Portugal NHR Tax Regime Replacement: What the IFICI Means for Expats

Portugal's Non-Habitual Resident (NHR) tax regime was one of Europe's most popular expat tax incentives — a flat 20% income tax rate on Portuguese-source income for qualifying workers. It was abolished at the end of 2023 for new applicants. But its successor, IFICI (Incentivo Fiscal à Investigação Científica e Inovação), is now live.

What Is IFICI?

IFICI offers a flat 20% income tax rate on Portuguese-sourced income for qualifying residents for up to 10 years. It targets technology workers, researchers, and certain investment activities.

Who Qualifies?

Qualifying activities include IT and technology roles, scientific research, R&D positions, startup founders, and highly qualified professionals in innovation sectors. You must not have been a Portuguese tax resident in the previous 5 years.

Key Differences from NHR

NHR was available to almost any profession. IFICI is more targeted, specifically favouring tech and innovation workers. Passive income (dividends, pensions from abroad) no longer qualifies for the same blanket exemptions.

Is Portugal Still Worth It?

For tech workers and researchers, yes — particularly in Lisbon and Porto. The combination of good salaries (by Portuguese standards), a high quality of life, and the IFICI discount makes it one of Europe's best propositions for the right profile.