Philipp Sauerborn

Emigrating to Portugal – everything you need to know about the NHR system 2024

Emigrating to Portugal has become a real alternative for many since the introduction of the low-tax NHR status. Let me explain how to get the status and exactly what it means.

NHR status in Portugal. Is it the right idea for you?

In this guide, I have putt together all the information I have on the NHR programme in 2023.

And let me make one thing clear right from the start:

These are not half-truths, hypothetical possibilities, or questionable tax tricks.

It is simply a matter of the current state of affairs, what needs to be taken into account and what mistakes you should not make under any circumstances.

Does that sound interesting to you?

Then let’s dive in.

Note: Portugal discontinues the NHR system. Read more here: https://philippsauerborn.com/en/portugal-discontinues-the-nhr-system/

CHAPTER 1

Why Portugal is a popular emigration destination

More and more people are drawn to Portugal. In this article, you can find out why this is and what the NHR system has to do with it. In addition, this article will also give you a small foretaste of what awaits you.

The country that lies on the Atlantic Coast, has long since developed from a classic insider tip into a sought-after destination for emigrants. This is of course due to the sunny location, the varied landscapes, living directly beside, or at least near the sea, and last but not least, the relaxed life and the taste of dolce vita.

But Portugal offers even more than that: those who live here as an emigrant can claim tax advantages that only a few other countries offer. This is made possible by the Portuguese NHR (non-habitual resident) tax regime. To date, over 10,000 applications have been submitted to attain NHR status, so far.

Celebrities in Portugal

There’s a good reason why many celebrities are already taking advantage of this special tax status. The list of celebrities residing in Portugal reads like a who’s who of well-known personalities. The names range from John Malkovich and Michael Fassbender, to Monica Belluci and Madonna, to Eric Cantona and Christian Louboutin.

Content of this Article

In the following article, I will present all the information worth knowing about the tax benefits you receive as an emigrant in Portugal, in a transparent way. Whether you are an entrepreneur, a working individual or a pensioner – if you want to emigrate to Portugal, you should read this article carefully.

I am not concerned with diffuse tax tricks and the evasion of high tax burdens through activities from the grey area of taxation. Instead, using solid information and data, I will show you why Portugal can make sense from a tax perspective. I will provide you with the background of the NHR regulation and the requirements you must meet to obtain NHR status. You will also gain deep insights into the subject of international tax law. Last but not least, I will briefly discuss the other advantages of Portugal, besides the tax issue. Because, in my years of experience, I have learned one thing: tax advantages can be one reason to emigrate to a country, but they should NEVER be the initial reason.

After reading my article, you will be able to make an informed decision about whether or not Portugal makes sense for you.

Have I aroused your interest?

Then let’s get started. The advantages offered by the country in the sunny south will surprise you – both in terms of tax benefits and the quality of life in Portugal itself.

NHR status in Portugal – 100% tax-compliant, with advice.

We will assess whether you qualify for NHR status in Portugal during your free initial consultation.
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CHAPTER 2

Why the NHR tax scheme exists and who benefits from it

Are you wondering why Portugal created the tax scheme?

And are you wondering if you could also benefit from the NHR scheme in Portugal?

Then read on.

The country that lies on the Atlantic Coast, has long since developed from a classic insider tip into a sought-after destination for emigrants. This is of course due to the sunny location, the varied landscapes, living directly beside, or at least near the sea, and last but not least, the relaxed life and the taste of dolce vita.

But Portugal offers even more than that: those who live here as an emigrant can claim tax advantages that only a few other countries offer. This is made possible by the Portuguese NHR (non-habitual resident) tax regime. To date, over 10,000 applications have been submitted to attain NHR status, so far.

Celebrities in Portugal

There’s a good reason why many celebrities are already taking advantage of this special tax status. The list of celebrities residing in Portugal reads like a who’s who of well-known personalities. The names range from John Malkovich and Michael Fassbender, to Monica Belluci and Madonna, to Eric Cantona and Christian Louboutin.

Content of this Article

In the following article, I will present all the information worth knowing about the tax benefits you receive as an emigrant in Portugal, in a transparent way. Whether you are an entrepreneur, a working individual or a pensioner – if you want to emigrate to Portugal, you should read this article carefully.

I am not concerned with diffuse tax tricks and the evasion of high tax burdens through activities from the grey area of taxation. Instead, using solid information and data, I will show you why Portugal can make sense from a tax perspective. I will provide you with the background of the NHR regulation and the requirements you must meet to obtain NHR status. You will also gain deep insights into the subject of international tax law. Last but not least, I will briefly discuss the other advantages of Portugal, besides the tax issue. Because, in my years of experience, I have learned one thing: tax advantages can be one reason to emigrate to a country, but they should NEVER be the initial reason.

After reading my article, you will be able to make an informed decision about whether or not Portugal makes sense for you.

Have I aroused your interest?

Then let’s get started. The advantages offered by the country in the sunny south will surprise you – both in terms of tax benefits and the quality of life in Portugal itself.

CHAPTER 3

Basic information on the special NHR status

Questions such as:

  • What does NHR stand for anyway?
  • Can anyone get such NHR status in Portugal?
  • Do certain requirements have to be met, and if so, what are they?
  • How does the application process for the NHR programme work? etc.

are answered in this chapter.

First, it is important to understand why Portugal implemented the NHR system. Because understanding this will give you insight as to why and how Portugal has established its rules regarding NHR issues, and it will make it easier for you to interpret the applicable laws.

Portugal brought the NHR scheme into force in 2009, and since then, the country has enabled significant tax savings for qualified individuals .

Portugal aims to attract entrepreneurs, investors and professionals of high cultural and economic value through its NHR tax regime, in order to increase the country’s international competitiveness.

Who benefits from Portugal’s NHR system?

Portugal has chosen the NHR rules in such a way that it is mainly wealthy individuals and entrepreneurs who benefit from the status. Specifically, this means freelancers, business owners, pensioners and other professionals of high cultural or economic value.

Of course, you can also live in Portugal with a smaller budget, but the tax advantages are especially important if you have a higher income or a comparatively high pension.

NHR status in Portugal – 100% tax-compliant, with advice.

We will assess whether you qualify for NHR status in Portugal during your free initial consultation.
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CHAPTER 4

All the advantages of the NHR system in Portugal at a glance

This chapter provides an overview of all the tax benefits of the NHR system.

Read here to see if you can also benefit from tax reductions.

CHAPTER 5

The NHR system and DTAs

What does Portugal’s NHR system have to do with DTAs, and what are the implications for you? Read this article to find out.

You are probably wondering how the NHR works in Portugal. I’ll tell you how – through double taxation agreements (DTAs). First of all, here is the general definition of DTAs by the Federal Ministry of Finance:

“Double taxation agreements (DTAs) are treaties under international law that help countries avoid imposing multiple burdens of similar taxes on the same income for the same taxpayer for the same period of time. This occurs when taxpayers are either residents of two states at the same time, or have sources of income located in states other than the state of residence. In both cases, each state concerned may assert its own tax claim against the taxpayer. On the one hand, in order to avoid double taxation, the country from which income originates (the source country) withdraws taxation in favor of the country of residence of the recipient of the income or restricts it,and on the other hand the country of residence exempts the taxpayer from taxation on income that can be taxed in the source country or credits the taxes against taxes payable on that income to the foreign country.” – Source: Federal Ministry of Finance

In simple terms, to avoid double taxation, the country of the source of income leaves the taxation to the country of residence. The country of residence, in turn, exempts the taxpayer of taxes on income that is taxable in the source country. Most countries choose not to tax the income of people who are not residents of the country in order to be seen as open to foreign investment. Under the NHR programme, Portugal does not tax most income from foreign sources, because taxation can take place abroad. That makes it possible to earn foreign income and not pay taxes on it. Currently, Portugal has 79 DTAs with other countries. For countries without DTAs, the OECD Model Tax Convention applies. Under the following link, you will find a list of countries with which Portugal has a DTA.
CHAPTER 6

Interim Summary

Yes, I know that was quite a lot of information at once. Therefore, I have taken the trouble to summarise the most important information for you.

Main points summarised

NHR Portugal PS EN

Tax exemption of income under the NHR system.

  1. Passive foreign income such as interest, dividends, royalties and capital income are tax-free (without progression, except in the case of capital gains from real estate)
  2. Pensions are IRS-exempt, so they are tax-free. From 1 April 2020, they are subject to a 10% tax rate
  3. Foreign income from gainful employment is exempt from tax
  4. Income from services originating from abroad is tax-exempt (without progression), provided it originates from activities with high added value of a scientific, artistic or technical nature

PREREQUISITE:

  1. A DTA exists with the country from which the income originates
  2. If the country does not have a DTA with Portugal and the country is not on the blacklist of tax havens, the OECD Model Tax Convention applies.
  3. If items (1) and (2) are not met, income from employment or self-employment is subject to a flat tax rate of 20% – provided it is derived from activities with high added value of a scientific, artistic or technical nature
CHAPTER 7

Advantages for entrepreneurs, private persons and professionals

So, after giving you a general overview of Portugal’s tax benefits, I will now go into more detail about the benefits available to individual groups of professionals. This section will focus on the benefits for entrepreneurs, private persons and professionals.

Probably the biggest benefit of the NHR regime concerns the group of entrepreneurs and high-net-worth individuals. This is because, as mentioned above, you are exempt from taxation on foreign sources of income for a period of 10 years, subject to certain conditions.

In simple terms, this means that income from abroad, such as interest, dividends, royalties or other capital gains, is tax-free.

Why doesn’t the foreign income have to be taxed?

You are probably wondering how the taxaxation of income from foreign sources works. I’ll explain briefly: if the foreign income comes from a country that has a double taxation treaty with Portugal, then the income does not have to be taxed.

Requirements for obtaining NHR status as an entrepreneur.

In order to benefit from the NHR status as an entrepreneur in Portugal, there are some points to consider; for example, the company must be located in the European Union and the majority of managers must be of non-Portuguese origin. In addition, the company must be registered in a country where, according to the DTA, the possibility of taxing dividends in the country of origin exists.

Also, the income may not originate from tax havens without DTAs, otherwise the tax rate of 20% + 3.5% applies.

It is possible to be exempt from taxation of foreign income under certain circumstances. This can be achieved, for example, by combining NHR status with a Maltese company.

Since Malta is in the EU and – unless the majority of your directors reside in Portugal and the Maltese company has a permanent establishment in Portugal – the CFC rules currently in force in Portugal (quasi the Portuguese Foreign Tax Law) are not harmful.

In short, by intelligently combining NHR status with an advantageous tax law of an EU country, it is possible to be exempt from the obligation to pay taxes in Portugal. However, there are some much more complex requirements to consider here, and each individual case should be analysed separately.

Incidentally, this also applies to entrepreneurs who are already operating in Portugal in some form.

Income from capital gains in Portugal

You also have tax advantages for income from capital gains.

Investors take note: if you emigrate to Portugal, you will also benefit from tax advantages with regard to income from interest, dividends and other capital gains. If you are a tax resident in the Algarve or another part of Portugal, and thus have NHR status, you will have to pay withholding tax of no more than 15 per cent in Germany, for example. This is at least ten percent less, compared to the regular tax rate on interest and dividends..

Which occupations are tax-exempt under the NHR regulation

Not all professionals benefit equally from the NHR system in Portugal. Tax benefits in Portugal are only granted to professions of high cultural and economic value. They are considered an added value for Portugal; therefore those who practice such professions benefit from generous tax exemptions.

The following count as high-value professions in Portugal:

  • Managing directors and senior executives
  • Managers of administrative and commercial service providers
  • Production and special services managers
  • Managers in the hotel and restaurant industry, trade and other services
  • Professionals in physics, mathematics, engineering and similar technical professions
  • Doctors, dentists
  • Architects, engineers, geologists
  • Tax consultants, auditors
  • University lecturers
  • Psychologists
  • Technicians and practitioners of other freelance professions
  • Biologists, archaeologists, researchers, developers, computer scientists, designers and journalists
  • Visual artists, such as painters and sculptors
  • Actors and musicians for theater, ballet, film, television, radio or theatre
    Members of corporate boards and management boards
  • Investors
  • Providers of information and services
  • Computer programmers and software consultants
  • Computer consultants and related services
  • etc.

Professionals of this type are largely exempt from taxation of foreign income in Portugal, under NHR status, due to DTAs (and to the extent that they exist.)

Employment income related to NHR status.

Professionals wih a high net worth, who have non-habitual residence status, receive a kind of tax flat rate, within the framework of a special status. For the corresponding groups of people, this means: they benefit from tax exemption or a flat reduced tax rate of just 20 percent.

I think I am not alone in my opinion. After all, the wealthy class in Germany generally has to pay top tax rates of 48 percent, and sometimes more, to the tax authorities or the German state.

In anticipation of a very frequently asked question: if you have already paid tax on the income in a country that has a DTA with Portugal, you are exempt from taxes in Portugal.

NHR and income from regular employment abroad

Income from regular employment is tax-exempt – provided it is income from high-net-worth activities. Here, too, there are further requirements you need to check on in each individual case.

NHR and income from self-employment

Income from self-employment is taxed normally, unless your activity falls within the category of the above-mentioned professions, in which case you also benefit from tax exemption. This income is then also subject to social security contributions.

NHR status in Portugal – 100% tax-compliant, with advice.

We will assess whether you qualify for NHR status in Portugal during your free initial consultation.
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CHAPTER 8

Advantages of the Portuguese NHR system for pensioners

Let’s move on to the last group of people. The pensioners. There are also attractive incentives for this group of people to emigrate to Portugal.

Pensioners from various European countries have long since discovered Portugal as an attractive country to emigrate to. But this is not only due to the sunshine, the beach and the ocean. Taxation factors also tip the scales here. For a long time, pensions in Portugal were completely tax-free. Until 31 May 2020, to be precise..

As of 1 April 2020, pensions and annuities received from other countries have been taxed at a flat rate of ten percent, under NHR status. At first glance, the entry into force of this special tax status means a disadvantage for emigrants of retirement age.

The change in the NHR programme for pensioners

I examined this matter intensively at an early stage. That is precisely why I can promise you one thing: the introduction of this ten percent taxation will lead to tax advantages, some of which are considerable, compared to the legal situation that applied before. But this regulation cerainly doesn’t apply to all pensioners who emigrate to Portugal.

This means that if you already held NHR status, which is always limited to ten years, before 1 April 2020, this change will not affect you at all. Any pensions drawn from abroad will continue to be tax-free. The same applies to those who were already tax residents in Portugal before this effective date and have filed an application for recognition of special tax status.

In this context, I will give you a tip:

Even if you have not yet filed such an application but still registered as a taxable resident in Portugal before 1 April 2020, you will benefit from complete tax exemption. At least until the end of March 2021. Because that’s when the deadline for the application for recognition of the special tax status “residente não habitual” or non-habitual residence expires.

How to make the NHR programme work for you as a pensioner

You should hurry and submit the application on time. In this case, the ten percent taxation introduced just under a year ago does not apply. Your pension or annuity remains completely tax-free. The Portuguese tax authorities have placed these “old cases” under the so-called grandfather clause.

Have you actually filed your 2020 tax return yet? If not, as a recipient of a pension or annuity with tax exemption in Portugal, you have the option of choosing whether you would like to pay tax on such pensions at a flat rate of ten percent, on the basis of the new legal situation. If you decide to exercise this option, you must indicate this in your tax return for the 2020 tax year.

Benefits of NHR Portugal for pensioners

I have checked carefully: there are pensioners who benefit from the ten percent tax burden. It is important here, that each case is examined individually and comprehensively. For example, doctors, architects and other pensioners who used to be partially or fully self-employed and now receive benefits from the relevant pension schemes will be in a better tax position from 1 April 2020.

In some cases you can now avoid double taxation

Until this date, Portugal refrained from levying taxes under the NHR concept, but this group of persons had to pay taxes to the German state, under the so-called reverse taxation system. Now, according to the NHR status, pensioners of this type pay ten percent tax in Portugal..

And that’s it. Because according to Art. 22 DBA (Double Taxation Agreement) the German state no longer has the right of taxation.

The favourable tax rate of ten percent in Portugal also has financial benefits for recipients of German pensions, for example. This is because taxation in Portugal, under NHR status, means that these pensions are not taxed further in Germany. As a rule, this means that you pay less tax, since pension taxation in Germany entails a much higher tax burden.

You also benefit from this advantage as a pensioner

In addition, as a pensioner with another income taxable in Portugal, you can pay tax on your pension together with your other income. The general rules are used as a benchmark. For you, this means that you benefit from the progressive tax rate applied in Portugal.

CHAPTER 9

Taxation of cryptocurrencies in Portugal

Portugal’s goal of improving the economic situation with the help of tax incentives under the NHR programme is also proving successful in the cryptocurrency sector.

Portugal is considered one of the most innovative countries in Europe. Its approach to cryptocurrencies is also future-oriented: for example, Portugal is becoming increasingly open to payment for services using cryptocurrencies. Portugal has also set up vending machines in various locations, where it is possible to withdraw cryptocurrencies.

But this is not the only reason why Portugal counts as a cryptocurrency-friendly country.

In order to attract investors and cryptocurrency traders, the country has created a number of tax incentives.

Taxation of revenue from cryptocurrencies in Portugal

Cryptocurrencies are currently in high demand, and they are subject to strict regulations in most countries. Furthermore, in most countries, taxes are assessed on the capital gains of the sale of cryptocurrency. Not so in Portugal – here the income is tax-free. I will explain the legal basis for this in the following section.

Handling the profit from crypto sales in Portugal

Let’s take a look at the document published in 2016 by the Portuguese tax authority, which describes the classification of cryptocurrencies by income type.

Below I have taken the trouble to translate parts of the document, and to explain the meaning and summarise the rest of the letter for you.

As cripto moeda ou “moedas virtuais” não são, tecnicamente, consideradas “moeda” por não disporem de – Cryptocurrencies or “virtual currencies” are not technically considered “currency” as they are not legal tender in Portugal.

curso legal ou de poder liberatório em Portugal, no entanto, as mesmas podem ser trocadas, com – However, cryptocurrencies can be profitably exchanged for real currency (be it real or virtual currency).

proveito, por moeda real (sejam euros, dólares, ou outra), junto de empresas especializadas para o – Cryptocurrencies can be exchanged for real currency (euros, dollars or others) at specialised exchange offices.

According to the document, the value of a cryptocurrency, compared to real currency, is thereby determined by the (online) demand for cryptocurrencies.

The document, dated 27 December 2016, goes on to say that cryptocurrencies can generate different types of taxable income:

  1. profits from the purchase and sale of virtual currencies or trading them on the stock exchange for real currency.
  2. obtaining commissions for the provision of services related to the acquisition or sale of cryptocurrencies
  3. revenue from the sale of products or services in cryptocurrency

Note: The following explanations refer to Point 1 and do not consider Points 2 and 3.

Point 1 is further broken down into three different income categories:

  1. Category G: Capital gains
  2. Category E: Investment income
  3. Category B: Business or professional income

Category G – Capital gains in Portugal

Category G describes capital gains. It therefore refers to profits generated from the positive price performance of investment instruments.

According to Article 10 of the IRS Code, the following are taxable as capital gains.

  • Disposal of shares and other profit-yielding securities;
  • Transactions with derivative financial instruments, with the exception of profits pursuant to Article 5 (2) (q)
  • Transactions relating to certificates entitling the holder to receive the value of a specified underlying asset; business activities relating to certificates entitling the holder to receive the value of a specified underlying asset, other than profits referred to in Article 5(2)(r)
  • Paid assignment of loans, additional installments and supplementary installments.

According to the legislator, taxation on the profits occurs only if they relate to Points 1-4.

Since the value of cryptocurrency can be determined by supply and demand, cryptocurrency is not considered a derivative financial product and is therefore not subsumed as a security.

Consequently, in Portugal, under current legislation, taxation only takes place if one of the situations described is involved. However, because cryptocurrencies do not fall under these Category G specifications, cryptos are not taxable in Portugal.

Therefore, Category G cryptocurrencies are not subject to tax.

Category E – Investment income in Portugal

Capital gains are gains from the purchase and sale of assets.

Thus, with respect to Category E, the income is only taxed if it arises purely from the investment of capital. Since the income from the sale of cryptocurrencies is generated by the sale of the right, activities related to cryptocurrencies are not subject to Category E and thus are not taxable under Category E.

Category B – Business or professional income in Portugal

Category B concerns the income of self-employed persons .

The first thing to note about Category B is that if it is in competition with any of the previous categories, Category B prevails. In other words, if the type of income is assignable to two categories and one of the categories is Category B, then taxation according to Category B applies.

Category B taxes are levied on income derived from the performance of an activity and not according to the origin of the income.

Therefore, taxes are levied on the income, regardless of whether the income comes from sales, earnings or any other type of income, according to Article 3 (1) of the IRS Code.

Whereby the exercising of the activity – according to the document – is determined by the regularity and the orientation of the activity to the achievement of profits. Therefore, if there is a business or professional activity, the taxable person is obliged to issue an invoice (or equivalent document) when selling or providing services.

In concrete terms, therefore, this means that you must carefully examine whether your activities are considered business or professional activities. If so, you are required to comply with the obligation of declaration contained in Article 3 (6) of the IRS Code (see paragraph above).

As you can surely guess, this has to be checked in each individual case. Basically, it can be assumed that if your crypto activities are your main income, your activities are considered business or professional activities.

Conclui-se assim que a venda de cripto-moeda não é tributável face ao ordenamento fiscal português, a não ser que pela sua habitualidade constitua uma atividade profissional ou empresarial do contribuinte, caso em que será tributado na categoria B.

So, to summarise, the sale of cryptocurrencies is not taxable under the Portuguese tax system, unless it counts as a professional or commercial activity of the taxpayer – in which case it is taxed under Category B.

However, this provision only applies if you are a natural person. Legal entities holding cryptocurrencies in a company based in Portugal must pay tax on all profits, regardless of whether or not the company is engaged in trading. Capital gains by registered companies trading in cryptocurrency are taxed between 28% and 35%.

Value Added Tax in the European Union

In 2015, the ECJ ruled that the purchase and sale of Bitcoin is exempt from VAT. Based on the “currency” exception, the Court of Justice of the European Union ruled that the services provided by a Bitcoin exchange, when exchanging Bitcoin for a conventional currency, are exempt from VAT(source).

Portugal has followed the official EU regulation when it comes to cryptocurrency legislation: this means that profits from the purchase and sale of cryptocurrencies are not subject to VAT.

Interim Summary

Non-commercial crypto profits are tax-free in Portual. The commerciality is determined on a case-by-case basis. In the case of almost everyone I’ve talked to so far, it has been commercial. This link is useful in determining commerciality.

Portugal has thus created good conditions for those whose income is generated by cryptocurrencies, provided it does not count as a business activity.

Nonetheless, there is some uncertainty, as Portugal had no regulatory framework as of 2023. It is expected that cryptocurrencies will be regulated at some point, and the tax regime regarding cryptos will be concretely defined. Furthermore, classification as a financial asset (rather than a currency) could result in a change in definition, which could result in a change in taxation.

NHR status in Portugal – 100% tax-compliant, with advice.

We will assess whether you qualify for NHR status in Portugal during your free initial consultation.
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CHAPTER 10

The beauty of Portugal

As I mentioned at the beginning of this article, tax advantages should be taken into account when considering a new residence, but they should never be the main reason. So I will now give you a brief overview of the beauty of Portugal.

Even though this article is primarily about the tax advantages for emigrants to Portugal, I would like to take this opportunity to once again – independently of the tax issue – discuss the country at the westernmost point of continental Europe. Because the beauty of Portugal fascinates me anew every time. Emigrating to Portugal – tax benefits are one drawcard, but the varied scenery also offers strong arguments.

It is not without reason that the country is considered to be one of the most popular vacation destinations and the choice of home for emigrants from all over the world, due to its beautiful coastlines and beaches, its climate, the varied landscape and also its island groups, including Madeira and the Azores.

You want to live by the sea? Then your new home should be in the south.

Internationally, the south of Portugal, which is composed of the three regions Algarve, Alentejo and Terras do Sado, are best known. Faro, Portalegre, Beja and Évora are the largest cities in the south of Portugal. In these southern areas, you can expect lots of sun, lots of sea, lots of beach life, and a hot, dry climate.

While the sun-drenched Algarve, with its fine sandy beaches, imposing cliffs and dreamy, romantic villages, is dominated by tourism, the sparsely populated Alentejo is characterised by extensive olive groves, grain fields and cork oaks. This region is also a major sheep-farming area.

Numerous meadows are used for this purpose. In summer, these meadows boast an impressive play of colours, when they are covered in a spectacular sea of flowers.

Do you prefer hilly to mountainous terrain?

Then you should consider finding a place to stay in Central Portugal. The Serra da Estrela mountain range, which is particularly famous for its numerous hiking opportunities and winter sports, is situated in the midst of this region.

Moreover, you are virtually sitting at the fountain: the entire region, with its immensely fertile soils and favourable climate, is one of the best wine-growing areas in all of Europe.

For a city experience with historical-cultural flair, Lisbon, Viseu, Leiria, Sintra, Coimbra, Castelo Branco and Santarém are also ideal.

In the northeast of Portugal, it gets really mountainous

It gets even more mountainous in the northeast of Portugal. Here lies the region of Trás-os-Montes, which literally means “behind the mountains”. This name is more than appropriate from a scenic perspective Mountains, hills and comparatively less lush vegetation dominate the scenery. The northeast of Portugal is also characterised by extremely hot summers and very cold winters.

Living in the green garden of Portugal – also an option

The north of the country is also attracting more and more emigrants. Although you won’t find the Dolce Vita feeling of the Algarve or the other southern regions here, you will be living in the green garden of Portugal.

You will encounter highly developed vegetation, a comparatively cool and humid climate, and the most densely populated area in all of Portugal. Characteristic of this area are the numerous rivers and valleys, with vineyards covering the hillsides.

CONCLUSION

8 good reasons to move to Portugal

Finally, I have summarised what I consider to be the most compelling advantages of Portugal in 2023, in an infographic.

I consider Portugal to be the optimal emigration destination because of its advantages in terms of quality of life, and also thanks to the perks. I would be interested to know what you think of it. If you have any questions or even suggestions on the subject, feel free to write in the comments or use the contact form.

FAQ

Frequently asked questions about NHR Status Portugal

Yes, I know that was quite a lot of information at once. Therefore, I have taken the trouble to summarise the most important information for you.

The NHR system is a Portuguese tax regime designed to attract foreigners with a high value-added potential, such as… entrepreneurs, high net worth individuals, professionals and pensioners.

NHR stands for non-habitual resident (also known as residente não habitual – RNH), and it refers to a tax status granted by Portugal. Specifically, this means that foreigners with non-habitual resident status can benefit from certain tax rates.

Tax credits are realised under the NHR programme. NHR status is valid for 10 years from the date of application.

In principle, any adult citizen with EU residency can apply for the NHR programme.

However, only the following groups of people are eligible for the programme: entrepreneurs and high net worth individuals, professionals of cultural or economic value, and pensioners.

  • The non-resident tax regime in Portugal applies to citizens who are at least 18 years old
  • You must have the right to reside within the EU
  • You may not have been a Portuguese citizen for the last 5 years
  • You must be able to prove residence in Portugal
  • You must belong to one of the groups of people to whom the NHR system applies
  • If you live in Portugal for more than 183 days (with or without interruptions) in any twelve-month period
  • For a shorter stay: if you own (or rent for at least 12 months) a property in Portugal, which indicates that you intend to keep it and use it as a residence
  • You were a member of a ship’s crew or an aircraft on 31 December, provided that the company has its actual place of residence in this territory
  • You perform functions or activities abroad on behalf of the Portuguese State

Yes, if you are not able to prove tax residency, for example.

  1. You must register as a non-resident taxpayer
  2. You must present a certificate of residence
  3. You must register as a tax resident
  4. You can apply for non-habitual resident NHR status: https://www.acesso.gov.pt

First, you must have registered as a Portuguese resident. Then you need to request a password on the portal Finanças: www.portaldasfinancas.gov.pt

To do this, click on “Registar-se” and fill out the form. After registration, the password will be sent to your address. Using this password, you can now apply for NHR registration on the Finanças portal.

The following steps are necessary: Cidadãos > Serviços > Dados > Cadastrais > Residente Não Habitual > Entregar Pedido de Inscrição

The NHR application can only be submitted after you have applied to be a resident in Portuguese territory . You can apply for resident status at any local tax office or citizens’ service centre.

The application must be submitted by 31 March. Please note that you must have submitted proof of habitual residence by 31 December.

You can enquire about the NHR system on the following page: https://www.acesso.gov.pt/v2/loginForm

The NHR application can only be submitted after you have applied to be a resident in Portuguese territory . You can apply for resident status at any local tax office or citizens’ service centre.

The application must be submitted by 31 March. Please note that you must have submitted proof of habitual residence by 31 December.

You can enquire about the NHR system on the following page: https://www.acesso.gov.pt/v2/loginForm

Case I: You have received the NHR status

If your NHR application has been accepted by the Autoridade Tributária e Aduaneira, you can view the proof through the finanças portal at the following link: Cidadãos > Serviços > Dados Cadastrais > Residente Não Habitual > Consultar Pedido de Inscrição

Case II: You were rejected

If your application is rejected, then you will receive a letter of rejection from the Autoridade Tributária e Aduaneira. In the letter of rejection, you will receive information about the reasons for the decision. You are free to challenge the decision.

As a rule, you will receive the decision after a few weeks.

The main advantages of the NHR programme are

  • Tax exemption on foreign-source income
  • 20% flat tax rate for certain professions and from self-employed activities
  • No gift and inheritance taxes to immediate family members
  • No property tax
  • Free transfer of funds to Portugal
  • The country is on the white tax list within the EU
  • No minimum stay required

If you receive income from a country that has a double taxation agreement with Portugal, then you do not have to pay tax on your income. If the country your income comes from is on the blacklist of tax havens, then a flat tax rate of 20% applies to you – as long as you fit into the high value category.

Under the following link, you can see the countries that have a DTA with Portugal: https://info.portaldasfinancas.gov.pt/

Yes, as an entrepreneur, it is also possible to enjoy the benefits of NHR status in Portugal, under certain circumstances.One solution would be to combine the NHR status with a Malta Limited company. For more details, check out this article: https://philippsauerborn.com/de/nhr-in-portugal-mit-einer-malta-gesellschaft

Since solutions vary greatly from case to case, and are highly complex, you should seek advice on this matter and not choose a 0-8-15 solution.

Yes, through programmes such as the Golden Visa programme.

  1. Employment income (either tax-free or flat tax rate of 20% if not from one of the permitted high value professions).
  2. Income from self-employment (insofar as it is derived from a recognised profession and a DTA exists with the country of origin, or the OECD Model Convention applies).
  3. Royalties and income from financial assets
  4. Real estate income and capital gains
  5. Pension income

If the country does not have a DTA with Portugal, and if the country is not on the blacklist of tax havens, the OECD Model Tax Convention applies.

  • Managing directors and senior executives
  • Managers of administrative and commercial service providers
  • Production and special services managers
  • Managers in the hotel and restaurant industry, trade and other services
  • Professionals in physics, mathematics, engineering and similar technical professions
  • Doctors, dentists
  • Architects, engineers, geologists
  • Tax consultants, auditors
  • University lecturers
  • Psychologists
  • Technicians and practitioners of other freelance professions
  • Biologists, archaeologists, researchers, developers, computer scientists, designers and journalists
  • Visual artists, such as painters and sculptors
  • Actors and musicians for theater, ballet, film, television, radio or theatre
  • Members of corporate boards and management boards
  • Investors
  • Providers of information and services
  • Computer programmers and software consultants
  • Computer consultants and related services
  • etc.

Employment income

Income earned in Portugal is generally taxed at a standard progressive tax rate. If the income is derived from high value-added employment, a 20% rate may be applied.

Income from employment

Income from employment is generally taxed at a standard progressive tax rate. If the income is derived from high value-added employment, a 20% rate may be applied.

Real estate income and capital gains

Rental income is taxed either at a 28% tax rate or at a normal progressive tax rate. Net capital gains are taxed at the normal progressive tax rates of 50%.

Pension income

Pension income is taxed at the normal rates.

Then please use the contact form. I look forward to receiving your questions!

Are you considering getting NHR status?

I know: there’s a lot of input!

A lot of work has gone into this overview, and I hope it has been helpful to you.

Do you still have questions? Or do you need more information on one matter or another?

My offer to you: tell me about your project and I will help you – initially always free of charge.

I look forward to receiving your enquiry. Sunny greetings,

Yours, Philipp Sauerborn

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Disclaimer

The above article is based solely on independent research by Philipp M. Sauerborn and cannot constitute legal advice. If you would like more information, please contact us for an appointment.

You can find more information here.

About Philipp M. Sauerborn

Philipp Maria Sauerborn is a certified tax advisor and expert in International Tax. As CEO of the law firm DW&P Dr. Werner & Partners in Malta, he has advised over 3000 clients on their personal tax situation.

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