Advising Americans in Portugal: A Compliance Checklist for Wealth Firms

Portugal has become one of the most popular destinations for Americans moving abroad, including retirees. If your firm advises clients there, expect US citizens and green card holders among them.

They report to both countries. Portugal wants foreign income and a list of foreign accounts; the US wants worldwide income plus its own account reports. Here is what to track and where your role ends.

Many Americans moved to Portugal expecting the old NHR regime. Most new arrivals no longer qualify for it, which changes the tax case for where assets are held and how pensions are drawn. Clients who planned their move around NHR may need their plan revisited.

1. Portugal: the IRS return and Anexo J
   Portuguese residents declare income from everywhere. Foreign income goes on Anexo J of the Modelo 3 return, gross and with any foreign tax paid, which can be credited against Portuguese tax. The return is filed between 1 April and 30 June of the following year.
2. Portugal: list every account held abroad
   Anexo J also asks residents to identify every deposit or securities account held with an institution outside Portugal, even if it produced no income, where they are holder, beneficiary or authorised to operate it. Once the client lives in Portugal, their US accounts are on that list.
3. NHR is closed; IFICI is narrower
   The original NHR regime closed to new applicants from 2024, with transitional rules for some people who moved in 2023 or 2024. Its replacement, IFICI, targets specific professions such as technology, research and higher education, requires no Portuguese tax residence in the previous five years, and generally does not cover retirees. Confirm which regime, if any, each client is actually under.
4. US: FBAR and Form 8938
   Portuguese accounts count toward the $10,000 FBAR threshold, reported by each account's maximum balance. Form 8938 applies above $200,000 at year end or $300,000 at any time for a single filer abroad, double for joint filers. Neither Portuguese regime changes the US obligations. See FBAR vs Form 8938.
5. Watch for PFICs
   Portuguese and other European funds and ETFs are usually PFICs for a US person, with punitive default tax and usually a Form 8621 for each one. See our PFIC explainer.
6. Check US broker access
   US custodians often restrict accounts once the address is in Portugal, and EU rules generally block retail purchases of US ETFs without a Key Information Document. If a letter has arrived, use our advisor playbook for restricted accounts.
7. Keep one consistent set of figures
   Record each account's institution, country, owner, year end value and maximum balance in its original currency. The Portuguese account list and the US reports should describe the same accounts.
8. Confirm who files
   Identify the client's US and Portuguese tax advisers and agree when your firm sends them the account data they need.

Checking one client quickly? Our free Expat Client Exposure Check flags custodian, FBAR, Form 8938 and PFIC risk in six questions.

Unless your firm has the right tax expertise, leave preparing and signing these returns to qualified tax professionals in each country. Your role is making sure the financial picture is complete, including accounts held outside your firm.

Aequify connects a client's accounts across 30+ countries into one view, including assets held elsewhere, and produces tax-ready data packs with FBAR maximum balances and Form 8938 figures, plus one consistent account list the Portuguese accountant can work from. See how Aequify works for advice firms.

This article provides general information for advisers, not tax or legal advice. Rules and thresholds change, so confirm them with a qualified tax adviser for each client.