10 Countries with Zero Income Tax in The World.
Personal income taxes are a huge source of revenue for governments globally, and the
debate on taxes has been a hot-button issue in recent elections in the U.S. and Europe. Income
tax is levied by most countries today and is paid at varied rates depending on a country’s tax laws.
Income tax is essentially a tax charged on the net income of an individual or a business. This
tax has to be filed annually by the taxpayer and it acts as a source of revenue for governments. In
2019 the highest income tax was collected in Sweden where individuals with highest incomes
paid more than 50 per cent of their taxable income. Countries situated in Northern Europe
and North Atlantic generally have greater income taxes. On the other hand there are some countries
with minimal and virtually no income tax at all. Such countries are either tax havens
or they are countries whose economies are highly dependent on natural resources like oil. The
revenues obtained from these oil rich countries stabilise their economies to a degree that they
can do without collecting income tax from their residents. Countries with zero income tax rates
are generally situated in the oil rich Gulf region and the Caribbean islands. These countries known
around the world for being popular destinations for foreign investors and expatriates.
Join us on this trip through the 10 Countries with zero income tax in the world.
10. Qatar. At first glance, Qatar appears
remarkably similar to its neighbors in the Persian Gulf. It’s a small,
wealthy country that earned its fortune through the oil industry. Its culture
is highly conservative yet rapidly modernizing thanks to foreign investment and influence.
And, of course, its oil and gas revenue allows the government to stay afloat without levying an
income tax. Despite these similarities, Qatar is a fascinating country due to its particularly high
level of development and role in world politics. Despite its small size, Qatar has
the highest per capita income in the world, and many regard it as the most developed
country in the Middle East. It also plays a unique role in global and regional politics.
Although Qatar is autocratic by most standards, it supported many rebel groups during the Arab Spring
financially and through Al Jazeera – a Doha-based media organization. Qatar’s regional and global
ambitions have ultimately landed the country in hot water with its Middle Eastern neighbors, and
many of them have even cut diplomatic ties with the country. In spite of this conflict, Qatar is
a relatively peaceful and pleasant place to live, and it’s the only Gulf country to offer
permanent residence for expats. That being said, like most countries with no income tax,
it’s still difficult for foreigners to attain permanent residence
since requirements are strict and few lawyers specialize in the area. To even be eligible,
you must have lived in the country for over 20 years and have a good command of Arabic. If
you’re looking for a place where you can easily establish a tax-free second residence, look no
further than Saint Kitts and Nevis. Unlike most tax-free countries in the Persian Gulf, you won’t
need to meet substantial requirements to become a permanent resident. The price tag of citizenship
by investment is also far lower than comparable programs in places like Monaco. After these scenic
Caribbean islands suffered hurricane damage in 2017, Saint Kitts and Nevis reinvigorated its
citizenship by investment program, offering a passport and permanent residence for a $150,000
donation to its hurricane relief fund. 9. Oman.
Like most of the Middle Eastern countries on this list, Oman is a wealthy and entrepreneurial nation
that has no need for an income tax thanks to its oil and gas industry. Additionally,
despite its massive oil and gas reserves, Oman has made a distinct effort to diversify its economy
and open its markets to new opportunities. This makes it a great alternative to the UAE
for investors looking for new opportunities in the Gulf. The Omani government even offers an Investor
Residence Visa on its website. However, specifics like minimum investments aren’t readily available,
and none of the lawyers I spoke to in Oman specialize in this area. As with most wealthy
Middle Eastern states, Oman isn’t exactly dying for foreign capital, so expats looking
to move there usually need a job or family in the country to do so easily. Actually living there
can also be a major adjustment since Omani culture is quite conservative. In fact, you need to obtain
a personal liquor license from a local police station to even buy a bottle of wine. Oman is an
interesting option among countries with no taxes, but living there long-term isn’t generally in the
cards for most Nomad Capitalists. 8. Nauru
Nauru is a small island country in Micronesia that was first named “Pleasant Island” by European
sailors. Unfortunately, however, the island doesn’t seem to quite live up to its nickname.
Most people only know of Nauru for making headlines as the location of a controversial
Australian-run detention camp for asylum-seekers. Although Nauru certainly has many of the charming
features that draw visitors to other Pacific islands, the island’s phosphate mining industry
has decimated its economy. It may even be sinking into the Pacific
Ocean, too, thanks to rising sea levels. In fact, Nauru is among the world’s countries
with no taxes because of the government’s last-ditch efforts to keep its economy afloat.
If you’re looking for a peaceful tax haven in the South Pacific, Nauru might not be your best bet.
7. Monaco. Monaco’s status
as one of the world’s best tax-free countries has made it into a playground for the European elite.
This gorgeous country on the French Riviera is safe and luxurious, yet it charges its residents
and citizens a total of zero income tax. Plus, since the country tends to attract high-income,
tax-averse types, it will likely remain among countries with no income tax for the foreseeable
future. It’s also one of the easier tax-free countries to become a citizen in. Although
you’ll need to spend several million dollars to prove your wealth in order to become a resident,
the residency process itself is fairly straightforward since it’s a popular
destination. For those of you prefer
European glamour to island life, then living tax-free in Monaco may be the right choice
6. Maldives. Imagine living in an over-water
bungalow without paying a dime in income tax. You can technically do that in the Maldives,
a small island country in the Indian Ocean. Thanks to its plentiful – and expensive – resorts,
the Maldives doesn’t see much need for an income tax. However,
while spending your days living tax-free in the Maldives sounds idyllic at first,
staying there long-term is close to impossible. You need to be a Sunni Muslim to even apply for
citizenship or permanent residence. Even if you are Muslim, the country doesn’t have a program for
foreigners to become permanent residents – let alone citizens. So, while you won’t
have to worry about triggering tax requirements as you lounge at the St. Regis, moving to the
Maldives is out of the question for most people. 5. Kuwait.
Like many of the Gulf countries on this list, Kuwait doesn’t need to levy an income tax
thanks to its large oil industry. It’s also one of the most expat-friendly countries in
the world. Foreign citizens make up two-thirds of the population, and from my experience,
Kuwait City is highly Americanized and easy to navigate. However, while I enjoyed visiting and
doing business in Kuwait, obtaining permanent residency there generally requires you to have
Kuwaiti relatives or formal employment within the country. It also doesn’t have much need for
foreign investment, so citizenship by investment is also out of the question. Living permanently in
Kuwait’s tax-free haven, then, is near-impossible, so I wouldn’t base your tax strategy here.
4. Cayman Islands. Like the Bahamas, the Cayman Islands’
scenic beaches draw in enough tourists to keep its government afloat without the need for income tax.
However, if you want to live there long-term, be prepared to invest a considerable amount of money.
You’ll need to be making $145,000 per year and invest at least $600,000 in real estate
or local companies if you want to live on Grand Cayman, and from there, you’ll
need to wait another eight years for permanent residence. And, as in most Caribbean countries,
the more money that you invest, the more easily you can obtain permanent residence.
However, you can get away with investing a bit less if you choose to move to one of
the less-popular islands, like Cayman Brac. The Cayman Islands can therefore be an interesting
zero-tax option if you have the money to invest in becoming a permanent resident.
3. Brunei. This tiny Sultanate on the Malaysian
island of Borneo also has enough oil wealth to forego income tax. However, unlike Bahrain
or the Bahamas, Brunei is extremely difficult to live in. I wasn’t a fan of Brunei when I visited
several years ago. It’s not very friendly to foreigners, and the government is, frankly,
heavy-handed and dictatorial. I even met a fellow expat who was scared to speak with
me thanks to local laws and policing practices. Permanent residence and citizenship are also
out of the question – unless you somehow gain the approval of the Sultan. Brunei mostly just
exemplifies how countries with no income tax are not necessarily hubs of economic freedom.
2. Bahrain. Bahrain was one of
the first states in the Persian Gulf to discover oil on its lands. This oil discovery has allowed
it to become one of the wealthiest nations in the world – and one of
the handful of countries with no income tax. It’s also fairly easy to live there. While I’m
not particularly enamored with Manama, the city is well-developed, and there’s a sizable expat
community here. However, the problem with Bahrain – and many other Gulf states – is that getting
permanent residence can be difficult. To establish permanent residence in
Bahrain, you need to be retired, invest $135,000 in property, or invest $270,000 in a Bahraini
company. While getting permanent residence in Bahrain is possible, citizenship is another story.
You need to live in the country for 25 consecutive years and be fluent in Arabic. Bahrain, then,
could be an option if you’re looking for a tax-free permanent residence in the Gulf,
but don’t count on getting a second passport there.
1.The Bahamas. As one of the most popular tourist destinations in
the world, it’s no wonder why the Bahamas doesn’t need to charge income tax to make ends meet. Plus,
with its stunning beaches and fast-growing economy,
the Bahamas is one of the most livable countries with no income tax. Establishing a second
residence there is not too difficult, either – as long as you have the money. Getting a temporary
residence permit is as simple as paying $1,000 at the immigration office, and it’s renewable every
year. Recently, however, the Bahamas has started cracking down on foreign residents who use the
temporary permit without making investments. If you want to stay there long-term, you’ll need
to buy at least $250,000 in property to get on track for permanent residence. As a general rule,
the more money that you invest in the Bahamas, the more likely you’ll be treated favorably by the
immigration office. While getting permanent residence is mostly a matter of investment,
citizenship is another story. The country has flirted with an expensive citizenship
by investment program, but nothing has come of it yet. You won’t pay much in
taxes to the Bahamas, but you’ll need to spend a substantial amount of money to live there.
In the long run, though, it could be worth it
to pay no taxes while lounging by the beach. Hope you had an amazing trip with us through
the 10 countries with zero income tax in the world. Please don’t forget to like, share,
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