European wealthy clients moving to Portugal in the context of the Non-Habitual Resident (NHR) regime enjoy a favourable tax treatment for a period of ten years. Although this is interesting, they should make sure they have a comprehensive succession and estate planning solution in place while they are resident in Portugal but also afterwards when/if they decide to go back to their country of origin.

The situation - French Resident moving to Portugal

In this case study, we are looking at the specific example of a French resident planning to move to Portugal to benefit from the NHR regime. In addition to the general advantages of the NHR regime, the client is entitled to a range of further benefits when subscribing or co-subscribing our Portuguese compliant life insurance solution before moving to Portugal:

  • No exit tax: no exit tax due upon transfer of residence to Portugal (i.e. art 167 bis CGI) for life insurance contracts
  • Efficient succession planning: optimal wealth planning solution to pass the wealth to the next generation. May benefit from the French life insurance tax regime upon death of the policyholder(s)/life assured (applicable to  the beneficiaries resident in France if the contract is signed before the age of 70, no inheritance tax but beneficiary tax due)
  • Better net performance: Favourable tax regime on passive incomes generated within the life insurance contract (i.e. tax deferral). The client can therefore benefit from a better net performance of his portfolio
  • Larger choice of investments: the insurance premium can be invested in a wide range of assets which are deposited with and managed by financial institutions/asset managers according to the investment strategy selected by the client
  • Profit from the Luxembourg triangle of security: one of the strongest asset protection mechanisms in the European Union.
  • Higher flexibility: surrenders are allowed, the contract can be pledged or used as collateral, the beneficiary clause can be modified during the lifetime of the contract.
  • Benefit from impatriation regime: may benefit from the French “impatriation” tax  regime upon transfer of residence back to France after 10 years or more
  • Compliance: the solution complies with Portuguese legislation.

Main tax advantages of the Non-Habitual Resident regime (NHR)


 NHR Regime                                with life  insurance  

 NHR regime                                    without life insurance


  • Tax deferral during lifetime of contract
  • Taxation upon surrender:
    • 28% (less than 5 years)
    • 22.4% (5-8 years)
    • 11.2% (after 8 years)

 28% (domestic income) or 0%    (foreign income)


 28% (domestic income)  0%    (foreign income)

  Capital Gains

 28% or 0% (if taxable in the source  country under the relevant treaty)

  Wealth Tax

 No wealth tax

 No wealth tax

  Gift and      Inheritance    Tax

 0% - no stamp duty tax

 10% - Portuguese assets  Exemption for direct heirs    (spouse, children or parents)

  Exit Tax

 No exit Tax

 Exit Tax