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Introduction to the New Fiscal Incentive Regime: Scientific research and inovation


Open source: Freepik

Portugal is charting a bold new direction with its latest fiscal policy move, stepping away from the familiar Non-Habitual Resident (NHR) regime to embrace a future rich in scientific research and innovation.


With the 2024 State Budget unveiling the "Regime de incentivo fiscal à investigação científica e inovação", it's clear the country is keen on drawing in and keeping top-tier talent in these critical fields. This pivot reflects a deep-seated commitment to staying on the cutting edge, making Portugal a magnet for the world's best and brightest minds. 


The new regime targets researchers and highly qualified workers who have not been tax residents in Portugal for the past five years and who decide to become residents. Eligible professionals include higher education and scientific researchers, qualified positions within productive investment schemes, and roles requiring a doctorate in research and development, especially within the SIFIDE framework.  


The regime is part of a larger scheme by the Portuguese government to boost national productivity and competitive edge through innovation. The spotlight is also on the System of Tax Incentives in Business Research and Development (SIFIDE), signaling a robust backing for corporate investments in R&D. By transitioning from the NHR to this new regime dedicated to scientific research and innovation, Portugal is boldly adapting its fiscal landscape to nurture economic growth and pioneering work. 

 


Who gets to benefit from this innovative regime?  


It boils down to three main criteria: 

  1. you need to be a tax resident in Portugal,  

  1. you haven’t been a tax resident in the country for the past five years, and 

  1. your income should come from specific professional categories.  


These categories are wide-ranging, covering everything from academia and research to finance, economics, and other fields critical to Portugal's economic ambitions. 


Eligible professional careers include:


  • Higher education teachers and researchers integrated into the national science and technology system, as well as professionals from recognized technology and innovation centers;

  • Qualified jobs and members of corporate bodies in entities benefiting from tax incentives for productive investment; 

  • Highly qualified professions in the areas of finance and economics; 

  • Professionals in companies with a history of tax support for investment and in industrial and service companies that export significantly; 

  • Qualified jobs and members of corporate bodies in entities recognized by AICEP, EPE, or by IAPMEI, IP, as relevant to the national economy; 

  • Research and development jobs, especially for doctorates whose costs are eligible for the System of Tax Incentives in Business Research and Development (SIFIDE), and 


  • Jobs and members of corporate bodies in entities certified as start-ups, under the terms of Law no. 21/2023, of May 25th, which means companies that:  - Have been in business for less than 10 years;   - Have less than 250 employees;   - Have less or equal to 50M€ turnover;  - Have not been created as a result of a demerger;  - Are established in Portugal (or have at least 25 employees in Portugal);  - Have a high growth potential or have received venture capital funds. 

 

The tax benefits associated with the regime are: 


  1. a special 20% tax rate on professional income; 

  1.  exemptions on most foreign-sourced income, echoing some of the NHR perks but with a laser focus on fostering innovation and research.  


This set of benefits will be available for a period of 10 years, if the beneficiaries remain tax residents in Portugal and keeps receiving the incomes from those eligible activities. Also, it mirrors the essence of the NHR regime but is tailored to support Portugal's ambition of becoming a hub for research and innovation. 


In sum, Portugal's strategic refocus on a fiscal incentive regime tailored for scientific research and innovation marks a savvy step towards securing its spot as a premier destination for the global innovation community. This shift not only opens a new chapter in Portugal's fiscal policy narrative but also underscores its dedication to creating a thriving ecosystem for scientific progress and economic prosperity. 


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