Paying taxes can be a burden, but not every country requires you to do so. Find out which countries with no income tax you could relocate to.
November 29, 2024
By: Bobby Casey, Managing Director GWP
In the US, personal income tax rates range from 10% to 37%. If you’re sick of paying so much of your income to taxes, and you want a change of scenery, then you may be researching potential countries to move to.
There are definitely countries with lower income tax rates, but you’d be surprised to learn that there are ones with no income taxes at all!
Of course, there are caveats, so it’s best you know about them now rather than later.
So, which countries have no income tax? We’ll discuss several that you should be aware of.
6 Countries That Don’t Pay Taxes
The United Arab Emirates (UAE)
The UAE is world famous for its richness in oil and natural gas. Not only that, but the country makes lots of money off of tourism and financial services, making it a place of much wealth.
There’s no income tax in the UAE, and there are favorable corporate tax incentives in free zones. This, plus the fact that there’s a rapidly growing business environment, makes the nation an amazing place to be if you’re an entrepreneur.
In addition, there’s a high standard of living in the UAE, especially in Dubai and Abu Dhabi. There’s also luxury shopping, a vibrant nightlife, and modern amenities. And you won’t feel out of place, as there are well-established expat communities all around.
However, the drawback is there’s a high cost of living, especially in real estate. Also, there’s a hot desert climate that causes inhabitants to hide indoors all year long where there’s air conditioning. Those who are employed will be highly reliant on work visas too.
If you’re particularly interested in living in Dubai, then our guide on the pros and cons of living in the city should help.
Bahrain
Bahrain’s another on the list of income tax-free countries in the Middle East. This country generates revenue from oil, financial services, and trade, and although it doesn’t have income tax, it has affordable living in comparison to other Gulf countries.
Over half of its population is expats, so you won’t feel out of place. You’ll get a nice mix of traditional Arab culture and modern amenities too.
The downside is that getting permanent residence in Bahrain isn’t easy. There are three options:
- Earn a salary of at least $5,300 per month
- Invest $530,000 in property
- Be retired
The Bahamas
The Bahamas is a tropical paradise people would love to visit at least once in their lives. It has beautiful beaches and a relaxed Caribbean lifestyle, with plenty of access to water sports. So for many, it’s the ultimate goal to live there.
Even better is that there’s no income tax or capital gains tax. As a result, retirees and high-net-worth individuals flock to the Bahamas. You can benefit from island living and a friendly, laid-back community.
But because you’re living on an island, goods are imported and have high price tags. There are also periodic hurricanes. Plus, there are limited local job opportunities unless you work in tourism or finance, or you work remotely.
Another drawback is that while obtaining a temporary resident permit is relatively easy (you just pay $1,000), the process is becoming harder. If you want to qualify for permanent residence, you have to buy property worth at least $750,000.
Bermuda
Bermuda is similar to the Bahamas in that it has pristine beaches, but is a British territory, which means it has a British-style culture. It has a strong financial sector, which attracts professionals in insurance and reinsurance.
Residents benefit from no personal income tax since the country’s main revenue is financial services and import duties. However, it also profits massively from payroll tax, which is 9.5% (self-employed people have to pay the tax themselves, whereas employers deduct the 9.5% from their employees’ salaries).
In addition, there’s no permanent residence or residence/citizenship-by-investment. If you want to live in Bermuda, then you’ll have to either get a short-term permit visa (up to six months’ stay) or a work permit (between one to five years). There’s also the Economic Investment Certificate, which requires a $2.5 million investment in exchange for five years of residence, after which you can get a Residential Certificate.
Like with the Bahamas, Bermuda is an island, which means there’s a high cost of living for housing and imported goods.
Cayman Islands
To add another British territory to the list of income tax-free countries in the world, we have the Cayman Islands. There are stunning beaches and a laid-back lifestyle here too, and the nation makes its money through tourism, financial services, and customs duties.
The Cayman Islands is well-known as a tax haven with no income tax or corporate tax. But if you want to become a resident, there’s a high income requirement of $147,000 a year or an investment of $1.2 million in the local economy. After that, it’ll take a long eight years for permanent residency.
Other drawbacks include high cost of living and real estate, and a limited local job market. The islands are also vulnerable to hurricanes.
Monaco
If you’d like to live in Europe, then look to Monaco, as it’s among the countries that don’t pay taxes on income.
This country is famous for its luxurious lifestyle, safety, and casinos. Not to mention, it’s got fantastically mild Mediterranean climate. To make up for no income tax, Monaco has revenue streams through tourism and real estate, as well as VAT.
The high standard of living, stable political environment, and beautiful weather attract wealthy individuals and celebrities. But this also means that there’s an extremely high cost of real estate. In addition, Monaco can get crowned in urban areas during peak tourist seasons, so it won’t be very peaceful or calm.
Consider These Countries With No Income Tax
These are but a few countries with no income tax; there are a few more in the world you can consider. Most of these are all tier 1 countries, meaning that you’ll pay taxes if you have a local job.
Another thing to think about is tier 2 countries instead. These have residency-based territorial tax systems, and you’ll only pay tax on income you earn there and not your worldwide income.
Contact us today if you need asset structuring assistance when moving abroad. Global Wealth Protection will minimize your tax obligations wherever you move to, while maintaining your privacy too.
