Portugal's NHR Program and the IFICI Regime: What US Expats Need to Know

Portugal's Non-Habitual Resident (NHR) program gave qualifying new residents ten years of reduced or zero Portuguese tax on most foreign-source income, making it one of the most attractive expat regimes in Europe through 2023. Portugal closed the NHR to new applicants in 2024 and replaced it with the IFICI regime, which targets researchers, tech workers, and investors in specific sectors rather than all new residents. Neither the NHR nor the IFICI regime changes your US tax obligations. The Foreign Tax Credit is still your main tool for avoiding double taxation, and if Portugal taxes some income at a reduced rate under IFICI, you may end up with less credit and more US tax than expected. Anyone planning a move to Portugal should model their US tax position alongside the local tax benefits, because the two systems interact in ways that tend to surprise people who focus only on the Portuguese side.