João Medeiros de Barros Updated: May 21, 2025
Portugal’s NHR Program has been a popular tax regime for expats since its launch in 2009. The tax regime has provided key benefits to expats from around the world who have applied to the program to unlock significant tax advantages.
However, under the State Budget Law of 2024, the NHR program ended.
In this article, we’ll provide you with the latest updates on the NHR program, plus introduce the Tax Incentive for Scientific and Innovation program, regarded by many as the NHR 2.0. and a replacement to the current NHR scheme.
The End of the Non-Habitual Residence Program
In October 2023, the Portuguese Prime Minister announced that he intended to close the NHR program, stating that “maintaining this measure for the future is prolonging a measure of fiscal injustice.”
As such, the State Budget Law for 2024 determined the end of the NHR regime. By the end of March 2025, the program closed completely to new applicants. However, individuals who had already registered under the program before this date will be able to take full advantage of the program under the existing terms for the ten-year period.
The End of the Transitional Period for the NHR
While the NHR program has ended, there was a transitional period presenting a window of opportunity for individuals to qualify for the existing program.
Individuals who had registered as tax residents in the country in 2023 and had not been taxed in Portugal for the previous five years could still apply for the existing NHR program, provided they did so by 31 March.
For those who qualify for the program under these conditions, they will have NHR status and benefit from the tax benefits available to them under the program.
Now, however, the transitional period is over, and the tax regime is no longer available.
NHR 2.0.: Tax Incentive for Scientific Research and Innovation
Although the Tax Incentive for Scientific Research and Innovation has not been coined as the NHR 2.0, the tax program does have some similarities with the NHR program and is being referred to as the NHR 2.0 by many.
Below you’ll find the requirements for the program, in addition to the key benefits of applying to the program.
Requirements
To be eligible for the Tax incentive for the Scientific Research and Innovation program, the requirements are as follows:
- Become tax residents in Portugal
- Have not been residents of Portugal in the previous five years
- Earn income in certain professional categories
The main differentiator between the original NHR program and the Tax Incentive for Scientific Research and Innovation is that individuals will need to earn income from certain professional categories.
Eligible professional categories
The professional categories in question include the following:
- Teachers and scientists
- Those in qualified jobs, as specified in the Tax Code
- Activities carried out within the scope of the extractive industry and manufacturing industries
- Tourism, including activities that are of interest to tourism
- IT and related activities and services
- Agricultural, aquaculture, fish farming, farming and forestry activities
- Research and development, in addition to high technological intensity activities
- Audiovisual and multimedia production
- Defense, environment, and energy
- Telecommunication and activities of shared service centers
- Highly qualified professionals: This refers to individuals or entities engaged in one or more of the activities mentioned above within a qualifying organization.
- Members of corporate bodies that carry out economic activities
- Those employed by companies that are recognized by relevant government agencies, such as AICEP, EPE, IAPMEI, and IP, or that are relevant to the national economy (e.g., working with investment, etc.)
- Research and development personnel who meet the definitions of the tax code
- People working for startups, certified by law as such
- Individuals who work in Madeira or the Azores who meet the criteria set by these regions
Note: Exclusions include NHR beneficiaries and Regressar Program beneficiaries.
Main benefits of the program
Individuals eligible for the new program can enjoy a flat tax rate of 20 percent on their professional income, along with an exemption on the majority of income earned internationally, such as dividends, interest, capital gains, and rents. Importantly, pensions are not covered under this scheme, unlike the original NHR program. However, as with the original NHR program these advantages are applicable for a duration of ten years.
In the upcoming months, further information regarding qualifying jobs in Madeira and the Azores is expected to emerge, along with a clearer timeline for when the new tax regime will be available.
Stay Up to Date on the Latest Developments
Alongside our residency and citizenship division, Global Citizen Solutions, we will keep you up to date on the latest developments. Should you be looking to see how to get Portuguese residency, reach out to them, and they will be able to discuss which residency option is best suited to your needs.
Frequently Asked Questions about the NHR 2.0
Is the NHR regime in Portugal ending?
Yes, the Non-Habitual Residency (NHR) program has ended.
The program has been succeeded by the Tax Incentive for Scientific Research and Innovation Program, offering comparable advantages but to a more limited segment of expats.
What is the new NHR for Portugal 2024?
The Tax Incentive for Scientific Research and Innovation Program replaced the current NHR scheme. To apply for the new program, individuals will need to generate income in specific professional fields like teaching, scientific research, and development to qualify. Under this program, there’s a uniform tax rate of 20 percent applied to professional income earned within Portugal, alongside exemptions on most foreign-derived income types like dividends, interest, capital gains, and rents.
