Are you planning to reduce your tax load? A country that is free of income tax could be the best option for you. But before you settle in, there are various factors that you should take into consideration. For instance, the lifestyle of the people in the country, additional taxes that are levied on citizens, and the citizenship or residency programs that are accessible to international residents. In this article, we will take you through the best countries with no income tax to live in, how to plan your taxes, and more.
Are countries with no income tax a reality?
Taxes play an important role in driving a country’s economy. And income tax generates the maximum income in terms of taxes for most countries. But some countries do not levy income tax on their citizens. This is achievable because the country has other sources of income to bank upon. For example, middle eastern countries like Qatar and Kuwait are very rich in natural resources, hence their primary source of income is the oil and gas trade. On the other hand, countries like the Bahamas and Antigua and Barbuda that attract tourists generate income mainly through their tourism sector. Moreover, countries with no income tax can also be an opportunity to attract more foreign investors.
The Top Tax-free Countries to Settle in
There are various tax-free countries that you can choose to settle in. Once you spend 183 days a year in the country of your choice, you are eligible to become a tax resident of that country. With a tax residence permit, you can enjoy tax-friendly policies and other benefits. In this section, we will take you through the best tax-free countries to immigrate to.
Antigua and Barbuda
Home to a few of the world’s most charming beaches, picturesque landscapes, exotic flora and fauna, and a welcoming population, Antigua and Barbuda is one of the best places to live in if you are looking for a country that imposes no income tax. In addition to this, the country also levies no taxes on wealth, capital gains, or inheritance.
In Antigua and Barbuda, registered International Business Companies (IBC) are not required to pay taxes for 50 years. These taxes include Corporate tax, tax on income from real estate, securities, and other financial assets. Instead of taxes, these companies pay an annual fee that is dependent on the capital size that has been authorized.
But do note that Antigua and Barbuda do not possess tax treaties with multiple countries across the world. Most of their treaties are with other Caribbean countries. This points to the fact that even if you are settling in Antigua and Barbuda, you may have to continue paying taxes in your home country.
By investing $100,000 or more, you can obtain a passport of Antigua and Barbuda through their Citizenship By Investment program. You need to fulfill the following criteria to qualify under the Antigua and Barbuda Citizenship by Investment Program –
- The applicant should be 18 years or older
- The applicant should possess good character
- The applicant should have no criminal record
- The applicant should be in good health condition
- The applicant should be financially adept at making the investment in the country
- The applicant should meet the residency requirement of a minimum of five days in the country within five years of obtaining citizenship.
- The person should be available to take an oath of allegiance in Antigua and Barbuda or any Embassy, High Commission, or Consulate of Antigua and Barbuda.
Benefits of the Antigua and Barbuda passport
- The country imposes no tax on worldwide income
- The Antigua and Barbuda passport is comparatively easier and cheaper to obtain than other Caribbean countries
- There is no education or language requirement
- You can travel visa-free to more than 140 countries with an Antigua and Barbuda passport
- You can include your family members in your passport application
- The country has a thriving real estate market. You can also invest in the real estate of the country in order to obtain citizenship of Antigua and Barbuda.
The United Arab Emirates
The United Arab Emirates imposes no income tax on its residents. Although there is no tax for legal entities in the country, businesses with high net profits have to pay a federal corporation tax of 9%. In addition to this, oil companies and international banks have to pay corporate taxes in the UAE.
The UAE has no Citizenship by Investment Program, but in exchange for an investment of $205,000, you can obtain a renewable residence permit in the UAE. If you are a foreigner living in UAE with a residence visa, then you are a tax resident. Although you need to stay in UAE for over 180 days to obtain a Tax Residence Certificate.
Apart from being a tax-friendly nation, the UAE also offers world-class education, health, business opportunities, and other facilities to foreign investors. But it would be best if you also kept in mind that you need to follow specific rules and restrictions as per the Islamic code of conduct in the country.
Vanuatu
If you are looking to live in a tax-friendly Caribbean paradise, then Vanuatu is your perfect place to be. Apart from offering global mobility, and a charming beach lifestyle, the country also has a very economical tax infrastructure. The country does not impose a personal income tax, inheritance tax, capital gains tax, or taxes on capital export for individuals living in Vanuatu.
By paying $300 per annum, companies don’t have to pay corporate or other taxes for twenty years in the future. But since Vanuatu doesn’t have tax treaties with many countries across the globe, hence individuals may have to pay taxes in their home country. Vanuatu also offers foreigners citizenship through the Vanuatu Citizenship by Investment Program. You can obtain a second passport in the country within a short period of 1-3 months by investing a minimum amount of $130,000.
Benefits of a Vanuatu passport
- There is no personal income tax, no wealth tax, no inheritance, gifts, or capital gains tax in the country.
- With a Vanuatu passport, you have visa-free access to over 96 countries across the world.
- You can include your entire family in your passport application.
- You can obtain the passport within 1-3 months in exchange for a very affordable investment of $130,000.
- With a Vanuatu passport, you can fast-track your application in case you are traveling to the Commonwealth.
Saint Kitts and Nevis
Renowned for its charming white beaches, rainforests, and beautiful landscapes, St Kitts and Nevis have a thriving tourism sector and real estate market. What makes the country even more attractive is that no taxes are imposed on income, dividends, royalties, or interests for individuals with residence permits. Although, the country does charge corporate tax at 33%, VAT at 10-15%, and property ownership at 0.2 – 0.3%.
By applying through the St Kitts and Nevis Citizenship Program, you can obtain the country’s passport in exchange for an investment of $150,000. The requirements for citizenship include the following: The individual must be 18 years and above, have no criminal record and must have excellent personal health. In addition to this, the foreign investor must be able to make a qualifying investment.
Benefits of the Saint Kitts and Nevis passport
- St Kitts and Nevis have a tax-friendly infrastructure with no income, inheritance, or gift tax.
- With a St Kitts and Nevis passport, you can visit more than 140 countries across the globe, including popular areas like the Schengen area, the United Kingdom, and Singapore.
- You can include your family members in your passport application.
- The country provides lifetime dual citizenship for applicants.
- You can accelerate your citizenship application process in St Kitts and Nevis and obtain it, if necessary, within a short time period of sixty days.
- There is no requirement for minimum residency, interview, or the need to know a certain language to obtain permanent residence in the country.
Other Tax-free Countries
Apart from the above-mentioned countries, there are several other countries with no income tax policy. But do note that you can’t obtain citizenship in these countries by making an investment. Although, in some of these countries, you can obtain residency through investment. But in that case, it is more expensive to obtain citizenship.
In this section below, we will take you through the list of other countries with no income tax.
| Country | Taxes on Companies/Individuals | Immigration by Investment | Lifestyle of the Country |
| Bahrain | Corporate – Companies working in the oil and gas sector need to pay 46% income tax
VAT – 10% Property – Around 1.7-2% stamp duty and 10% municipality tax for rental to expatriates |
You cannot obtain citizenship, but you can apply for residency in the country.
By investing $270,000 through buying property or being a retiree with enough income, you can obtain residency. |
The country has a tropical climate with hot summers and light winters. Expats constitute almost half of the population. 70% of people in the country are Muslim. |
| The Bahamas | Corporate – to apply for a license for business, you have to pay around 3% of the turnover
VAT- 0-12% Property- 1-10% of stamp duty and around 0.75%-2% real property tax |
You cannot obtain citizenship
By investing $2.5 million, you can obtain residency. |
The Bahamas is a famous Caribbean Island that has a warm climate and a huge expat community.
The majority of the population of the country follows Christianity. |
| Bermuda | Corporate – An annual company fee that is based on share capital levels
VAT – 0% |
You cannot apply for citizenship, but you can obtain residency by investing $2.5 million. | The country has a sub-tropical climate and is very humid.
Bermuda has beautiful beaches, and picturesque landscapes. Expats constitute over 20% of the population and most of the citizens in the country practice Christianity. |
| The Cayman Islands | Corporate – Not applicable VAT – 0% Property – 7.5% Stamp duty |
You cannot apply for citizenship, but you can obtain residency by investing $2.4 million | The Cayman Islands have a warm tropical climate and consist of various overseas organizations.
The country also has an efficient health infrastructure. The majority of citizens follow Christianity, and more than half of the population in the country are expats. |
| Monaco | Corporate – Companies churning revenue more than 25% of their turnover outside of Monaco need to pay around 33%
VAT is around 20% |
You cannot obtain citizenship By investing £1 million, you can obtain residency |
Monaco is famous for its luxurious lifestyle and is frequented by the elite class of Europe
More than 70% of people living in the country belong to expat community. Most of the citizens in the country follow Christianity. |
| Brunei | Corporate – 18.5% of income tax VAT – 0% Property – On the basis of the municipality, it varies. |
Neither Citizenship nor Residency is possible in this country | The country has a humid climate. Since most of the country is populated with Muslims.
Around 40% of the population in the country consists of expats. |
| Kuwait | Corporate – 15% income tax VAT – 0% but the country is planning to impose 5% in 2023Property – None |
Neither Citizenship nor residency is possible in the country | The country has a dry and hot climate but is relatively safer than the other middle-eastern countries.
The majority of the population is Muslim. Expatriates constitute around 60% of the population. |
| Qatar | Corporate – 10% income tax
VAT – 0% but the country will be imposing 5% VAT in 2023 Property – Fees for lease registration |
You cannot apply for Citizenship or Residency in the country | Qatar also has a hot climate. The majority of the population is Muslim.
Around 88% of people in this country are foreign workers. |
| Somalia | No Tax | You cannot apply for Citizenship nor residency in this country | Economically unstable country and not very safe to live in.
More than 99% of the people in this country are Muslims. |
| Western Sahara | No Tax | You cannot apply for Citizenship nor residency in this country | Owing to old disputes, the country is tax-free. It is also not safe to live in this country
Most of the citizens follow Islam, followed by Christianity. |
Ways to Save Taxes without Immigrating Abroad
There are various countries across the globe that offer residency or business opportunities to help you save taxes. Most of these countries have very little to no residency requirement, and hence you don’t have to spend most of your time in that country.
Here is a list of a few countries that you consider:
Cyprus – By spending sixty days in a year in Cyprus and not spending more than 183 days in a year in some different country, you are eligible to become a tax resident. In Cyprus, taxes are comparatively lower than in other countries.
Malta – Through the Global Residence Programme, an individual can obtain Malta Residency. With a Malta Residence Permit, you can pay taxes in Malta that varies from the standard tax rate in the country. For instance, if you are earning outside of Malta and don’t transfer to the country, you don’t have to pay income tax in Malta. Foreign investors in Malta need to pay €15,000+ per annum as tax on foreign income transferred to Malta.
Before you move to a different country to establish a business or settle, check if your home country has a double tax treaty with the country you plan to move to. If there isn’t any such treaty, then you might have to pay double taxes instead of saving.
Contact Global Citizen Solutions to know all about countries with low income taxes that could be of interest to you.
Frequently Asked Questions
Which are the countries that don't have taxes?
At present, there are 14 tax-free countries across the globe. They include Antigua and Barbuda, St. Kitts and Nevis, the United Arab Emirates, Vanuatu, Brunei, Bahrain, the Bahamas, Bermuda, the Cayman Islands, Monaco, Kuwait, Qatar, Somalia, and Western Sahara.
Which Caribbean country has no income tax?
The Cayman Islands in the Caribbean has a tax-friendly infrastructure for its residents. The country has no income tax nor any payroll, capital gains, or withholding tax.
Which is the best tax-free country?
The Bahamas, the Cayman Islands, Panama, Dominica, St Kitts and Nevis, Vanuatu, the UAE, and, Antigua and Barbuda are some of the best tax-free countries in the world.
Do I have to shift abroad to optimize taxes?
It’s not compulsory to move abroad to save on taxes. You can also choose not to relocate but just move your business abroad to save on taxes.
