Tax Residence: Am I Still a French Resident If I Set Up in Portugal?
Audrey Marques
Consultant in business establishment & company formation in Portugal
Founder of Business Portugal, Audrey supports French-speaking entrepreneurs in setting up their company in Portugal and opening their bank account. She coordinates a network of partners (accountant, tax adviser) and points clients to the right contacts, she is neither an accountant, nor a tax adviser, nor a lawyer.
It is probably the question we hear most often: "If I set up my company in Portugal, I'm no longer a French tax resident, right?" And almost always it rests on the same belief: the "183 days" rule. The idea is appealing in its simplicity, spend less than half the year in France and you escape French tax. That is wrong, or rather it is a half-truth that hides a far more important one. The "183 days" is only one aspect of one of the residence criteria; it has never been the single rule.
This article answers the question honestly, because getting it wrong here is costly. Business Portugal is a setup and incorporation consultant: we coordinate registration, banking and accounting with our partners, and the detailed analysis of your residence belongs to a partner tax adviser, never to us. What follows clarifies the mechanics of French law so you ask the right questions before signing anything.
Article 4 B of the French tax code: one criterion is enough
In French law, tax residence is not a box you tick on a form. It is defined by Article 4 B of the French tax code, and the logic is unforgiving: you are deemed a French tax resident as soon as you meet AT LEAST ONE of the following criteria. First criterion, your home or, failing that, your main place of stay is in France, this is where the famous question of time spent belongs. Second criterion, you carry on a professional activity in France, unless you can show it is only ancillary there. Third criterion, the centre of your economic interests is in France.
Read it carefully: one criterion met, and you are a French resident, whatever the other two say. That is why "183 days" is so misleading. You can spend most of the year outside France and still be a French resident because your spouse and children live there (home), because you carry on most of your activity there, or because your main income and investments are managed there (centre of economic interests). Counting days does not settle the matter on its own: it is merely a component of the first criterion.
Setting up in Portugal does not "decree" your residence
Here is the point that appealing arrangements forget: forming a Unipessoal Lda or a Lda in Portugal, obtaining a NIF, opening a Portuguese bank account, all of that creates a Portuguese company. It does not, in itself, create your Portuguese residence or the loss of your French one. Residence is not decreed by an administrative declaration or a paper move: it is established on the facts. Where you actually live, where your family has its home, where you really work, where your assets are managed.
The consequence is direct and too rarely stated: you can perfectly well set up a company in Portugal while remaining a French tax resident. And it is in fact the most common situation among entrepreneurs who "set up in Portugal" without moving their life there. Yet being a French tax resident means being taxable in France on your entire worldwide income, subject to international treaties. Including, therefore, on what you draw from your Portuguese company. The Lisbon address changes nothing in this base reasoning as long as your real life is in France.
The double risk of a Portuguese company run from France
If you remain a French resident while running a Portuguese company from your living room in France, you expose yourself to two families of risk. The first concerns the company itself. In tax matters, substance prevails over the registered office: a company registered in Portugal but whose decisions are actually taken in France can be regarded as having its place of effective management there, or as constituting a permanent establishment there. Possible outcome: the French tax authority claims the taxation of profits you thought were housed in Portugal.
The second family of risks targets you personally, through the anti-avoidance rules. Article 209 B of the French tax code allows France to reintegrate the profits of a foreign entity controlled by a corporate-tax company when it falls under a privileged tax regime. Article 123 bis targets resident individuals holding at least 10% of a foreign entity with mainly financial assets under such a regime, a "privileged tax regime" being assessed within the meaning of Article 238 A. Standard Portuguese IRC is in principle not caught, but it depends on your structure and your effective taxation: this is exactly the kind of validation that a tax adviser, and only a tax adviser, can carry out properly.
The France-Portugal treaty: to break ties, not to decree
What happens if, after a genuine move, both countries each consider you a resident? That is the dual-residence case, and this is where the tax treaty between France and Portugal comes in, signed on 14 January 1971, in force since 18 November 1972 and amended by the protocol of 25 August 2016. It provides tie-breaker rules, applied in order: first we look at where your permanent home is; failing a decision, the centre of your vital interests; then your habitual abode; and as a last resort, your nationality.
Keep the treaty's role clear: it breaks an existing dual residence, it does not manufacture residence where there is no real life. As for IFICI (the former NHR, which excludes retirees and requires prior recognition of the activity), it concerns your taxation in Portugal once you are resident there. It does not settle the question of your French residence at all: these are two distinct layers of the reasoning, and confusing them is a classic mistake.
So, still a French resident? The honest answer
The answer depends entirely on your facts, not on your intentions or your registration. If you keep your home, your main activity or the centre of your economic interests in France, you most likely remain a French tax resident, with a Portuguese company that may become a risk factor rather than an advantage. If instead your life genuinely shifts to Portugal, your family, your activity, your management, then the question is posed differently, and it is the treaty that will clarify borderline cases. No declaration replaces this observable reality.
Our role, as a consultant, is to build a real and compliant presence in Portugal and to connect you with a tax adviser for the analysis of your residence, which is a personal and regulated matter. More than 75 entrepreneurs supported since 2025 have taught us one simple thing: the first decision to clarify is not "where do I incorporate" but "where do I really live". If you are still torn between staying in France, moving to Portugal or doing both halfway, this is precisely the moment to talk, before you file anything.
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