Starting in 2024, Portugal introduced new tax benefits for non-habitual residents (NHR), particularly targeting the start-up ecosystem. This new regime offers tax advantages for employees and board members of certified start-ups, making moving to Portugal an attractive option for many.

Qualification Criteria

To be certified, a company must:

• Be less than 10 years old.
• Have fewer than 250 employees.
• Have an annual turnover under 50 million euros.
• Not be a spin-off or transformation of a large company.
• Not have a majority shareholding in a large company.

Eligible Professions

Eligible professionals include:

• Higher education teachers and researchers in the national science and technology system and recognised technology and innovation centres.
• Qualified professionals and board members in entities benefiting from tax incentives for productive investment.
• Highly qualified finance and economics professionals.
• Professionals in companies with a history of tax-supported investment and those in significant export industries.
• Qualified professionals and board members in entities recognised by AICEP, EPE, or IAPMEI, IP, as relevant to the national economy.
• Research and development jobs, especially those involving doctorates eligible for the System of Tax Incentives in Business Research and Development (SIFIDE).
• Jobs and board members in start-ups certified under Law no. 21/2023, of May 25th.

NHR 2024 for Start-up Employees and Board Members

From 2024, tax residents in Portugal can benefit from a flat 20% tax rate on personal income earned in Portugal and exemptions on various categories of foreign income. This makes the Portugal NHR scheme highly advantageous for those seeking lower tax obligations.

Other Tax Benefits

Corporate Tax Rates: New companies in Portugal enjoy favourable tax rates. The Portuguese mainland applies a 12.5% rate on the first 50,000 euros of taxable profit (8.75% in Madeira), and excess amounts are taxed at 21% (14.7% in Madeira).

Madeira's Advantages: Start-ups in Madeira benefit from a special 5% tax rate, making it an attractive location for favourable tax environments.

Stock Options and Crypto Assets: Portugal offers a competitive tax regime for stock options and crypto assets, providing flexibility and advantages for start-ups.

Accelerated Residence Permit Procedure: Employees from third countries and start-up management can benefit from an accelerated residence permit process, easing their transition into the Portuguese business environment.

The benefits remain the same – a 20% flat tax rate on personal income and a tax exemption on other passive income. Therefore, you will also not pay any tax on dividends, interest, royalties, capital gains, rental income from real estate outside Portugal, and income from employment in-country.

The NHR 2024 regime is more than just a tax incentive; it aims to drive growth, innovation, and international collaboration. By creating a supportive environment for start-ups, Portugal positions itself as a prime location for those seeking tax advantages and a vibrant ecosystem to enhance their entrepreneurial journey. This scheme significantly benefits those considering moving to Portugal and taking advantage of the Non-Habitual Residency (NHR) scheme.

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