Paraguay or Portugal in 2026: After the end of the NHR, who will take over from the 0%?
For fifteen years, Portugal was the default answer for French-speaking tax expatriation: the NHR (non-habitual resident) regime offered ten years of reduced rates on active income and, for a long time, pure exemption for foreign pensions. Lisbon and the Algarve filled with French retirees, freelancers, and founders; relocation agencies, guides, and video channels built an entire industry on three letters. Then, on January 1, 2024, the curtain closed: the NHR was closed to new entrants, a victim of its success and the housing crisis it was blamed for, replaced by a narrow scheme detailed in our article on Madeira, the IFICI, reserved for scientific and technological profiles.
One question remains that tens of thousands of potential expatriates still ask, given the inertia of online content: what is Portugal worth without NHR, and what has taken over from the product Lisbon withdrew from the market? This comparison answers in three parts: ordinary Portuguese law versus Paraguay, quantified; the fate of the three historical NHR groups—retirees, freelancers, founders; and the lesson this closure teaches about all preferential regimes, which has run through our series since the first article.
Dimension 1: The Post-NHR Portugal, Quantified
| Aspect | Paraguay | Portugal without NHR |
|---|---|---|
| Principle | Strict territoriality, Law 6380/2019: foreign-sourced income out of scope for everyone, no application, eligible profession, or time limit. | Worldwide taxation at scale, up to 48% plus solidarity surtax on high incomes, resulting in an effective marginal rate exceeding 50%: ordinary Portugal is, fiscally, an Atlantic France. The NHR masked this scale; its closure makes it applicable to all new arrivals. |
| Freelancer earning €100,000 per year | €0 tax, approximately €2,400 for accounting: ~€97,600 net. | IRS at scale, €28,000 to €35,000, plus self-employment social contributions, approximately 15% of gross income (our Madeira article detailed these): total levy of €40,000 to €48,000. Net: ~€52,000 to €60,000. Difference with Paraguay: €38,000 to €45,000 per year, €190,000 to €225,000 over five years. Post-NHR Portugal joins post-regime Ireland and Italy in the pack of destinations where a self-employed person does not build wealth. |
| The IFICI, the narrow successor | Not applicable: one regime for all. | 20% for ten years on eligible active income: research, higher education, certified scientific and technological profiles. A senior developer may qualify, with an application; a consultant, marketer, e-commerce entrepreneur, or coach, no. And even the chosen one pays their ~15% contributions on top, for a real levy of ~35%, for a limited duration. The successor to the NHR is a niche regime with a narrow window, not a mass-market product. |
| Pensions, the other closure | French pension: foreign source, out of scope; our Mauritius comparison detailed the complete setup for retirees. | The golden age is doubly over: the total exemption for NHR pensions, first version, had already been replaced by a 10% rate, then the entire regime closed. A retiree settling today is subject to the full tax scale on their pension, with the Franco-Portuguese convention governing distribution: the product that filled the Algarve no longer exists, neither at zero rate nor at ten percent. |
| Crypto and capital gains | 0% on foreign-sourced capital gains; DNIT reporting obligation beyond USD 5,000 per year (Resolution 47/2026), purely informative. | Our Madeira article confirmed it: the Portuguese crypto paradise died in 2023, gains from assets held for less than one year taxed at 28%, exemption for holdings over one year maintained for now, with a trend towards tightening. Capital gains on movable and immovable property: ~28% in practice via partial aggregation. The second pillar of the Portuguese legend followed the first. |
| Stability, the line that sums it all up | A 2019 law, unchanged, without date, without conditions, which benefits its country: nothing to withdraw, no one to withdraw it from. | In a decade: NHR pensions 0% → 10% → closed; crypto 0% → 28% under one year; real estate golden visa → abolished. Three flagship products, three withdrawals, each announced a few months in advance, each leaving tens of thousands of settlers to recalculate their lives. Portugal did not betray: it did what preferential regimes do, it changed. This is the thesis of our series, here in its most complete historical demonstration. |
Tax verdict: Portugal in 2026 is a beautiful country with French taxation, a niche window for tech profiles, and the memory of a golden age abundantly documented online, making it the most deceptive destination in our series: never has the gap between available content and applicable law been so wide. Paraguay offers, without time limit or profession, what the NHR offered its beneficiaries for ten years: it is, term for term, the successor.
Dimension 2: The Three NHR Publics, and Where Each Is Going
| Historical NHR Public | What NHR Gave Them | Their Options in 2026 |
|---|---|---|
| The Retiree | Foreign pension at 0%, then 10%, under the Atlantic sun, 2 hours from Paris. | Portugal now offers them the standard tax scale: up to 30-40% effective on a comfortable pension. Their real alternatives: Greece at 7% for fifteen years, our dedicated comparison quantified it, for those who want to stay in Europe; Mauritius at 15% for the French-speaking lagoon; Paraguay at 0% for those who want the maximum pension and the elder age benefit at USD 300; our Mauritius duel decided by pension amount: below €3,000, the Paraguayan zero changes the nature of retirement. |
| The Freelancer | 20% on their activity for ten years, plus contributions: a real European deal, in the continent's gentlest city. | Full tax scale unless IFICI, reserved for certified tech profiles. Their alternatives: IFICI if they meet the criteria, knowing the ten-year limit; otherwise, our entire series has explored Europe for them (Canary Islands, Madeira, Croatia, Latvia), no continental regime accommodates the generalist freelancer, and Paraguay at 0% without eligible profession is structurally their only true zero: a €40,000 annual difference with Lisbon, half a career's head start in ten years. |
| The Founder and Investor | NHR on their income, real estate golden visa for residence permit, crypto at 0%: the golden triptych of Lisbon 2018-2022. | All three pillars have closed. Their alternatives: for the structure, our European panel (Madeira CINM at 5% with substance, Malta at 5% effective with machinery, Isle of Man at 0% post-Brexit on application); for the individual, the question of our entire series: which regime covers the individual living off their company? Unchanged answer in fourteen duels: Paraguayan territoriality, the only one to cover active income, dividends, capital gains, and crypto all at once, without expiry. The savvy founder places the structure where their market demands, and their residence where nothing expires. |
Dimension 3: What Portugal Retains, and What No One Takes From It
| Aspect | Paraguay | Portugal |
|---|---|---|
| Quality of Life | Asunción, a green and quiet capital, 300 days of sunshine, no coastline; our series stated it plainly. | Still one of the most beautiful countries in Europe to live in: Lisbon and Porto, the Algarve, 300 days of Atlantic sunshine, among the best safety records on the continent, great food, wine, and the ocean. The NHR closure has taken nothing away from the country itself, and the honesty of our series demands it: as a pure quality of life, Portugal remains a ten. |
| Access and Passport | Residency from €1,400 in 2 to 4 months, naturalization in 3 years; our nationality guide details de facto dual nationality. | Free European settlement for a French citizen, immediate and free, and naturalization in 5 years, as our Madeira article highlighted, one of the most accessible in the Union, for a top-tier global passport. Two true advantages that no tax reform has touched, in their rightful place: they make life easier, they do not fund savings. |
| Cost of Living | USD 1,200 to 2,200 per month, single person, our usual scale. | €1,800 to 3,500 in Lisbon, where rents doubled during the golden years—precisely the effect that politically killed the NHR; medium-sized cities and the interior remain significantly softer. The fiscal golden age left a real estate bill that new arrivals pay without the regime that justified it: the worst of both worlds for the 2026 candidate. |
Dimension 4: The Summary
| Dimension | Paraguay (/10) | Portugal 2026 (/10) | Advantage |
|---|---|---|---|
| Taxation for a new freelance arrival | 10 | 3 | Paraguay |
| Taxation for a new retiree arrival | 10 | 3 | Paraguay |
| Niche tech regime, IFICI | 9 | 6 | Paraguay |
| Crypto and capital gains | 10 | 5 | Paraguay |
| Stability of the tax framework, historically proven | 10 | 2 | Paraguay |
| Cost of living | 9 | 5 | Paraguay |
| Quality of life | 5 | 10 | Portugal |
| Safety | 7 | 10 | Portugal |
| Access, Europe, passport in 5 years | 7 | 9 | Portugal |
| Proximity to France | 4 | 10 | Portugal |
| Overall Score | 81/100 | 63/100 | Paraguay |
Which Country for Whom, in 2026
Paraguay is for you if:
- You are exactly the public that the NHR served and that Portugal has ceased to serve: generalist freelancer, retiree, founder living off their structure. The handover is term for term, but better: 0% instead of 20%, no application, no eligible profession, no tenth year.
- You have learned the Portuguese lesson: three flagship products withdrawn in a decade. You want a regime that cannot close its window, because it has no window.
- You hold crypto or latent capital gains: the one-year Portuguese clock versus the absence of a clock.
Portugal is for you if:
- You are IFICI certifiable, a recognized researcher, scientific or technological profile, and ten years at ~35% all-inclusive in Europe's most beautiful living environment is worth, for you, the differential with zero: it's a clear-headed life choice, our series respects it, provided you plan for the eleventh year from the first.
- Proximity to France is non-negotiable, 2 hours flight, same time zone within an hour, and you accept the tax scale as the price of a weekend at grandparents': the most human argument of all, which no table refutes.
- Your horizon is the second European passport in 5 years for a non-European spouse: Portuguese naturalization remains one of the best doors to the Union, regardless of any taxation.
The combined reading
- Tax residence in Paraguay, and Portugal for stays, well under 183 days: Lisbon in spring, the Algarve in September, without IRS or social contributions. This is our usual hybrid strategy, with a touch of historical irony: experiencing Portugal as a tax visitor is exactly what the NHR allowed residents to do, and it is now the only way to recover the deal that Lisbon withdrew.
Three mistakes to avoid
- Planning based on content from before 2024. The NHR is the most documented regime in the history of French-speaking expatriation: thousands of guides, videos, and forum threads describe it in the present tense. Any content that does not mention its closure on January 1, 2024, is outdated, and half the web is. Our series' reflex, vital here: date everything you read, including this article.
- Mistaking IFICI for a rebranded NHR. The successor has neither the scope (pensions excluded, professions filtered) nor the simplicity of its predecessor: it is a niche regime requiring an application, on which one builds only after certification is obtained, not on the intention to obtain it. Have your eligibility validated by a Portuguese tax specialist before moving, or choose a regime without conditions.
- Believing it will only happen to other regimes. The Portuguese lesson is not anti-Portuguese; it is general: any preferential regime, including IFICI, CINM, ZEC, lives under the dual veto of domestic politics and Brussels, and recent history shows the notice period: a few months. A common law territoriality does not have this risk, by design: there is nothing to repeal. This is, in a sentence, why this series exists.
Conclusion
Portugal offered the French-speaking world the finest demonstration ever of what a preferential regime is: fifteen years of golden age, tens of thousands of lives relocated, then three closures in four years—pensions, crypto, NHR—each decided in Lisbon for Lisbon-specific reasons, each imposed overnight on residents who could do nothing about it. The country remains splendid, safe, close, and welcoming; its mass-market tax offer has simply ceased to exist, and the vast online library that still praises it is the main danger for the 2026 candidate.
Paraguay does not take Portugal's place in people's hearts; it takes the NHR's place in plans: the same service, protected foreign income, provided by an instrument of a different nature—a common law with no window, no profession, no expiry, and no precedent of withdrawal. The Portuguese golden age is a memory; Paraguayan territoriality is a regime. One visits memories; one resides in regimes.
The NHR has closed, but your project hasn't? Contact us: Paraguayan tax residency from €1,400, or €1,800 with our Express formula completed in a single 2-day trip on-site, US LLC creation, Paraguayan bank account for €250, and DNIT accounting for €30 per month. Lisbon withdrew the product; Asunción never needed to launch it. Write to us on WhatsApp at +595 971 362 302: quick response, in French.