IFICI or the general regime: what changes when hiring talent from abroad

Since 2024, the former non-habitual resident regime (RNH) has been closed to new registrations. People who move to Portugal to work may now qualify for IFICI — Incentivo Fiscal à Investigação Científica e Inovação (tax incentive for scientific research and innovation), set out in article 58.º-A of the Estatuto dos Benefícios Fiscais (Portuguese tax benefits statute) and regulated by Portaria n.º 352/2024/1. For the hiring company the difference is practical: a qualified candidate coming from abroad compares net salaries, and the tax regime they will fall under weighs on that sum.

The starting point is simple: IFICI is not RNH under another name. Its scope is much narrower — it depends both on the person and on the organisation they work for.

IFICI: a special 20% rate for 10 years

For those who meet the requirements:

• Special 20% rate on net income from categories A (employment) and B (self-employment) earned in the eligible activity;
• 10 consecutive years, counting from the year the person becomes resident;
• Foreign-source income generally exempt, except pensions (category H); income paid by entities in tax havens on the official list is taxed at 35%;
• Aggregation with other income is available as an option, if it pays off.

Requirements for the person:

• Not having been a Portuguese tax resident in the previous five years;
• Never having benefited from RNH or from IFICI itself (it can only be used once);
• Minimum qualifications depending on the activity — for the highly qualified professions in the Portaria, a doctorate or a bachelor’s/master’s degree with three years of proven professional experience.

Requirements for the organisation — this is where most SMEs fall outside. Among other situations provided for in the law, the activity must be carried out at:

• Higher education institutions, entities in the scientific system, or technology and innovation centres;
• Companies with contractual tax benefits for productive investment, or that have used RFAI (investment tax credit) with relevant investments in the year the job starts or in the previous five;
• Industrial and service companies with an economic activity code listed in annex II of the Portaria that export at least 50% of their turnover;
• Companies whose activity is recognised by AICEP or IAPMEI as relevant to the national economy;
• Companies using SIFIDE II (R&D tax credit), for staff directly involved in R&D;
• Certified startups under Lei n.º 21/2023 (Portuguese startup law).

A little-known conflict: according to Ofício Circulado n.º 20276/2025 from the Autoridade Tributária (tax authority), IFICI does not apply to jobs the company has already counted towards the RFAI job-creation uplift (article 22(2)(c) of the Código Fiscal do Investimento, the investment tax code). The two benefits cannot be used on the same job.

Deadline: the application is made by the employee on the Portal das Finanças by 15 January of the year after they become resident. A late application only takes effect from the year it is filed, and that time is lost from the 10-year benefit.

General regime: progressive rates up to 48%

Without IFICI, employment income is aggregated and taxed under the brackets of article 68 of the CIRS (personal income tax code) — in 2026, from 12.5% to 48%, plus the solidarity surcharge above €80,000 of taxable income. The advantage of the general regime is that it depends on nothing: it applies to any company and any role, with no certification and no registration deadline.

There are also two alternatives that exclude IFICI, and vice versa:

• IRS Jovem (youth income tax relief) (article 12.º-B of the CIRS): up to age 35, a 100% exemption in the first year of income, 75% in years 2 to 4, 50% in years 5 to 7 and 25% in years 8 to 10, capped at 55 times the IAS (€29,542.15 in 2026);
• Former residents’ regime (article 12.º-A of the CIRS), for Portuguese people returning to the country.

How much the difference is worth: three salaries

Figures for an employee, single, in mainland Portugal, with the 2026 specific deduction (the higher of €4,587.09 and Segurança Social (social security) contributions). These are tax amounts before personal deductions (health, education, dependants), which lower the tax under the general regime and narrow the gap.

The reading is clear: the average rate under the general regime only exceeds 20% from around €28,000 of taxable income (close to €32,600 gross). Below that, IFICI brings almost no advantage — and the person uses up a right they can only use once. On €60,000 gross, the difference comes to about €47,000 over 10 years (with a constant salary); on €100,000, it exceeds €137,000.

Side-by-side summary

What this changes for the employer

• Confirm the company’s eligibility before negotiating the salary. If the offer assumes 20% IRS and the company does not fit any category, the candidate finds out the difference on the first payslip.
• Keep proof of what makes the company eligible — startup certification, share of exports, investment contract, SIFIDE — because that is what the verifying body (FCT, AICEP, IAPMEI, ANI, Startup Portugal or the AT itself) will ask for.
• Do not count the same job towards the RFAI uplift if the employee is going to apply for IFICI.
• Remind the employee of the deadline. Someone arriving in September 2026 has until 15 January 2027 to apply.

Recommendation: it depends on three questions

1. Does your company fit one of the categories in the law? If not, the question ends here: the general regime applies (or IRS Jovem, if the person is 35 or under). 2. Is the salary high enough? Below €35,000–€40,000 gross the advantage is small. For those aged 35 or under, IRS Jovem may pay off more in the first years, and the two cannot be combined — it is worth running both sums. 3. Does the person have significant income abroad? If so (rents, dividends, remote work for foreign clients), the foreign-source exemption may be worth more than the 20% rate itself.

To see exactly what an employee costs the company — salary, employer social security and other charges — use the platform’s calculator. The choice of the employee’s tax regime should be validated with a certified accountant before the offer is finalised.