Portugal: IFICI opened up to new technology occupations

Portugal's incentive regime for scientific research and innovation replaced the non-habitual resident status, which is closed to new entrants.

It applies a special rate of 20%¹ to category A and B income — salaries and self-employment income — received for an eligible role.

The benefit is granted for a consecutive period of 10 years², provided the person has not been a Portuguese tax resident during the from 5 years³ preceding arrival.

The scheme's originality lies in what it is anchored to: it is not tied to an income level or to wealth, but to the nature of the activity performed and to the entity employing the person.

The same profile may therefore be eligible in one organisation and not in another. The employer becomes a parameter of the tax plan, which is unusual.

This logic makes sense in light of the stated objective: Portugal no longer seeks to attract wealthy residents but skills, after the public debate sparked by the former status and its effect on the housing market.

The change in target population is therefore deliberate, and it explains the exclusion of retirees as much as the regime's anchoring in a list of roles rather than in an income or wealth threshold.

Extending the list of eligible activities widens the population without changing the rate or the duration. It is an adjustment of scope, not an improvement of the advantage.

It does, however, have an important practical consequence: an applicant ruled out in an initial analysis may have become eligible, and conversely, a plan built on an old list may rest on an outdated basis.

We do not publish the list of eligible activities, the occupations recently added, or the competent authorities for each sector: the implementing regulations were published in stages and we have not been able to verify the current version. It must be confirmed with the Portuguese tax administration.

This instability is the scheme's weak point. The list of eligible activities and the competent authorities were specified after the regime came into force, which put the first applicants in an uncomfortable position.

A flat withholding rate of 35%⁴ also applies to income from a jurisdiction with a privileged tax regime, which closes a route the former regime left open.

Retirees are excluded. This is the change with the heaviest consequences compared with the former status, and it explains why part of this demand has shifted to Greece, whose regime applies 7%⁵ for 15 years⁶, or to Cyprus and its non-dom status.

The regime covers only earned income. Investment income falls under the ordinary rules: dividends bear a flat withholding rate of 28%⁷, and capital gains on securities receive specific treatment beyond a holding period of more than 365 days⁸.

The ordinary scale, which applies otherwise, ranges from from 12.5%⁹ to 48%¹⁰. The gap with the special rate is therefore considerable for high earnings.

Finally, the benefit requires registration with the competent authority, within a window that closes shortly after settling in. It is not a declaration but an application, and it is time-barred once the deadline has passed.

1. Check the eligibility of the role and the employer before moving, against the list in force.
2. Obtain a Portuguese tax identification number and establish residency, presence of more than more than 183 days¹¹ being decisive.
3. Identify the competent authority, which differs according to the sector of activity.
4. File the application within the set window: the deadline is short and mandatory.
5. Handle the departure from France according to its own criteria and the France–Portugal tax treaty.

The general lesson of this succession of regimes applies beyond Portugal: an attractiveness scheme can be closed to new entrants overnight, whereas an ordinary-law rate does not expire. Building a ten-year plan on the former means accepting this risk, and putting a figure on it.