Portugal NHR Successor 2025: New Tax Benefits After the End of the Non-Habitual Resident Status

What was Portugals NHR Status, and why was it abolished?

Before we look at alternatives, we should understand what we lost. The NHR program used to be a tax paradise for international entrepreneurs.

The Basics of the Non-Habitual Resident Program

NHR status granted a ten-year tax privilege to new Portuguese tax residents. Launched in 2009, it was designed to attract qualified foreigners to the country.

Here are the main benefits:

• Exemption from foreign income: Dividends, interest, and royalties from abroad remained tax-free
• Reduced income tax: Certain professions paid just 20% instead of up to 48%
• No inheritance tax: Asset transfers were untaxed
• EU benefits: Freedom of movement and rights within the European Union

A concrete example: Thomas, a German online entrepreneur, saved over €150,000 in taxes every year thanks to NHR. His dividends from a Cypriot holding were completely tax-exempt in Portugal.

Reasons for the Abolition of the NHR Status

Why did Portugal pull the plug on this program?

The answer comes down to three factors:

The program fell victim to its own success. Over 60,000 people benefited from NHR status, including many wealthy Europeans.

Transitional Arrangements for Existing NHR Holders

If you already have NHR status, you’re in luck. Portugal is granting protection for all who registered before October 2023.

Your benefits remain valid until:

• End of your originally approved 10-year period
• Or until you leave Portugal
• Or until you change your tax status

Additionally, existing NHR holders can still bring their families over. However, these family members will no longer receive their own NHR status.

Portugal NHR Successor 2025: The New Tax Schemes in Detail

Portugal scrapped NHR but hasn’t given up on its ambitions. The country still wants to attract international talent.

Just with a different approach.

The Tech Visa and D7 Visa as Alternatives

Portugal is now focusing on selective schemes. The Tech Visa targets IT professionals and tech entrepreneurs.

The requirements are stricter:

• Proof of employment at a Portuguese tech company
• Or founding an innovative startup
• Minimum salary of €1,760 per month
• Language skills in Portuguese or English

The D7 Visa (Passive Income Visa) remains available. It targets retirees and people with passive income.

Key minimum requirements:

But take note: These visas no longer grant special tax advantages.

Portugal Golden Visa Changes 2025

The Golden Visa still exists but has been severely restricted. Real estate investment is no longer possible in Lisbon and Porto.

New minimum investments:

• Venture capital funds: €500,000
• Research & Development: €500,000
• Cultural projects: €250,000
• Inland real estate: €400,000 (only outside coastal areas)

The Golden Visa grants eligibility for Portuguese citizenship after five years. However, it no longer brings any direct tax advantages.

New Rules for Digital Nomads

Portugal introduced a Digital Nomad Visa in 2022. It applies to remote workers and freelancers.

The requirements:

• Proof of a remote employment contract or freelance activity
• Minimum monthly income of €2,800
• Health insurance valid in Portugal
• Clean criminal record

In tax terms, digital nomads are treated as regular tax residents. The main advantage is easier entry and residence permits.

Tax Benefits in Portugal 2025: Whats Left After the End of NHR?

Let me be frank: The days of major tax advantages are gone. But Portugal still offers some interesting aspects.

Source Taxation on Foreign Income

Portugal continues to apply the principle of source taxation. In other words: Income is taxed where it arises.

In practice this means:

• Dividends from German stocks remain taxable in Germany
• Royalties from the US are subject to US tax
• Rental income from French real estate is taxed in France

However, the exemption with progression applies here. Portugal includes this income when calculating your tax rate, but does not tax it a second time.

Exemption with Progression and Double Tax Treaties

Portugal has double tax treaties (DTA) with over 80 countries. These agreements prevent double taxation of your income.

A practical example: Elena receives €50,000 in dividends from her German GmbH. Germany withholds 26.375% withholding tax. Portugal includes the €50,000 in her tax rate calculation, but does not tax it additionally.

Her Portuguese tax rate increases from 28% to 35%. However, the German dividends themselves remain tax-free in Portugal.

Tax Treatment of Cryptocurrencies

Portugal has some of the most liberal crypto tax rules in Europe. Private crypto gains remain tax-free as long as you’re not classified as a professional trader.

The criteria for private trading:

• Minimum holding period of 365 days
• No regular trading activities
• Crypto is not your main source of income
• No leveraged products used

Professional crypto traders pay normal income tax of up to 48%. The distinction can be tricky and should be checked individually.

Alternative Tax Optimization: Strategies Beyond Portugal

Portugal was never the only game in town. Other countries still offer attractive tax regimes.

Let’s take a look at the realistic alternatives.

Cyprus Non-Dom Status as an NHR Alternative

Cyprus offers a Non-Dom status with a structure quite similar to the old NHR. You must spend at least 60 days per year in Cyprus.

The key benefits at a glance:

Robert, a German consultant, takes advantage of the Cyprus Non-Dom regime. His holding company pays him €200,000 in dividends. In Germany, he would pay €52,000 in taxes. In Cyprus: none.

This status lasts for 17 years and is relatively straightforward to obtain.

Dubai Tax Advantages for Entrepreneurs

Dubai introduced a 9% corporate tax in 2023. That might not sound attractive at first. But for entrepreneurs with higher profits, Dubai remains an interesting option.

The key facts:

• Tax-free threshold: First 375,000 AED (approx. €102,000) are tax-free
• Corporate tax rate: 9% on profits above the threshold
• Personal tax: Still 0% personal income tax
• Holding advantages: Dividends from subsidiaries are tax-free

For Sophie, a coaching entrepreneur with €500,000 annual profits, this means:

• Germany: approx. €240,000 tax (48%)
• Dubai: approx. €36,000 tax (9% on €398,000)
• Savings: €204,000 per year

On top of that: no inheritance tax, no wealth tax, no social security contributions for the self-employed.

Malta and the 6/7 Rule

Malta offers an intriguing option for EU citizens. With the so-called 6/7 rule, you can receive nearly all foreign-source income tax-free as a Non-Dom.

The conditions:

• Minimum stay of 90 days per year in Malta
• No domicile in Malta (not born there nor having parents domiciled there)
• Foreign income is only taxed if remitted to Malta

A practical example: Thomas remits only 1/7 of his foreign income to Malta for living expenses. 6/7 remains tax-free abroad.

With annual income of €350,000, he transfers €50,000 to Malta (taxable) and leaves €300,000 abroad (tax-free).

Practical Steps: A Step-by-Step Guide to the Optimal Tax Strategy

Enough theory. Let’s get practical. How do you find the best solution for your circumstances?

Assessing Your Current Situation

Before you move anywhere, you need to give yourself an honest assessment. I use a simple checklist for this:

1. Analyze income structure: Salary, dividends, capital gains, rental income
2. Calculate current tax burden: Germany vs. intended destination
3. Assess living situation: Family, children, schooling, health insurance
4. Review business activities: Client locations, employees, substance
5. Consider time flexibility: Minimum stay requirements, travel opportunities

I often find: The best tax solution isn’t always the best life solution.

Location Evaluation and Criteria

When choosing your destination, weigh several factors:

My recommendation: Create a weighted evaluation matrix. Tax savings are important, but not everything.

Timing and Implementation Planning

Moving abroad takes careful planning. Here’s my proven timeline:

6–12 months prior:

• Tax advice and strategy development
• Choose destination and check visa requirements
• Plan business structure (holding, operating company)
• Register change of residence with German authorities

3–6 months prior:

• Apply for visa and prepare paperwork
• Open bank accounts in destination country
• Look for accommodation (buy or rent)
• Obtain health insurance

1–3 months prior:

• Prepare to deregister in Germany
• Set up companies (if necessary)
• Register for taxes in the new country
• Organize the move

Also important: Document every step. The German tax office will want to see evidence of your genuine move abroad.

Practical Tip: Keep a relocation diary. Record where you are, business activity, and personal connections. This can be invaluable in future audits.

The days of easy tax optimization are over. But with the right strategy and professional guidance, we’ll still find legal ways to cut your tax bill in 2025.

Most importantly: Be honest with yourself. The best tax strategy is useless if you cant live happily with it.

Frequently Asked Questions about Portugals NHR Successor 2025

Can I still register for NHR status in Portugal?

No, the NHR scheme was closed to new applications in October 2023. Existing NHR holders can continue to use their benefits until the end of their originally approved 10-year period.

What alternatives are there to Portugal’s NHR program?

The most attractive alternatives are Cypruss Non-Dom status (0% tax on foreign income), Dubai with 9% corporate and 0% personal income tax, and Malta with the 6/7 rule for Non-Dom residents.

Do I still have to pay taxes in Portugal if I already had NHR status?

Yes, as a Portuguese tax resident you pay tax on your worldwide income. NHR status granted exemptions for certain kinds of foreign income, which remain valid until the end of your original NHR period.

Does Portugal still offer tax benefits for cryptocurrencies?

Yes, Portugal still doesn’t tax private crypto gains provided you hold for at least 365 days and aren’t classified as a professional trader. This rule is separate from NHR status.

What minimum stay is required for tax benefits in other countries?

It depends on the country: Cyprus requires 60 days, Dubai and Malta both require 90 days per year. Portugal still requires 183 days for tax residency, but offers no NHR advantage anymore.

Can EU citizens easily relocate to Dubai?

Dubai offers various visa options such as the Freelancer Visa or Golden Visa. However, EU citizens need either a sponsoring company or must set up their own company. The tax benefits are significant, but residence and business requirements must be checked carefully.

How does the German tax office verify my move abroad?

The tax office checks your actual living circumstances: time spent in the country, property ownership, family ties, business activities, and personal connections. Carefully document your move and make sure you meet the minimum stay in your new country.

Is moving abroad worth it for lower incomes?

That depends on your individual situation. With annual income below €100,000, the costs and effort of moving usually outweigh the tax savings. From €200,000 per year upwards, tax optimization generally becomes economically viable.

What costs are involved in a tax-motivated relocation?

Expect to pay €15,000–30,000 for advice, visa applications, company set-up, and moving expenses. Ongoing tax and accounting/compliance fees can add a further €10,000–20,000 per year.

Can I keep my German health insurance?

After permanently leaving Germany, statutory health insurance usually ceases. Youll need international health insurance or insurance in your new country. Private insurances often provide worldwide plans.