Your NHR Is Ending: Staying in Portugal vs Cyprus or Dubai

IFICI questions on the Portuguese tax authority (AT) website

Portugal had 128,958 people on the NHR regime in 2024, according to an IGF audit reported by ECO. That’s three times the 41,229 counted in 2019. Every one of them has a 10-year clock, and since the count tripled between 2019 and 2024, a large share of those windows close between 2029 and 2033.

When the window closes, you become an ordinary Portuguese taxpayer. There’s no successor regime for you: IFICI, the program that replaced NHR, excludes anyone who has ever benefited from NHR. That leaves two real choices. You restructure and stay, or you move somewhere else before the bill arrives.

This article covers both, including the two destinations that come up most in expat circles, Cyprus and Dubai. For the regimes themselves, see my Portugal tax guide for expats.

What Changes When Your NHR Ends

Under NHR, foreign dividends, interest and rental income were usually exempt, and qualifying Portuguese work income was taxed at a flat 20%. Capital gains on shares were mostly taxed at 28% even under NHR, because tax treaties usually give the taxing right to the country where the seller lives. Once the 10 years are up, the standard rules apply to everything:

Dividends, interest and most capital gains on securities: a flat 28%, or 35% if the income comes from a jurisdiction on Portugal’s blacklist. Property gains and short-term trading by high earners follow different rules, covered in my guide to capital gains tax in Portugal.
Work and business income: progressive rates up to 48%, plus a solidarity surcharge of 2.5% above €80,000 and 5% above €250,000.
Foreign pensions: taxed at progressive rates, where under NHR they were exempt or taxed at 10%.
Dividends from a company you own abroad: 28%, where under NHR they were usually exempt. For business owners, this is the change that costs the most.

Some things don’t change. Portugal has no wealth tax. The only thing close is AIMI, a surcharge on residential property whose combined taxable value (the cadastral value, usually well below market value) exceeds €600,000 per person. Inheritances and gifts to a spouse, children or parents are also exempt from the 10% stamp duty on gratuitous transfers, though gifts of property still pay 0.8%. Those two points matter more than the income tax rate if you’re building wealth to pass on.

On IFICI, the tax authority’s FAQ is clear: anyone who benefits or has benefited from NHR is excluded. That holds even if you leave Portugal and come back years later.

Option 1: Stay in Portugal and Restructure

This is the practical answer for most people, especially families with children in school. The standard regime is heavier than NHR, but it’s predictable, and a few tools cut the bill.

Run the business through a Portuguese company

Corporate tax (IRC) is 19% in 2026, with a 15% rate on the first €50,000 of profit for SMEs. It’s legislated to drop to 18% in 2027 and 17% in 2028. A municipal surcharge of up to 1.5% applies on top.

Most of the saving comes from profit you leave inside it. Dividends paid out to you are taxed at 28%, so profit that’s fully paid out costs around 41-42% in total, not far below what you’d pay as a high earner on progressive rates. The saving comes from paying yourself what you spend and leaving the rest in the company to reinvest.

Two traps to know about. First, a company owned by up to five people whose income is mainly passive investment income can fall under the tax transparency regime in Article 6 of the IRC code. Its profit is then taxed on you every year as if it had been paid out, which removes the deferral. The same regime catches some professional services companies, where the owners are all professionals earning most of the income from that profession, so a one-person consultancy needs checking too. Don’t use the company as a box for your portfolio. Second, a salary means 11% employee plus 23.75% employer social security, which is why most owners pay themselves a small salary and take the rest as dividends.

If banks matter to you, dividend income also changes how they assess you for a mortgage, which I cover in Portugal mortgages for business owners.

Hold your portfolio inside an insurance wrapper

A unit-linked capitalization policy is a life insurance contract that holds investments. You pay no tax while the money stays inside, so switching funds or rebalancing doesn’t trigger a gain. When you cash out, the gain is taxed at:

28% within the first 5 years
22.4% between years 5 and 8
11.2% after year 8

The lower rates only apply if at least 35% of the premiums were paid in the first half of the policy’s life, so money has to go in early. Portuguese insurers withhold the tax for you. Luxembourg policies are the usual choice for larger portfolios because of the wider investment choice, but their annual fees eat into the benefit. This overview on Legal500 covers the mechanics.

The two tools fit together. Business profit stays in the company at around 20%. What you take out as dividends, after paying the 28%, and don’t spend goes into the wrapper, where future investment gains are taxed at 11.2% after 8 years instead of 28%.

Own a company that operates from Malta

If the business has a real base in Malta, the company can stay there while you live in Portugal. Malta taxes company profit at 35%, then refunds six-sevenths of that to the shareholder when a dividend is paid, so trading profit ends up taxed at around 5%. Malta charges no withholding tax on the dividend, and Portugal taxes it at 28% because Malta isn’t on its blacklist. Fully paid out, that comes to about 32%, against 41-42% through a Portuguese company.

The low rate is also what draws Portugal’s attention. Two conditions decide whether the setup holds:

The company has to be managed in Malta. The board meets there, the directors who make the decisions live there, and the deals are made there. If the real decisions come from your home office in Cascais or Lisbon, Portugal can treat the company as Portuguese tax resident, and the Malta rate no longer applies.
It needs substance. Portugal’s controlled foreign company rules can tax you on the profit of a foreign company taxed at less than half the Portuguese rate, whether or not it pays a dividend. EU companies are exempt if they carry on a genuine business with their own people, premises and equipment. A Maltese company with staff and an office meets that test, while a letterbox company doesn’t.

This suits owners of businesses with a team and management in Malta, such as gaming, fintech and software companies, or groups that already have their base there. For a founder doing all the work from Portugal, a Maltese company has the same problem as the US LLC below. Get advice in both countries before relying on it, including on how Portugal treats the Maltese refund.

Check that your existing setup still holds

Many NHR holders invoice through a US LLC or a UK company and report the income as exempt foreign dividends. A recent binding ruling on US LLCs prompted plenty of nervous discussion about this. The ruling itself only covered a US resident with Portuguese clients, but the logic applies more widely. If you do the work from Portugal and make the decisions here, the tax authority can treat the income as Portuguese work income rather than foreign dividends. It can also treat the foreign company as resident in Portugal, because that’s where it’s managed. How it plays out depends on the entity, the income and where management really sits.

The authorities generally have four years to reassess past returns, longer in some cases. If your NHR reporting relied on foreign dividends from a company you actually ran from Portugal, get it reviewed before the regime ends, not after.

Option 2: Move to Cyprus

Cyprus is where most of the post-NHR advice points, and for business owners paid in dividends the reasons hold up. I cover the system in detail in my guide to Cyprus tax. In brief:

Non-dom status: no Special Defence Contribution on dividends or interest for 17 of 20 years. You still pay the 2.65% health contribution (GeSY) on that income, capped at €180,000. After 17 years you can extend non-dom status by paying €250,000 per 5-year block, up to two blocks.
Corporate tax: 15% from 2026, up from 12.5%.
A 50% exemption on employment income above €55,000 for 17 years, for people taking their first job in Cyprus who were generally non-resident for the previous 15 years.

The 60-day rule gets most of the attention. You can become Cyprus tax resident with only 60 days a year on the island, as long as you don’t spend more than 183 days in any other single country, keep a home in Cyprus, and have a business, job or directorship there. Since the 2026 reform, you no longer need to show that you’re not resident anywhere else.

School is the problem for families. Wherever your children go to school, your family lives for nine months of the year. Unless you live apart from them, that country gets more than 183 days of you, which rules out the 60-day rule on its own. It’s also your center of vital interests, which decides the treaty tie-breaker if two countries both claim you. The 60-day rule works for single founders, couples without children, and parents whose children have left home. If you have children in school, Cyprus means moving the whole family there, with schools in Limassol or Nicosia, and being resident the normal way.

Cyprus is not on Portugal’s blacklist (it came off in 2011), so the departure itself is clean.

Option 3: Move to Dubai

The UAE has no personal income tax. Corporate tax is 9% on profit above AED 375,000, and companies that elect small business relief pay 0% until the end of 2029 if revenue stays at AED 3 million or less. Free-zone companies and large multinational groups are excluded. Under the UAE’s residency rules, you’re tax resident if you spend 183 days there, or 90 days if you hold a residence permit and have a home or business in the UAE.

Two Portuguese rules complicate it.

The first is the blacklist. Article 16(6) of the IRS code says that Portuguese nationals who move to a blacklisted territory stay Portuguese tax resident for the year they leave and the following four years. The UAE is on that list. The rule stops applying if you become resident in a country that isn’t on the list, and you can escape it by proving valid reasons for the move. It only applies to Portuguese nationals, and very few NHR holders are Portuguese, so most readers aren’t caught. The exceptions are emigrants who came back and used NHR, and anyone who took Portuguese citizenship during their years here.

The second is the tax treaty. Portugal and the UAE do have one, but its definition of a UAE resident requires UAE nationality. A European living in Dubai can’t use it to settle a residency dispute with Portugal. If you keep a home, a spouse or a business in Portugal, Portugal can still claim you, and the treaty won’t help.

Leaving the EU also brings costs the tax rate doesn’t show. International school fees in Dubai are high. If you don’t hold an EU passport, letting your Portuguese residence permit lapse means losing the right to live in the EU, and it can set back a Portuguese citizenship application that depends on years of legal residence. For a family, Dubai is a lifestyle change first and a tax move second.

Option 4: Italy, Greece and Malta

These suit specific profiles rather than the typical NHR holder.

Italy: a flat €300,000 a year on most foreign income, plus €50,000 per family member, for people arriving from 2026 who were non-resident for 9 of the previous 10 years (it was €200,000 before). It only makes sense for very large foreign incomes.
Greece: a flat €100,000 a year on foreign income, plus €20,000 per family member, for up to 15 years, in exchange for a €500,000 investment in Greece. It suits large passive incomes.
Malta: non-doms are taxed on foreign income only if they bring it into Malta, and foreign capital gains aren’t taxed even then. A minimum annual tax of €5,000 applies if your foreign income is €35,000 or more. I cover it in moving to Malta for tax.

Is Everyone Moving to Cyprus?

You hear it in expat groups and adviser webinars, so I looked for data. There isn’t any. Cyprus doesn’t report immigration by previous country of residence to Eurostat, Portugal doesn’t report emigration by destination, and Cyprus doesn’t publish a count of non-doms because the status applies automatically.

The timing also argues against a big wave yet. Cyprus immigration did jump from about 25,000 a year in 2021 to about 40,000 in 2022-2024, but the jump started in 2022, which lines up with the arrivals that followed the invasion of Ukraine, years before NHR terms started ending in volume. Most NHR terms haven’t ended yet. If people around you are moving to Cyprus, they’re probably early, or they’re the profile the 60-day rule suits. Much of the advice saying “Cyprus is the new Portugal” comes from firms that sell Cyprus relocations.

A Planning Timeline

If nothing big changes in your finances before your NHR ends, there’s no rush. Start the review 2-3 years before the end date.

If you expect an exit, a large dividend, or a property sale, start now. A dividend from your foreign company paid while NHR still applies is usually exempt. The same dividend one year later is taxed at 28%. Gains on shares don’t benefit the same way, since they were mostly taxable under NHR anyway.

3 years out: list your assets, your income sources and where each is taxed. Decide whether you’re staying or leaving.
2 years out: pay out retained profits from foreign companies while NHR still applies, and set up the company or wrapper if you’re staying. Wrappers start their 5- and 8-year clocks from the first premium, so open one early.
Final year: do the move or finish the restructure. Leaving it until after NHR has ended means losing the last year of exempt dividends.

If you’re leaving, Portugal has no general exit tax on unrealized gains in shares. There are two narrow exceptions. Gains deferred through a share exchange, merger or demerger become taxable when you leave (Article 10-A of the IRS code). Crypto-assets are treated as sold on the day you stop being resident, with the gain taxed at 28%. Whether coins held for more than 365 days stay exempt on departure depends on where you’re moving, so if you hold a large crypto position with a big gain, check this before you leave. The detail is in my guide to crypto tax in Portugal.

Frequently Asked Questions

Can I switch from NHR to IFICI when my NHR ends?

No. IFICI excludes anyone who has benefited from NHR, even if you leave Portugal and come back later.

How many days do I need outside Portugal to stop being tax resident?

The general rule is more than 183 days in Portugal in any 12-month period, but you’re also resident if you have a home here that you appear to intend to keep as your usual residence. Your family, school and work count. Spending fewer days here doesn’t help if your life is still here.

Does the Cyprus 60-day rule work for families?

Rarely. The country where your children go to school will usually get more than 183 days of you, which rules out the 60-day rule.

Is there an exit tax when I leave Portugal?

Not on ordinary shares. There is one on crypto-assets and on gains deferred through company restructurings.

Does Portugal have a wealth tax or inheritance tax?

No general wealth tax. Residential property with a combined taxable value above €600,000 per person pays the AIMI surcharge. Inheritances to a spouse, children or parents are exempt from stamp duty, and other heirs pay 10%.

Can I move to Dubai and stop paying Portuguese tax immediately?

If you’re a Portuguese national, no. You remain Portuguese tax resident for the year you leave and the next four, unless you prove valid reasons for the move or become resident in a non-blacklisted country. Non-Portuguese nationals aren’t caught by this rule, but they still need to cut their ties with Portugal clearly.

This article is general information, not tax advice. Portuguese tax rules change often, and your situation may differ. Speak to a qualified tax advisor in each country involved before acting.