However, as of now, the measure remains an announcement rather than an established law.

Pedro Reis has assured that the regulation, part of the IFICI (Tax Incentive for Scientific Research and Innovation) + framework, will have retroactive applicability to January 2024 for registrations completed by March 15, 2025.

Speaking during a parliamentary committee session on the 2025 State Budget, Reis stated, “We are days, hours away from having the instrument out there, as promised.” He further clarified that the incentive will allow foreign workers who meet the criteria to benefit from a reduced income tax rate of 20% on 2024 income, provided they register within the stipulated timeframe.

This proposed measure is included in a package of 60 economic proposals announced earlier this year by Minister of Finance Joaquim Miranda Sarmento, described as a reintroduction of Portugal’s Non-Habitual Residency (NHR) tax regime or NHR 2.0 as it’s often been referred to as. Unlike its predecessor, the IFICI+ initiative specifically excludes pension income and focuses on highly qualified foreign workers.

While the Executive branch has emphasised its commitment to finalising the regulation, key details remain unsettled. According to Reis, the initiative will “cover a wider set of qualified professions and companies,” but no specifics have been disclosed.

The IFICI (NHR 2.0 tax regime) framework was first introduced under the previous government as a measure to attract top-tier international talent, offering a preferential tax rate for a 10-year period. The current government has expanded its scope, but without formal approval, this incentive is still a work in progress.

Reis also acknowledged the practical timeline for implementation, stating, “This is to give people time to familiarise themselves with the instrument.” The deadline for future years will revert to January 15, but for the first rollout, registrations can extend until mid-March.

The retroactive nature of the measure, if implemented, would mean that eligible individuals could apply the reduced tax rate to their 2024 income when filing returns in 2025. However, with no regulation published yet, the timeline remains tight for those planning to take advantage of the initiative.

Paul Stannard, Chairman and Founder at Portugal Pathways, said: ‘’Entrepreneurs, academics, and highly skilled foreign workers eyeing Portugal as a destination for their expertise will be watching closely to see whether this incentive is finalised as promised at the end of the year or whether there are any further delays. Until then, it remains a proposal awaiting formalisation in law.

“The proposals for this new tax regime for internationals and their companies would greatly benefit the Portuguese economy and are likely to sustain the ongoing trend of international inward investment into Portugal.

‘’Through our Portugal Investment Owners Club platform, we’ve witnessed a strong appetite for investing in Portugal’s future. We already have firm investment commitments for 2025, and confirmation of this new tax regime would, in our view, trigger significant inward investment through our Portugal’s Future Fund. This alternative fund will focus on supporting industry sectors that are driving the country’s GDP growth trajectory.”

About Portugal Pathways

Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and aims to continue to do this through its Portugal Investment Owners Club. The organisation also provides expert guidance on luxury property, wealth management, tax optimisation, private healthcare, and bespoke relocation solutions to enhance life and investments in Portugal.