Today we will discuss the Non Habitual Resident regime for Portugal, a lot of clients ask us: “hey how can I live in Europe without paying taxes? I ve heard about this country, I heard about this and that…,”. We also receive questions about other countries in Europe especially because a lot of people have second passports and they can easily get a European residence.
So why Portugal? Well as you know it is quite similar to Italy,Portugal is quite similar in terms of people, in terms of food, in terms of culture, we can say as well in terms of weather.
So that’s why today I wanted to talk about the Non-Habitual Resident regime. This regime is a regime made by the Portugal government in 2009 and this was particularly made to attract people. Did you know about the Inpatriate regime (Regime Impatriati) in Italy? Is a regime made for attracting people to move to Italy. Well Portugal has made something like that!
The first thing that you have to notice is that if you are an European citizen or for instance a Swiss citizen, you can easily become a resident of Portugal, so if you’re looking at this video and you are from France or from Germany, you don’t have to require a Visa because you can directly go to Portugal, rent an apartment and you go to the commune and register yourself in this city or town (and stay at least 6 months). It’s a little bit more complicated if you are an extra EU or an extra Swiss because you know Switzerland is considered as EU for those purposes.
How does the Non Habitual Resident Regime work? This regime stands for 10 years in which you don’t pay taxes on the income that you have produced outside Portugal. This schema is valid only for a specific list of professions which normally qualify as highly qualified personnel.
The list of professions are published in the official portoghese government website In this articole you will also find more technical details (into portoghese laws and regulations) of how to apply this regime.
https://www.acm.gov.pt/documents/10181/753067/IRS_RNH_EN.pdf/
In order to benefit fully from this regime its very important that you don’t open a company in
Portugal. You have for instance another company in another country and as administrator of this company you won’t be taxed when you withdraw money from it. Moreover, if you have an income generated inside Portugal it will be taxed at the flat rate of 20% rather than use the ordinary portoghese tax brackets which are quite high for higher salaries or incomes.
Let’s make an example with a specific case here. Let’s say you are an entrepreneur and you have a company in Italy because you are an Italian fiscal resident and you want to reduce taxes. Moving the residence in Portugal allows you to reduce your taxes on your money coming from Italy. Of course, from a tax optimization point of view, the best strategy is to close the Italian company and open a company in a jurisdiction with a zero corporate tax such as Dubai. After that you move to Portugal as a non habitual resident scheme and you don’t pay taxes either at the level of your personal income.
As pensioners, you also have the benefit of paying only a 10% flat rate on your foreing pension if you take the fiscal residence in Portugal. I remember in our esentaxa channel, we discussed a lot about Italy and when a lot of Italians after the retirement age, they move to Portugal in order to not pay taxes on their pensions.
For more info about tax optimizations contact us