IFICI (NHR 2.0): A New Opportunity

August 6, 2026August 6, 2026Tax lawFilipe Nuno Schönburg Carrillo de MiraNo Comments

In 2024, the Non-Habitual Resident (NHR) regime ("NHR 1.0") was repealed by the State Budget Law for 2024.

A new scheme was introduced: the Tax Incentive for Scientific Research and Innovation ("IFICI"), commonly referred to as "RNH 2.0", which replaced RNH 1.0 for new applicants.

The IFICI is primarily aimed at highly qualified professionals in the fields of science and engineering, as well as employees and members of the governing bodies of start-up companies engaged in innovation-related activities.

Individuals who become tax residents in Portugal must apply for the regime by January 15th of the year following the year in which they acquired Portuguese tax residency.

The RNH 2.0 is applicable for a period of 10 consecutive years.

Application process and benefits.

The application must be submitted by January 15th of the following year and is reviewed by the competent authorities. The applicant is notified of the decision by March 31st. If granted RNH 2.0 status, they may benefit from various tax advantages.

Among other things, income from dependent and independent work obtained in Portugal within the scope of eligible activities may be subject to a special fixed rate of 20%. It is important to note that income from dependent work, independent work, capital, real estate and capital gains obtained abroad are, as a rule, exempt from taxation in Portugal through the progressive exemption method, except when they are paid or made available by entities resident in jurisdictions included in the Portuguese list of clearly more favorable tax regimes.

Although access to the scheme is subject to prior approval and is primarily intended for highly qualified professionals in the fields of science and engineering, the RNH 2.0 represents an excellent opportunity. The scheme provides for the application of a reduced fixed rate of 20% to eligible income from dependent and independent work obtained in Portugal and allows for exemption, through the progressive exemption method, of various categories of income obtained abroad, excluding pensions.

For example, a computer engineer who intends to live and work in Portugal may benefit from an exemption on income earned abroad, excluding pensions, and a highly competitive tax rate on eligible income from dependent or independent work earned in Portugal.

The following table presents a comparison between RNH 1.0, the previous Non-Habitual Resident regime, and RNH 2.0 (IFICI).

Comparative table between RNH 1.0 and RNH 2.0 (IFICI)

RNH OLD	RNH 2.0 IFICI
INCOME
Income from Dependent Employment
Income from dependent work earned in Portugal is subject to a fixed rate of 20%, although aggregation remains possible. Income from dependent work of a foreign source is exempt from tax, provided that it is effectively taxed in the other jurisdiction.	Income from dependent work obtained in Portugal while carrying out an activity eligible under the RNH 2.0 scheme is subject to a fixed rate of 20%, although aggregation remains possible. Income from dependent work of foreign origin is exempt from tax through the progressive exemption method, except when paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.
Income from Self-Employment
Income from self-employment originating in Portugal is subject to a fixed rate of 20%, provided it results from a high value-added activity. Income from self-employment originating from abroad is exempt from tax provided it results from a high value-added activity, can be taxed in the other jurisdiction under an applicable double taxation avoidance convention or, in the absence of such a convention, under the OECD Model Convention, subject to the observations and reservations formulated by Portugal, and does not originate in a jurisdiction included in the Portuguese blacklist of clearly more favorable tax regimes.	Income from self-employment originating in Portugal from an activity eligible under the RNH 2.0 scheme is subject to a fixed rate of 20%, although aggregation remains possible. Income from self-employment originating from foreign sources is exempt from tax through the progressive exemption method, except when paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.
Capital Income
Capital income from foreign sources, such as dividends, interest and royalties, is exempt from tax provided that it can be taxed in the other jurisdiction under an applicable double taxation avoidance convention or, in the absence of such a convention, under the OECD Model Convention, subject to the observations and reservations formulated by Portugal, and does not originate in a jurisdiction included in the Portuguese blacklist of clearly more favorable tax regimes. *The Portuguese Tax Authorities have accepted the tax exemption for income from jurisdictions included on the Portuguese blacklist of clearly more favorable tax regimes when a double taxation avoidance agreement is in force with the jurisdiction in question. Portugal has signed double taxation avoidance agreements with jurisdictions such as the United Arab Emirates (UAE) and Panama, which are on that list. However, because a double taxation avoidance agreement is in force, the Tax Authorities have accepted the application of the exemption.	Capital income from foreign sources is exempt from tax through the progressive exemption method, except when paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.
Property Income
Property income from foreign sources is exempt from tax provided that it can be taxed in the other jurisdiction under an applicable double taxation avoidance convention or, in the absence of such a convention, under the OECD Model Convention, subject to the observations and reservations formulated by Portugal, and does not originate in a jurisdiction included in the Portuguese blacklist of clearly more favorable tax regimes.	Property income from foreign sources is exempt from tax through the progressive exemption method, except when paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.

RNH OLD	RNH 2.0 IFICI
Capital gains from foreign sources are exempt from tax provided that they can be taxed in the other jurisdiction under an applicable double taxation avoidance convention or, in the absence of such a convention, under the OECD Model Convention, subject to the observations and reservations formulated by Portugal, and do not originate in a jurisdiction included in the Portuguese blacklist of clearly more favorable tax regimes. *Important note: most double taxation avoidance agreements concluded by Portugal do not allow the source State to tax capital gains relating to movable property; instead, Portugal, as the State of residence, generally has the exclusive right of taxation. In these cases, the exemption may not apply.	Capital gains from foreign sources are exempt from tax through the progressive exemption method, except when they are paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.

RNH OLD

RNH 2.0 IFICI

Capital gains

Capital gains from foreign sources are exempt from tax provided that they can be taxed in the other jurisdiction under an applicable double taxation avoidance convention or, in the absence of such a convention, under the OECD Model Convention, subject to the observations and reservations formulated by Portugal, and do not originate in a jurisdiction included in the Portuguese blacklist of clearly more favorable tax regimes.
*Important note: most double taxation avoidance agreements concluded by Portugal do not allow the source State to tax capital gains relating to movable property; instead, Portugal, as the State of residence, generally has the exclusive right of taxation. In these cases, the exemption may not apply.

Capital gains from foreign sources are exempt from tax through the progressive exemption method, except when they are paid or made available by entities resident in jurisdictions included in the Portuguese blacklist of clearly more favorable tax regimes.

RNH OLD	RNH 2.0 IFICI
Pensions from foreign sources are subject to a fixed rate of 10%. Important note: applicants who obtained RNH status before the changes introduced by the State Budget Law for 2020 are protected by the applicable rules safeguarding acquired rights. Prior to this change, pensions from foreign sources were exempt from tax if they were taxed in the country of origin or if they were not considered to have been obtained in Portugal under Portuguese tax rules.	Pensions are not covered by the RNH 2.0 regime and are therefore subject to the general rules of the IRS (Income Tax).

RNH OLD

RNH 2.0 IFICI

Pensions

Pensions from foreign sources are subject to a fixed rate of 10%.
Important note: applicants who obtained RNH status before the changes introduced by the State Budget Law for 2020 are protected by the applicable rules safeguarding acquired rights.
Prior to this change, pensions from foreign sources were exempt from tax if they were taxed in the country of origin or if they were not considered to have been obtained in Portugal under Portuguese tax rules.

Pensions are not covered by the RNH 2.0 regime and are therefore subject to the general rules of the IRS (Income Tax).