What is IFICI and who can benefit from it?

IFICI is the regime that replaced the Non-Habitual Resident (NHR) regime. It retains its general structure: a 20% rate on eligible Portuguese professional income and an exemption for several categories of foreign-source income, for a period of ten years (Autoridade Tributária e Aduaneira).

Access has, however, been considerably restricted.

The regime is intended for individuals who transfer their tax residence to Portugal in order to carry out an activity falling within sectors considered to have high added value in scientific, technological or innovation terms, based on a list and conditions relating to the nature of the activity and, in some cases, the employer.

Applicants must also not have been Portuguese tax residents during the previous five years and must effectively become Portuguese tax residents.

Eligibility must be assessed on a case-by-case basis before the move.

Are retirees covered?

No, and this is the most consequential change.

The former regime gave foreign-source pensions favourable treatment, which had made Portugal the reference destination for French retirees.

IFICI does not cover retirement pensions.

A retiree moving to Portugal today is therefore subject to the ordinary progressive tax scale, whose top marginal rate is high, subject to the application of the France-Portugal tax treaty depending on the nature of the pension, whether public or private.

The distinction between public-sector and private-sector pensions therefore becomes decisive and must be examined pension by pension.

Portugal retains all of its lifestyle advantages for retirees.

It has lost its specific tax advantage.

What is the tax treatment outside the special regime?

Personal income tax is progressive and comprises several brackets, with a high top marginal rate to which a solidarity surcharge applies for higher levels of income.

Investment income and capital gains are subject to specific rules, with, in certain cases, an option for a final withholding tax rate.

There is no general wealth tax, but an additional tax applies to real-estate holdings exceeding a certain value threshold.

Corporate income tax was reduced to 19% on mainland Portugal in 2026 (Autoridade Tributária e Aduaneira), with reduced rates applying to the first bands of taxable profit for smaller businesses and more favourable regimes in Madeira and the Azores.

This ordinary-law framework remains competitive by European standards, without being exceptional.

Is Portugal still attractive for an entrepreneur?

Yes, but the argument has shifted.

It is no longer based on a broad exemption of foreign-source income, but rather on a European base with controlled costs: a 19% corporate tax rate (Autoridade Tributária e Aduaneira), EU membership with all that entails in terms of intra-EU VAT, free movement and recognition of legal structures, a skilled workforce at a lower cost than in France, and a genuine technology ecosystem in Lisbon and Porto.

For an entrepreneur whose eligible activity falls within the scope of IFICI, the 20% rate on professional remuneration provides an additional and substantial advantage.

For everyone else, Portugal should be assessed as a conventional European business location and compared on that basis with Italy, Spain or Greece.

How does the France-Portugal tax treaty allocate taxing rights?

As Portugal is a member of the European Union, the conditions for deferring payment of the French exit tax are among the most favourable available. This represents a genuine consideration for a business owner holding substantial shareholdings and can sometimes be a decisive factor when comparing Portugal with a destination outside Europe.

The France-Portugal tax treaty allocates taxing rights according to the category of income and contains tie-breaker rules in cases of dual residence.

French-source rental income remains taxable in France, and French real-estate wealth tax (IFI) continues to apply to your French real-estate assets.

Finally, Portugal’s proximity and frequent air connections make travel between the two countries easy, making it all the more important to document the reality of the relocation.

What is AIMI, and does it apply to foreign property owners?

AIMI is the Additional to Property Tax (Adicional ao Imposto Municipal sobre Imóveis), and it applies regardless of nationality or tax residence.

It is based on the aggregate taxable property values of residential properties and building land held by the same individual.

For individuals, a EUR 600,000 allowance applies, followed by a rate of 0.7% up to EUR 1 million, 1% between EUR 1 million and EUR 2 million, and 1.5% above EUR 2 million. The thresholds are doubled for couples who opt for joint taxation (Autoridade Tributária e Aduaneira).

A significant Portuguese real-estate portfolio therefore carries a recurring annual tax burden, which is often omitted from initial projections.

What are the exact eligibility requirements for IFICI?

They are cumulative and stricter than its commercial presentation might suggest.

The regime, established by Article 58-A of the Portuguese Tax Benefits Code, requires the individual to become a Portuguese tax resident without having been resident there during the previous five years, to carry out an activity included among the eligible activities, and never to have benefited from either the Non-Habitual Resident regime or IFICI (Article 58-A of the Portuguese Tax Benefits Code).

It then provides for taxation at 20% on eligible Portuguese professional income for ten consecutive years beginning from registration as a tax resident.

Eligibility is assessed based on the actual nature of the activity, not its job title or description.

What is the tax rate for a Portuguese company in 2026?

A national rate of 19% applies on mainland Portugal, to which local and national surcharges that are rarely mentioned must be added (Autoridade Tributária e Aduaneira, Corporate Income Tax Code).

The municipal surcharge, determined by each municipality, can reach 1.5% of taxable profit, while a progressive state surcharge applies to higher profits.

The autonomous regions of Madeira and the Azores apply reduced rates.

The actual effective tax rate of a Portuguese company is therefore higher than the headline rate and varies according to the municipality in which the company is established.

This is a factor that should be incorporated into the choice of registered office from the outset, alongside the cost of premises and access to skilled employees.

What happens to my social-security coverage when I move to Portugal?

It transfers to the Portuguese system, with European coordination mechanisms applying.

An individual carrying out their professional activity in Portugal contributes to the Portuguese system and ceases to benefit from the French system.

A retiree receiving a French pension may, however, request the relevant European coordination form allowing them to receive healthcare in Portugal at France’s expense, provided they do not carry out a professional activity locally.

This mechanism, which is specific to the European Union, is a tangible advantage not provided by Dubai, Mauritius or Paraguay, and it carries significant weight when comparing destinations for a retiree profile.

What acquisition costs should be budgeted for when buying property in Portugal?

Three categories are added to the purchase price.

First, the tax on onerous transfers of property, calculated according to a progressive scale that varies depending on the nature and value of the property.

Second, stamp duty calculated on the acquisition value.

Third, notarial and registration costs.

Annual taxation must then be added: municipal property tax, whose rate is determined by the municipality, supplemented where applicable by AIMI above EUR 600,000 of taxable property value (Autoridade Tributária e Aduaneira).

A realistic acquisition budget must therefore allow for several percentage points above the advertised purchase price, followed by an ongoing annual tax burden.

Does the investment residence programme still include real estate?

No, and this development has reshaped access to Portugal.

Routes based on the acquisition of real estate and on the simple transfer of capital have been removed, with the reform redirecting the programme towards productive investment, including private-equity funds, job creation, research and support for cultural heritage.

Many online sources still describe the former real-estate-based regime, resulting in projects being built around rules that have already been repealed.

We systematically verify the law applicable on the date of the project, because this programme has undergone more changes in five years than most of the regimes we cover.

Does moving to Portugal facilitate the treatment of the French exit tax?

Yes, significantly.

Because Portugal is a member of the European Union, payment deferral is granted automatically, without the need to provide security or appoint a tax representative (Article 167 bis of the French Tax Code).

This is the most favourable configuration provided for by the legislation.

The tax is subsequently discharged after two years, or five years where the value of the shares exceeds EUR 2,570,000 (French tax administration).

Compared with a move to the Channel Islands, the difference in cash that would otherwise be tied up can amount to several hundred thousand euros.

For a business owner preparing a disposal, this factor alone often justifies considering European destinations first.

Do French social levies decrease if I am resident in Portugal?

Yes, and the difference is significant.

French-source investment and property income received by a non-resident is generally subject to 17.2% in social levies, but individuals affiliated with a mandatory social-security system in an EEA country or Switzerland are exempt from the CSG and CRDS.

Only the 7.5% solidarity levy remains payable (French tax administration).

A property owner receiving EUR 40,000 of French rental income would therefore save nearly EUR 3,900 per year compared with a resident of Jersey or the Bahamas.

How does Coreway Consulting support a relocation to Portugal?

We begin by assessing eligibility for IFICI with a Portuguese tax adviser, because the answer determines whether the project has a tax rationale or is primarily a lifestyle decision.

Both are legitimate objectives, but they lead to different decisions.

We then verify how your various categories of foreign-source income will be treated, an area where general assumptions are of little use.

Finally, we handle residence registration, obtaining the tax identification number, bank account opening, housing search and schooling, while coordinating the termination of French tax residence and the exit tax with the relevant advisers.