NHR (non-habitual resident) regime in Portugal

NHR (non-habitual resident) regime in Portugal

What is the NHR (non-habitual resident) regime?

NHR (non-habitual resident) is a tax regime that was created 2009 with the aim to attract talent in high value added activities to Portugal. The NHR regime comes with various tax benefits for a period of 10 years. Any EU/EEA/Swiss citizen or holder of a residence permit that has not been a tax resident of the country during the previous 5 years can become a NHR resident.

The main tax advantages as a NHR are:

  • Possibility of a fix tax rate of 20% on domestic income from eligible professions
  • Possibility of tax exemption on dividends, interests, rental incomes, property returns, royalties and non-public pensions income that comes from abroad (generated outside of Portugal)
  • Possibility of tax exemption on foreign income
  • Tax-free inheritances and gifts

The key message is the word “possibility” which indicates you can enjoy tax exemption in Portugal if the possibility of taxation in the contracting country exists.

Taxation of income obtained in Portugal

The income derived from categories A (employment) and B (business income) can be taxed at a flat rate of 20% if it comes from "high value-added activities" if the taxpayer does not opt for tax aggregation ("englobamento").

Taxation of income obtained abroad

The income from foreign sources is tax-exempt, regardless of its category, if any of the two following paragraphs is met:

  1. the income can be taxed in its source country as per the applicable tax treaty signed between Portugal and that State, or
  2. non-existence of tax treaty and the income is not considered as Portuguese sourced income

Capital gains from equities

Capital gains derived from the disposition of shares can only be taxed at the country where the resident has its fiscal residency.

  • From the tax treaty between Portugal and the US (Article 14 - Capital gains): Gains from the alienation of any property other than property referred to in paragraph 1 through 5, [regular shares dispositions are not mentioned in those paragraphs] shall be taxable only in the Contracting State of which the alienator is a resident.

Therefore, capital gains derived from the disposition of equities should be taxed in Portugal as the tax treaty doesn’t leave the door open to taxation at source. The autonomous tax for this type of income is 28%.


For dividends most tax treaties state that they can be taxed at source, but don’t have to (“may be taxed”).

  • From the tax treaty between Portugal and the UK (Article 10 - Dividends (2)): Dividends paid by a company which is a resident of one Contracting State to a resident of the other Contracting State who is subject to tax in that other State in respect thereof, may be taxed in the first-mentioned State and according to the law of that State but the tax so charged shall not exceed (see screenshot below):

tax treaty UK Portugal

This means that the UK has the power to tax them under article 10 (2) of the DTA, although it does not if the recipient is not a UK resident. On the other hand, Portugal will not tax such dividends in the hands of an NHR either, because the UK may tax them under the DTA. This way, the non-habitual resident of Portugal may receive dividends from a UK source completely tax free.

What are high-value added activities that qualify for NHR application?

Current list of high value added professional activities (source).

  • 112 - Directors and Executives of companies
    • 12 - Directors of Administrative and Commercial Services
    • 13 - Directors of production and specialized services
    • 14 - Directors of Hotel, Restaurant, Business and other similar services
  • 21 - Specialists in the physical sciences, mathematics, engineering and related techniques
  • 221 - Doctors
  • 2261 - Dentists and stomatologists
  • 25 - Experts in information and communication technologies (ICT)
  • 264 - Authors, journalists and linguists
  • 265 - Creative Arts and Entertainment Artists
  • 31 - Technicians and Intermediate Occupations in Science and Engineering
  • 35 - Information and Communication Technology Technicians
  • 61 - Farmers and skilled workers in agriculture and livestock breeding for trade
  • 62 - Skilled workers in forestry, fishing and hunting
  • 7 - Skilled workers in industry, construction and crafts, including in particular metallurgy, metalworking, food processing, woodworking, clothing, crafts, printing, precision instrument manufacturing, jewelers, craftsmen, electrical and electronic workers
  • 8 - Plant and machine operators and assembly workers, namely operators of stationary machines

Interesting sources with further information



Expad living and working in Portugal. Besides writing and coding, I enjoy cooking and sports.