IFICI (NHR 2.0) in Portugal: who qualifies and how to apply

For more than a decade, Portugal's Non-Habitual Resident regime (Residente Não Habitual, or NHR) attracted thousands of foreigners with low tax on Portuguese salaries and tax-free foreign income. It closed to new applicants in 2024. In its place is IFICI, the Incentivo Fiscal à Investigação Científica e Inovação (tax incentive for scientific research and innovation), which is often called "NHR 2.0". The name sounds generous, but IFICI is much narrower than NHR: it rewards specific jobs, not simply moving to Portugal. This guide explains what happened to NHR, who qualifies for IFICI in 2026, what it covers and how to apply without missing the deadline.

What happened to the old NHR regime

The 2024 State Budget (Lei n.º 82/2023) repealed NHR from 1 January 2024. Since then:

• Existing NHR holders keep it. If you were registered, you keep the benefits for the rest of your 10-year period. Nothing changes until that period ends.
• A transitional window has closed. People who became tax resident by 31 December 2024 could still register if, by the end of 2023 (or 10 October 2023, depending on the document), they already had something like an employment contract or promise of one, a lease or property purchase agreement, a child enrolled in a Portuguese school, or a residence visa or permit (granted or applied for). Registration for that group had to be made by 31 March 2025.
• New arrivals since then cannot get NHR. If you are moving in 2026, IFICI is the only regime of this kind, and only if your job qualifies.

As a reminder, NHR taxed qualifying "high value-added" Portuguese work income at 20%, exempted many types of foreign income, and from 2020 taxed foreign pensions at 10%. People registered before April 2020 could choose to keep the earlier full pension exemption under transitional rules.

What IFICI offers

IFICI is set out in article 58.º-A of the Estatuto dos Benefícios Fiscais (EBF, the Tax Benefits Statute) and regulated by Portaria n.º 352/2024/1 of 23 December 2024. It applies to people who become tax resident from 1 January 2024 onwards. The benefits are:

• 20% flat IRS rate on net employment income (category A) and self-employment income (category B) earned in Portugal from the qualifying activity. You can choose to have this income taxed at the normal progressive rates instead if that works out lower.
• Exemption for most foreign-source income. Foreign employment, self-employment, investment (category E), rental (category F) and capital gains (category G) income is generally exempt. The exempt income is still counted to work out the rate on your other taxable income, which is known as exemption with progression.
• 10 consecutive years, counted from the year you become resident.
• 20% withholding from the start. Once you have applied, your employer or client can withhold IRS at 20% if you show proof of your application. If the application is later refused, the income is taxed at the normal rates when your return is assessed.

The exceptions matter:

• Pensions are not exempt. Pension income (category H) is not on the list of exempt foreign income.
• Blacklisted jurisdictions. Foreign income of any category paid by an entity in a country or territory on Portugal's list of tax havens is taxed at 35%.
• Only income from the qualifying activity gets 20%. Other Portuguese income, such as rent from a Lisbon flat or a second, non-qualifying job, is taxed under the normal rules.

For comparison, normal 2026 IRS rates for residents run from 12.5% up to 48%, plus a solidarity surcharge on very high incomes.

Who qualifies for IFICI

You must meet all of the following conditions:

1. You become Portuguese tax resident in the year you want the regime to start. See our guide on tax residency for how residency is determined.
2. You were not tax resident in Portugal in any of the five previous years.
3. You do one of the qualifying activities below, for a qualifying entity.
4. You have never had NHR, have never had IFICI before, and have not opted for the Programa Regressar regime for returning emigrants (article 12.º-A of the IRS Code).

Qualifying activities and who checks them

"Highly qualified professions"

For categories (c)(i) and (c)(ii), Annex I of Portaria 352/2024/1 lists the eligible professions by Portuguese occupational code:

• company directors and chief executives, administrative and commercial directors, production and specialised-services directors;
• specialists in physical sciences, mathematics and engineering (excluding architects, planners, surveyors and designers, although industrial product and equipment designers are included);
• doctors;
• university and higher education teachers;
• ICT specialists.

You also need a doctorate, or a bachelor's or master's degree plus at least three years of proven professional experience. Board members, managers and general directors of the qualifying companies also count.

For category (d), AICEP and IAPMEI have published their own lists of qualified jobs and relevant economic sectors. Their lists are somewhat broader and include, for example, finance and accounting specialists and science and engineering technicians.

Employment contract vs freelance

The tax authority's FAQs say that a "job" (posto de trabalho) means an employment contract. A service agreement does not qualify for those categories. Board members and managers are covered separately. If you work on recibos verdes (self-employed invoices), check carefully whether your category allows it before you rely on the 20% rate.

Who usually does not qualify

• Retirees. IFICI is linked to work, and pensions are not exempt. A retiree moving to Portugal today is taxed under the normal rules: foreign pensions at the progressive IRS rates, with relief under any double tax treaty.
• Remote workers for foreign employers who have no link to a qualifying Portuguese entity.
• Anyone who had NHR before, even if it was years ago.

How and when to apply

Every applicant applies in the same place, whichever entity checks the activity.

1. Become resident and register. You need a NIF (número de identificação fiscal, your tax number) and your address in Portugal registered with the tax authority, plus access to the Portal das Finanças.
2. Gather documents. Depending on your category, these may include: your employment contract, an up-to-date commercial registry certificate (for board members), your research grant contract, proof of your qualifications, and a declaration from the company confirming that it meets the requirements (for categories b, d and e).
3. Submit the application on the Portal das Finanças: Cidadãos > Serviços > Benefícios Fiscais > Inscrição no IFICI > Entregar Pedido. You must do this by 15 January of the year after you become resident. If you became resident in 2026, the deadline is 15 January 2027. If you do more than one qualifying activity checked by different entities, submit one application for each.
4. Give proof to your employer so it can apply 20% withholding.
5. Verification. FCT, AICEP, IAPMEI, ANI or Startup Portugal report to the AT by 15 February. For highly qualified professions (category c), you do not upload documents. Instead, your employer receives a confirmation request in its Portal das Finanças area by the end of February and must confirm by 15 March.
6. Check the outcome. By 31 March the AT shows the status of your registration in your Portal das Finanças area, and you can download proof.
7. File your return. Each year, file Annex L with your Modelo 3 IRS return to declare the income covered by the regime. See our guide to the IRS tax return.

If you register late, IFICI applies from the year you register until the end of the original 10-year period. In the AT's own example, someone who became resident in 2025 but only applies in January 2029 gets six years (2029–2034) instead of ten.

Keeping the status for 10 years

• Each year you must be tax resident in Portugal and still earn income from a qualifying activity.
• Changing jobs: you keep the benefit if the new qualifying activity starts within six months of the old one ending. Report changes by 15 January of the following year. If a different entity has to check the new activity, or a different company has to confirm it, file a new application. The 10-year clock does not restart.
• Gaps: if you do not use the regime for one or more years, for example because you left Portugal, you can resume it for the years that remain if you become resident again and return to a qualifying activity.
• Records: keep your supporting documents, because the AT can ask for them.

NHR vs IFICI at a glance

An illustration

Illustration only, with round numbers and before deductions and social security details. Imagine a software engineer with a master's degree and five years' experience moves to Portugal in 2026 to work for a qualifying export-focused tech company. Their net qualifying salary is €80,000. At 20%, that comes to about €16,000 of IRS. Under the normal progressive rates, the bill on the same income would be substantially higher. If they also have dividends from a non-blacklisted foreign country, those dividends would generally be exempt in Portugal. The engineer's retired parent, moving at the same time, would get no such benefit for their foreign pension.

How an accountant can help

IFICI is unforgiving on details. Eligibility often depends on your employer's tax position, sector code or export share, which you cannot easily check yourself. The 15 January deadline also comes round quickly after a mid-year move. A contabilista certificado (certified accountant) who knows the regime can:

• check whether your job and employer fit a category before you sign or move;
• prepare the application, coordinate with your employer on confirmations and handle any changes in role;
• file Annex L each year and treat foreign income correctly, including blacklisted-jurisdiction and treaty issues.

If you need help, you can compare accountants who work with NHR and IFICI clients and ask how many IFICI applications they have handled.