Bulgaria vs Portugal after NHR: how flat 10% compares

So what's the real comparison after NHR?

Bulgaria's appeal is straightforward: 10% personal income tax, 10% corporate income tax and generally 5% tax on dividends. Portugal's pre-2024 NHR regime is not available to ordinary 2026 arrivals; standard Portuguese personal income tax is progressive, reaching 48%, with a solidarity surcharge above certain high-income thresholds.

Portugal's replacement, the Incentive for Scientific Research and Innovation (IFICI, often called "NHR 2.0"), can apply a 20% rate to eligible Portuguese employment and self-employment income for up to ten years. But it is a selective scheme, not a general remote-worker, retiree or investor tax regime.

Which country gives you the lower headline rate?

Is Portugal's NHR still available to new arrivals?

Portugal ended the original NHR regime for new entrants from 1 January 2024 under the 2024 State Budget changes. Transitional treatment was limited to people who had demonstrably begun their relocation process before the regime closed, and the practical window for those transitional registrations has now largely passed.

Existing NHR beneficiaries can generally continue for the remainder of their original ten-year entitlement. But a person becoming Portuguese tax resident for the first time in 2026 should assume that the old NHR regime is unavailable unless they have highly unusual, separately verified transitional facts.

This matters because much online content still compares Bulgaria's 10% system with the old Portuguese NHR model. That is no longer the relevant decision for most new movers.

What replaced NHR in Portugal?

IFICI is a targeted incentive for scientific research and innovation. It can apply a 20% IRS rate to eligible Portuguese-source Category A employment income and Category B self-employment income for qualifying individuals, potentially for ten years.

It is not a general "new resident" tax rate. Eligibility depends on residence history, the individual's role and qualifications, the employer or business activity, and the relevant statutory route. Most general remote workers, freelancers, retirees and passive investors should not assume they qualify.

Who may qualify. IFICI has statutory pathways for roles connected with:

• Higher-education teaching and scientific research.
• Qualifying productive-investment projects.
• Highly qualified professions in certain R&D, manufacturing, technology, health, higher-education or export-focused businesses.
• Entities recognised as relevant to Portugal's national economy.
• R&D activities qualifying under SIFIDE.
• Certified startups under Portugal's Startup Law.

The application deadline is generally 15 January of the year following the year in which tax residence begins, although the exact process and evidence requirements should be confirmed with a Portuguese adviser or the Portuguese Tax Authority before relying on it.

What do you actually pay in Portugal without IFICI?

Without IFICI, a Portuguese tax resident is generally taxed under Portugal's normal progressive IRS system. For mainland Portugal in 2026, rates begin at 12.5% and reach 48% on taxable income above €86,634.

A solidarity surcharge also applies at 2.5% on taxable income between €80,000 and €250,000, and 5% on the portion above €250,000. Portugal's standard system should not be viewed in isolation: deductions, family status, source and category of income, social-security treatment, aggregation elections, foreign-tax credits and treaty outcomes all affect the final result.

Investment income. For Portuguese resident individuals, dividends and interest are generally subject to a 28% autonomous withholding/final rate, though aggregation with other income may be elected in certain cases. For non-professional cryptocurrency investors, gains on cryptoassets held for at least 365 days are generally exempt, while shorter holding periods are generally taxed at 28%. The rules are detailed, and reporting obligations may still apply even where a gain is exempt.

How does Bulgaria's flat 10% framework work?

Bulgaria generally applies a 10% flat personal income tax and a 10% corporate income tax. Unlike IFICI, these headline rates are not limited to a designated list of research, innovation or export-linked activities.

Dividends distributed by a Bulgarian company are generally subject to 5% withholding tax where paid to individuals and certain non-EU/EEA corporate recipients. The shareholder's own residence country may levy further tax, while EU/EEA corporate-shareholder treatment and treaty relief need fact-specific confirmation.

For founders operating through a Bulgarian company, the simplified sequence is often: the company earns taxable profit; the company pays 10% corporate tax; a dividend distribution to an individual shareholder generally incurs 5% tax on the post-corporate-tax amount.

What about social security?

A "10% tax" comparison is incomplete if it omits social-security contributions.

In Bulgaria, a self-insured person generally pays approximately 27.8%, or 31.3% if sickness and maternity cover is included, on insurable income. From 1 August 2026, the monthly insurable-income range stated in current guidance is €620.20 to €2,300, though annual equalisation and individual status can matter.

In Portugal, independent workers generally contribute 21.4% on their contribution base. For services, relevant income is generally 70% of gross service income, with quarterly declarations; the contribution base is capped at 12 times the IAS, and a first-year exemption commonly applies. Neither system should be reduced to one percentage — your legal form, business activity, remuneration method and actual coverage determine the real cost.

Which country is better for your company?

Portugal is not a high-tax jurisdiction by Western European standards, but it is materially more expensive than Bulgaria for a standard operating company.

For an EU-facing founder-led company, Bulgaria's combination of 10% company tax, 5% dividend tax and EU access is often simpler than using Portugal as the operating-company jurisdiction. Portugal may still be the better personal base for someone who qualifies for IFICI or prioritises its lifestyle and market connections.

Which country fits your lifestyle and residency plans?

Both countries are EU, Schengen and euro-area jurisdictions. Bulgaria adopted the euro on 1 January 2026; Portugal has used the euro since its launch.

Portugal remains attractive for climate, established international communities, infrastructure, coastal lifestyle and residency routes. For third-country nationals, commonly discussed routes include the D7 for applicants with qualifying passive income and the D8 for remote workers, but immigration rules, consular practice and evidence requirements must be checked before planning around them.

For 2026, commonly reported benchmarks are around €920 per month of income for a D7 principal applicant (with family multipliers and savings expectations), and around €3,680 per month of qualifying remote-work income for a D8 applicant. Bulgaria can be significantly less expensive day-to-day, though costs depend heavily on city and household — indicative comparisons place a central one-bedroom apartment at roughly €600–€750 in Sofia versus €1,200–€1,500 in Lisbon. Treat these as directional estimates, not fixed budgets.

Who is Bulgaria actually best for?

• Founders who want a broadly available 10% personal and corporate tax framework.
• EU-facing consultants, agencies, ecommerce operators and service businesses.
• Owner-managed companies intending to retain or distribute profit under a simpler company-and-dividend structure.
• People who value lower fixed costs and less reliance on a specialist newcomer-tax regime.
• Entrepreneurs whose work does not fit IFICI's defined research, innovation, investment or certified-startup routes.

Who should still consider Portugal?

• Individuals who already hold valid NHR status and can retain it for the balance of its original term.
• Researchers, academics, qualifying startup employees, R&D professionals and certain highly qualified workers who can document IFICI eligibility.
• People who prioritise Portuguese lifestyle, language, climate, family factors or proximity to Portuguese and international markets more than the lowest possible tax rate.
• Investors whose income mix and asset holding periods align well with Portugal's ordinary investment-income rules, particularly long-held non-professional cryptoassets.

What to check before you move

• Establish tax residence first — for you, your spouse and your company, under domestic law and relevant treaties.
• Map income by category — salary, consulting, company profit, dividends, capital gains, rent, pensions, interest and crypto can be treated differently.
• Test IFICI before moving — don't rely on "NHR 2.0" branding; identify the exact statutory route, certifications, activity code, deadline and evidence.
• Separate company tax from personal tax — a low corporate rate doesn't mean low tax when you take money personally.
• Model social security and payroll — often a material part of the real cost.
• Review other-country exposure — CFC rules, permanent establishment, management and control, exit tax, source-country withholding and reporting.
• Use a three-year model — incorporation, accountant, payroll, social security, rent, health cover, travel, visa/residency, banking, filings and adviser fees, not just headline rates.

Sources

• Portugal's 2024 State Budget changes and NHR transitional provisions (Portuguese Tax Authority guidance).
• Portugal's Tax Benefits Statute, Article 58-A, and Portaria No. 352/2024/1 for IFICI qualification routes.
• Portuguese IRS Code, Articles 68 and 68-A, for the 2026 progressive rates and solidarity surcharge.
• Portuguese Social Security Code (Law No. 110/2009) for independent-worker contributions.
• Bulgaria's Corporate Income Tax Act, Article 20, and National Revenue Agency guidance for corporate and withholding tax.
• Bulgarian self-insurance guidance for 2026 contribution rates and income limits.