In summary…
The IFICI (Incentivo Fiscal à Investigação Científica e Inovação) regime replaced the Non-Habitual Resident (NHR) regime in Portugal on January 1, 2024, following State Budget Law No. 82/2023. It is significantly more restrictive than the previous NHR regime. It is aimed at individuals who transfer their tax residence to Portugal to work in sectors deemed to have high added scientific, technological, or innovative value. Eligible beneficiaries are taxed at a flat rate of 20% on Portuguese-source income derived from these activities and, in principle, benefit from an exemption on most foreign-source income for ten years.
The scheme is no longer available to retirees with foreign pensions (the 10% tax exemption has been eliminated). For a French executive with substantial financial assets, the IFICI remains relevant only if the business activity carried out in Portugal falls within the list of eligible sectors, or if the asset profile can be structured to primarily generate passive income from foreign sources.
The transition from RNH to IFICI: what has changed
The Non-Habitual Resident (NHR) scheme, created in 2009 and closed to new registrations on December 31, 2023, granted for ten years a flat rate of 20% on certain high-value-added Portuguese professional activities and a near-complete exemption on foreign-source income, including retirement pensions (taxed at 10% since 2020). It had made Portugal a major destination for French, British and Nordic retirees.
The IFICI scheme that replaces it retains the structure (20% tax rate, % for eligible local activities, conditional exemption on foreign income, 10-year term) but drastically tightens the eligibility criteria. It is no longer aimed at a general expatriate audience but specifically at those contributing to Portugal's national effort in research, technology, and innovation.
Beneficiaries registered under the NHR scheme before December 31, 2023, retain their scheme until the expiration of their individual ten-year term. New arrivals from January 1, 2024, onwards can only apply for the IFICI.
IFICI Eligibility Requirements
Condition 1 — Transfer of tax residence to Portugal
The taxpayer must become a Portuguese tax resident as defined in Article 16 of the Income Tax Code (CIRS). The main conditions are: physical presence for more than 183 days over 12 consecutive months, or the availability of Portuguese accommodation used as a habitual residence.
Condition 2 — Non-Portuguese tax residence in the previous 5 years.
The candidate must not have been tax resident of Portugal during the five tax years preceding his application for registration in the IFICI regime.
Condition 3 — Carrying out an eligible activity
The activity carried out in Portugal must fall within one of the categories listed in the implementing texts: careers in scientific research and higher education (universities, recognized research centers), activities in industrial companies with high technological content, management positions in companies qualified as exporters, certain activities in sectors defined by decree (information technologies, biotechnologies, renewable energies, etc.).
Condition 4 — Application within the deadlines
Registration for the IFICI scheme must be requested from the Autoridade Tributária e Aduaneira (AT) no later than March 31 of the year following the transfer of residence. Failure to meet this deadline will result in the permanent loss of the scheme for a period of 10 years.
Taxation applicable under the IFICI regime
| Income category | IFICI regime | Portuguese general law regime |
| Employment income (eligible activities, source PT) | 20 % flat rate | Progressive scale up to 53 % |
| Targeted income (eligible activities, source PT) | 20 % flat rate | progressive scale |
| Dividends from foreign sources | Exemption (subject to conditions) | 28 % flat rate |
| Capital gains on securities from foreign sources | Exemption (subject to conditions) | 28 % flat rate |
| Foreign-sourced property income | Exemption (subject to conditions) | Scale or 28 % |
| Foreign-source retirement pensions | Normal taxation (NO exemption) | progressive scale |
| Income from Portuguese sources excluding eligible activity | Common law regime | Common law regime |
The France-Portugal tax treaty
The tax treaty signed on January 14, 1971, between France and Portugal, as amended by successive addenda, governs the allocation of taxing rights between the two states. For a Portuguese tax resident benefiting from the IFICI (French wealth tax on real estate):
- Dividends paid by a French company are subject to withholding tax in France at the treaty rate (15% of the taxable shareholding is less than 25%, with a reduced rate possible for substantial shareholdings). The Portuguese IFICI exemption can then create a situation of partial tax laundering (income not taxed in Portugal, with limited withholding in France).
- Capital gains from the sale of shares in French companies are in principle taxable in the state of residence of the seller (Portugal), with a treaty exemption in France except in cases of real estate predominance.
- Real estate income from French sources remains taxable in France according to French law (Article 6 of the convention).
Case study: Retired executive selling €4 million
Profile. Retired executive, 62 years old, selling an SME in 2026 for 4 million euros, additional financial assets of 2 million euros, planning to move to Portugal for quality of life. French tax resident for the last 30 years.
Under the old RNH (before 2024)
The executive allegedly benefited from an exemption on his foreign dividends (received via a asset holding company foreign) and a 10% tax on his French pensions. An extremely attractive scheme, ending after 10 years.
Under the IFICI 2024+ regime
The retiree's profile does not correspond to the eligible sectors. Therefore, the applicant does not qualify for the IFICI regime. They become a Portuguese tax resident under ordinary law. Their French pensions are taxable in Portugal according to the progressive tax scale (potential marginal rate up to 53% of %), with a tax credit as stipulated in the tax treaty. Their foreign dividends are taxed at 28% of %. This regime is significantly less advantageous than the historical NHR (Non-Habitual Resident) status.
Conclusion
For a retiree, Portugal has lost its distinctive tax appeal since 2024. A rational decision should compare Portugal under the IFICI scheme (without the benefits of the regime) to Italy under the neo-resident regime (a flat rate of €200,000 on foreign income) or to a UAE scheme. For an active executive in an eligible sector (tech, research, technology industry), the IFICI scheme remains very efficient.
The Balmont verdict
Portugal is no longer a default destination for wealthy French individuals. The Non-Habitual Resident (NHR) scheme was closed due to European political pressure and internal Portuguese tensions over soaring property prices. The French Real Estate Investment Trust (IFICI) scheme is technically compatible with wealth relocation for an executive actively working in an eligible sector (such as starting a technology business or taking a position in a qualifying company).
For other profiles — retirees, passive rentiers, executives in final sale without new activity — post-NHR Portugal no longer offers a differentiating tax advantage and other European destinations (Italy, Greece under the large wealth regime) are more efficient.
Sources & references
- Lei n.º 82/2023, de 29 de zembro — Order of the State for 2024. Article 263 creating the IFICI regime in article 58.º-A of the Estatuto dos Benefícios Fiscais (EBF), and article 236 revoking the regime of Non-Habitual Residents (RNH). Diário da República, n.º 250/2023, Series I of 2023-12-29. https://diariodarepublica.pt/dr/detalhe/lei/82-2023-225689132
- Portaria n.º 352/2024/1, of 23 de zembro — Implementing regulations defining the procedures for registration under the IFICI scheme, the list of highly qualified professions, and the eligible industrial and service activities. Diário da República, Series I of 2024-12-23. https://diariodarepublica.pt/dr/detalhe/portaria/352-2024-1
- Portaria n.º 52-A/2025/1, of 25 fevereiro — Amendment to portaria n.º 352/2024/1, specifying the eligible CAE (economic activities) codes and extending the transitional period for 2024 residents.
- Despacho n.º 2416-A/2025, of 20 fevereiro — Approves the official IFICI registration form.
- Ordem dos Contabilistas Certificados (OCC) — Guia Prático IFICI: Regime de Incentivo Fiscal à Investigação Científica et Inovação, March 2025. Reference document consolidating the entire legal, regulatory and procedural framework with detailed FAQ. https://www.occ.pt/sites/default/files/public/2025-03/Guia_Pratico_IFICI.pdf
- Tax Convention of January 14, 1971 Agreement between France and Portugal aimed at avoiding double taxation and establishing rules for reciprocal administrative assistance in matters of income tax (reference text). Approved by Law No. 72-534 of June 30, 1972, which entered into force on November 18, 1972. Consolidated version available on the DGFiP website: https://www.impots.gouv.fr/sites/default/files/media/10_conventions/portugal/portugal_20190805.pdf
- Decree No. 2018-7 of January 4, 2018 Publication of the amendment modifying the convention of 14 January 1971 (signed in Lisbon on 25 August 2016). Notable changes include: taxation by France of salaries and public pensions paid to Portuguese residents, alignment with OECD standards, and strengthening of anti-tax evasion measures. Official Journal No. 0004 of 6 January 2018. https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000036396339
- Official Bulletin of Public Finances — BOI-INT-CVB-PRT — French administrative comments on the tax treaty between France and Portugal. https://bofip.impots.gouv.fr/bofip/5551-PGP
- Article 16.º of the IRS Code — Criteria for Portuguese tax residence (physical presence of 183 days or accommodation used as habitual residence).
