Portugal’s new IFICI regime (NHR 2.0) replaces the old NHR with an efficient model designed to attract skilled professionals and foreign investors — especially those earning income abroad. If you’re a startup founder, or an investor earning dividends, Portugal may still be the right place to relocate or structure your operations.
This article is for those researching Portugal tax residency, low-tax countries for U.S. citizens, or tax optimization for remote entrepreneurs.
Tax Strategy vs. Residency Authorization: Know the Difference
It’s essential not to confuse tax strategy (like IFICI or dividend exemptions) with your residency or immigration status (such as the D7 visa for passive income or D8 visa – remote work permits). Both are necessary parts of a complete relocation plan. That’s why you should work with an immigration lawyer who can coordinate both sides — tax and legal residency — to ensure your transition to Portugal is secure and optimized.
What is IFICI?
IFICI (Incentive for Scientific Research and Innovation) is Portugal’s new special tax regime for high-value professionals.
You may qualify if you:
- Work in technology, consulting, engineering, or scientific fields;
- Are employed by or provide services to clients abroad;
- Are not a tax resident in Portugal in the last 5 years.
Why it matters to U.S. investors and entrepreneurs
1. 20% flat income tax on qualified income
Instead of paying up to 48% in progressive rates, qualified professionals pay a flat 20% on salaries or consulting income from high-value work.
2. Full exemption on foreign passive income
Dividends, royalties, interest, and capital gains from abroad may be fully exempt from Portuguese tax under IFICI, provided:
- The income is taxed (or taxable) in the source country;
It does not come from a blacklisted jurisdiction
What about dividends and D7?
Outside IFICI, Portugal taxes dividends at 28%. But if you’ve already paid taxes in your home country (e.g., through a U.S. C-corp or LLC), that tax can often be credited or adjusted under tax treaties.
Alternatively, if your income is entirely passive, you may qualify for the D7 visa, Portugal’s residency path for individuals with stable income such as dividends or investment returns. To verify if you are suitable for a D7 visa application, feel free to book a first free call.
If you’re considering relocating or optimizing your tax residency in Europe, working with a lawyer who understands both immigration and international tax law is essential. You’ll need the right structure, correct documentation, and strategic timing. Feel free to reach out to design a full migration and tax optimization plan tailored to your business and income sources.