The taxation of capital gains, which are profits made from the sale of assets, varies widely from country to country in the global financial landscape. While most nations impose a tax on capital gains to maintain economic growth and equity, some countries offer a unique advantage – no capital gains tax at all.

This distinct fiscal policy attracts investors looking to maximize their returns and makes these countries lucrative personal and corporate investment destinations.

In this article, we will explore the nations that eschew capital gains tax, their reasons for doing so, and the implications of this policy for their economies and global investment patterns.

What is capital gains tax?

Capital gains tax is a tax on the profit realized from the sale of a non-inventory asset purchased at a cost lower than the amount realized on the sale. In simpler terms, it’s the tax you pay on the profit from selling something you own for more than you spent to acquire it. These assets can include investments like stocks and bonds and tangible assets like real estate.

The specific rate at which capital gains are taxed depends on various factors, including the type of asset, the time it was held, and the jurisdiction imposing the tax. Typically, there are two types of capital gains: short-term and long-term.

Short-term capital gains are usually taxed at a higher rate and apply to assets held for a year or less. Long-term capital gains apply to assets held for more than one year and are generally taxed at a lower rate, reflecting an incentive for longer-term investment in the economy.

Some jurisdictions may offer exemptions or reduced rates under certain conditions to encourage investment or not unduly burden the selling of personal properties, such as a home where you’ve lived for several years. The rationale behind the capital gains tax is to tax the increase in value of an asset, thus capturing a portion of the gain that the seller has realized.

It’s a way for governments to generate revenue from the increase in the value of assets within their economy while also encouraging the long-term holding of assets, which can contribute to a more stable economic environment.

10 Countries that have no capital gains tax


hong kong new zealand real estate united arab emirates long island tax bracket capital gains taxes capital gain tax income tax income taxes stock investments bernard arnault intellectual property living proof calendar year yucatan peninsula kuala lumpur bank accountBermuda is a beautiful island that attracts international business and investment because of its unique tax regime. One of the most notable aspects of Bermuda’s tax policy is the lack of capital gains tax.

This approach is part of a broader strategy to encourage multinational corporations, hedge funds, and other investment funds to make Bermuda their preferred domicile.

The island’s economy flourishes as a global hub for insurance and reinsurance, thanks to its tax-friendly environment. The government primarily earns revenue from customs duties, payroll taxes, and license fees rather than direct taxation on income or capital gains.

This simplifies tax compliance and administration, which makes the location even more appealing to high-net-worth individuals and businesses looking to optimize their tax exposure.

However, it’s important to note that Bermuda’s high cost of living and the requirement for businesses to have a substantial local presence ensure its benefits are balanced with contributions to the local economy.

The Bahamas

 hong kong real estate united arab emirates capital gains taxes capital gains tax rate tax free bank account central american countries tax exempt eu countries welcome mat stock exchange caribbean country bird's eye view sandy beachesThe Bahamas is a country that doesn’t impose capital gains tax, which makes it an attractive destination for investors and financial services. Its tax system is designed to encourage foreign investment and boost economic activity without imposing direct taxation on income, inheritance, or capital gains.

Instead, the government relies on indirect taxes like value-added tax (VAT), import duties, and property taxes to generate revenue. This approach has made The Bahamas a popular choice for real estate investors, as property value appreciation is not subjected to capital gains tax.

Moreover, The Bahamas is known as a tax haven because of its regulatory framework, which supports privacy and asset protection. The country has a well-established banking and financial services sector that caters to international businesses and high-net-worth individuals seeking favorable tax conditions.

Despite criticisms of being a tax haven, The Bahamas maintains that its tax policies are intended to promote economic growth and job creation and maintain its competitive edge as a global financial center.

The United Arab Emirates (UAE)

capital gains tax rate hong kong new zealand tax capital gains tax rates tax free subject to the normal capital gains derived personal income tax rates pay capital gains taxes real property gains tax estate and income taxes tax burden corporate tax avoid paying taxesThe UAE’s tax system is highly favorable to businesses and investors, as it does not impose capital gains tax on most investments. This tax policy is part of the UAE’s strategy to diversify its economy beyond oil and establish itself as a leading global business hub.

The lack of capital gains tax applies to both residents and non-residents, making the UAE an attractive destination for international investors.

Furthermore, the country’s free zones offer additional tax incentives, such as 100% foreign ownership, full repatriation of profits, and exemption from import and export taxes.

These benefits are designed to attract foreign direct investment in key sectors like technology, finance, and renewable energy. The UAE’s approach to taxation, including the absence of capital gains tax, has contributed to its rapid economic growth and the development of world-class infrastructure.

However, the UAE has also implemented VAT and excise taxes to diversify government revenue sources and ensure sustainable development. This balanced approach maintains the UAE’s tax-competitive environment while addressing the need for public services and infrastructure.

Cayman Islands

tax benefits tax and business environment create attractive tax incentives other capital gains regular income taxes range private capital gains corporate tax rates ranging capital gains strategy british overseas territory avoid paying unnecessary tax capital gains realized significant real estate investment ordinary income low tax country attractive tax incentives family investment visa program capital gains realised business asset sales tax burden ranging obtaining tax residency regular income taxes tax residency status few dual taxation treaties country's tax system fixed income securitiesThe Cayman Islands are known for not having direct taxes, including no capital gains tax. This makes them attractive to international investors and financial service providers. This tax policy is an essential part of the economic model of the Cayman Islands, which aims to attract hedge funds, private equity funds, and multinational corporations seeking tax-efficient operations and investments.

The lack of a capital gains tax is complemented by no direct taxes on corporate earnings, income, or wealth, providing a simple and beneficial tax environment for both individuals and businesses.

The government derives its revenue from indirect sources, such as fees for company registration, work permits, and import duties.

This tax structure supports the Cayman Islands’ position as a leading offshore financial center, hosting a significant percentage of the world’s investment funds. The regulatory framework of the islands is tailored to meet international standards of transparency and cooperation in tax matters, aiming to balance tax advantages with responsible participation in the global financial system.


individual capital gains tax income tax rate paying capital gains tax rates income taxes separate capital gains tax charge capital gains taxes obtaining tax residency capital gains rates depend personal property sales foreign and malaysian stocks capital gains rates own money immovable property regular income other assets generally exempt discourages investment tax free country draconian government rule nations offering competitive incentivesMonaco is a well-known location for its tax-friendly environment. The principality exempts residents from personal income tax, inheritance tax, and capital gains tax.

This policy has made Monaco an attractive destination for wealthy individuals who wish to preserve their wealth. The principality’s tax regime is part of a broader strategy to maintain its status as a luxurious and prestigious place to live and conduct business.

Monaco’s economy benefits from high-end tourism, real estate, finance, and yachting. The absence of capital gains tax makes it more appealing for real estate investment, with property values among the highest in the world. Monaco earns revenue through VAT, corporate taxes on companies earning revenue from outside Monaco, and various fees and duties.

The principality has established strict residency requirements and invests in public services and infrastructure to ensure that its tax policies support the well-being of its residents and the economic stability of the country.

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barbadosBarbados has created a favorable tax environment to encourage foreign investment and boost its economy. The country has developed a diverse economy, with its key sectors being tourism, international business, and financial services.

To attract more businesses, Barbados offers various tax incentives, including special regimes for international companies that provide exemptions from certain taxes and duties.

One notable feature of Barbados’ tax system is the absence of capital gains tax, which makes it an attractive location for investment, especially in real estate and financial assets.

While maintaining a competitive tax system, the government ensures compliance with international tax transparency standards. Barbados’ taxation approach supports its development goals, attracts international business, and ensures sustainable economic growth.


Belize tax exempt capital gain tax rate tax rates beautiful scenery hong kong new zealand real estate tax on capital gains city state pay taxes paying taxes case law effective tax rate corporate tax rates wealth taxBelize offers a business-friendly environment to attract foreign investors and retirees. Its tax system is structured to promote investment and economic development, with various incentives, such as the Qualified Retired Persons (QRP) program, which provides tax exemptions.

The country’s economy is based on tourism, agriculture, and offshore financial services, which are sectors that the government encourages to grow. Belize does not have a capital gains tax, which is part of its broader strategy to create an advantageous tax regime.

Additionally, Belize has taken steps to improve its regulatory framework for financial services to address concerns about transparency and financial integrity. Its natural beauty, along with its tax policies, makes Belize an attractive destination for investors interested in emerging markets.


pay capital gains tax capital gains tax considerations income tax rate tax resident capital gains tax considerations regular income tax rates real property long term capital gain private property one way trading companies best places flat rate online business sales capital assets short term capital gain low cost hainan island business investorsOman has created a business-friendly environment that is attractive to investors by not imposing capital gains tax on the sale of securities and certain other assets. This policy is part of Oman’s efforts to reduce its dependence on oil and gas, and instead, encourage the growth of the private sector and foreign investment.

Oman has implemented several reforms, such as the introduction of value-added tax (VAT) and corporate income tax for certain businesses, to increase its revenue base while maintaining incentives for investment. By not imposing capital gains tax on most investments, Oman aims to become a competitive destination for regional and international businesses.

Oman focuses on developing key sectors such as tourism, logistics, manufacturing, and mining, which offer a stable and attractive investment climate.


qatar - permanent resident doesn't pay taxesQatar’s tax regime is characterized by the absence of capital gains tax on personal investments, making it an attractive destination for international investors and expatriates.

The country’s economy, one of the richest globally due to its substantial natural gas reserves, benefits from a deliberate strategy to attract foreign capital and expertise to diversify its economic base. Qatar offers a competitive business environment with tax incentives, including the absence of capital gains tax, to support its vision of sustainable economic development.

The government has invested heavily in infrastructure, education, and technology, positioning Qatar as a hub for innovation and investment in the Middle East. While Qatar introduced a minimal corporate tax rate for foreign companies, the lack of capital gains tax on personal investments remains a key feature of its tax policy.

Saint Vincent and the Grenadines

Saint Vincent and the Grenadines offers an appealing tax regime for investors, with no capital gains tax on the sale of property or securities. This policy forms part of the country’s strategy to attract foreign investment and stimulate economic growth.

The island nation focuses on tourism, agriculture, and offshore financial services as principal economic drivers, providing various incentives to encourage investments in these sectors. The absence of capital gains tax enhances Saint Vincent and the Grenadines’ attractiveness as a destination for real estate investment and financial services.

The government aims to balance attracting investment with maintaining fiscal stability, ensuring that its tax policies support long-term economic development and contribute to the country’s appeal as a place to live, work, and invest.

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Frequently Asked Questions About Countries That Have No Capital Gains Taxes

What are the benefits of investing in countries that have no capital gains taxes?

Investing in countries without capital gains tax can boost net returns on investments, simplify tax planning, and attract international investors, creating a vibrant investment community.

How do countries without capital gains tax generate revenue?

Countries without capital gains taxes typically generate revenue through other means, such as value-added taxes (VAT), sales taxes, property taxes, customs duties, and license fees.

Some also impose corporate taxes, particularly on companies operating within certain sectors, or generate significant income from natural resources. These alternative revenue sources help maintain public services and infrastructure without relying on capital gains taxes.

Are there any drawbacks to living or investing in a country with no capital gains tax?

Countries without capital gains tax may impose higher taxes in other areas, such as property or consumption taxes, that could offset the advantages. There may also be regulatory challenges, higher living costs, or less political stability in these countries. Moreover, they may offer fewer government-funded public services and infrastructure.

Can foreigners easily invest in countries that have no capital gains tax?

While many countries that have no capital gains tax actively encourage foreign investment to boost their economies, regulations and ease of investment can vary.

Some countries offer incentives for foreign investors, including residency permits or citizenship in exchange for significant investment. However, potential investors should be aware of any legal restrictions, reporting requirements, or financial regulations that might impact their ability to invest or repatriate profits.

Does the absence of capital gains tax in a country mean there are no taxes on investment income?

When it comes to taxes, just because a country doesn’t impose capital gains tax doesn’t mean it’s tax-free. Other types of investment income, like interest, dividends, or rental income, could still be taxed. Every country has different tax laws, so it’s crucial to consider the overall tax implications of your investment activities in different jurisdictions. To navigate these complexities effectively, it’s advisable to understand the specific tax laws and consult with a tax professional.