Are you paying too much income tax?
I used to live in the UK and paid 45% tax. I could only dream of living in a tax-free country where the sun shines every day.
Hence, In today’s article, I am going to talk about five tax-free countries that you can move to make the most of your income.
However, there are several other factors to be considered when selecting a low-tax area perfect for you, such as the lifestyle, and the other taxes levied by the country. and If it is offering citizenship or residency to foreigners.
Best tax-free countries to immigrate
Several countries are easy to immigrate to, where you can spend 180 days in a year to become a resident and enjoy the luxuries of low tax benefits and other advantages.
Here are 5 tax-free countries to immigrate to:
1. United Arab Emirates
The UAE currently imposes zero income tax and has no taxes for legal entities. However, there are plans to introduce a 9% federal corporation tax targeting businesses with high net profits.
While citizenship by investment isn’t offered in the Emirates, acquiring a Golden Visa is possible through investments starting at $205,000.
Foreigners holding a residence visa are regarded as tax residents in the UAE. Individuals must stay in the country for at least 180 days to obtain a Tax Residency Certificate.
This certificate becomes essential when earning income in another state and aiming to leverage a double tax treaty to minimize taxes there.
The UAE is known for its diverse entertainment and educational facilities, offering numerous investment opportunities for global businesses. Lately, the UAE has become one of the leading travel destinations.
2. Antigua and Barbuda.
In Antigua and Barbuda, individuals enjoy freedom from paying taxes on wealth, capital gains, and inheritance in addition to zero income tax.
Companies like International Business Companies (IBCs) get to enjoy a tax exemption such as corporate tax and income tax from real estate and other assets. They are solely required to pay an annual fee based on the authorized capital size. It’s important to note that Antigua and Barbuda have limited tax treaties, mostly with Caribbean countries.
Acquiring citizenship in another country may require you to fulfill tax obligations in your original passport country.
Antigua and Barbuda, a fascinating island state boasting pink and white sand beaches, coral reefs, and captivating blue lagoons, is renowned for its lavish marinas.
Foreigners of substantial means have the opportunity to gain citizenship in Antigua and Barbuda by investing a minimum of $100,000.
Prospective investors must be at least 18, possess lawful income, and have a clean criminal record.
Furthermore, it’s feasible to include family members in the application, such as a spouse, financially reliant children and parents, and unmarried siblings. While Antigua and Barbuda citizenship isn’t automatically inherited, investors must ensure all eligible family members are added within five years of obtaining citizenship.
Apart from its tax advantages, holding an Antigua and Barbuda passport offers numerous privileges, enabling holders to:
• Enter Schengen countries without a visa and stay for up to 90 out of 180 days.
• Visit the UK visa-free for 180 days.
• Travel visa-free to a total of 150 countries.
3. Vanuatu
Vanuatu imposes no taxes on personal income, inheritance, capital gains, or capital exports for individuals. Companies can enjoy exemption from corporate and related taxes for 20 years, only required to pay around $350 annual fee.
However, Vanuatu lacks tax treaties with most global states, potentially obliging Vanuatu passport holders or companies to pay taxes elsewhere.
Vanuatu has the fastest citizenship program, offering a second passport within 1-3 months with an investment of $130,000.
You can travel to 95 countries visa-free which include Singapore, Hong Kong, and the UK.
It also enables applicants to apply for a multi-entry 5-year tourist visa in the US. However, Schengen countries still require a visa for Vanuatu citizens.
4. Saint Kitts and Nevis
The islands are renowned for their natural beauty, including mountains, rainforests, and stunning beaches with black volcanic sand.
Travelers visit Saint Kitts and Nevis for activities like sunbathing, diving, coastal yacht tours, and trying local cuisine.
Citizenship in Saint Kitts and Nevis is attainable through an investment of $150,000. The investor must be over 18, possess legal income, and have a clean criminal record.
Including family members in the application, such as a spouse, financially reliant children and parents, and unmarried siblings, is also feasible.
The Saint Kitts and Nevis passport offers visa-free travel to 157 countries, including Singapore, Hong Kong, the UK, Ireland, and all Schengen countries.
5. Oman
Similar to many Middle Eastern nations, Oman, due to its robust oil and gas industry, does not levy an income tax.
Despite its significant reserves, Oman has diversified its economy, welcoming new business prospects, making it an appealing option in the Gulf for investors seeking opportunities.
Oman’s government provides an Investor Residence Visa through its website. Obtaining residency or moving to Oman often requires a job offer or family ties.
Living in Oman necessitates adaptation to its conservative culture. For instance, purchasing alcohol requires a personal liquor license from a local police station.
Why Some Countries Don’t Impose Taxes?
You might wonder if these countries don’t levy income tax on their inhabitants, then how do they generate income to keep their country running?
This is attainable when a state forms enough services through different means. For instance, some nations like Qatar and Kuwait, are rich in raw materials and create a pay from their oil and gas business. Others, like the Bahamas, draw enough travelers to raise solid services from that sector.
Governments of some countries also use the tactic to attract investors by not imposing income tax on foreigners.
The 14 countries that have zero income tax in the world are Vanuatu, Brunei, Bahrain, Antigua and Barbuda, Cayman Islands, Monaco, Kuwait, St Kitts and Nevis, UAE, The Bahamas, Bermuda, Qatar, Somalia, and Western Sahara.
Can I lower my Tax Without Moving Overseas?
There are several low-tax countries where you can obtain residency or register a company to optimize your taxes – without having to live there for most of the year. Some of the following are shown below.
1. Cyprus:
Becoming a tax resident in Cyprus requires spending a minimum of 60 days per year in the country without surpassing 183 days in any other nation. Compared to numerous other countries, Cyprus maintains considerably lower tax rates.
2. Malta:
Through the Global Residence program, individuals can obtain a residency permit in Malta. Holding this residency permits taxation under different rates compared to the standard tax structure in the country:
For instance, if an individual earns income outside of Malta and doesn’t transfer it into the country, they are not liable for income tax on that amount in Malta.
Participants in the Global Residence program are obliged to pay a minimum of €15,000 annually as a tax on foreign income brought into Malta.
However, it’s essential to verify whether your primary country of residence has a bilateral tax treaty with the country where you intend to relocate or establish a business. In the absence of such an agreement, instead of tax optimization, you might find yourself liable for taxes in both nations.
Conclusion
14 countries currently offer zero-income tax policies, with four offering citizenship or residence permits through investment opportunities.
Antigua and Barbuda, apart from its zero income tax, extends tax exemption privileges to individuals regarding wealth, capital gains, and inheritance.
For foreign individuals seeking tax optimization strategies, the option to acquire residency in Malta or Cyprus and establish a company exists, allowing tax optimization without the requirement of residing there for a significant period.
It’s crucial, however, to conduct your due diligence before choosing a destination for tax optimization, ensuring that your primary country of residence has a double tax treaty established with the country of relocation or business establishment.
This precautionary step can help you to prevent potential dual taxation scenarios, providing a more streamlined tax optimization process.
