Non-habitual Resident (NHR) 2.0

The Ordinance No. 352/2024/1, published on December 23, 2024, establishes the Tax Incentive Regime for Scientific Research and Innovation (IFICI), as outlined in Article 58-A of the Tax Benefits Statute (EBF). This measure is part of the government’s strategy to foster an environment conducive to innovation, digitalization, and economic development by applying a reduced 20% IRS tax rate on income derived from scientific, technological, and innovative activities.

Context and Rationale

This ordinance is enacted within the framework of fiscal reforms established by Law No. 82/2023, which approved the State Budget for 2024. The Portuguese government recognizes that a high tax burden has historically discouraged merit, productivity, and business competitiveness. Thus, this tax incentive aims to attract highly skilled talent, enhance Portugal’s appeal as a destination for innovative professionals and companies, and strengthen an economy based on knowledge and value creation.

Key Provisions

  1. Eligibility Criteria and Registration Process

IFICI is available to Portuguese tax residents engaged in eligible activities, with registration required by January 15 of the year following their residency establishment.

Applications must be submitted to the relevant authorities, including:

  • Foundation for Science and Technology (FCT) – for researchers and university faculty;
  • Agency for Investment and Foreign Trade of Portugal (AICEP, E.P.E.) – for professionals covered by investment incentive programs;
  • Tax and Customs Authority (AT) – for highly qualified professions;
  • National Innovation Agency (ANI, S.A.) – for R&D activities with eligible tax incentives.
  1. Verification and Certification of Requirements

The application of this regime depends on compliance with the criteria established in Article 58-A of the EBF, particularly regarding the qualification of professionals and the certified nature of the employing entities.

The designated authorities are responsible for reviewing and validating applications to ensure full compliance with legal and regulatory requirements.

  1. Highly Qualified Professions and Eligible Sectors

The ordinance provides a list of eligible professions in Annex I, including:

  • CEOs, executive managers, and directors of specialized services;
  • Experts in exact sciences, engineering, and information and communication technologies (ICT);
  • University professors and researchers;
  • Medical professionals and specialists in technological innovation.

Additionally, Annex II defines the industrial and service activities eligible for the regime, covering key economic sectors such as:

  • Extractive and manufacturing industries;
  • Information and communication technologies;
  • Scientific research and development;
  • Higher education and healthcare.
  1. Reporting Obligations and Notification of Changes

Employers and beneficiaries must keep their records updated with the relevant authorities and report any changes in their tax status by January 15 of the following year.

The Tax Authority (AT) provides an annual update on enrollment status by March 31, ensuring transparency and accessibility of information.

  1. Transitional Provisions and Entry into Force

The ordinance entered into force the day after its publication and applies to taxpayers who become tax residents in Portugal as of January 1, 2024.

For income earned in 2024, transitional provisions allow registration applications to be submitted until March 15, 2025, with the responsible authorities notifying the Tax Authority by April 15, 2025.

Conclusion

The Ordinance No. 352/2024/1 represents a significant regulatory milestone for promoting scientific research and high-value entrepreneurship in Portugal. By offering attractive tax benefits to highly skilled professionals and strategic economic sectors, this measure encourages talent retention, boosts business competitiveness, and fosters an economic model rooted in innovation and knowledge.