11 Countries With the Lowest Taxes in the World: 2025 Guide

Looking for the countries with the lowest taxes? Around the globe, taxation systems differ dramatically. Some nations impose zero income tax, while others attract residents using low flat tax rates or territorial tax systems that exempt foreign income.

For expats, investors, retirees, and digital nomads, identifying the lowest personal income tax rates in the world can mean significant financial savings, better global mobility, and access to favorable residency options.

This guide compares personal income tax, corporate tax, VAT, and capital gains tax across multiple countries and jurisdictions. We also highlight the best low-tax countries to live in, including European countries with the lowest taxes and developed countries with favorable tax structures.

• 11 Countries With Low- to No-Taxes
• Quick Comparison of Countries With the Lowest Taxes
• How Global Tax Systems Differ
• Pros and Cons of Low-Tax Countries
• Frequently Asked Questions

11 Best Low-Tax Countries to Live, Work, and Invest In

1. United Arab Emirates (UAE)

Zero income tax and expats’ top choice

The United Arab Emirates (UAE) is one of the most popular countries with the lowest taxes in the world. It imposes no income tax on individuals and only recently introduced a modest 9% corporate tax in 2023.

Tax profile:

• Personal income tax: 0%
• Corporate tax: 9% (on profits over ~$100,000)
• VAT: 5%
• Capital gains tax: 0%

The UAE is a strategic global hub, offering modern infrastructure, long-term residency visas (such as the UAE Golden Visa and a digital nomad visa), and strong expat communities in cities like Dubai and Abu Dhabi. It combines tax efficiency with a high quality of life and international connectivity.

2. Cayman Islands

Classic zero-tax country

The Cayman Islands levy no income, corporate, or capital gains taxes. Instead, government revenue comes mainly from import duties and fees.

Tax profile:

• Personal income tax: 0%
• Corporate tax: 0%
• Sales tax: 0%
• Capital gains tax: 0%

Known for its financial services sector and strong legal system, the Cayman Islands are favored by investors and wealth managers. Expats also enjoy a stable political environment and Caribbean lifestyle.

3. Bahamas

Zero income tax and expat tax haven

The Bahamas combines zero income and corporate taxes with attractive residency-by-investment programs.

Tax profile:

• Personal income tax: 0%
• Corporate tax: 0%
• VAT: 12%
• Capital gains tax: 0%

In addition to tax benefits, the Bahamas offers proximity to the U.S., English as the official language, and a relaxed island lifestyle. It has become a preferred choice for retirees and digital nomads.

4. Qatar

Tax-free for individuals

Qatar provides a tax-free environment for individuals, with only a 10% corporate income tax on most businesses.

Tax profile:

• Personal income tax: 0%
• Corporate tax: 10%
• VAT: 5%
• Capital gains tax: 0%

Its booming economy, modern infrastructure, and high salaries make Qatar attractive for expats. It also plays an increasing role as a strategic hub in the Middle East.

5. Bulgaria

Lowest tax rates in Europe

Bulgaria offers a flat 10% tax on both personal income and corporate profits, the lowest in the European Union (EU).

Tax profile:

• Personal income tax: 10%
• Corporate tax: 10%
• VAT: 20%
• Capital gains tax: 10%

It’s a popular base for entrepreneurs and remote workers thanks to its affordable living costs, EU market access, and growing tech scene.

6. Hungary

Europe’s lowest corporate tax

Hungary applies the EU’s lowest corporate tax rate at just 9%, alongside a flat 15% income tax.

Tax profile:

• Personal income tax: 15% flat
• Corporate tax: 9%
• VAT: 27% (highest in EU)
• Capital gains tax: 15%

Despite its high VAT, Hungary remains attractive for businesses seeking EU access, competitive labor, and pro-business policies. Budapest also offers a vibrant cultural life at relatively low costs. The government offers the investment-based Hungary Golden Visa for those seeking a fast route to residency and eventual citizenship.

7. Andorra

Low-tax haven in the Pyrenees

Andorra combines low personal and corporate income taxes with Europe’s lowest sales tax rate at 4.5%. It also has a flat 10% income tax, no wealth tax, and no inheritance tax.

Tax profile:

• Personal income tax: Max 10%
• Corporate tax: 10%
• Sales tax (IGI): 4.5%
• Capital gains tax: 0–10%

Set in the Pyrenees, Andorra appeals to retirees and digital nomads with its outdoor lifestyle, political stability, and proximity to Spain and France.

8. Singapore

A developed country with low taxes

Singapore’s territorial taxation system exempts most foreign income, making it a leading global low-tax hub. Unlike countries that tax on a worldwide income basis, Singapore only taxes earnings sourced locally or remitted into the country.

Tax profile:

• Personal income tax: Progressive up to 22%
• Corporate tax: 17% (effective rates often lower)
• GST: 8%
• Capital gains tax: 0%

As a global financial center, Singapore pairs low taxes with excellent infrastructure, strong tax treaties, and investor-friendly incentives. It is also known for its favorable corporate tax rates and pro-business environment, making it one of the best developed countries with the lowest taxes.

9. Switzerland

Competitive taxes and high living standards

Switzerland’s cantonal competition creates wide variation in rates, with corporate tax as low as 11.9% in some areas.

Tax profile:

• Personal income tax: 0–40% depending on canton
• Corporate tax: ~15% average
• VAT: 7.7%
• Capital gains tax: 0% (on private assets)

It remains a top choice for investors and high-net-worth individuals due to its banking sector, neutrality, and quality of life. Lump-sum agreements also make it attractive for wealthy foreigners.

10. Ireland

Low corporate income taxes in the EU

Ireland is famous for its 12.5% corporate tax rate, which has attracted global tech giants.

Tax profile:

• Personal income tax: Up to 40%
• Corporate tax: 12.5%
• VAT: 23%
• Capital gains tax: 33%

As an English-speaking EU country, Ireland offers a skilled workforce, pro-business environment, and strong international links, despite relatively higher personal taxes.

11. Costa Rica

Low taxes for retirees and digital nomads

Costa Rica applies a territorial tax system, which means only local income is taxed. Foreign income such as pensions, remote salaries, or overseas investments is exempt. This makes Costa Rica especially attractive compared to countries that tax residents on worldwide income.

Tax profile:

• Personal income tax: 0–25% (on local income only)
• Corporate tax: 30% (lower for small businesses)
• VAT: 13%
• Capital gains tax: 15% (local only)

With its stable governance, affordable healthcare, and eco-friendly lifestyle, Costa Rica is an appealing low-tax choice for retirees and digital nomads who want to legally reduce their tax liability while enjoying a high quality of life.

Quick Comparison of Countries With the Lowest Taxes

How Global Tax Systems Differ

Not all low-tax countries operate in the same way. Some adopt zero-tax regimes, meaning no personal or corporate income tax at all (for example, UAE, Cayman Islands).

Others use a territorial tax system, taxing only locally sourced income while exempting foreign income (for example, Singapore, Costa Rica). Tax structures can also be:

• Flat tax systems: a single rate applied to all income (Bulgaria: 10%).
• Progressive systems: higher rates apply as income rises (Switzerland, Singapore).
• Special regimes: lump-sum taxation, expat exemptions, or reduced rates for investors.

Understanding these differences is crucial when evaluating what country has the lowest tax rate for your situation, since residency rules, tax treaties, and reporting obligations will affect the outcome.

Pros and Cons of Low-Tax Countries

Choosing to live in a country with the lowest taxes can be a smart financial decision, but it comes with both benefits and risks.

Pros:

• Keep more of your income, dividends, and capital gains.
• Gain access to attractive residency programs for investors, retirees, and nomads.
• Competitive business environments with low corporate tax rates.
• Entry to international markets and, in some cases, strong financial privacy.

Cons:

• Some low-tax countries provide limited public services (such as healthcare and pensions).
• Higher cost of living may offset tax savings.
• International scrutiny of tax haven countries can pose reputational risks.
• Complexities in tax compliance. This particularly pertinent for U.S. citizens, who are taxed on worldwide income.

While low-tax countries can provide major financial benefits, individuals should balance tax savings with quality of life, long-term stability, and compliance obligations.