Saving money is one of the most common reasons for moving abroad, so an up-to-date list of zero-income tax countries or near-zero tax states will be of interest to many.
Income tax is a tax levied on income earned by individuals and businesses. In some high-tax states the income tax exceeds 50%. However, countries whose citizens are completely exempt from this obligation do exist as well. Their governments use alternative sources of income, such as the nationalised oil industry or tourism industry.
It should be noticed that there are no countries with no tax. If income taxes are absent, the government will raise funds through value added tax (VAT), real estate taxes, import duties, stamp duties and license fees.
Individuals seeking to preserve their capital are interested in countries with no income tax where they may get citizenship or residency by investment. Most of these countries require a stay of 183 days or more per year to maintain tax residency status and take full advantage of the local tax system. At the same time, they offer a high quality of life and a comfortable environment for work, business and leisure.
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Are there any countries with no income tax?
There are several countries whose citizens and residents are completely exempt from income tax. Best tax free countries attract investors and entrepreneurs seeking to diversify their assets and optimise their tax burden.
15 countries without income tax
Tax-free countries include:
- Antigua and Barbuda.
- Kitts and Nevis.
- Bahrain.
- The UAE.
- The Bahamas.
- The Cayman Islands.
- Bermuda.
- Vanuatu.
- Monaco.
- Saudi Arabia.
- The Virgin Islands.
- Turks and Caicos.
- Brunei.
- Kuwait.
- Qatar.
The lowest tax countries in the world
In addition to nations that have no income tax at all, there are the lowest taxed countries. They either offer very low income tax rates (below 10%) or only tax local profits. Such countries include:
- It was the first Gulf country to introduce an income tax. Under a law approved in July 2024, Omani citizens will be taxed at 5% on global income over $1 million. Expats will pay tax on incomes over $100,000 with a progressive rate of 5–9%.
- The island nation's income tax ranges from 0 to 35%. Foreign income not transferred to local accounts is not taxed, while transferred income is taxed at a rate of 15%. Income earned within the country is taxed up to 35%.
- The rate also varies from 0 to 35%. There is no tax on foreign income and inheritance; the corporate tax rate is only 12.5%, which is lower than in most European countries.
- The income tax rate for individuals and legal entities is 9%. Tax residents do not pay interest tax and luxury tax. The annual property tax rate varies between 0.25-1% depending on the market value of the property.
- Income tax for individuals and legal entities is 10%. VAT in the Principality is 4.5%, the lowest in Europe.
- Income tax rate for individuals varies from 0 to 22%, and corporate tax is 17%.
Is it possible to optimise taxes without moving abroad?
To minimise the tax burden, foreigners can establish residency or open a company in a low-tax state. One of the available options is permanent residence in Cyprus. To maintain tax residency status, you must stay in the Republic for at least 60 days per year.
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The citizenship and residence permit by investment programme is also available in Malta, Montenegro, Andorra and Singapore. A participant interested in tax optimisation should make sure that his/her main country of residence has a double tax treaty with the state in which he/she plans to become a resident.
Overview of zero income tax countries
Antigua and Barbuda
In addition to income tax, the island nation has no estate, wealth, capital gains, or inheritance taxes. International business companies incorporated in the country also do not have to pay corporate tax on income from property, securities and other financial assets for 50 years. Instead, they pay an annual levy, the rate of which depends on the amount of capital.
However, it should be noted that Antigua and Barbuda does not have many double tax treaties. They are mostly concluded with other Caribbean states. Therefore, most residents will still have to pay taxes in the country of first citizenship.
The minimum investment threshold for obtaining a passport is $230,000.
St Kitts and Nevis
It is the country with no taxes on income, dividends, luxury and interest for residents. Corporate tax is 25% (it was reduced in January 2024 from 33% previously). It is a low VAT country ranging from 10 to 15%. The property tax rate is between 0.2 and 0.3%.
The minimum investment threshold for citizenship is $250,000.
Bahrain
Residents of the kingdom are exempt from income tax, and a corporate tax of 46% is levied only on companies operating in the gas and oil sector. VAT and council tax on rent for expats in the country is 10%, and stamp duty on the transfer or registration of property varies between 1.7-2% of its value.
The minimum investment threshold for a residence permit is $132,500.
The UAE
The state belongs to the group of countries with no taxes on personal income, capital gains, inheritance, gift, and estate. A corporate tax of 9% applies only to businesses with profits exceeding $102,000.
The minimum investment threshold for obtaining a residence permit is $204,000.
The Bahamas
Residents are exempt from income tax. A corporate tax of 15% is levied only on large multinational companies whose annual profits exceed €750 million, according to the OECD's Pillar Two rules. Ordinary businesses pay a licence fee, the rate of which can be as high as 3% of turnover. VAT ranges from 0 to 12% and real estate tax from 0.75 to 2%.
The minimum investment threshold for obtaining a residence permit is $750,000.
The Cayman Islands
The islands have no income or corporation tax and no VAT. The amount of stamp duty on property transactions is 7.5%.
The minimum investment threshold for a residence permit is $2.4 million.
Bermuda
Bermuda is one of the countries without VAT. Corporate tax is calculated based on share capital, except for large multinational companies with annual revenues over €750 million, for which it will be 15% from 2025. Property tax is calculated based on the assessed value of the annual rental.
The minimum investment threshold for obtaining a residence permit is $2.5 million.
Vanuatu
Individuals in the republic are exempt from taxes on personal income, inheritance, capital gains, and exports. Companies paying an annual fee of $300 can also be exempt from corporate and other types of taxes for 20 years.
However, the Vanuatu government has not entered into a double taxation agreement with many nations around the world. Therefore, most expats who have obtained local passports must pay taxes in the other country.
The minimum investment threshold for citizenship is $130,000.
Monaco
Residents of the microstate are exempt from income tax and property tax. Corporate tax is 25% and VAT is 20%.
The minimum investment threshold for residence permit is €1 million.
Saudi Arabia
The kingdom has no personal income tax. The corporate tax rate is 20% of net profits, but income from oil and hydrocarbon production is taxed at a rate of 50-85%. The standard VAT rate is 15%.
The minimum investment threshold for a residence permit is $26,500.
The Virgin Islands
The overseas British territory does not levy taxes on income and capital gains. They do not currently have an active programme to grant citizenship or residence permits by investment.
Turks and Caicos
Another British overseas territory in the Atlantic Ocean has no taxes on income, capital gains, property, inheritance or corporate profits. Residence or citizenship cannot be obtained in exchange for investment.
Brunei
There is no personal income or value added taxes in the sultanate. Corporate tax is 18.5% for most companies. However, for companies involved in oil and gas extraction, the rate is 55%.
There is no current programme for granting residence permits or citizenship by investment.
Kuwait
Citizens of the emirate do not pay taxes on personal income, value added and property. The corporate tax rate is 15%.
The state does not currently grant residence permits or citizenship to investors.
Qatar
The Middle Eastern state has no personal income, value added, and property taxes. However, when renting out property, a fee must be paid to register the contract. The corporate tax rate is 10% for most companies. However, for companies in the oil and gas sector, the rate can be as high as 35%.
Residence permit or citizenship cannot be obtained through investments.
To move to a country with an attractive tax system, contact the experts at Citizenship-By.Investments. We can help you search for the right place to move to, apply for a residence permit/permanent residence permit/citizenship programme, and find accommodation.