Portugal introduced the None-Habitual Tax Regime or NHR in 2009 and it has been an outstanding success ever since. In this short article we are going to look at potentially ideal NHR applicants and explain why the regime is especially suitable for some individuals who perhaps had not been looking at Portugal or Madeira.
Firstly, we would like to look at why the government of Portugal introduced the NHR tax regime;
Portugal intended to attract wealthy pensioners and qualified persons who will buy property and spend their private pensions and wages living in Portugal as residents. The NHR applicants often buy more expensive property and this helps support the local housing market and various tiers of the local economy.
Those in the NHR who are living as resident also find the high quality of life in Portugal and excellent local restaurants numerous and appealing, there is also outstanding value for money. Portugal and Madeira are rated as one of the best places to live in the world for safety, good weather and the sublime lifestyle.
Pensions & Income
If you have a good private pension and will be paying personal tax in your home country, you are already going to find the NHR taxation on private pensions attractive. Private pensions that have not come from a government source are suitable for the NHR regime. Private pensions, royalties and savings are all tax exempt in the NHR regime for a period of 10 consecutive years.
In subtropical Madeira, a low corporation tax is available for business owners in The Madeira International Business Centre or MIBC. A business owner who incorporates a new business in Madeira or relocates his company can be subject to a special EU state-aid regime that allows for a 5% corporation tax for the business profit. There is also European Union funding available for some business types, such as websites or trading companies.
Working in Portugal
The NHR is also ideal for certain individuals who have degree qualifications in scientific, technological or artistic fields and will are interested to work in Portugal. A special flat rate personal tax of 20% is available, this when compared to normal Portuguese rates of up to 48%, represents a good saving. New NHR rules from July 2019 can also be extended to some business owners who have registered a business in the MIBC and have also taken the NHR status.
The ideal NHR applicant will be considering a move to Portugal and spending a minimum of 183 days a year in Portugal. They will have pensions from a private non-governmental source and perhaps even some dividends. Business owners should look no further than the MIBC and a residential location to Madeira Island.
Next step is a tax enquiry.
With a low tax or tax exemption and a healthy lifestyle the NHR regime in Portugal has so much to offer. We recommend a financial analysis with a qualified registered Portuguese accountant before you go further. Please contact us for a PDF factsheet on the NHR and the MIBC, you can also talk to our experts when you call.