For over a decade, Portugal’s Non-Habitual Resident (NHR) regime served as a powerful magnet for investors, entrepreneurs, and retirees. With its attractive tax breaks and European lifestyle, it helped transform the country into a global hotspot for relocation and investment.

As of 2024, the original NHR program has been replaced by a new framework known as NHR 2.0. Officially referred to by the government as IFICI (Incentivo Fiscal à Investigação Científica e Inovação), it is also commonly called TISRI, short for Tax Incentive Scheme for Scientific Research and Innovation. Despite the different names, they all refer to the same regime.

While the revamped version is more selective, it still offers significant tax advantages, but only for individuals aligned with Portugal’s long-term strategic goals.

Why Portugal Replaced the Original NHR

The original NHR attracted tens of thousands of foreign residents. However, critics argued it contributed to rising property prices and economic disparity, especially in Lisbon and Porto.

In response, the Portuguese government launched NHR 2.0 to:

●        Better target high-value sectors

●        Encourage innovation and research

●        Support sustainable economic development

If you're unsure whether you still qualify or how the new rules affect your situation, here's a comprehensive breakdown of Portugal”s NHR 2.0 tax regime.

This guide walks you through eligibility, tax implications, and application strategies under NHR 2.0.

Who Is Eligible Under NHR 2.0?

Unlike the previous regime, NHR 2.0 is reserved for professionals in specific fields and looking to invest into the Portuguese economy through one of the many routes available, which range from dedicating their expertise to a Portuguese certified start-up to incorporating a company in Portugal within one of the qualifying codes of activity. Applicants must prove their eligibility with contracts, certifications, or official validation from Portuguese institutions.

Tax Benefits of NHR 2.0

Qualified individuals can access the following incentives:

●        Flat 20% income tax on qualifying Portuguese-sourced income

●        Tax exemptions on most foreign-sourced income

●        10-year benefit period for qualifying individuals

Who Is Left Out?

Some groups no longer qualify under the new rules, including:

●        Retirees with no professional activity

●        Individuals not engaged in Portugal’s “strategic sectors”

Portugal Remains a Top Relocation Destination

Despite a narrower scope, Portugal continues to offer:

●        Visa-free EU travel

●        300+ days of sunshine per year

●        A fast-growing tech and startup ecosystem

●        Lower cost of living compared to other EU nations

NHR 2.0 is still one of the most competitive tax regimes in Europe for those who meet the criteria.

A New Chapter for Portugal’s Tax Landscape

Portugal’s shift from the broad-based NHR regime to the more selective NHR 2.0 marks a new phase in the country’s global positioning. While the door has closed for retirees without economic ties, it has opened wider for highly skilled professionals, researchers, and innovators who align with Portugal’s vision for a modern, competitive, and sustainable economy.

For those who qualify, the benefits remain powerful, offering not only tax relief but also access to a thriving EU market, a high quality of life, and a future-facing environment for innovation.

Whether you're an entrepreneur, researcher, or remote worker, now is the time to assess how Portugal’s new rules can work in your favor.