If you had the chance to move to a country with no income tax, would you do it? Take the UAE, for example. There is no income tax in UAE for foreigners, which makes the country an attractive location for expats looking to grow their business or diversify their investment portfolio.
Many countries don’t collect income tax from their residents; instead, they generate revenue through other channels like tourism or indirect taxes. This makes them highly sought out by wealthy individuals or business owners. This is our list of top 10 countries that do not collect income tax:
1. UAE
The United Arab Emirates does not levy income tax on its residents. However, a 5% VAT was introduced in 2018. More recently, the government introduced a 9% corporate tax in UAE, levied on taxable income above AED 375,000.
If you stay in the country for more than 183 days, you become a tax resident and will need to get a Tax Residency Certificate. The UAE is still tax-free for residents with personal and/or business income under AED 1 Million.
UAE is considered to be one of the best tax-free countries in the world, mainly due to its business-friendly environment. It offers three main locations for setting up a company: free zone, mainland, and offshore.
A&A Associate makes business setup in Dubai a streamlined process, making sure you are supported every step of the way, and get your Dubai trade license as quickly as possible. We can help you apply for visas and open a business bank account.
2. Cayman Islands
This is one of the world’s most popular offshore company locations. As one of the countries with zero income tax, the islands offer a high standard of living and do not levy any personal or business tax on its residents, generating most of its revenue from tourism.
You can obtain residency in the islands by making a local investment, proving you are a high net-worth individual, or are operating a business in the area.
3. Qatar
Qatar is another GCC tax-free country that does not tax its residents’ income. The country has a 10% corporate tax and a 5% VAT, just like the UAE. Qatar also positions itself as a hub for businesses, attracting many foreign investors and entrepreneurs.
Expat residents can get permanent residency in the country if they buy real estate worth at least $200,000 or invest over $1 million in the economy. Residents can also become permanent residents if they have lived in the country for over 20 years.
4. The Bahamas
Like the UAE, income tax is not levied in the Bahamas. The island is located in the Caribbean and is a famous holiday destination for beach lovers. There is also no corporate taxes for both local and foreign-owned businesses. To become a resident of the Bahamas, you can invest a minimum of one million dollars in real estate and hold the property for at least 10 years.
5. Antigua & Barbuda
There are no personal income, corporate, inheritance, or capital gains taxes in Antigua & Barbuda. High net-worth individuals may be interested in moving there for its beautiful beaches and can do so by investing at least $230,000 in the Caribbean country.
6. The British Virgin Islands
The British Virgin Islands is a popular tax haven with no personal or corporate taxes. As businesses do not owe taxes, they can generate higher profits and reinvest the money into their long-term growth. However, you cannot get citizenship or residency in the islands through investments.
The islands also offer ocean activities like snorkeling and scuba diving, along with hiking trails and white beaches.
7. Vanuatu
Just like there is no income tax in UAE for foreigners, Vanuatu also does not levy income taxes. Businesses also do not owe corporate tax, making it a lucrative location for foreign investors.
You can get citizenship in Vanuatu in a few months by investing over $130,000. However, that will not exempt you from paying taxes in your home country as Vanuatu does not have many double taxation agreements.
8. St. Kitts & Nevis
Saint Kitts & Nevis is a Caribbean country that offers citizenship by investment. Individuals have to invest $250,000 in the economy and can get lifelong citizenship. No one has to pay income taxes in St. Kitts & Nevis, regardless of their tax residency. However, there is a 33% corporate tax and a 17% VAT levied by the government, so this might not be the place to set up a business if you don’t have a sizable budget.
9. Monaco
Another popular tax haven for yacht and casino lovers, Monaco enjoys a reputation as a massive tourist destination as well as a second home to many foreign individuals. You will be classified as a resident of the country if you live there for at least three months out of the year, but cannot get citizenship through investment. Corporate tax is levied at 33%, but there is no personal tax.
10. Bahrain
Similar to the UAE, Bahrain is another Middle Eastern country with no income tax. There is a 46% corporate tax, but it is only levied on businesses engaged in activities related to Oil & Gas. You are able to get a “Golden Visa” that allows individuals to become residents for 10 years by investing $530,000 in property. Bahrain does not grant citizenship to foreign individuals.
To learn more about relocating to a tax-free country, contact us at +971 50 483 6190 or email us at enquiry@aaconsultancy.ae.
FAQ’s
There is no income tax in UAE for foreigners. The UAE does not collect personal taxes from residents or citizens. This makes it a popular destination for businesses, high net-worth individuals, and investors.
The UAE does not have any income tax. Working individuals will not have any income withheld from their salary, so they will be able to take home the entire amount they earn.
Business owners may have to pay corporate tax in UAE (set at 9%) if their taxable income exceeds AED 375,000. The UAE has one of the lowest tax rates in the world, making it a hub for business activity and international investments.
The UAE has a 5% VAT, implemented in 2018. The country also recently introduced corporate tax at 9%, although it is only applicable to businesses and entities with AED 375,000 or higher in taxable income.
You are allowed to live in Dubai without citizenship, you just need a residency permit. You can get a residency by starting a business, finding a local employer, or investing AED 2 million in the economy.
Dubai is considered to be a tax haven as residents pay 0% income tax. There are also minimal tax obligations for business owners, making it a top choice for foreign entrepreneurs.
The UAE, Bahrain, Qatar, Antigua & Barbuda, the Bahamas, Monaco, and St Kitts & Nevis are all examples of countries with no income tax.
If you work in Dubai, you will not need to pay income tax on your salary. If you’re a business owner, you will owe the government 9% corporate tax if your taxable income is more than AED 375,000.
Bahrain, The Bahamas, The Cayman Islands, Vanuatu, UAE, Bermuda, Monaco, and Qatar are some tax-free countries in the world.
Business owners do not need to pay income taxes if they operate anywhere in the UAE. You can set up a business in a free zone, on the mainland, or as an offshore company.
