The Portuguese Non-Habitual Resident (NHR) regime was a tax incentive program designed to attract foreigners and qualified professionals to live and work in Portugal. The scheme ended in 2024, and the government has replaced it with the Incentivo Fiscal à Investigação Científica e Inovação (IFICI).
In this article, we take a look at what the NHR scheme was, how IFIC applies to digital nomads in 2026, and what is needed to benefit from the tax breaks.
Old NHR Scheme for Digital Nomads
Foreigners in Portugal, including remote workers on the Portugal D8 Digital Nomad Visa, could have applied for NHR if they registered as tax residents. The status offers several tax benefits, including a flat 20 percent tax rate on most income earned in Portugal, such as employment income, rental income, and capital gains.
Especially attractive to digital nomads, foreign-sourced income was exempt from taxation, provided it was subject to taxation in the source country under double taxation agreements.
This was significantly lower than the top marginal tax rate of 48 percent for residents in Portugal, and a few more of the key advantages of NHR status included:
- No wealth tax, unlike in some other European countries
- No tax on cryptocurrency, as personal gains are not subject to taxation
- No tax on dividends of foreign origin
- No tax on foreign income (if a double taxation agreement is in place)
- Better opportunities to work remotely
- 20 percent tax on self-employment
- 10 percent flat tax on pensions from a foreign source
While the scheme was popular with expats, the Portuguese government decided to close the regime in 2024. There was a transitional period where anyone who registered as a tax resident in the country in 2023 and had not been taxed in Portugal in the previous five years could still apply by March 2025.
Those who had NHR status by the cutoff will remain under the scheme until 2033.
New NHR for Tax Residents
Following the closure of the traditional NHR regime, the Portuguese government introduced a new system, the Incentivo Fiscal à Investigação Científica e Inovação (IFICI), which translates to the Incentivized Tax Regime for Scientific Research and Innovation. Also referred to as the "new NHR", it focuses on people working in high-skilled positions in technology, research, engineering, and innovation-driven industries.
This means eligibility is now closely linked to your professional activity, and remote workers can qualify. Most people assume that a digital nomad works in a creative industry, but that's not always the case.
A digital nomad is someone who can work remotely from anywhere, so a software developer or pharmaceutical researcher working remotely from Portugal will also meet the requirements.
If you’re eligible, the IFICI scheme provides:
- A flat 20 percent tax rate on qualifying Portuguese-source employment and self-employment income (regardless of the source)
- It lasts for ten years
Who qualifies for IFICI?
For anybody to qualify, there are three criteria:
- Become a Portuguese tax resident by spending more than 183 days in the country in a year
- Carry out a qualifying professional activity
- Meet the criteria defined by the Portuguese tax authorities
Digital nomads and full-time foreign employees in the following professional activities are considered important to Portugal’s economic development and will be eligible for the IFICI scheme:
- Scientific research and academic roles
- Technology and IT-related professions
- Engineering and technical industries
- Certain roles in manufacturing, energy, and telecommunications
- Employees of certified startups or companies recognized by government agencies such as AICEP or IAPMEI
How Digital Nomads Qualify for IFICI
The IFICI regime is not specifically designed for digital nomads, but remote workers may qualify if their professional activity falls within the eligible categories. Importantly, according to the official professional body for accountants in Portugal (OCC), there is no requirement that your employer must be Portuguese.
Reinforcing the eligibility, the Portuguese Tax and Customs Authority (AT) defines Portuguese-source income in Categories A and B as "income earned from work performed in Portugal, or paid/borne by a Portuguese company or permanent establishment (PE), even if the work is not fully performed there."
So, in other words, digital nomads working from Portugal can have their income treated as Portuguese-source income even if their employer or clients are abroad.
What taxes will digital nomads pay under IFICI?
If you qualify for IFICI, income from eligible professional activities is taxed at a flat rate of 20 percent.
Other types of income may be treated differently. Foreign-source income is generally not taxed directly in Portugal under the IFICI regime, but it is taken into account when determining your overall tax position. The exact treatment depends on the type of income and any applicable double taxation agreements.
When filing your annual taxes in Portugal, your overall tax liability will depend on how your income is structured and whether it falls within the eligible categories.
Key Differences Between NHR and IFICI
While the IFICI regime replaces the NHR system, the two regimes differ significantly in scope.
- The NHR regime was designed to attract a broad range of foreign residents, including retirees, remote workers, and investors. It offered wide-reaching tax benefits, particularly through exemptions on foreign-sourced income and a flat 20 percent tax rate on certain professions.
- IFICI is more targeted. It focuses on attracting professionals working in high-value sectors such as technology, research, engineering, and innovation-driven industries. Eligibility now depends primarily on your professional activity rather than your residency status alone.
In simple terms, NHR offered flexibility and broad access, while IFICI is more selective and aligned with Portugal’s economic priorities.
Applying online for IFICI status
You can apply for IFICI status in Portugal online. First, you must establish tax residency by being registered as a tax resident with the Portuguese tax authorities. To ensure you are covered as soon as possible, you should apply by January 15 of the year following the one in which you become a tax resident, or you'll lose access to the regime for that year.
Then, you need to provide the following for your IFICI application:
- A residency permit in Portugal or an EU passport
- Proof of your Portuguese fiscal address (this can be a rent contract registered at the tax authorities in Portugal or your residential property)
- A NIF number
You can only create an account on Portal das Finanças if you have a NIF, and you need one to apply for the IFICI tax regime online.
The process is straightforward and can be completed within a few minutes. Log in to your account, search for "Incentivo Fiscal à Investigação Científica e Inovação" and follow the steps by completing the IFICI registration form. Depending on your activity, you might be asked to upload an employment contract or service agreement, proof of your qualifications, or documentation confirming your professional activity.
Once the application is submitted, the tax authority will review it and inform you of your IFICI status within a few weeks.
Importance of a NIF and Portuguese Bank Account
To apply for IFICI status, you must have a tax identification number (NIF) in Portugal. The NIF is a unique nine-digit number assigned by the tax authorities. It is required for all tax-related activities in Portugal, including purchasing property, signing contracts, and opening a bank account. Opening a bank account in Portugal is also important for IFICI status, as it allows you to receive income and pay expenses in Portugal.
How We Can Help You
We’re the experts in getting you a NIF and helping you open up a Portuguese bank account from anywhere in the world. Order a NIF online through our application form, and we’ll have one sent straight to your inbox in two to three weeks.
If you're a non-EU/EEA/Swiss national, you're required by Portuguese law to hire a fiscal representative. We also offer fiscal representation services to help you apply for a NIF and serve as a point of contact between you and the Portuguese tax office.
Frequently Asked Questions about IFICI and Digital Nomads
What is the IFICI tax regime in Portugal?
IFICI is a Portuguese tax incentive designed to attract highly qualified professionals working in innovation, research, and high-value sectors. It replaces the NHR regime and offers a flat 20 percent tax rate on qualifying income for up to 10 years.
Who qualifies for IFICI in Portugal?
To qualify for IFICI, you must become a Portuguese tax resident and work in an eligible profession, such as technology, engineering, scientific research, or certain consulting roles tied to innovation and economic development.
Can digital nomads qualify for IFICI?
Yes, digital nomads can qualify for IFICI if their work falls within eligible high-value sectors. Eligibility depends on your profession, not your visa, so remote workers in fields like tech or consulting may qualify.
Do you need to work for a Portuguese company to qualify for IFICI?
No, you do not need to work for a Portuguese company. You can qualify while working remotely for a foreign employer or international clients, as long as your activity meets IFICI eligibility criteria.
How is IFICI different from the NHR regime?
IFICI is more selective than NHR. While NHR applied to a broad range of professions and offered wide exemptions on foreign income, IFICI focuses on specific high-value activities and follows standard tax rules for foreign income.
How long does the IFICI tax benefit last?
The IFICI regime applies for up to 10 years, similar to the previous NHR program, provided you continue to meet the eligibility requirements during that period.
What tax rate applies under IFICI?
Under IFICI, qualifying employment or self-employment income is taxed at a flat rate of 20 percent. Non-qualifying income is taxed under Portugal’s standard progressive tax rates.
Does IFICI exempt foreign income from tax?
No, IFICI does not offer broad exemptions on foreign income like NHR did. Foreign income is generally taxed under standard Portuguese rules, with relief provided through double taxation agreements where applicable.
How do you apply for IFICI in Portugal?
To apply for IFICI, you must first become a Portuguese tax resident, then register with the tax authorities and declare your qualifying professional activity within the required timeframe.
Is IFICI suitable for remote workers in Portugal?
IFICI can be suitable for remote workers if their profession qualifies under the regime. However, not all remote jobs are eligible, so it is important to confirm whether your activity meets the required criteria.
