This article addresses the most recent changes to Portugal’s immigration and tax frameworks designed to attract foreign investment and international talent. It explores the revamped Golden Visa program, now focused on high-impact investments, and introduces the NHR 2.0 regime, which targets highly qualified professionals in science, research, and innovation. The article outlines the main benefits, eligibility criteria, and transitional rules for both programs, providing a clear guide for foreign nationals considering residence in Portugal.

Portugal has established itself as an attractive destination for foreign investment and the relocation of international talent. Two of the key legal mechanisms supporting this strategy are the Residence Permit for Investment Activity (ARI), commonly referred to as the “Golden Visa”, and the newly restructured Non-Habitual Resident (NHR) regime, now known as “NHR 2.0 – Scientific Research and Innovation Tax Incentive.”

Residence Permit for Investment Activity (ARI)

Under the provisions of Law no. 23/2007, of 4 July (Foreigners Act), as amended, the ARI allows nationals of non-EU countries to obtain a temporary residence permit in Portugal by carrying out certain qualified investments, exempting them from a residence visa requirement.

As of 2024, legislative amendments have redefined the eligible investment options, excluding real estate acquisitions and favouring high-impact initiatives such as:

• Capital transfers into venture capital or private equity funds aimed at Portuguese companies;

• Funding scientific and technological research;

• Investment in artistic production or cultural heritage preservation;

• Creation of at least 10 full-time jobs;

• Incorporation or capital reinforcement of companies headquartered in Portugal.

Golden Visa holders benefit from:

• Entry and residence in Portugal without a visa;

• Right to live and work in Portugal, with a minimum stay of 7 days in the first year and 14 days in subsequent years;

• Visa-free travel across the Schengen area;

• Family reunification rights;

• Eligibility to apply for permanent residency and, eventually, Portuguese citizenship, under the requirements set out in the Nationality Law (Law no. 37/81, of 3 October).

Non-Habitual Resident Regime 2.0 – Incentive for Research and Innovation

The original NHR scheme was repealed at the end of 2023. In its place, the Portuguese government introduced a new, more targeted framework in 2024: the Scientific Research and Innovation Tax Incentive, also known as NHR 2.0.

The main goal of this regime is to attract highly skilled individuals with proven relevance to strategic sectors such as science, technology, innovation, and education—contributing to Portugal’s global competitiveness.

Key features of NHR 2.0:

1. Strategic Focus

• Available to professionals engaged in scientific research, technological innovation, higher education, and executive functions in companies benefiting from fiscal incentives.

2. Favourable Taxation

• Application of a flat income tax rate of 20% on employment and self-employment income earned in Portugal, valid for up to 10 years.

3. Exemption for Foreign Capital Income

• Exemption from Portuguese taxation on foreign-sourced passive income such as dividends, interest, royalties, and capital gains—subject to applicable tax treaty conditions.

4. Eligible Professions

• University professors, researchers, executives and legal directors in innovation-driven companies, and professionals in R&D activities are among those qualified.

5. Transitional Rules

• Individuals who acquired NHR status under the previous regime by 31 December 2023 will retain all benefits for the remainder of their 10-year period, including the favourable tax treatment of foreign pensions.

Advantages:

• Competitive tax rate for high-value professions;

• Exemption from Portuguese tax on most foreign capital income.

Limitations:

• Narrower eligibility, excluding retirees and previously covered professions;

• End of flat-rate taxation for foreign pensions, now subject to general progressive income tax rates.

These regulatory changes reflect a shift in Portuguese tax and immigration policy, prioritising the retention of strategic talent and the mobilisation of capital into sectors with strong structural impact, rather than relying on passive fiscal attractiveness.

Disclaimer: Although the content of the articles published here has been reviewed, any liability for potential errors or omissions is excluded. Therefore, legal advice should be sought regarding any of the topics addressed.