Portugal’s New IFICI Tax Incentive for Highly Skilled Expats
Portugal has long been a top destination for expats and professionals seeking a high quality of life combined with exciting career opportunities. With the introduction of the Tax Incentive for Scientific Research and Innovation (IFICI) as part of the 2024 Finance Law, Portugal is making an even bolder move to attract highly skilled workers, foreign talent, startup founders, and innovative entrepreneurs. This new incentive, replacing the Non-Habitual Resident (NHR) regime, aligns perfectly with Portugal’s ambition to be a global hub for innovation and technology.
If you’re a professional in fields like scientific research, ICT, or engineering—or an entrepreneur eager to build your next venture in Europe—Portugal’s IFICI offers both financial advantages and a vibrant ecosystem for growth. Here’s everything you need to know about the new program and why it might be the perfect opportunity for you.
What is IFICI?
The Tax Incentive for Scientific Research and Innovation (IFICI) was introduced as part of the 2024 Finance Law to promote Portugal as a destination for highly qualified professionals and entrepreneurs in cutting-edge fields. The incentive is aimed at professionals engaged in scientific research, higher education, and innovation-related professions, as well as startup founders involved in research and development.
Unlike the now-replaced NHR regime, IFICI is more focused on attracting talent in highly specialised and strategically important sectors for the Portuguese economy.
Key features of the IFICI program include:
- Flat 20% tax rate on income for eligible professionals and entrepreneurs for 10 years.
- Tax exemptions on most non-Portuguese income, except for pensions and income from countries on Portugal’s blacklist of non-cooperative jurisdictions, which is taxed at 35%.
- Application deadline: Applications must be submitted by January 15 of the year following the applicant’s registration as a tax resident in Portugal. A transition period is available for new tax residents in 2024, extending the application deadline to March 15, 2025.
Who can apply for IFICI?
Eligibility for IFICI is determined by a set of clear criteria outlined in the ministerial order of December 23, 2024. The program is open to all non-tax residents who:
- Have not been tax residents in Portugal for the last five years.
- Hold at least a bachelor’s degree or a doctorate, with a minimum of three years of professional experience.
- Are engaged in a highly qualified profession relevant to the Portuguese economy.
Eligible professions
The ministerial order provides a list of professions covered by IFICI, including:
- Doctors and medical specialists
- ICT experts and software developers
- Engineers and experts in physics, mathematics, and related fields
- Industrial designers
- General managers and executive directors
- Directors of administrative, commercial, and production services
Additionally, professionals in higher education, scientific research, and research and development (R&D) are also eligible.
The applicant’s professional role must be recognised as relevant to the Portuguese economy, which is verified by one of the following agencies:
- Portuguese Agency for Investment and External Trade (AICEP)
- Agency for Competitiveness and Innovation (IAPMEI)
Applicants may be required to submit documents that verify their qualifications and work experience, ensuring they meet the standards of the IFICI program.
How to apply for IFICI
Applying for the IFICI tax incentive involves several steps. While the process is relatively straightforward, it’s important to adhere to the timeline and ensure all required documents are in order.
- Register as a tax resident in Portugal
New residents must declare their tax residency by obtaining a Portuguese tax identification number (NIF) and registering with the local tax authority. - Submit the IFICI application
Applications must be submitted through the Portuguese tax authority’s online portal no later than January 15 of the year following the year of residency. For new residents in 2024, the deadline is extended to March 15, 2025. - Verification by the designated authority
A designated organisation will review each application, confirming that the applicant’s professional role aligns with the criteria of the IFICI program.
What are the benefits of IFICI?
The IFICI tax incentive is designed to offer significant financial advantages for qualified professionals and entrepreneurs, making it one of Europe’s most appealing programs for expats.
1. Flat 20% tax rate on income
Eligible professionals benefit from a flat tax rate of 20% on their Portuguese-sourced income for 10 years. This is considerably lower than Portugal’s regular progressive income tax rates, which can reach up to 48%.
2. Tax exemptions on non-Portuguese income
Most non-Portuguese income is exempt from taxation under the IFICI regime. This includes foreign-earned salaries, dividends, and capital gains, making it highly attractive for international investors and entrepreneurs. However, it’s important to note that income from countries on Portugal’s blacklist of non-cooperative jurisdictions will be taxed at a higher rate of 35%.
3. Support for innovative entrepreneurs
Startup founders and innovators stand to benefit greatly from IFICI. Combined with Portugal’s thriving startup ecosystem and continued operation of the Golden Visa program for non-real estate investments, the new incentive is a game-changer for entrepreneurs seeking to expand their ventures in Europe.
Portugal – a thriving hub for research, innovation, and startups
Portugal’s innovation-driven economy is booming, with Lisbon leading the way as the European Innovation Capital of 2023. Over the past decade, startup investments in the country have grown by an impressive 30% annually—double the rate of other European capitals.
Key sectors experiencing rapid growth include:
- Technology and ICT: Lisbon and Porto are major tech hubs, attracting talent from across Europe and beyond.
- Health and biotech: The country’s biotech sector is expanding rapidly, with research institutions and startups focusing on groundbreaking healthcare solutions.
- Green tech and renewable energy: Portugal is a leader in renewable energy, making it an attractive destination for professionals in the green tech sector.
Why IFICI is a game-changer for expats
The IFICI tax incentive marks a new era for expats and highly qualified professionals in Portugal. By offering a competitive tax regime and targeting strategic sectors like research, innovation, and technology, IFICI positions Portugal as one of Europe’s most attractive destinations for international talent and entrepreneurs.
Whether you’re a scientific researcher, a tech professional, or a startup founder, the IFICI program provides the perfect platform to build your future in Portugal. Combined with the country’s high quality of life, dynamic innovation ecosystem, and access to European markets, it’s a golden opportunity you don’t want to miss.
If you’re considering a move to Portugal, now is the time to start planning. Connect with a tax advisor, explore the opportunities awaiting you, and get ready to thrive in one of Europe’s most exciting countries for research and innovation.
