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The Portuguese Non-Habitual Resident Program, also known as NHR is a tax regime for non-habitual residents, that was created to improve the international competitiveness of Portugal and attract more foreigners. The NHR regime targets non-resident individuals, who are likely to establish a permanent or a temporary residence in Portugal.
Mann’s Solutions team has prepared an overview of the NHR Tax regime to make the application process clearer.
The NHR Program is a tax regime that offers reduced tax rates and exemptions on some taxes to foreign residents and investors.
The main advantages of the NHR Program:
Who can be a Non-Habitual Resident:
Under the NHR regime, employment income is either exempt from tax, or is taxed at a flat rate of 20%.
Income from financial assets
If income comes from a country with a DTA or a country without a DTA but which isn’t a blacklisted tax haven, the income is tax-exempt. In case, when the country is a blacklisted tax haven, income will be taxed at the rate of 28%-35%.
Real estate income and capital gains
If real estate or capital gains income comes from a country with a DTA or a country without a DTA but which isn’t a blacklisted tax haven, the income is tax-exempt. In the income that comes from the country that is a blacklisted tax haven, income will be taxed at the rate of 28%-35%.
Will be tax-exempt if it comes from a country with a DTA.
Real estate income and capital gains
Rental income in Portugal will be taxed at the rate of 28% or at normal progressive rates. Talking about Capital Gains, net capital gains are taxed at a rate of 50% (which is a normal progressive rate).
Regular Pension tax will be applied.
Who can apply for the Portuguese NHR regime?
Individuals who become residents in Portugal for tax purposes, without having been so in the previous five years.
What are the main reasons to consider taking personal residence in Portugal?
The Non-Habitual Tax Resident regime grants an exemption on foreign source income. Besides, the regime grants limited taxation on income deriving from high value-added activities. The Portugal Golden visa also allows non-EU investors and their families to travel to the entire Schengen area.
What is considered a Qualifying Income?
Qualifying income includes pension, dividends, royalties, and interest income. As well as any professional income from high value-added activities, which benefit from a special flat tax rate of 20%.
What are the requirements?
To benefit from the tax regime, the person has to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years.
For how long is the Status granted?
This status is granted for 10 years.
The Portuguese Residence Permit Program grants the right to live, work and study in Portugal, with visa-free access within the EU countries. The program investment options include the creation of at least 10 jobs via investing into business; investment of €1,000,000 or purchase of real estate within a range of €280,000 – €500,000, depending on where it was built.
Portugal residency by investment program grants the applicant a 5-year residency permit and let’s apply for permanent residence and citizenship after this period. The Program requires only 7 days a year visit to Portugal in a 1 year and 14 days visit during each subsequent 2 years to keep the permit. Portugal residency allows the whole family to travel without a visa to all Schengen Zone countries and gives access to high-standard education.
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Mann’s Solutions is an international immigration law firm with offices in London, Hong Kong, and Moscow and has expertise in offering UK Visas and Immigration by Investment services to high net worth individuals. Our immigration advisers are regulated by OISC and IMC (Investment Migration Council).
For further information or to discuss your circumstances in a private consultation with our immigration lawyers in London Office, please contact us at email@example.com or call +44 207 993 63 46.
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