Portugal Has Become the Preferred Holding Company Hub for Latin American Businesses: What Changed in the Tax Framework in 2026

The End of the NHR Regime and the Narrower Scope of IFICI

Portugal's Non-Habitual Resident (NHR) tax regime, introduced in 2009, was closed to new applicants on 1 January 2024 (KPMG 2024). Individuals already registered under the NHR regime as of 31 December 2023—or who met the eligibility requirements by that date—remain entitled to the benefits for the remainder of the original ten-year period under grandfathering provisions.

The replacement regime, established by Ordinance No. 352/2024/1 of 23 December 2024 and applied retroactively to 1 January 2024, is the Tax Incentive for Scientific Research and Innovation (IFICI), commonly referred to as NHR 2.0 (Sovereign Group 2025). The regime applies for ten consecutive years and provides a flat 20% income tax rate on Portuguese-source employment and self-employment income, together with exemptions for certain categories of foreign-source income.

The fundamental distinction between the two regimes lies in their scope. IFICI is available exclusively to professionals engaged in scientific research, technology, higher education, and other strategic sectors designated by regulation. Retirees, remote workers, and passive investors—three groups that represented a significant share of beneficiaries under the original NHR regime—are no longer eligible (International Bar Association 2025). For Brazilian entrepreneurs considering Portuguese tax residency as part of a wealth-planning strategy, IFICI will rarely be the applicable route.

The Golden Visa After 2023

Law No. 56/2023, commonly known as the Mais Habitação ("More Housing") Law, substantially reformed Portugal's Residence Permit for Investment Activity (Golden Visa) program in October 2023.

Residential real estate investments and direct capital transfers were removed from the list of qualifying investments. The remaining qualifying routes include a minimum investment of €500,000 in venture capital or private equity funds regulated by the Portuguese Securities Market Commission (CMVM), a minimum €250,000 donation to cultural or heritage projects (€200,000 in low-density areas), investments in scientific research, and job creation initiatives (Global Citizen Solutions 2026).

Two aspects deserve particular attention.

First, the Golden Visa grants a residence permit—not automatic tax residency. Portuguese tax residency still requires physical presence in Portugal for more than 183 days during a tax year or the establishment of a habitual residence (HPT Group 2026).

Second, amendments to Portugal's Nationality Law approved in May 2026 provide that Golden Visa holders may generally apply for Portuguese citizenship after ten years of lawful residence. Nationals of Portuguese-speaking countries—including Brazilians—benefit from a specific exception, allowing them to apply after seven years (La Vida 2026).

The SGPS Regime and the Participation Exemption

The core reason why Portugal continues to attract Brazilian corporate groups as a holding jurisdiction remains unchanged and predates the debate surrounding individual tax residency. The Sociedade Gestora de Participações Sociais (SGPS), governed by Decree-Law No. 495/88, is Portugal's traditional holding company vehicle, established exclusively to manage equity interests in other companies (Madeira Corporate Services 2026).

Portugal's participation exemption regime, established under the Corporate Income Tax Code, provides a full exemption from corporate income tax on qualifying dividends received and capital gains derived from the disposal of shareholdings, provided that three conditions are met: a minimum direct or indirect participation of 10% of the share capital or voting rights; continuous ownership for at least twelve months; and the subsidiary is subject to a corporate income tax broadly equivalent to the Portuguese corporate income tax (the subject-to-tax test) (PwC Portugal 2026). The exemption applies not only to Portuguese subsidiaries but also to subsidiaries established in other European Economic Area Member States and in qualifying third countries that satisfy the equivalent taxation requirement.

The extension of the participation exemption to subsidiaries located outside the European Union is what makes the SGPS particularly attractive for Brazilian corporate groups. A Portuguese holding company may receive dividends from Brazilian subsidiaries free of Portuguese corporate taxation, subject only to Brazilian withholding tax under the 2001 Brazil–Portugal Double Taxation Convention.

How Law No. 15,270/2025 Changes the Tax Planning Equation

Law No. 15,270/2025, enacted on 26 November 2025 and effective as of 1 January 2026, ended nearly three decades of dividend tax exemption in Brazil. The new legislation introduced a 10% withholding income tax on dividends distributed by the same legal entity to the same Brazilian-resident individual whenever monthly distributions exceed BRL 50,000 (Escola Superior de Negócios 2026). It also established a Minimum Personal Income Tax (IRPFM) with progressive rates ranging from 0% to 10% for individuals earning more than BRL 600,000 annually, reaching the maximum rate for annual income above BRL 1.2 million.

For non-resident investors, the 10% withholding tax applies immediately to cross-border dividend payments, without the deferral opportunities available to Brazilian tax residents (Dootax 2026). The legislation also introduced a transitional rule. Profits earned through the 2025 tax year whose distribution was formally approved through corporate resolutions by 31 December 2025 remain exempt, even if the actual payment occurs in subsequent years.

This reform has significant implications for Brazil–Portugal corporate structures. Article 10 of the Brazil–Portugal Double Taxation Convention (Decree No. 4,012/2001) limits withholding tax on dividends paid to residents of the other contracting state to 15%. Before Law No. 15,270/2025, Brazil's domestic dividend exemption rendered this treaty provision largely irrelevant in practice. Beginning in 2026, however, the treaty ceiling once again becomes a meaningful consideration for structures involving Portuguese holding companies receiving dividends from Brazilian subsidiaries. As a result, international tax planning for Brazilian corporate groups has regained an important variable that had remained dormant for nearly thirty years.

What This Means for Brazilian Companies

For Brazilian companies considering a Portuguese holding structure in 2026, the decision to establish a Portuguese holding company should be analyzed separately from the personal tax residency decisions of its shareholders, whether in Portugal, Brazil, or another jurisdiction. These are independent decisions governed by different legal frameworks, and the abolition of the NHR regime affects only the latter.

Later, companies should assess whether their expected dividend distributions exceed either the new monthly withholding threshold (BRL 50,000 per distributing company) or the annual threshold for the Minimum Personal Income Tax (BRL 600,000). For groups below these thresholds, Law No. 15,270/2025 has limited practical impact. For larger corporate groups, however, a Portuguese holding structure may once again provide meaningful tax efficiencies.