio of securities and anyone holding shares in a foreign company who expects a liquidity event in the future.

The losers- It has been extensively highlighted in the media that IFICI does not include any benefits covering pension income. Indeed,pension incomeis not covered by IFICI and is subject to full progressive taxation. The pensioners are therefore the main losers of the new scheme.

Who qualifies for IFICI / NHR 2.0?

To qualify for IFICI, a new taxpayer should have not been a tax resident in Portugal in the last 5 years. In addition, anyone who benefits from NHR status orIRS Jovemcannot apply for IFICI.
The original proposal for IFICI included only a few narrow groups, including research workers with a Ph.D., certain senior roles in the financial industry, professors in university.

However, following criticism, the government significantly extended the eligibility criteria to include additional groups:
Those who work for or members of the statutory bodies ofcertified startup companies.
Those working in Madeira/Azores, with the criteria for eligibility to be defined by the respective local autonomous governments.

We can resume it through the following eligibility paths:

1.

The startup route – IFICI for people working for / members of the statutory bodies of certified startup companies

Certifying entity: Startup Portugal
This broad criterion has been drafted to include anyone working for a certified startup company, regardless of their position or experience. In addition, the legislation includes anyone on the management body (e.g. board) of such a startup company.
Importantly, notall the incomeof the taxpayer needs to come from the certified startup. It is sufficient that the startup would pay a reasonable salary and the remaining income of the taxpayer can come from other sources.

The primary obstacle is that the startup needs to be “certified”. Otherwise, the benefits do not apply.[/li]

Joining a startup that is already certified

The easiest way to obtain a role in a certified startup is join a startup that has already obtained the required certification.
When the legislation originally passed in early 2024, at FRESH we identified the opportunity that this presents to startups in Portugal and have been advocating loudly within the ecosystem that startups should seek certification. And indeed, there is growing excitement in the Portuguese startup ecosystem about working with talented expats who have skills, contacts and capital. Working with local incubators, accelerators and VC funds, we have been expanding our network of already-certified startups that are happy and open to collaborate with expats. 
We believe that this is the best route available today to qualifying under the IFICI scheme quickly and also add the most value to Portugal and its economy.

Since the law grants status not only to employees but also to members of the statutory bodies,it will be possible to access the benefits by adding enough value to a startup, normally by making an angel investment in a certified startup and taking a board seat in that startup.

People who do not have angel investment experience but will find supporting Portuguese startups and taking an active role in them to be a fantastic experience and that is very much what the government is looking to encourage.

Certifying your own startup

If an expat intends to set up their own tech startup company, another option is to certify one’s own startup.
There are a number of routes for a startup to be certified. Firstly, any startup who received an investment from acertified VCor acertified angel investor or angel groupis automatically a certified startup. The VC or the angel need to be certified in Portugal, so qualifying under these criteria requires some external investment.

Another option for certification is via a combination of an approval from ANI and an endorsement of a startup incubator. The startup can also elect to be certified directly by one of two different bodies – one of them is Startup Program and the procedure for startup certification is already working.
At FRESH, we work with VC funds, as well as incubators and we have extensive experience certifying startups via all these routes.

2.

Export Companies - IFICI for people having certain activities and working for companies that are focused on export

Certifying entity: Tax Authority
Another route for qualification for IFICI involves the creation of a company that exports 50% or more of its turnover in one of the following fields:
Transformative Industries: Manufacturing and related activities (Divisions 10-33 of CAE).
Scientific R&D: Physical and natural sciences research (Group 721).
Information and Communication Technologies: Activities within Divisions 58-63.
Higher Education and Health Services: Subcategories related to university teaching and advanced medical services

Then, the benefits are offering to people in the following professions with at least a bachelor's degree and 3 years of proven experience, or a Ph.D. with no experience requirement:
Directors of companies and specialized service departments.
Experts in physical sciences, engineering, and IT.
Medical professionals and university professors.
Other roles requiring advanced technical qualifications.

In other words, to qualify under the export companies’ route, the taxpayer’s company should be in one of the trade areas mention above AND the expat himself should have a high value activity role AND at least a bachelor’s degree and 3 years of proven experience.

3.

Companies that are important to the national economy – IFICI for people working in certain companies and professions

Certifying entity: IAPMEI / AICEP
Another route to IFICI involves working within entities engaged in economic activities recognized as relevant to the national economy, particularly those aimed at attracting productive investment and reducing regional disparities.

In order to regulate the IFICI framework in detail, IAPMEI (up to 75M Euro) and AICEP (beyond 75M Euro) —agencies responsible for economic development in Portugal—have issued specific ordinances outlining the criteria to be considered for IFICI applications within their respective areas of competence. Below is a sum up of the criteria.

Eligibility Requirements:

The professionals must perform activities listed as “qualified jobs”

 Examples include: - General managers and executive directors
- Specialists in physical sciences, mathematics, engineering, and IT
 - Medical doctors
- University professors
 - Finance and accounting specialists
- Directors in hospitality, production, and administrative services

The company must operate within “relevant economic sectors”

Industries recognized for their contribution to investment and regional development, such as: - Extractive industries
- Manufacturing
- Energy production and distribution
- Construction
- Information and communication
- Finance and insurance
- Scientific research and consultancy
- Health and social care

Additionally, activities within projects recognized as Projects of Potential National Interest (PIN) or Interior Investment Projects (PII) are also eligible.

Individuals must hold at least Level 5 under the European Qualifications Framework (EQF) or International Standard Classification of Education (ISCED) – which corresponds to a post-secondary/bachelor degree. No need to prove experience.

For regulated professions, compliance with applicable legislation is mandatory.

Additional information may be requested by IAPMEI or AICEP, referring to the eligibility and the company/position details.

4.

People who move to Madeira/Azores (doesn’t work yet)

At the time of writing this article, the autonomous governments of Madeira and Azores are yet to define a criterion but considering the political orientation of these governments and the different approach that the islands have taken, historically, it is likely that the criteria will be wide and may include anyone living and working on the islands, including remote workers. In other words, the most likely outcome is NHR-alike benefits for anyone living on the islands and not retired. We will continue to follow this matter and update this guide accordingly. However, for now, there are no specific benefits for those moving to the islands.

5.

Scientific/Innovation Research and Academical Roles

Another pathway to obtaining IFICI is based on a slightly more restrictive criterion, aimed at highly qualified professions and positions, particularly in research and development roles within Portuguese academic and research institutions. The criteria are divided as follows:

Teaching and scientific research, including scientific employment in higher education institutions:

Entities, structures, and networks dedicated to the production, dissemination, and transmission of knowledge, integrated into the national science and technology system.

Positions directly involved in scientific research or innovation:

Members of governing bodies of entities recognized as technology and innovation centers, certified as such by the National Innovation Agency (ANI).

In this case, the IFICI certification is carried out by the Fundação para a Ciência e a Tecnologia (FCT).

IFICI / NHR 2.0 – How to Apply - General Guidelines for the Application Process:

Applications are always submitted via the Tax Authority’s portal. This is contrary to previous information provided by the government that applications will be submitted to the certifying authority.

Applicants must register for the IFICI regime by January 15 of the year following the fiscal year in which they establish residency in Portugal (except for income earned in 2024 – the deadline in 2025 is March 30). Depending on the nature of their activity, applications are the sent (by the tax authority) to one of several competent entities, including:

-The Foundation for Science and Technology (FCT): For higher education and scientific research. -The Portuguese Trade & Investment Agency (AICEP): For qualified positions under investment incentive agreements.
-The Portuguese Tax Authority (AT): For highly skilled professionals in companies with significant investments or export-driven revenue.
-IAPMEI: For activities considered essential to the national economy.
-The National Innovation Agency (ANI): For R&D projects eligible for tax incentives.
- Startup Portugal: For roles within certified startups.

Applicants are required to maintain detailed documentation to verify their eligibility, which must be presented to the Tax Authority upon request.

By January 15 of the following year, beneficiaries must report any changes in their eligibility through the Tax Authority Portal by logging in, completing the appropriate form, and submitting it along with the necessary supporting documents for review, whenever:The requirements for benefiting from the regime are no longer met; or
There is a change in the information provided at the time of registration.

If the reported change concerns the commencement of a new activity covered by the regime, the right to the benefit remains valid, provided that the new activity begins within a maximum period of six months after the termination of the previously exercised activity.

And what about the pensioners?

For income earned in 2024, the following deadlines apply:
Application submission: By March 30, 2025.
Certification by relevant entities: By April 15, 2025.

IFICI / NHR 2.0 – When to Apply? Key Deadlines

We urge pensioners not to panic. Whilst social security (US) / state pension (UK) will indeed be taxed using the progressive rates system, savvy expats who would switch their portfolio from pension products to investment products that are not pension, alongside meeting the qualification criteria of IFICI will be able to enjoy a full exemption of their foreign-sourced income.
We strongly recommend people not to make life-changing decisions such as where to live and where to move based on rumors or internet memes and to consider quality advice on the subject.

Next steps

On its face, IFICI is more complex than NHR but here at FRESH, we work tirelessly to make it simple. We already have significant infrastructure to support anyone wishing to move to Portugal and continue to enjoy tax benefits.
We are glad to say that the door of Portugal remains wide open and with excellent VISA opportunities, an attractive tax scheme that is even better for some than the previous one, and the famous beaches, great food and wonderful climate.

To move forward, we recommendbooking a consultation.

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