Many developed western countries like the United States, Australia, and Canada are known for levying massive income taxes on their high-earning citizens.
Although taxes are one of the sources of revenue for the government, levying taxes has lots of disadvantages, both for individuals and business entities. One of which is the reduction of direct financial income.
However, there are some tax-free countries you can relocate to if you want to avoid the clutch of paying taxes every month. Here are the countries.
What's in this guide?
Top tax-free countries in the world
Here are the best tax-free countries in the world:
1. The United Arab Emirates
The first on the list is UAE. A gulf country known for its massive oil industry and free trade zones. With the oil industry serving as a revenue-generating means, they levy no tax either income tax, corporate income tax (for some types of business), or withholding tax on their citizens.
Famous for its free economy, the UAE is open to foreign investments and migrants making it one of the easiest gulf countries to live and work in.
The Republic of Panama located in Central America is regarded as a safe tax haven. The country is tax-friendly not only to individuals but also to offshore companies making starting a business in the country a viable option as the overhead costs are low.
And this makes Panama a good option for anyone looking to relocate for personal or business reasons.
Also Read: Personal income tax rates in Nigeria
Kuwait is also one of the tax-free gulf states. The country generates revenue via natural resources like oil and therefore does not charge taxes on personal income to every resident irrespective of their nationality.
However, opening a foreign corporate account in the country requires paying 15% of the income to the government, and also their residency isn’t as easy as in the UAE. Permanently residing in the country isn’t easy if you don’t have relatives or you’re not formally employed by a company or organization within the country.
4. The Bahamas
This Caribbean country is famously known for its many tourist centres. With its tourist centres and tax-friendly law, it’s undoubtedly a great place to reside in.
But you’ll have to invest in real estate to have a permanent residence in the country and hitherto eliminate your income taxes.
5. St Kitt and Nevis
This is also another Caribbean country with no income tax as it received most of its revenue from tourism and offshore finance sectors. They offer tax-friendly formation of offshore companies, foundations, and trusts.
Unlike some other Caribbean countries, establishing a residency in this country is quite easy. With the contribution of a discounted $150,000 to their hurricane relief fund, you’ll get a citizenship passport and permanent residence.
6. Cayman Island
This list of tax-free countries is undoubtedly dominated by the Caribbean countries. Cayman Island is another Caribbean country with zero taxes. Similar to St Kitt and Nevis, they generate their revenue from tourism and the offshore financial industry.
However, the living cost of the country is expensive, and you’ll have to invest a considerable amount to maintain a long-term residency. But it’s a viable option to consider for wealthier investors willing to reside in a developed nation that offers a first-class lifestyle.
This is a South Pacific Ocean Country that generates its revenue from tourism, allowing its citizens to enjoy no income tax.
Getting a passport and residency on this island isn’t much of a hassle. With a cost of $200,000, you can become the owner of a Vanuatuan passport within two months.
Similar to the other tax-free gulf countries, it’s also a tax-free country with the government making its income from its oil and gas industry.
In addition, anyone relocating to Oman would need to be employed by them or have relatives residing there to make residing in the country easy.
This is the only European country on the list. It has become widely known as one of the tax-free states for the wealthy to relocate to.
The process of acquiring citizenship and residency is quite easy but expensive. To acquire a residence, you’ll have to prove your wealth by spending some dollars, but it is a viable option for those looking for quick reasonably affordable second citizenship to evade their tax bill.
Also Read: How to register a Patent in Nigeria
The Caribbean island is famous for the mysterious Bermuda triangle. It’s more developed than other Caribbean islands. It’s an income tax-free haven also. While they levy some taxes like custom duties, payroll taxes, and land taxes.
Acquiring a permanent residence in the country isn’t easy, but with a bit of persistence you can see it through. However, there are friendly visa options for you to stay as a tourist or business person from 3 months to 5 years.
Bahrain is a country situated in the Persian Gulf between Saudi Arabia and Qatar. It’s a tax-free nation with the oil industry serving as its source of revenue.
Acquiring citizenship in the country is a bit difficult, and permanently residing requires investing $270,000 in a company, being retired, or investing $135,000 in the property.
Near the Caribbean sea, the island of Anguilla is a famous tourist centre known for its greenish-blue waters and beaches. In addition to the attractive features, it’s also one of the countries in the world free from income tax.
An island is also a perfect place for business with its favourable business climate, business-friendly stable government, and well-developed structure.
With the oil industry being their source of revenue, Qatar is also one of the gulf countries with Zero income tax.
Their peaceful climate and diverse economy make the country a perfect location to reside in. Although getting a permanent residence in the country isn’t easy.
It’s also a country free from income tax, but it’s not a viable option for economic activities. Acquiring citizenship and permanent residence in the country is very difficult as you’ll need to get the approval of the sultan.
15. Vatican City
A city located on the west bank of the Tiber River in Rome. It’s also a tax-free country generating its revenue from tourism. However, getting a residence in this state is very difficult, as their residence is only open to high members of the catholic and Swiss guard members.
Living in a tax-free country has a lot of advantages which include, an increase in savings for individuals and an increase in overall net profit for business entities.
Above are the tax-free countries you can relocate to.