The IFICI regime (Incentivo Fiscal à Investigação Científica e Inovação) replaced Portugal's Non-Habitual Resident (NHR) regime in January 2024. IFICI offers a 20% flat income tax rate on Portuguese-source employment and self-employment income for eligible new residents, for a period of 10 years.

What is IFICI and How Does It Differ from NHR?

The NHR regime ran from 2009 to December 2023 and attracted hundreds of thousands of foreign professionals and pensioners to Portugal. The Portuguese government replaced it with IFICI in January 2024, maintaining many benefits but with updated eligibility rules.

Key differences from NHR:

• Eligible professions: IFICI requires working in specific high-value sectors (tech, science, arts, highly qualified activities).
• Pension income: NHR offered a 10% flat rate on foreign pensions. IFICI does not include a pension exemption.
• Foreign income: IFICI maintains exemption on most categories of foreign-source income if taxed at source in the country of origin.
• Duration: Both NHR and IFICI offer 10 years of benefits.

Who Qualifies for IFICI?

To qualify for IFICI you must:

• Become a Portuguese tax resident for the first time, or not have been a resident in the previous 5 years
• Work in one of the eligible activity categories
• Apply in the year you become tax resident in Portugal

Eligible Activity Categories

• Technology and information systems (software, IT, cybersecurity, AI)
• Scientific research and development
• Higher education and scientific teaching
• Highly qualified professionals (managers, engineers, specialists with university degree)
• Investors and entrepreneurs creating qualified employment in Portugal
• Artistic and cultural activities
• Professionals employed by companies registered in Portugal with international activities

IFICI Tax Benefits in 2026

• 20% flat rate on Portuguese-source employment and self-employment income (vs up to 48% standard rate)
• Exemption on most foreign-source income: dividends, interest, capital gains, rental income from abroad — if taxed at source
• Duration: 10 consecutive years from the year of first application

How to Apply for IFICI

1. Become a Portuguese tax resident (spend 183+ days in Portugal, or have a habitual residence here)
2. Register as a tax resident at Finanças
3. In your first IRS tax return, declare IFICI status by selecting the appropriate code
4. Provide documentation of your eligible activity (employment contract, professional qualifications)

The application is made through the annual IRS declaration — there is no separate IFICI application form. A certified accountant handles this process.

IFICI and Opening a Company in Portugal

IFICI is compatible with being a company director or shareholder. If you set up a Lda. or Unipessoal in Portugal and pay yourself a salary, the IFICI 20% rate may apply to the salary component. Company profits are taxed separately at IRC rates (16–21%). A certified accountant can structure this optimally.

Full guide: Open a company in Portugal as a foreigner →

Frequently Asked Questions

What replaced NHR in Portugal?

The IFICI regime replaced NHR in January 2024. It maintains the 20% flat tax rate on Portuguese-source income for eligible new residents but removed the pension income benefit that NHR offered.

What is the IFICI tax rate in Portugal?

IFICI offers a 20% flat income tax rate on Portuguese-source employment and self-employment income, compared to the standard IRS rate which goes up to 48%.

Who qualifies for IFICI in Portugal?

New Portuguese tax residents who work in eligible sectors: technology, scientific research, highly qualified professions, arts, and qualified investment. Must not have been a Portuguese tax resident in the previous 5 years.

How long does IFICI last?

IFICI benefits last for 10 consecutive years from the year of first application. After 10 years, standard Portuguese IRS rates apply.

Can I still apply for NHR in 2026?

No. NHR closed to new applicants on 31 December 2023. New residents must apply for IFICI instead.

Do I need a certified accountant to apply for IFICI?

Yes. The IFICI application is made through the annual IRS tax return, which must be prepared by a Certified Accountant in Portugal. HVR handles IFICI applications for clients.