The end of NHR and Portugal's new fiscal strategy

Residential and wealth decisions begin well before the choice of a property — they begin with an understanding of the context in which that decision will be made. For more than a decade, the Non-Habitual Residents regime (NHR) was one of the principal factors considered by those contemplating establishing residency in Portugal. Its revocation for new applicants and the creation of IFICI have changed that framework. This Briefing is for those considering a move to Portugal, carrying out international activity or holding assets across multiple jurisdictions, and seeking to understand the current tax framework before deciding. Throughout, you will find answers to the most frequently asked questions: is NHR still available? What is IFICI and who can benefit? What has actually changed? And what should be analysed before changing your tax residency?

Current position

For more than a decade, the Non-Habitual Resident regime was one of the principal instruments Portugal used to attract international residents — skilled professionals, entrepreneurs and investors alike.

Created in a context where the country sought to sharpen its international competitiveness, the regime played a meaningful role in Portugal's strategy for attracting talent and capital.

From 2024, that strategy was redrawn. The NHR ceased to be available to new applicants and was replaced by the Incentivo Fiscal à Investigação Científica e Inovação (IFICI) — a more selective regime, oriented towards activities considered strategic to the Portuguese economy.

This change is more than a legislative adjustment. It reflects an evolution in the way Portugal seeks to compete internationally for talent, knowledge and innovation.

In this Briefing we examine that transition on the basis of official sources, drawing a clear distinction between fact, context and interpretation. More than explaining the legislation, we seek to answer the essential question: what does this change mean for those considering a residential or wealth decision in Portugal? In the final chapter, the Briefing moves beyond technical analysis — and offers a broader reading of what this shift reveals about how countries compete, and about what separates an opportunistic decision from a genuinely strategic one.

If you are considering establishing residency in Portugal, you have almost certainly come across references to the Non-Habitual Resident regime (NHR).

For many years, this regime was one of the principal factors weighed by highly skilled professionals, entrepreneurs, investors and retirees seeking a competitive tax framework within which to develop their personal and wealth projects.

That reality has changed. The NHR is no longer available to new applicants and has been replaced by a new fiscal framework operating under a different logic. The question is no longer simply where you wish to live — it now turns equally on what your activity contributes to the strategic objectives of the Portuguese economy.

This shift raises new questions for those considering residency in Portugal. Who can benefit from the new regime? What are the criteria currently in force? How does the IFICI compare with the former NHR? And, above all, what aspects must be examined before any residential or wealth decision is taken?

This Briefing seeks to answer those questions through analysis of the official sources currently available, maintaining a clear distinction between fact, context and interpretation. More than explaining legislative changes, it aims to help the reader understand the new framework within which decisions on residence, assets and investment are now made.

For more than a decade, the Non-Habitual Resident regime played an important role in Portugal's strategy for attracting international residents.

Created in 2009, at a time marked by the need to strengthen the country's economic competitiveness, the regime sought to position Portugal as an attractive destination for skilled professionals, entrepreneurs, investors and retirees wishing to establish tax residency in the country.

Over its lifetime, thousands of people transferred their residence to Portugal under this framework, helping to raise the country's international profile and stimulate activity across multiple sectors of the economy.

The economic, social and political landscape, however, evolved considerably. Over the years, debate around housing, fiscal competitiveness, innovation and the sustainability of public policy led to a reassessment of the instruments the state was using to attract new residents.

It was within this context that the legislature decided to revoke the NHR for new applicants and create a new fiscal regime with different objectives. More than replacing a tax benefit, this change represents a shift in Portugal's international attraction strategy. The priority is no longer simply to draw in new residents. It has refocused on attracting professionals, researchers and activities considered strategic to the country's economic and scientific development.

It is in this context that the Incentivo Fiscal à Investigação Científica e Inovação (IFICI) emerges.

In practical terms

If you are considering moving to Portugal, it is important not to assume that the current fiscal framework mirrors the former Non-Habitual Resident regime. Although both aim to strengthen Portugal's international competitiveness, the access criteria, target profiles and underlying philosophy are substantially different. Understanding those differences is essential before beginning any process of changing residency.

Can I benefit from this regime?

This is, in all likelihood, the first question any person considering a transfer of residency to Portugal will ask. Unlike the former Non-Habitual Resident regime, the IFICI does not apply automatically to new tax residents. Access depends on the simultaneous satisfaction of requirements relating to tax residency, the professional activity carried out and, in many cases, the entity within which that activity is performed. For this reason, the eligibility analysis should be completed before any change of residence, so as to confirm whether the legal framework corresponds to the prospective resident's actual situation.

What are the eligible activities?

The competent authority for confirming the applicable framework depends on the activity performed and the nature of the entity within which that activity is developed.

What are the principal benefits?

In practical terms

The IFICI should not be viewed merely as a tax benefit. In practice, it is a regime directed at specific professional profiles and demands considerably more preparation than was required under the former NHR. Confirming eligibility before changing residency can prevent decisions being taken on incorrect assumptions, and allows the move to be structured more coherently — both from a fiscal and a wealth perspective.

Although both regimes were created with the aim of strengthening Portugal's international competitiveness, the IFICI is not a simple continuation of the Non-Habitual Resident regime. The change goes far beyond a renaming. It reflects a shift in Portugal's strategy for attracting international residents — moving from a relatively broad model to a more selective framework oriented towards activities considered strategic to the national economy.

Comparison between the two regimes

The principal difference lies in the underlying philosophy of each regime. The NHR sought to make Portugal more competitive in attracting new international residents. The IFICI seeks to make Portugal more competitive in attracting highly qualified professionals, researchers, innovation and high-value-added activities. In practice, this means eligibility no longer depends solely on a change of tax residency — it now requires a substantive connection to activities considered strategic for the country.

In practical terms

If you are planning to move to Portugal, you should not assume that the current regime is simply the former NHR under a different name. The IFICI was designed to serve different objectives and demands an individual analysis of your professional, fiscal and wealth situation before any decision is taken. More than identifying the existence of a tax benefit, what matters is confirming whether the legal framework corresponds to your life project and the strategy you intend to build in Portugal.

The fiscal framework is only one part of the decision

The existence of a favourable tax regime can influence the decision to establish residency in a given country. It should, however, rarely be the only determining factor. Changing tax residency is, in most cases, a decision with consequences for the organisation of one's assets, professional activity, family structure and long-term life project. For this reason, any analysis must go beyond eligibility for a particular fiscal regime and consider the broader context within which that decision will be taken.

Each of these decisions may produce effects for many years. It is precisely for this reason that they must be analysed in an integrated manner — not as isolated choices.

Before deciding, consider these questions

Does my life project justify this change? Is the decision driven solely by the existence of a tax benefit, or does it correspond to a sustainable residential and professional project over the long term?

Is my asset structure prepared? Does the location of assets, income and businesses remain appropriate after the change of residency?

Does my professional activity fall within the new regime? Eligibility for the IFICI depends on the activity performed and, in many cases, on the entity within which it is carried out. Confirming that framework before the move avoids decisions built on incorrect assumptions.

Am I considering the impact on my family? Education, healthcare, mobility, succession, quality of life and family objectives should be part of the decision from the outset.

In practical terms

A well-structured residential decision rarely depends on the existence of a tax benefit alone. Fiscal regimes evolve, legislation changes and the economic priorities of countries shift over time. The most robust decisions are those that continue to make sense even when the fiscal framework changes. For this reason, before deciding where to live, it is important to understand not only the incentives currently available, but also how that move fits within your life project, your professional activity and your long-term wealth strategy.

What this change reveals about how countries compete

At first glance, the replacement of the Non-Habitual Resident regime by the IFICI might appear to be no more than an adjustment to Portuguese fiscal policy. In reality, this change reflects a deeper transformation.

In recent years, competition between countries has shifted away from a narrow focus on attracting investment or new residents. It has turned, increasingly, towards the capacity to attract knowledge, innovation, highly qualified talent and projects with the potential to generate long-term economic value. In this context, fiscal incentives have ceased to be mere instruments of tax competitiveness. They have become part of a broader strategy of economic development.

The IFICI sits precisely within this evolution. More than replacing a prior regime, it reflects a change in the way Portugal seeks to position itself in an increasingly competitive international landscape.

The decision does not belong to states alone

When a country changes its fiscal policy, it also changes the context in which thousands of people make decisions about where to live, work, invest or develop their projects. Public decisions and individual decisions are mutually shaping. Governments seek to create conditions that attract certain profiles. People seek countries that offer them stability, opportunity and quality of life.

It is at this point that the decision ceases to be merely fiscal. It becomes strategic.

Why this matters for those who decide

The most robust residential and wealth decisions are rarely made on the basis of a single benefit. They arise from the combination of fiscal, wealth, professional, family and personal factors that, together, underpin a long-term strategy. Understanding the context in which those decisions are taken reduces uncertainty and improves the quality of the choice. That is precisely the purpose of Decision Intelligence: transforming information into context, and context into more considered decisions.

In practical terms

Fiscal regimes can change. So can the economic priorities of countries. What tends to endure is the need to make decisions that are coherent with long-term personal, family and wealth objectives. Before asking "what tax benefit exists today?", it may be equally useful to ask: will this decision still make sense when the context changes? That reflection is often what distinguishes an opportunistic decision from a genuinely strategic one.

A thought to carry with you

Legislative changes frequently make headlines. Tax benefits occupy the centre of the debate. And they sometimes create the impression that a good decision depends solely on the existence of a more favourable regime.

The reality is, however, more nuanced. Fiscal regimes change. The economic priorities of countries evolve. Legislation follows those transformations. Residential and wealth decisions, by contrast, tend to produce effects for many years. They shape the way we live, work, educate our children, organise our assets and project our future.

Will this decision still make sense when the context changes?

At Vieira da Fonseca, we believe that the finest residential and wealth decisions do not spring from the pursuit of an immediate benefit. They arise from an understanding of context, clarity of objectives and the capacity to build a strategy that remains sound even when the framework shifts. Because, in the end, a good decision is not one that best answers the present. It is one that continues to make sense in the future.