Cyprus vs Portugal: what changed after NHR ended
Portugal's NHR regime ended for new applicants in 2024. Without it, Portugal's 19% CIT is 4 points above Cyprus's 15%. Both are EU with SEPA and Stripe. But neither offers 0% on reinvested profits.
Portugal post-NHR vs Cyprus: the new reality
Portugal was attractive for entrepreneurs when NHR offered preferential tax treatment. That chapter is closed. Here is what remains.
Cyprus: 15% with IP and non-dom
Cyprus applies a 15% CIT rate with an IP box (3% effective) and non-dom regime (no SDC on dividends for 17 years). The rate rose from 12.5% to 15% on 1 January 2026. EU membership provides SEPA, Stripe, and single market access. English is widely spoken. Professional services are mature. For IP-heavy businesses extracting dividends, the total tax burden can be very low. No further rate change has been announced.
Portugal: 19% CIT, NHR closed to new applicants
Portugal's NHR regime, which offered favorable personal tax treatment for 10 years, ended for new applicants in 2024. Without NHR, the standard CIT rate is 19%, with municipal and state surcharges added on top. Portugal remains an attractive lifestyle destination with excellent infrastructure and a growing tech scene (Lisbon, Porto). But from a pure tax perspective, it is now one of the higher-taxed EU countries for corporate income.
Cyprus vs Portugal: the full comparison
| Criterion | Cyprus | Portugal |
|---|---|---|
| Standard CIT | 15% | 19% (+surcharges) |
| IP incentive | IP box: 3% effective | Limited (patent box less developed) |
| NHR / non-dom | Non-dom: 17 years no SDC | NHR ended 2024 for new applicants |
| VAT | 19% | 23% |
| Company formation | EUR 2,500-5,000 | EUR 1,000-3,000 |
| Monthly accounting | EUR 300-600 | EUR 250-500 |
| EU member | Yes | Yes |
| SEPA | Yes (Eurozone) | Yes (Eurozone) |
| Stripe | Yes (full EU) | Yes (full EU) |
| Schengen | Candidate | Yes |
| OECD | No | Yes (founding member) |
| Rent (1BR Lisbon/Limassol) | EUR 800-1,500 | EUR 1,200-2,000 |
| Tech ecosystem | Growing | Strong (Lisbon, Web Summit) |
| Climate | Mediterranean (300+ sunny days) | Mediterranean/Atlantic |
| Language | English widely spoken | Portuguese (English improving) |
15% vs 19%: the post-NHR reality
Without NHR, Portugal's tax advantage has evaporated. Cyprus now offers a clearly lower corporate tax rate.
Cyprus: stable and competitive
Cyprus raised its rate from 12.5% to 15% on 1 January 2026. The IP box offers 3% on qualifying IP income. The non-dom regime eliminates SDC on dividends. For a business earning EUR 200,000 in profit, Cyprus taxes EUR 30,000 vs EUR 38,000+ in Portugal. That is EUR 8,000 in annual savings at the corporate level alone, before considering dividend treatment.
Portugal: 19%+ without NHR
Portugal's 19% CIT can increase with municipal surcharges (up to 1.5%) and state surcharges on higher profits (3-9% above certain thresholds). Without NHR, personal tax rates on dividends and income are also higher. Portugal remains excellent for lifestyle, with a growing tech scene and Web Summit. But from a pure tax perspective, it is no longer competitive with Cyprus, let alone Latvia at 0%.
Post-NHR, Portugal's corporate tax burden is clearly higher than Cyprus's. For growth-focused businesses, both are more expensive than Latvia's 0% on reinvested profits.
Living in Lisbon vs living in Limassol
Cyprus: Mediterranean warmth, English-first
Year-round sunshine (300+ days), English widely spoken, established international community. Limassol is the business hub with modern infrastructure. Rent is EUR 800-1,500/month. The timezone (UTC+2) aligns with European and Middle Eastern business hours. Smaller scale than Lisbon but with a growing tech and startup community.
Portugal: Europe's darling for expats
Lisbon and Porto are among Europe's most popular destinations for digital nomads and entrepreneurs. Excellent food, culture, and quality of life. Growing tech ecosystem with Web Summit. However, Lisbon has become expensive (EUR 1,200-2,000/month for 1BR) and the housing market is tight. Portuguese is the business language, though English is improving. The Atlantic climate is milder than Mediterranean Cyprus.
What if you could pay 0% and stay in the EU?
Latvia offers what Portugal's NHR once promised, but better: 0% on reinvested profits, permanently, with full EU infrastructure.
| Criterion | Cyprus | Portugal | Latvia |
|---|---|---|---|
| CIT on reinvested profits | 15% | 19%+ | 0% |
| Special tax regime | IP box + non-dom | NHR ended 2024 | Standard (no regime needed) |
| SEPA + Stripe | Yes | Yes | Yes |
| Schengen | Candidate | Yes | Yes |
| OECD | No | Yes | Yes |
| Monthly accounting | EUR 300-600 | EUR 250-500 | Quoted per case |
| Cost of living | EUR 1,500-2,500/mo | EUR 1,500-2,500/mo | EUR 1,200-1,800/mo |
There is a European country with 0% corporate tax, stable banks and French-speaking support
And it is not Estonia, Ireland, or Dubai.
Why Latvia outperforms both
The NHR replacement, but permanent
Portugal's NHR was time-limited (10 years) and is now closed. Cyprus's non-dom is 17 years. Latvia's 0% on reinvested profits has no time limit. It is a structural feature of the tax code, not a special regime. No application, no expiry, no risk of policy change ending your benefits.
0% vs 15% vs 19%: the math is clear
On EUR 200,000 reinvested profit: Latvia pays EUR 0. Cyprus pays EUR 30,000. Portugal pays EUR 38,000+. The savings compound every year. Over 5 years, Latvia saves EUR 150,000 vs Cyprus and EUR 190,000+ vs Portugal. No IP box or special regime needed.
Full 6/6 international score
Latvia: EU, Eurozone, Schengen, OECD, NATO, EEA (6/6). Portugal: 6/6 as well. Cyprus: 3/6, as it is outside Schengen, the OECD and NATO. On this point Latvia and Portugal are level, and both are ahead of Cyprus.
Lower operating costs than both
Rent from EUR 500-900/month. Formation and accounting are priced on your file, with a written proposal after a first call. Riga's cost of living is 30-40% below Lisbon and 20-30% below Limassol. For cost-conscious entrepreneurs, Latvia offers the best value in the EU.
Compare in detail:
Frequently Asked Questions
Is Portugal's NHR still available?
No. NHR ended for new applicants in 2024. Existing beneficiaries keep their status until their 10-year period expires. Without NHR, Portugal's standard CIT is 19% with potential surcharges above that.
Which is cheaper for corporate tax?
Cyprus at 15% (3% via IP box) is 4 points below Portugal's 19%. Latvia at 0% on reinvested profits is the cheapest of all three for growth-focused businesses.
Do both have SEPA and Stripe?
Yes. Both are EU Eurozone members with native SEPA, full Stripe, and VAT OSS. Latvia also matches both on all payment infrastructure metrics.
Is the cost of living comparable?
Lisbon has become expensive (EUR 1,200-2,000/month for 1BR). Limassol runs EUR 800-1,500. Porto and smaller Portuguese cities are cheaper. Riga (Latvia) is the most affordable at EUR 500-900/month with full EU infrastructure.
Is there a better EU alternative?
Yes. Latvia offers 0% on reinvested profits, full EU/SEPA/Stripe, Schengen, and OECD membership. See Cyprus vs Latvia and Portugal vs Latvia for details.
This Cyprus vs Portugal comparison covers the post-NHR reality for entrepreneurs. See also Cyprus vs Latvia, Portugal vs Latvia, and Cyprus vs Ireland for more EU comparisons.