With the recent introduction of two ridiculously compelling tax regimes for skilled foreigners moving to Portugal, the country is cementing its foothold as having the best tax offering in the European continent, or perhaps even the developed world.

I’m Semyon, the founder of Touchdown: we’re a leading platform that helps founders, entrepreneurs and mobile individuals find their tax efficient setup in the sun. In this blog, I’ll shed some light on how Portugal has maintained pole position with Dubai from a tax perspective. And why, I think we often ask the wrong question when choosing where to call home.

Consistent movements, over time

The Portuguese Non Habitual Residency Scheme (NHR) was first introduced under the Socialist Party (PS) government led by Prime Minister José Sócrates. The value proposition was simple: come to Portugal and pay no tax on any income from abroad, for ten years. In Portugal, you get a fixed 20% rate from anything you earn in the country.

It wasn’t an immediate hit. In the decade leading up to 2019, only an estimated 27,000 people benefited from the regime: and most of them were pensioners. However, this has changed fast in recent years, and is a testament to the post-covid migration to Portugal: approximately 70,000 people applied in the four year period leading up to the end of 2023. In fact, so much so that the government at the time led by Prime Minister António Costa cancelled the programme in the 2024 state budget, describing the NHR as “a measure of fiscal injustice”. Shortly after, Costa resigned in a corruption investigation.

After the Socialist Party (PS) lost its absolute majority in the March 2024 elections, the newly formed government was a centre-right minority led by Luís Montenegro. Despite the change in leadership, the new government proceeded to re-create the NHR under a new name: the IFICI regime, or commonly referred to as the NHR 2.0. And in some ways, I think it’s even better.

This reflects a bipartisan consensus across the political echelons that the country needs tax incentives to align with national economic objectives, and a consistent approach to do more to attract foreign talent to the country. This serves as an indicator of policy stability for the years to come. For me, it’s a massive green flag and a sign that the Portuguese state is committed to attracting and retaining top, global talent.

Introduction of IRS Jovem

Another powerful lever introduced by the incumbent  government was the launch of IRS Jovem in 2024. Seen as a counter to Portugal’s historic and extensive, domestic brain drain of  talent, the value proposition was simple: if you’re under 35 and you’re a skilled professional, you won’t get taxed at all in your first year at work and only at a sliding, incremental rate for the proceeding 9 years towards a full national tax rate after ten years. The scheme essentially makes income tax very low for the first five years.

Again, this initiative was a product of cross party collaboration. And it's worth noting that IRS Jovem applies not only to foreigners, but also young Portuguese citizens. Our head of tax, Manuel has done an excellent write up on the specifics of the regime here.

Dubai holds reign

Dubai and the United Arab Emirates has emerged as a major hub for mobile individuals to come and save on tax, enjoy world class hospitality and top tier life infrastructure (even considering the recently introduced  9% corporate tax rate). I get it: it’s sexy, full of smart people and has a massive technology and business scene. The growth the city and state have undergone in the last decade is incredibly impressive. I try to make it out at least once a year to connect with some of the brightest builders I know, who call Dubai their home. 

Portugal, in comparison to this sprawling megalopolis, seems like a quaint retreat. What Portugal has that Dubai doesn’t, is provenance, clean air and virgin, accessible, green nature. The trade-off however is materialises in the level of infrastructure, service quality and business culture. Things move a bit slower, but that might be for the best.

Portugal isn’t for everyone, but the 300 days of sunshine, progressive tax regimes and fantastic nature definitely sold me, not to mention the access to the rest of Schengen which comes with your residencyvisa rights.

Touchdown’s customers are often closely matching Dubai against Portugal to choose between the two. The advice I give is consistent: you can only make a decision to live based on where you feel good within, not where you’ll pay less tax. It’s the people that surround you, the routine you can build and the places you can see that matter in the long run.

I’ve certainly fallen into the trap of “jurisdiction shopping” to solve for income. From my personal experience and having spent significant time with mobile individuals over the years, the harsh truth is that solving for income just doesn’t cut it for most.

Ready to make the move? Let’s do it properly.

Portugal’s new tax regimes are fantastic – but only if you know how to make them work for you. That’s where Touchdown comes in. 

We specialise in relocation, tax strategy, and business setup for global professionals landing in Portugal.

Join a growing, connected international community that is thriving in some of the fastest growing corners of the world. Portugal - now; Spain - soon; the rest of the world - to come.

👉 Want to know more? We’ll walk you through it – no jargon, just straight answers. Answer a couple of questions in the Touchdown Advisor to book a free introduction call with our team.