A tax-free paradise. Countries with zero or almost zero taxes

There are several countries in the world where you don’t have to (or almost don’t have to) pay taxes. Today, we’ll discuss the tax havens whose advantages you can benefit from.

A reasonable question is: how do such countries survive if they do not levy taxes? They simply have other sources of profit, enough to cover the necessary expenses. These sources could be oil production, tourism, mining, etc.

Such tax-free countries are ideal for diversifying income and optimizing tax burdens. We will give examples of such tax-free countries and tell you about the nuances that are worth considering. 

It is worth paying attention to whether the tax-free country and the country of your citizenship have a double tax avoidance agreement. It allows you to pay taxes at a reduced rate or be completely exempt from them.

Also note that we will be listing countries with zero or near-zero taxes, where it makes sense and is possible to move. We will not mention countries with low taxes but to which it is dangerous to move (such as Western Sahara and Somalia).

Countries with zero (or almost zero) taxes

United Arab Emirates

The UAE currently does not levy any personal income tax or corporate income tax. However, it is worth noting that there is a corporate tax on oil companies and foreign banks.

A tax resident in the UAE is every foreigner who has a resident visa.

List of countries with which the UAE has a double taxation treaty (92 in total): Albania, Algeria, Armenia, Austria, Azerbaijan, Andorra, Belarus, Benin, Belize, Bangladesh, Bermuda, Barbados, Bosnia and Herzegovina, Belgium, Mauritius, Canada, Bulgaria, China, Czech Republic, Egypt, Estonia, Ethiopia, Cyprus, Finland, Fiji, Georgia, Gambia, New Guinea, Germany, Greece, Hong Kong, Italy, India, Ireland, Japan, Kazakhstan, Kyrgyzstan, Kenya, Indonesia, Lebanon, Luxembourg, Latvia, Liechtenstein, Lithuania, Malaysia, Macedonia, Malta, Mongolia, Montenegro, Morocco, Mauritania, Mauritius, Mozambique, Mexico, Netherlands, New Zealand, Nigeria, Pakistan, Philippines, Poland, Portugal, Palestine, Panama, Romania, Russia, Seychelles, Singapore, Senegal, Switzerland Spain, Serbia, Slovenia, Slovakia, Sri Lanka, South Korea, South Africa, Sudan, Syria, Tajikistan, Thailand, Turkmenistan, Tunisia, Turkey, New Zealand, Ukraine, Uzbekistan, Uruguay, Uganda, Venezuela, Vietnam, and Yemen.

The average cost of a one-bedroom apartment (50 sq m) in the center of cities in the UAE — $125,000 (a "square" costs about $2500); outside the center — $95,000 (a "square" of about $1900).

Renting a one-bedroom apartment — $950-1500.

Expert on what’s happening in Dubai real estate market

Bermuda

In Bermuda, the situation is as follows: VAT is 0%, corporate tax is an annual fee based on the amount of registered capital, and land tax is calculated based on the annual rental value.

The list of countries with which Bermuda has a double taxation agreement (four in total): Bahrain, Qatar, the Seychelles, and the United Arab Emirates.

The average cost of a one-bedroom apartment (50 sq m) in the center — $440,000 ("square" is about $8,800), outside the center — $285,000 ("square" of about $5,700).

Renting a one-bedroom apartment costs $2,200–3,300.

Bahamas

Bahamian citizens have no tax obligations on income, capital gains, inheritance, or gifts. Instead, this government uses VAT and stamp duty to cover its expenses. Here are the numbers:

VAT: O-12%. 

Business license is up to 3% of turnover.

Stamp duty (property purchase tax) is 1–10%; property tax is 0.75-2%.

There are no double taxation agreements between the Bahamas and other countries.

The average cost of a one-bedroom apartment (50 sq ft) in the center of Bahamas cities is $100,000 (a "square" is worth about $2000); outside the center, it is $70,000 (a "square" is worth about $1400).

Renting a one-bedroom apartment costs about $1,000.

Monaco

Monaco also does not charge income tax.

Corporate taxes are up to 33%, but only for companies that earn more than 25% of their turnover outside Monaco. 

VAT: 20%. 

No taxes on real estate.

List of countries with which Monaco has a double taxation agreement (10 in total): France, Malta, Liechtenstein, Guernsey, Qatar, the Seychelles, Luxembourg, Mali, Mauritius, and Saint Kitts and Nevis. Also, Monaco has agreements with various countries to exchange tax information. 

The average cost of a one-bedroom apartment (50 sq m) in the center of the cities of Monaco is $4,000,000 (a «square» costs approximately $80,000), while outside the center it is $2,750,000 (a «square» costs approximately $55,000).

Renting a one-bedroom apartment costs $3,700 to $6,100.

Cayman Islands

The Cayman Islands have no property taxes, payroll taxes, income taxes, or capital gains taxes. 

VAT: 0%. 

Stamp duty on the purchase of real estate is charged at a rate of 7.5%.

The following countries have agreements with the Cayman Islands to avoid double taxation: the United Kingdom, New Zealand, and Japan. The Cayman Islands have also entered into agreements with various countries on the exchange of tax information. 

Note. A Tax Information Exchange Agreement (TIEA) is a legal document that allows the exchange of tax information upon request between two specific states. The average cost of a one-bedroom (50 sq m) apartment in the center is $500,000 (a "square" is worth about $10,000); outside the city center, it is $300,000 (a "square" is worth about $6,000).

Renting a one-bedroom apartment costs $1,900–2,700.

Bahrain

In Bahrain, there are no taxes on income, property, or capital gains. 

Income tax applies only to companies operating in the gas and oil sectors.

Corporate tax for companies: 46%. 

VAT: 10%.

Stamp duty is charged at 2% of the value of the property (on transfer and/or registration).

A municipal tax of 10% is charged when renting commercial and residential real estate to foreigners.

List of countries with which Bahrain has agreements to avoid double taxation (in total 45): Algeria, Austria, Bangladesh, Barbados, Belarus, Belgium, Bermuda, Bulgaria, Brunei, China, Cyprus, Egypt, Georgia, Hungary, Iran, Ireland, Jordan, Lebanon, Luxembourg, Malaysia, Malta, Morocco, UK, Yemen, Czech Republic, Estonia, France, Mexico, the Netherlands, the Isle of Man, Pakistan, the Philippines, Portugal, the Republic of Korea, the Seychelles, Singapore, Sri Lanka, Sudan, Syria, Tajikistan, Thailand, Turkey, Turkmenistan, and Uzbekistan.

The average cost of a one-bedroom apartment (50 square meters) in the center of cities in Bahrain is $85,000 (a "square" costs about $1700); outside the center — $75,000 (a "square" costs about $1500).

Renting a one-bedroom apartment is $700-900.

Panama

In Panama, there is no income tax, corporate tax, property tax, or capital gains tax. But if companies participate in local business, they will have to pay taxes. 

List of countries with which Panama has a double taxation agreement (17 in total): Barbados, Czech Republic, France, Ireland, Israel, Italy, South Korea, Luxembourg, Mexico, Netherlands, Portugal, Qatar, Singapore, Spain, United Arab Emirates, United Kingdom, and Vietnam.

The average cost of a one-bedroom apartment (50 square meters) in the city center of Panama is $90,000 (a «square» costs about $800), and outside the center, it is $60,000 (a «square» is about $1200).

Renting a one-bedroom apartment costs $500—$800.

Dominica

Dominica has no foreign income tax, corporate tax, estate tax, or withholding tax. In addition, there is no tax on gifts, inheritances, or income received abroad. 

But. Investors pay taxes in Dominica if they earn income there, start a company there, buy property there, or become tax residents. The main tax is income tax, which is up to 35% for individuals and 25% for companies. Legal entities also pay VAT at a rate of 10 to 15%.

Note. A person receives tax residency status only if he or she resides in the country for at least 183 days per year.

Dominica has a double taxation treaty with the following CARICOM (Caribbean Community) countries: Antigua and Barbuda, Barbados, Belize, Grenada, Guyana, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines.

Renting a one-bedroom apartment is about $350.

Antigua and Barbuda

In Antigua and Barbuda, individuals are exempt from income tax as well as wealth, capital gains, and inheritance taxes.

Legal entities that are tax residents pay no taxes on dividends, interest, and royalties. There are no taxes on capital gains, wealth, or inheritance.

However, there is a corporate income tax, for corporations if they are registered and operate in Antigua and Barbuda. The rate is set at 25% of the company’s income. Non-resident companies pay this tax only on profits earned in Antigua and Barbuda.

Moreover, if companies are registered as IBCs (International Business Companies), they are exempt from tax for 50 years.

The stamp duty in the country is 2.5%. 

Property taxes for owners range from 0.1% to 0.5%.

Antigua and Barbuda has no double tax treaties with most countries, but there are tax information exchange agreements with these Caribbean countries: Anguilla, Aruba, the Bahamas, Barbados, the Cayman Islands, Curaçao, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, St. Maarten, Trinidad and Tobago, and the Virgin Islands.

Renting a one-bedroom apartment is about $700—$1000.

Vanuatu

In Vanuatu, there are no taxes on personal income, inheritance, capital gains, or capital exports for individuals. Companies can avoid corporate and other taxes for the next 20 years by paying an annual fee (starting at $300). 

VAT in Vanuatu is 12.5%. 

Stamp duty is 5%.

The property registration fee is 2%. 

Vanuatu has no double tax treaties with most countries, but there are agreements on the exchange of tax information with some countries: Australia, France, Sweden, Denmark, South Korea, Grenada, New Zealand, Iceland, the Faroe Islands, Norway, Finland, Ireland, and San Marino.

The average price for a one-bedroom (50 sq m) apartment in Vanuatu is $40,000.

Renting a one-bedroom apartment costs about $1,000.

Saint Kitts and Nevis

Residents of St. Kitts and Nevis are not taxed on income, dividends, royalties, or interest.

The corporate tax rate for companies is 33%.

VAT is 10 to 15%.

Ownership of real estate is taxed at a rate of 0.2 to 0.3%. 

Countries with which St. Kitts and Nevis has agreements to avoid double taxation: Monaco, San Marino and some Caribbean countries.

Renting a one-bedroom apartment costs about $600-$800 per month.

How to get a visa or residence permit in these countries can be found on the sites of their migration services; for a complete list of sites around the world, see our article.