Portugal After NHR: What Remains and What Has Changed

Since 2009, the Non-Habitual Resident (NHR) regime was Portugal's main draw. Foreign arrivals paid a flat 20% tax rate on certain Portuguese income for ten years, while many foreign income sources were completely exempt. For UK entrepreneurs, freelancers, and retirees, this was a highly compelling offer.

Add to this the high quality of life: Lisbon and the Algarve offered a mild climate, lower living costs than the UK, and a growing international community. Portugal was attractive not just for tax reasons, but as a place to live. Many UK expats put down roots there.

The business infrastructure also improved: coworking spaces in Lisbon and Porto, a growing startup ecosystem, and relatively straightforward residency options via the D7 visa or Golden Visa programme made relocating easy.

This all changed when the Portuguese government announced the end of the NHR regime in 2023, closing it permanently at the end of 2024. The final transition period expired in March 2025. What remains is no longer sufficient for most UK and international entrepreneurs.

Portugal remains an attractive destination if tax planning is not your primary motive. Those choosing Portugal for its quality of life, climate, and culture - and who are prepared to pay regular Portuguese taxes - will find it an excellent place to live. It also remains appealing for long-term crypto investors thanks to the tax exemption after a 365-day holding period. Furthermore, qualified scientists or tech professionals who meet the IFICI criteria still benefit from the 20% rate.

Malta is the more stable choice for entrepreneurs seeking a predictable tax structure that doesn't depend on narrow professional qualifications. The refund system, offering an effective 5% corporate tax rate, is open to all industries. The FITWI regime, with its 15% flat rate for individuals, is not restricted to specific sectors. Additionally, the active Double Tax Treaty with the UK provides legal certainty when relocating.

For UK entrepreneurs with ongoing business in the UK or across Europe, both jurisdictions offer EU access. However, Malta combines this EU access with a significantly lower effective corporate tax burden and broader access to special tax programmes for individuals. If you want to set up an active company and build genuine substance, Malta offers the better combination of tax efficiency, administrative ease, and English-speaking infrastructure.

We regularly advise clients who already live in Portugal or whose NHR status has expired, and who are now considering whether Malta is the better long-term option. Relocating from Portugal to Malta is relatively straightforward within the EU, but it requires careful tax planning.

Key questions include: When does your unlimited tax liability in Portugal end? Are there exit tax rules that apply upon departure? How will your corporate structure be transitioned? Under certain conditions, Portugal levies a tax on unrealised capital gains when you leave. The exact implications depend on your individual asset portfolio and length of stay.

The relocation process follows a clear pattern: analysing your tax position in Portugal, planning the Maltese structure (company formation, refund setup, residency permits), coordinating the move with tax support in both jurisdictions, and establishing ongoing compliance in Malta. In a free initial consultation, we can assess whether a move makes commercial sense for your situation.