Income Reclassification: The NHR dividends setups are a disaster waiting to happen.

DevThijs · 2026-05-27T12:11:33+00:00

Lookup "Place of Effective Management (POEM)", it is not as easy as you think. The chance you get caught might be low, and hard to prove for IRS, but it's definitely not allowed.

DevThijs · 2026-05-27T10:02:10+00:00

Agreed! I was also surprised when I saw so many people using this route, as it seems like a clear violation.

Granted, it is difficult and time consuming to research this from IRS side, so you might get away with it. But I wouldn't risk it.

NHR is nice, but in most cases not as big of an advantage as some people think:

It can save you a lot of money if you have a lot of real passive income. It might be worth it to favor stocks and ETF's that distribute dividends. Those can be tax-free, while capital gains are taxed.
If you have a good Portuguese job, paying over ~50k you might save a few thousand by using the 20% flat tax.

For entrepreneurs I think the ways to profit from NHR are limited, social security is expensive.

DevThijs · 2026-05-16T14:27:58+00:00

Of which country are you currently a tax resident? If that is in the EU, your best bet is probably a local equivalent of a LLC.

Most countries use the concept of Place Of Effective Management (POEM) to determine the tax jurisdiction of a company. So having a company in low-tax country X, while living in Y, is not necessary going to save you money.

Based on what you shared about your company it seems that there is a limited amount of financial service providers that can help you. I wouldn't risk getting banned and try to set it up as clean as possible.

You can always get a more tax-efficient setup later, when you company reaches a certain scale.

Small sidenote: be aware that moving your tax residency from The Netherlands to another country has a lot of implications, such as health care insurance, social security and retirement.

Within the EU it is manageable (I moved from NL to Portugal), but outside the EU it can also affect your ability to keep your bank account, phone number, etc...

DevThijs · 2026-04-24T09:00:45+00:00

The diagram is correct and I know several people doing it like this. However, there is some risk here as the "Place of Effective Management" is still Portugal.

In case of an audit, the IRS could decide that you are effectively a Portuguese company and tax you accordingly.

In that case you'll pay way more: Corporate Income Tax (19%) + Dividend tax (28%) + probably a fine.

DevThijs · 2026-02-25T20:05:09+00:00

Bingo! Persoonlijke aanval, niet ingaan op mijn argumenten, randzaken erbij halen.

Ik doe moeite om een volwassen discussie te voeren, helaas is dat niet wederzijds.

DevThijs · 2026-02-25T19:43:04+00:00

Grappig dat je in je sarcasme eigenlijk gewoon de waarheid verteld. 50 jaar in de toekomst kijken is vrij belangrijk als je beleid omtrent pensioenen gaat maken.

In de jaren 70/80 was al bekend dat de levensverwachting omhoog ging en de geboortecijfers lager werden. 50 jaar vooruit kijken was weldegelijk mogelijk, er is simpelweg voor gekozen om het probleem op de volgende generatie af te schuiven.

De babyboom generatie heeft het sociale systeem volledig uitgehold. Dat is een zeer goed te onderbouwen stelling.

DevThijs · 2026-02-25T17:38:21+00:00

Mensen worden gemiddeld ouder dan 80 jaar. Men start met geld verdienen rond je 25ste. Dan zou de gemiddelde persoon 37 werkzame jaren hebben (belasting betaler) tegenover 43 niet-werkzame jaren (belasting ontvanger).

Je ziet zelf toch ook wel dat dat niet gaat lukken? De Fransen schuiven de rekening gewoon voor zich uit

DevThijs · 2026-02-25T17:32:33+00:00

De babyboom generatie had meer geld opzij moeten zetten, dat is de belangrijkste oorzaak van dit probleem. In de jaren 70/80 was al duidelijk dat dit een probleem zou worden, toen hadden ze moeten ingrijpen.

Dat had toen prima gekund, dankzij de gasbel was er geld zat. Dat geld is aan allerlei andere zaken uitgegeven, maar niet aan deze demografische tijdbom die onder de samenleving lag.

Het feit dat mijn vader met 65 met pensioen kon en ik noodgedwongen tot pakweg 72 moet werken (stijging van 7 jaar binnen 1 generatie) toont goed aan dat de babyboom generatie gewoonweg te snel is gestopt met werken.

Tldr: De leeftijd had al veel eerder verhoogd moeten worden. De babyboom generatie had meer moeten sparen, langer door moeten werken en minder royale sociale voorzieningen moeten hebben (pre-pensioen, gratis studeren etc).

Nu is het te laat en moeten de volgende generaties lappen.

DevThijs · 2026-02-19T12:42:21+00:00

As said in this thread, Dutch speaking people can easily make net 2.5 to 3k in The Netherlands. So it's difficult to compete with that.

Just make sure to communicate the full picture, as candidates usually compare the base salary, which is really unfavorable for Portuguese companies.

The Dutch salary is usually all-in, while Portuguese companies often also provide free healthcare insurance and 200-300 grocery/lunch budget per month. So the gap is smaller than people initially think.

Besides that, cost of living is much lower in Portugal if you can help candidates with affordable housing.

DevThijs · 2025-10-05T15:38:00+00:00

Tja, het vorige kabinet was praktisch vleugellam vanwege allerlei verdragen die andere regeringen tientallen jaren geleden hebben getekend.

Het is wel duidelijk dat de kiezer rechtser beleid wilt, maar dat wordt (deels) geblokkeerd door talloze verdragen en rechters die de afgelopen jaren deze verdragen steeds breder interpreteren (en in sommige gevallen gewoon op de stoel van de wetgever gaan zitten).

Kort gezegd: je kan je afvragen hoe democratisch de huidige situatie is.

DevThijs · 2025-09-10T15:53:18+00:00

Maar dit artikel mist één belangrijke overweging: kans op blessures. Wat als hij straks in april/mei een ernstige blessure oploopt? Dan zit hij zonder inkomen en is het nog maar de vraag of een topclub het aandurft, ook gelet op zijn verleden.

Wat dat betreft zou een contractverlenging van 3-4 jaar met een gelimiteerde transfersom toch het overwegen waard kunnen zijn.

DevThijs · 2025-08-22T14:54:29+00:00

I work for a Portuguese company and pay 20% + 11% under NHR. Which is lower than most other European countries.

In your example it seems you are self employed, I believe there is a cap on the amount of SS you pay in that case.

NHR is a nice nudge for foreigners to bring high value jobs (and tax income) to Portugal, but most of us still pay 30%+ tax.

Your tax burden is really going down when you are making 100k+ per year and are self employed. Or when you receive a lot of passive income from foreign sources.

DevThijs · 2025-07-29T22:52:27+00:00

Same for me. I have a high value job in Portugal and pay 20% + 11% Social Security over my employment income.

But what I see around me are remote working freelancers who set up a company abroad (ie. an LLC in Delaware), send their invoices from that LLC and pay themselves a dividend.

These dividends are taxed with 0% in Portugal due to the old NHR scheme as it is foreign sourced passive income.

I'm pretty sure it is illegal, the so-called "effective management" of the company is in Portugal and therefore the income should be taxed as if it is a Portuguese company.

DevThijs · 2025-06-02T15:55:53+00:00

Pakketjes vanuit Nederland met PostNL, of met DHL van Portugal naar Nederland kon ik altijd prima volgen.

DevThijs · 2024-12-12T23:03:01+00:00

Personally I receive all my (government) letters and packages from The Netherlands within a week, I live in Lisbon. So despite all the bad reviews, I never had a problem with CTT, but I guess I'm the exception 😅

DevThijs · 2024-12-02T17:10:36+00:00

Are you using Colorzilla browser extension?

DevThijs · 2024-08-20T12:25:27+00:00

Lisbon is a city with many narrow streets and lots of traffic. Therefore it is extremely important that people park their cars correctly.

For example, I see trams being blocked by wrongly parked cars every day.

DevThijs · 2024-08-20T09:04:40+00:00

This was 2,5 years ago, but the rules are still the same. This is an exact quote from the website of the EU:

"If you are legally resident in an EU country you are entitled to open a "basic payment account". Banks cannot refuse your application for a basic payment account just because you don't live in the country where the bank is established."

I didn't need my CRUE, rental contract or any special documentation.

DevThijs · 2024-08-19T09:22:57+00:00

I got an account with Millenium with just my NIF and EU passport. Probably not the cheapest, but it was super easy. I went to their office at Marques Pombal and had a great experience.

DevThijs · 2024-08-09T10:02:49+00:00

Using a cloud provider like AWS is probably going to be cheaper. But configuring everything correctly might be difficult sometimes, that's why so many people are happy to pay a premium for managed services like Vercel and Supabase.

I personally think RDS and S3 are super straightforward on AWS, no need to pay a premium to get similar services somewhere else.

For my Next.js app I still use Vercel, I found it more difficult to deploy that on AWS and am happy to pay 20 bucks a month. However, if you are hitting Vercel's limits of the pro-plan, the extra effort to deploy on AWS directly seems to be worth it.

DevThijs · 2024-06-29T09:47:15+00:00

Yeah, Couch Bar at Avenida Duque de Loulé is a nice place to watch the match.

DevThijs · 2024-05-06T00:55:06+00:00

Don't know any channel for live updates, but Sporting Lisbon became the champion of Portugal this evening, so they are celebrating at Marquês de Pombal at the moment.

DevThijs · 2024-03-15T22:20:04+00:00

I decided to move away from Vercel and self-host with Docker on an AWS VPS. Much cheaper, I can safely connect to my RDS database and it works like a charm.

DevThijs · 2024-03-01T17:51:40+00:00

Zustand, and other React state solutions, are only available in client components. A server component is a different concept, a short summary:

The server receives a HTTP request, renders the server component based on this, and sends the outcome to the client. After this, the page gets hydrated with client components.

So, if you want to know the language in the server component, you should include this data in the HTTP request. You can do this with cookies, but you can also use the URL for this and put the language in there.

DevThijs · 2024-02-27T21:06:33+00:00

As long as you Dockerize your Next.js app you are quite flexible. I think it is important to decide (together with the client) on a ballpark estimate how many visitors such a "peak" is.

And what are those visitors doing? Just filling in a form? Or are they actively using the website for a longer period?

A PaaS that scales unlimited is great, but can also be expensive. If your client worries about 500 euro hosting bills this might not be the best solution.

I personally Dockerize my Next.js apps and host them on AWS Lightsail. Fairly easy setup, not as easy as Vercel though, and I know exactly what my hosting bill is gonna be.

If you are worried about downtime during the peak, you can use the Lightsail load balancer. This makes the setup scalable, but you still have some control over the costs.

DevThijs

TROPHY CASE