RIP: Portugal’s Non-Habitual Residents Regime

For the internationally mobile, Portugal has been a popular relocation destination to consider. Its Non-Habitual Residents (NHR) regime (see it as akin to the UK’s regime for resident non-domiciliaries) offers tax incentives and breaks for certain foreign-sourced income. Coupled with the country’s so-called ‘Golden Visa’ enabling residence-by-investment, it wasn’t surprising Portugal was at the top of many clients’ lists when comparing jurisdictions to move to.

Monday’s announcement by the Portuguese Prime Minister that the NHR regime in its current guise will end in 2024 comes in the wake of its Golden Visa programme being abolished this year. One could draw parallels with the UK with the closure of its Tier 1 (Investor) Visa category in February 2022 and possible changes on the horizon to the remittance basis of taxation for non-domiciled UK residents in the run up to the general election next year. 

While these changes and uncertainties will give global families pause for thought in deciding where to move to, it is worth bearing in mind that these tax and residence-by-investment regimes for many are not their primary motivators. Core fundamentals such as whether the jurisdiction offers the right lifestyle for them, a strong educational system for their children, a stable rule of law and the optimal eco-system to pursue and develop business opportunities still remain the top priorities for what attracts our clients to relocate to a specific country, particularly with the UK and senior executives (discussed more here: https://www.forsters.co.uk/services/private-client/senior-executives/thinking-of-relocating-to-the-uk). 

Portugal to scrap ‘unjust’ tax breaks for foreign residents

https://www.theguardian.com/world/2023/oct/03/portugal-to-scrap-unjust-tax-breaks-for-foreign-residents
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