The Non-Habitual Resident Regime
The new Portuguese non-habitual resident status gives the opportunity to those who wish to become residents in Portugal to benefit from a favourable taxation of foreign income, with an exemption of taxation in Portugal and a possible double exemption, both in Portugal and in the country where the income is paid, if a Double Taxation Agreement is in place.
The non-habitual resident regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of pension income. Individuals who declare their foreign income here can also benefit from this preferential regime such as business and professional income, interest, and dividends.
This attractive regime also covers income deriving from high value-added activities, which benefit from a special tax rate of 20%.
The sole requirement to benefit from this preferential treatment is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. This status can be maintained for 10 years.