Portugal’s Non-Habitual Resident Program: Benefits, Pros, Cons & Cost

GPW Invest – 15 Fevereiro 2023

Portugal has been an attractive destination for many people looking to move abroad and take advantage of the country’s low taxes and high quality of life.
In particular, the Non-Habitual Resident (NHR) program offers some big benefits to foreign nationals who are willing to make a long-term commitment to living in the country.
This article will discuss the pros and cons of taking part in this program, as well as the cost associated with it.

What is the NHR Program ?

The Portuguese Non-Habitual Resident (NHR) program was created in 2009 by Portuguese authorities to attract foreign investment and skilled professionals to Portugal. Under this program, entrepreneurs, professionals, pensioners or high net worth individuals may take advantage of Portugal’s non-habitual resident status, thereby possibly enjoying a life free of income tax.

Benefits Of The NHR Program

Those who qualify for Portugal’s NHR program can benefit from a wide range of advantages such as exemption from taxation on certain types of income that would otherwise be taxable under Portuguese law (e.g., pensions from abroad). In addition, participants can also enjoy certain tax breaks when it comes to capital gains derived from investments held outside of Portugal. Furthermore, foreign nationals who become naturalised Portuguese citizens through the NHR program can benefit from reduced inheritance taxes when transferring assets between countries.
Finally, participating in this program also includes access to several social security benefits such as health care coverage and family allowances.

Pros & Cons Of The NHR Program  

When it comes to deciding whether or not you should participate in the NHR program there are both pros and cons that need to be taken into consideration. For starters, those who qualify for this program may enjoy significant savings on their overall tax burden since they will only be taxed on income earned within Portugal rather than worldwide income. On the other hand, there are certain conditions attached to participating in this program that must be met such as having an annual minimum stay within Portugal and maintaining your primary residence there for at least 183 days per year.
Additionally, there may also be certain restrictions on how much you can earn within a given year which could limit your potential earnings if you decide to participate in this program.

Cost Of The NHR Program   

In terms of cost, participating in the Portuguese Non-Habitual Residency (NHR) Program is relatively inexpensive compared with other programs offered by other countries around Europe. Depending on your individual situation you may have additional costs associated with obtaining residency or citizenship through the NHR program but those costs should generally not exceed €2 500 (or approximately $3 000 USD). Additionally it is important to note that once you have obtained your residency or citizenship through this program any funds spent towards obtaining them are usually considered an investment for tax purposes which means they could potentially be deducted from any future taxes owed by you in Portugal or elsewhere depending upon individual circumstances and local laws governing taxation..

Conclusion:  All things considered, becoming a non-habitual resident via Portugal’s Non Habitual Resident (NHR) program can offer a number of great benefits such as lower tax burdens and access to social security benefits like health care coverage and family allowances—all while allowing participants to maintain their original citizenship without giving up their right to live abroad indefinitely if they so choose. However before making any decisions about whether or not this is right for you it is important that you research all available options carefully so that you understand all prerequisites necessary before applying for residency via the NNR Program along with any associated costs including fees associated with obtaining residency or citizenship through this route if applicable.

Doing so will help ensure that your decision is an informed one and allow you reap maximum rewards should you decide that participating in the Portuguese NNR Program is indeed right for you!

Contact us if you need assistance in Portugal!

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