The IFICI is Portugal’s newest forward-looking tax regime for inbounds moving to Portugal. It provides personal income tax incentives focused on attracting qualified talent to drive innovation and scientific research in Portugal.

The IFICI was preceded by the popular NHR and is often considered its successor (although narrower in scope). This new regime focuses on promoting businesses driving innovation and scientific research, with the strategic aim of fostering high-value employment in Portugal.

The Portuguese 2024 State Budget Law created the IFICI in the aftermath of the termination of NHR. The first fiscal year of enforcement was 2024, but IFICI’s rules were only enacted in late December 2024.

The IFICI provides several personal income tax benefits, including a flat tax rate of 20% on employment income (category A) and self-employment income (category B) obtained in Portuguese territory.

Furthermore, a Personal Income Tax exemption is available for the following types of income obtained abroad:

1. Employment income,
2. Self-employment income,
3. Income derived from capital (e.g. dividends, royalties, interest)
4. Rental Income
5. Capital Gains

Maintenance of the eligibility requirements is required every year for the tax benefits to apply.

Eligibility is contingent on fulfilling personal requirements (regarding the applicant) and activity-related requirements (regarding the company/employer). Each beneficiary is entitled to IFICI’s benefits for a period of up to 10 years.

Applicants must establish tax residency in Portugal and not have been tax residents in the preceding five years. Furthermore, the regime does not apply to applicants who have already benefited from the NHR status or the Regressar regime.

Employment or self-employment income from a qualifying activity in Portugal is also required.

Eligible activities include:

Teaching and research positions in higher education, scientific research, and entities recognized as technology and innovation centers.

Qualified jobs within the scope of contractual benefits for productive investments under the Investment Tax Code

Highly qualified professions in companies with relevant applications in the year in which the employment duties started or in the five previous years, which benefit or have benefitted from the Investment Tax Regime (RFAI), as per below:

• Managing directors, executive managers
• Directors of administrative and commercial services
• Directors of production
• Specialists in physical sciences, mathematics, engineering and related techniques
• Industrial product and equipment designer
• Doctors
• University and higher education teacher
• Information and communication technology specialists
• Administrators, managers and general managers

Highly qualified professions in industrial and service companies, whose main activity corresponds to one of the following Economic Codes, with exports of at least 50% of their turnover, in the year the corresponding duties started or in any of the two previous years:

• Extractive industries
• Manufacturing industries
• Information and communication activities
• Research and development of physical and natural sciences
• Higher education
• Human health activities

Qualified job positions in entities carrying out activities deemed relevant for the Portuguese economy in a context of attracting productive investment and reducing regional asymmetries.

Activities carried out by tax residents of the Autonomous Regions of Madeira and Azores, terms and conditions to be defined

Employment in certified startup companies under the Startup and Scaleup Law

Applicants under professional activities must have a Doctorate degree or a bachelor’s degree and three years of proven professional experience.

The application request must be filed by January 15 of the year after becoming a tax resident in Portugal. Individuals who became Portuguese tax residents in 2024 can submit the request until March 15, 2025 (one-time extension).

The recipient of each application varies depending on the applicable eligibility model.

Our team of experts is available to assist you and your company in navigating IFICI tax benefits. Whether you are a company seeking to benefit from these fiscal incentives or a professional looking to relocate to Portugal, we provide specialized legal and tax advisory services tailored to your needs.

Contact us to discuss how you can strategically position yourself to take full advantage of Portugal’s upcoming tax policies. We advise you to secure your benefits as soon as possible.