What is Non-Habitual Resident (NHR)? Definition & Guide
A Portuguese tax regime that offered reduced tax rates on foreign income for qualifying new residents for a period of ten years.
The Non-Habitual Resident (NHR) regime was a Portuguese tax program that offered qualifying new tax residents a flat 20% income tax rate on Portuguese-sourced employment income from eligible professions and broad exemptions on most types of foreign-sourced income for a period of ten years.
The program was introduced in 2009 to attract skilled professionals, retirees and high-net-worth individuals to Portugal. Under NHR, foreign-sourced pensions, dividends, interest, rental income, capital gains and royalties could be received tax-free in Portugal, provided they were taxable in the source country under an applicable tax treaty.
The NHR program closed to new applicants at the end of 2023. Individuals who had already registered or who qualified under transitional provisions continue to benefit for their full ten-year period. The Portuguese government replaced NHR with a more limited incentive program targeting specific professions related to scientific research and innovation.
For investment migrants who registered before the cutoff, NHR remains a significant tax advantage. A Golden Visa holder who established NHR status can receive foreign pension income, investment returns and rental income from outside Portugal with little or no Portuguese tax for up to ten years.
The closure of NHR has shifted some demand toward other EU jurisdictions with favorable tax regimes for new residents, including Malta, Italy and Greece.
Why It Matters for Golden Visa Applicants
Although the NHR program closed to new applicants at the end of 2023, it remains relevant for Golden Visa holders who registered before the cutoff. Those individuals continue to benefit from reduced taxation on foreign-sourced income for up to ten years. For new applicants, the closure of NHR has shifted attention to alternative tax regimes in Italy (flat tax for new residents), Greece (50% income tax exemption for relocated workers) and Malta (remittance-based taxation for non-domiciled residents). Applicants should compare these alternatives with the help of a cross-border tax advisor before selecting a program based on tax considerations.
Example
"He registered for NHR status in 2022, so his US pension income remained exempt from Portuguese tax through 2032 despite the program's closure to new applicants."