NHR 2.0 in Portugal: Tax Incentive for Scientific Research and Innovation (IFICI)

Unlike the old Non-Habitual Resident (NHR) regime, which was broad and open to people receiving various income sources, the NHR 2.0 (IFICI) takes a much more targeted approach.

The tax new incentive is for professionals in strategic sectors that align with Portugal’s economic goals—particularly in Tech, Research, and Sustainable Development.

The NHR 2.0 offers a combination of foreign-sourced income exemptions and a flat 20% tax rate on qualifying job income which is significantly advantageous for skilled professionals looking to work in Portugal.

Who is eligible for NHR 2.0?

To qualify for NHR 2.0, you must be a new expat in Portugal, meaning you can't have been a resident for the last five years.

Additionally, your work needs to align with Portugal's strategic goals, as this new scheme is about attracting talent and investment that will actively contribute to specific industries.

For example, if you're a freelancer working remotely for a company outside of Portugal, this incentive will not be the fit for you. That’s a key difference to the original NHR scheme.

Another key difference is that the NHR was open to people receiving income from various sources, but this new regime ties those tax benefits directly to the work an individual does within Portugal, for Portuguese companies or organisations.

Therefore, you need to be actively employed by a Portuguese company or organisation operating in specific sectors to qualify.

Another major shift from the original NHR regime is the income requirement. Under NHR 2.0, your income must come from an eligible field — passive income or retirement income won’t qualify. The NHR 2.0 is for those expats making active contributions to the Portuguese economy.

Criteria to qualify for the NHR 2.0 (IFICI)

Eligible jobs which would qualify for the NHR 2.0 include:

• Scientists
• Engineers
• Product designers
• Medical professionals
• Analysts
• Programmers
• Database and network specialists
• High-level executives

There is a broader list of qualifying professions still pending, with government agencies expected to release updates soon.

Eligible industries for the NHR 2.0 are:

• Raw materials extraction
• Manufacturing
• Information and communication activities
• Publishing
• Media
• Telecommunications
• Computer consultancy and programming
• Data processing
• Information hosting and web portals
• Research and development in biotechnology
• Healthcare
• Higher education

To give a practical example of qualifying criteria, let’s say you’re a software developer with a master’s degree and you’re interested in a job in a new tech startup in Portugal. First, you will want to check whether your specific job title “software developer” falls under one of those eligible categories – it’s not about the exact name of the title, but the nature of the job itself.

Then, if the job is a match, you will need to consider the company you’ll be working for:

• Is it a Portuguese company?
• Are they engaged in innovative or strategic activities from the Portuguese perspective?

This two-fold requirement ensures that the NHR 2.0 incentive is only available for professionals and businesses contributing to Portugal’s long-term development goals.

Other considerations for the NHR 2.0 (IFICI)

If you need to switch jobs, or if your circumstances change, a transition period will be allowed. You will have a six-month grace period where you retain your tax benefits while looking for a new qualifying role. And, if you leave Portugal but return later, you can resume your benefits.

A crucial point for those currently under the old NHR regime— NHR 2.0 is not available to those who have already benefited from NHR.

Beyond individual benefits, NHR 2.0 is also beneficial for companies in Portugal. Since employees under this regime are taxed at a 20% flat rate, businesses can offer competitive net salaries while optimising labour costs. This creates an attractive environment for innovative enterprises looking to bring in top-tier talent without inflating their payroll expenses.

In conclusion, Portugal’s NHR 2.0 aims to attract professionals in high-value sectors, ensuring that only those actively contributing to economic and technological growth benefit.

It replaces the broad NHR approach with a more precise, investment-driven model, making a case for Portugal as a competitive destination for global talent.