Ordinary Portuguese residents pay 28% on dividends from a Luxembourg or Dutch company, with the foreign withholding credited. New residents under IFICI, and those still under NHR, generally receive foreign dividends tax-free for ten years, outside blacklisted jurisdictions. A company taxed at less than half the Portuguese rate can be looked through under the CFC rule, and a company managed from Portugal becomes Portuguese.
Portugal after NHR, explained simply
The non-habitual resident regime closed to new applicants in 2024. Its successor, IFICI, is narrower: it targets people moving to Portugal for research, technology, start-ups and some highly qualified roles, and it requires five years of prior non-residence. Those who qualify pay 20% on qualifying Portuguese professional income and, for ten years, generally nothing on most foreign-source income.
For everyone else, Portugal taxes dividends from a Luxembourg or Dutch company at a flat 28%, with credit for the foreign withholding tax. That is higher than many founders expect, and it is why the structure of the foreign company matters.
Like Spain, Portugal looks at where a company is really managed. A Luxembourg company whose owner takes every decision from Lisbon can be treated as Portuguese-resident. Portugal also has a CFC rule for low-taxed companies, which a normally taxed Luxembourg or Dutch company with real activity does not trigger.
Portugal after NHR: what a Luxembourg or Dutch company still does
Portugal remains a magnet for founders and investors, now under IFICI instead of the old NHR. Many keep or set up a Luxembourg or Dutch company for their international business or holdings. Whether that works depends on three things: the regime you are under, where the company is really managed, and how much tax it pays.
28% on dividends
Flat rate, foreign withholding credited.
Foreign dividends exempt
For 10 years, outside blacklisted jurisdictions.
Below half the Portuguese tax
Low-taxed controlled companies are looked through.
Effective management
A company run from Portugal is Portuguese.
The rules that follow the company
- Dividends. 28% flat for ordinary residents; IFICI and running NHR regimes generally exempt foreign dividends.
- CFC rule. Control and an effective tax below half of the Portuguese rate bring the company's profits into your tax; real EU activity is the escape.
- Effective management. Board decisions taken in Portugal make the company Portuguese-resident.
- Blacklist. Payments from blacklisted jurisdictions lose IFICI exemptions and face 35% rates.
- Reporting. Foreign accounts and holdings are reported through CRS and the annual return.
IFICI makes foreign dividends tax-free. It does not make a company managed from Lisbon Luxembourgish.
What people typically do
IFICI and NHR residents often keep income inside a Luxembourg or Dutch company until they have the regime, and distribute while it runs. Ordinary residents tend to pay themselves a salary for real work, keep dividends moderate and reinvest inside the company.
In every case the company needs its own life abroad: directors who really decide, board meetings held there, a bank account and an office or service provider. That is what turns the structure from a risk into a plan.
A Portuguese resident under the ordinary regime takes EUR 100,000 from a Luxembourg company: Luxembourg withholds EUR 15,000 and Portugal adds EUR 13,000, for EUR 28,000 in total. Under IFICI, the Portuguese part is generally nil.
Check your Portuguese position
Indicative: 15% foreign withholding credited against the 28% flat rate.
Portuguese resident with a Luxembourg or Dutch company
Enter the dividend and answer four questions. You get the Portuguese tax and the risk points.
On dividends for ordinary residents.
Foreign dividends for 10 years.
Of Portuguese corporate tax.
Or the company is Portuguese.
Portuguese residents with a foreign company: frequent questions
How are Luxembourg or Dutch dividends taxed in Portugal?
At a flat 28% for ordinary residents, or at progressive rates if you opt to aggregate, with credit for the foreign withholding tax.
Does IFICI exempt foreign dividends?
IFICI, the successor to NHR for new residents since 2024, exempts most foreign-source income, including dividends, for 10 years, except income from blacklisted jurisdictions. The 20% rate applies to qualifying Portuguese professional income.
Does Portugal have a CFC rule?
Yes. Income of a controlled foreign company taxed at less than half of what Portuguese corporate tax would be is attributed to the Portuguese shareholder, unless an EU or EEA company carries on a substantive economic activity.
Can Portugal treat my Luxembourg company as Portuguese?
Yes, if its place of effective management is in Portugal, for example because you take the decisions from Lisbon.
Who qualifies for IFICI?
People who become resident after not being resident for five years and work in qualifying roles: research, innovation, technology, start-ups and some highly qualified professions.