Are you considering Portugal as the next strategic step in preserving and enhancing your wealth? Or considering how best to structure your relocation to safeguard and strengthen your global assets?
If so, our trusted tax partners at Forvis Mazars, who specialise in cross-border planning between the UK and Portugal, have provided us with a clear, strategic insight into the newly introduced NHR 2.0 regime — and what it could mean for you:
Cross-Border Clarity: Planning Your Business, Investment, and Relocation from the UK to Portugal
In recent years, Portugal – and particularly the Algarve’s Golden Triangle – has become an attractive destination for ultra-high-net-worth individuals (UHNWIs) from the UK seeking a high quality of life, lifestyle, and a tax-efficient relocation. The introduction of Portugal’s new “NHR 2.0” regime in 2024 initially raised questions for prospective movers regarding their tax position, particularly for business owners, investors receiving dividends, or remote workers considering relocation.
Over time, as NHR 2.0 matures through market experience, legal interpretation, and rulings issued by the Portuguese Tax Authorities, these questions are being clarified, confirming the regime’s continued appeal.
In this article, we explore how UK UHNWIs can strategically plan their move to Portugal in a way that safeguards wealth, leverages cross-border tax opportunities, and ensures confidence in the process. The central idea: plan ahead, structure carefully, and only access wealth once your tax position is clear.
The Opportunity and the Strategic Considerations
For many UK UHNWIs, relocating to Portugal coincides with significant life or career milestones – selling a business, realising investment gains, or seeking a new work-life balance. Portugal has historically offered a favourable tax regime to new residents, most notably through the now-ended Non-Habitual Resident (NHR) regime. Its successor, NHR 2.0, aims to retain Portugal’s appeal, with a narrower focus and eligibility criteria, while offering significantly greater, more comprehensive, and clearer tax benefits.
However, a key question arises: how can UHNWIs plan their move to Portugal with confidence?
Structuring for Maximum Flexibility
Key to a successful move is structuring and timing:
For business owners selling a company: a common strategy involves using a UK top holding company to sell the underlying trading business. Provided certain conditions are met, the UK’s Substantial Shareholding Exemption (SSE) can apply, allowing the holding company to dispose of its subsidiary free of UK corporation tax. This secures a tax-free exit from the UK business under familiar and reliable rules and allows proceeds to remain inside the UK corporate structure, giving flexibility on when and how funds are extracted.
For investors and dividend recipients: delaying the actual distribution of accumulated UK dividends until NHR 2.0 status is confirmed helps ensure the most favorable tax treatment in Portugal.
For remote workers or those without direct business ownership: engaging in qualifying employment activities in Portugal for an eligible Portuguese company can unlock NHR 2.0 eligibility, with the added benefit of a significantly reduced tax rate on Portuguese-source salaries. At the same time, foreign-source salaries or professional income may remain fully exempt in Portugal, making this a highly tax-efficient strategy to supplement international income while working locally.
Critically, no income is received personally until the NHR 2.0 status is confirmed, thus avoiding personal tax liabilities — in the UK, Portugal, or elsewhere.
Clarifying NHR 2.0 Eligibility
The NHR 2.0 regime is designed to encourage innovation and value creation in Portugal. While some criteria target individuals with specific professional or scientific credentials, investing in a qualifying Portuguese company and joining its board could facilitate eligibility for those who may not otherwise possess such credentials.
That said, for those that are looking to become eligible and contribute to the Portuguese startup framework, the Portugal Innovation Investment Program has been developed, under which individuals may invest in innovative Portuguese companies that are compliant with the NHR 2.0. Participation in this program may therefore facilitate eligibility under the NHR 2.0 regime. These companies have established R&D partnerships with Portuguese universities and polytechnic institutes and are committed to innovation-driven, value-adding projects – the true goal of the NHR 2.0.
Where an individual relocating from the UK does not hold Portuguese or other EU citizenship and has qualifying business credentials or relevant domain expertise, it would also be possible to obtain a visa under this program, the Portuguese Highly Qualified Activity (“HQA”) Visa. This route can thus fulfil two parts of the move: tax and immigration.
Yet, timing and planning are of critical importance. One must ensure that:
- The relocation and residence status in both Portugal and the UK are firmly established before any income is drawn.
- The relevant documentation and evidence for the NHR 2.0 application are in place early.
- No income is received before the new regime has been approved.
Our experience suggests that close coordination between UK and Portuguese advisors is essential, both to validate the eligibility criteria under NHR 2.0 and to ensure the income is structured and distributed in a compliant and efficient manner.
What About UK Tax Residency?
Another key factor in this strategy is the UK’s own statutory residence test (SRT), which determines whether someone is still a UK tax resident. For individuals planning to benefit from Portugal’s tax regime, it is important that they sever UK tax residence and remain non-UK tax resident for a sufficient period to avoid unintended UK taxation.
Among other considerations this will include:
- Monitoring days spent in the UK.
- A careful review of any ongoing UK employment or directorships.
- Considering the availability of UK accommodation.
When well-managed, the individual can cease to be UK tax resident and establish Portuguese tax residency at the right time, maximising the benefit of cross-border rules.
A Word on Inheritance and Wealth Planning
While income and gains are often the immediate concern, HNWIs relocating to Portugal should also consider broader wealth and succession issues. Portugal does not currently impose inheritance or wealth taxes, but UK Inheritance Tax (IHT) rules may still apply for years after departure, particularly following the recent changes to UK IHT that took effect from 6 April 2025.
This makes advance planning crucial. Trusts, wills, and asset structuring should be revisited in light of the new residency and long-term intentions.
Conclusion: Planning with Confidence
Relocating to Portugal is a significant step – but with the right planning:
Business sales, investments, dividend income, and employment income can be structured efficiently.
Wait until NHR 2.0 status is approved in Portugal before receiving income streams.
Move only once confident of their future tax position.
This approach provides flexibility, legal certainty, and peace of mind — and helps make the dream of life in Portugal a tax-smart reality!
At Forvis Mazars, we work seamlessly across our UK and Portuguese teams to guide clients through this process, ensuring that tax risks are mitigated, and opportunities are fully explored. Whether you are just beginning to consider a move or are already mid-process, we are here to support you every step of the way.
Mário Patrício, Senior Manager (mario.patricio@forvismazars.com)
Sean Cockburn, Partner (sean.cockburn@mazars.co.uk)
From Strategy to Lifestyle: Aligning Tax Planning with Your Property Search
Relocation is never simply about acquiring a residence; it is about structuring a life. When considering Portugal’s NHR 2.0, tax strategy and property acquisition should move in parallel.
For clients exploring opportunities in Quinta do Lago and Vale do Lobo, early coordination between legal, tax and property advisors creates clarity and confidence from the outset. With the right structure in place:
- Residency timelines can be carefully aligned with acquisition and completion schedules.
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Ownership — whether personal or corporate — can be optimised for efficiency and long-term flexibility.
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Long-term estate planning integrates seamlessly with lifestyle objectives
If NHR 2.0 forms part of your forward planning, the advantage lies in acting early. Structured conversations today allow you to position your residency, assets and property investments with precision. At Liberty Real Estate, we collaborate closely with leading cross-border tax and legal advisers like Forvis Mazars to ensure your transition to Portugal is intelligently executed.
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