Understanding Tax Implications for a US LLC under Portugal's NHR Scheme

Hello everyone,

My name is Juan, originally from Spain but currently living in Mexico. I am contemplating a move to Portugal and would appreciate some insights from this knowledgeable community.

I am an entrepreneur with a primary focus on digital and affiliate marketing. My clients are globally spread and all revenue is received through a recently established LLC in the United States. One potential opportunity I am keen on exploring is the Non-Habitual Resident (NHR) scheme in Portugal.

I am trying to figure out if the income my LLC receives from affiliate marketing can be received by me as a physical person (as dividends or distribution) in Portugal, under the NHR scheme. Furthermore, I would like to understand the tax implications of this scenario - can I potentially pay a 0% tax rate or some lower rate on this income?

I’m hoping someone here has some experience with a similar situation or can point me in the direction of resources that could clarify this for me. Any input is greatly appreciated.

Thanks in advance for your help!

Best regards,

The answer is “it depends”.

Is it a single member LLC or a partnership? Is it member-managed? Are you the only person working for the LLC? Will you spend most of your time in Portugal?

Most likely you can’t have your cake and eat it too.

This article from Fresh Portugal gives a good overview over the potential risks of trying to claim double non-taxation for a member-managed LLC:

(You can access a special discount and lower-cost consultation with Fresh Portugal here)


Well… It is a single member LLC and member-managed. Only person working for the LLC, yes. Yes, the idea is to spend more than 183 days per year in Portugual.

That’s my situation but i don’t have clear if my plan will works or not.

Thank you @tkrunning

I also have a Single Member LLC with S-Corp election (pass-through entity). I’d recommend you check out https://www.nonhabitualtaxresident.com/. Ricardo has done groundbreaking work in this area for his US clients and can advise (as he has me) regarding the ins and outs of NHR program for US LLC’s (pass-through entities).

In my case i chose Sole Proprietorship instead S-CORP election, will work for me in my case or i need S-CORP? I will contact with Ricardo, thank you very much. Where are you living now, which city in Portugal? I am looking for Setubal or Algarve, i don’t know yet.

Ricardo has assisted other US clients with “US pass-through entities”. My D-7 is in process as we speak, so still in the USA.

I’m not sure where we will live yet. Headed there in August to scout out some properties. Maybe Tavira, but unsure right now. In Texas, so I am loathing the heat RN. ;-|

I think there is some risk with single member LLC or sole-proprietorships. Having an LLC with a “Managing Director” in addition to yourself might mitigate the risk of tax authorities claiming that “since you reside in Portugal, all the work of managing the business is more clearly your responsibility since you and you alone are involved”.

Thank you Teadrinker and nice to meet you!

Yes, we will speak with Ricardo to talk about my specific case.

The idea obviously is to know if the plan is viable or not with LLC to pay 0% or find other ways or countries, maybe.

Hello Juan, Did you find out if dividends from a single owned US LLC are exempt under NHR?

Hello! In your case, are you exempt of LLC dividends in Pprtugal? Being a single owned and working from here?

Hello Cherian, finally, i could not go to Portugal yet and i could see the NHR program is finishing soon, so, not my idea for now.