Second citizenship

Countries with no income tax: where to move to minimise the tax burden

“Zero income tax country” might sound appealing to a wealthy person seeking to optimise their tax burden. However, there are several things to be considered when choosing a low-tax country to live in: the general lifestyle of the country, other taxes it imposes on its residents, and the availability of residency or citizenship for foreigners.

Immigrant Invest experts share their personal ratings of the best tax-free countries to live in, along with an overview of other options.

Countries with no income tax

Country without income tax: is it possible?

Taxes are among the most popular means for a country to make money, and income tax usually plays a substantial role in it. However, some countries do not impose income tax on their citizens and residents. It is possible when a state makes enough money through other means.

Some countries, like Qatar and Kuwait, are rich in natural resources and make an income from their oil and gas trade. Others, like the Bahamas, attract enough tourists to raise substantial money from that sector. Lastly, the absence of income tax can also be a government choice to attract investors to the country.

Best tax-free countries to immigrate: our experts’ personal choice

Several countries with no income tax are pleasant to live in and easy to immigrate to. After spending 183 days there in a year, you can become their tax resident and enjoy low tax benefits and other advantages. Here are the options we recommend considering.

Antigua and Barbuda. Aside from zero income tax, in Antigua and Barbuda, individuals are also free from paying taxes on wealth, capital gains, and inheritance. 

Companies registered as IBC (international business companies) are exempt from paying taxes for 50 years, including corporate tax and tax on income from real estate, securities, and other assets — they only pay an annual fee, depending on the authorised capital size. 

However, note that Antigua and Barbuda don't have many tax treaties, and most of them are with the Caribbean countries. This means that when getting citizenship there, you will still likely have to pay taxes in your other passport's country.

Antigua and Barbuda is a beautiful island state with pink and white sand beaches, coral reefs and blue lagoons. The islands are famous for their comfortable marinas, and some celebrities love spending time there: for example, singer Eric Clapton and fashion designer Giorgio Armani bought houses there.

Wealthy foreigners may obtain Antigua and Barbuda citizenship by the investment of $100,000 or more. The investor must be over 18, with legal income and no criminal record. 

It is also possible to include the family in the application: a spouse, financially dependent children and parents, and unmarried siblings. Antigua and Barbuda citizenship is not inherited automatically, so an investor has to make sure to add all eligible family members within the first five years of obtaining citizenship.

Aside from the tax benefits, the Antigua and Barbuda passport allows its holders:

  • to enter the Schengen countries visa-free and stay there for up to 90 out of 180 days;
  • to visit the UK visa-free and stay there for 180 days;
  • to get a B-1/B-2 US 10-year visitor visa; and
  • to travel visa-free to 150 countries altogether.
Antigua and Barbuda no income tax country
Apartments, villas and shares in a coastal resort are government approved for Antigua and Barbuda Citizenship — meaning you can get citizenship and a profitable rental property

United Arab Emirates. Aside from zero income tax, UAE currently has no taxes for legal entities, but they plan to introduce a 9% federal corporation tax for businesses with high net profits. There is also a corporate tax on oil companies and foreign banks.

The Emirates does not offer citizenship by investment, but it is possible to obtain a renewable residence visa by investment from $205,000.

In the UAE, every foreigner with a residence visa is considered a tax resident. But to get a Tax Residency Certificate, one needs to stay in the country for 180+ days. You'll need this certificate if you earn income in another state and want to use a double tax treaty to reduce your taxes there.

The United Arab Emirates offers multiple entertainment and educational facilities, investment options for businesses from all around the world and support for expats from the government. However, as a primarily Islamic country, the Emirates does have rules and traditions to respect: women are advised to dress modestly everywhere, but in the beach area, public displays of affection are generally frowned upon, and alcohol purchasing is regulated.

Vanuatu. There are no taxes on personal income, inheritance, capital gains, and capital export for individuals. Companies can be exempt from corporate and other taxes for 20 years, only paying a $300 annual fee. However, Vanuatu hasn't concluded tax treaties with most of the states globally, so one with a Vanuatu passport or a company may be obliged to pay taxes in another country.

Vanuatu also has the fastest citizenship program — the second passport can be obtained in 1­–3 months by investing from $130,000.

The Vanuatu passport allows visa-free entry to 95 countries, including the UK, Singapore, and Hong Kong. It also allows you to apply for a multi-entry 5-year tourist visa in the US. . However, Vanuatu citizens will still need a visa for visiting Schengen countries.

Vanuatu no income tax
Vanuatu allows investors to obtain its citizenship in as little as 1­–3 months. Expats are attracted by its wonderful nature, sand beaches, waterfalls, diving spots — and decreased tax burden doesn’t hurt, too

Saint Kitts and Nevis. There are no taxes on income, dividends, royalties, or interest for residents in Saint Kitts and Nevis. Corporate tax is 33%, VAT is 10 to 15%, and property ownership is taxed at 0.2 to 0.3%.

The islands are famous for their picturesque nature: mountains, rainforests, and beautiful beaches with black volcanic sand. Travellers go to St Kitts and Nevis to sunbathe, dive, go on a yacht along the coasts and try local foods.

Saint Kitts and Nevis citizenship is obtainable by investment from $150,000. The investor must be over 18, with legal income and no criminal record. It is also possible to include the family in the application: a spouse, financially dependent children and parents, and unmarried siblings. 

In terms of visa-free travelling, Saint Kitts and Nevis passport is among the strongest Caribbean ones. It allows one to travel to 156 countries visa-free, including some less accessible ones such as Singapore, Hong Kong, the UK, Ireland, and all of the Schengen countries.

Saint Kitts and Nevis citizenship is hereditary, meaning if you have a passport, your children may also obtain citizenship.

What other countries don’t levy taxes on income?

There are some other countries with no income tax. It's worth mentioning, though, that none offer citizenship by investment. You can obtain residency by investment in some of them, but it is usually a lot more expensive than getting citizenship or residency in the above-mentioned countries. Moreover, not all these countries are advisable to live in or even visit.

Let us take a closer look at a list of other tax-free countries. Previously, Maldives and Oman were also on this list, but the Maldives has already introduced income tax, and Oman is preparing to do the same.

Other countries with no income tax: overview

CountryTaxes on individuals and companies, besides zero income taxThe difficulty of immigration by investmentQuick summary of the country’s lifestyle
Bahrain Corporate: 46% income tax — only for companies operating in the gas and oil sector

VAT: 10%

Property: stamp duty 1.7–2%, municipality tax for rental to expatriates 10%
🔴 Citizenship — not possible
🟢 Residency — obtainable by investment from $270,000, buying property or being a retiree with sufficient income
Mild winters and hot summers. Almost half of the population are expats. 70% Muslims, so respect for religious practices and local customs is required.
The BahamasCorporate: the licence for business operation — up to 3% of the turnover

VAT: 0–12%

Property: stamp duty 1–10%, real property tax 0.75–2%
🔴 Citizenship — not possible
🟢 Residency — obtainable by investment from $750,000
Famous Caribbean islands. Warm climate, go-with-the-flow attitude, and large expat community.
Bermuda Corporate: annual company fee based on share capital levels

VAT: 0%

Property: land tax based on assessed annual rental value
🔴 Citizenship — not possible
🟡 Residency — obtainable by investment from $2.5 million
Humid subtropical climate, nice beaches, and expensive groceries.
Как выглядит эмодзи Флаг: Острова Кайман в Apple.the Cayman Islands Corporate: none

VAT: 0%

Property: stamp duty 7.5%
🔴 Citizenship — not possible
🟡 Residency — obtainable by investment from $2.4 million
Warm tropical climate, many international companies, and good healthcare.
Monaco Corporate: up to 33% for companies earning more than 25% of their turnover outside of Monaco

VAT: 20%

Property: none
🔴 Citizenship — not possible
🟡 Residency — obtainable by investment from €1 million
“Playground for European elite”: expensive and luxurious living.
Brunei Corporate: 18.5% income tax

VAT: 0%

Property: varies depending on the municipality
🔴 Citizenship — not possible
🔴 Residency — not possible
Hot and wet climate. Muslim country — respect for religious practices and local customs is required.
Kuwait Corporate: 15% income tax

VAT: 0%, but planning to introduce 5% in 2023

Property: None
🔴 Citizenship — not possible
🔴 Residency — not possible
Dry, hot climate, relatively safe country, strong Muslim traditions.
QatarCorporate: 10% income tax

VAT: 0%, but planning to introduce 5% in 2023

Property: fees for lease registration
🔴 Citizenship — not possible
🔴 Residency — not possible
The hot climate and quite strict Muslim traditions regarding dressing, public displays of affection, and drinking alcohol.
Somalia None🔴 Citizenship — not possible
🔴 Residency — not possible
Considered a "failed state". A long history of civil war and crimes. Quite a poor and unsafe country to live in.
Как выглядит эмодзи Флаг: Западная Сахара в Apple.Western Sahara None🔴 Citizenship — not possible
🔴 Residency — not possible
Tax-free because of longstanding territorial disputes. Not safe to live in.

Is it possible to optimise taxes without moving abroad?

There are several countries where you can obtain residency or register a company to optimise your taxes — without having to live there for most of the year. Some of the options are listed below.

Cyprus. You can become a Cyprus tax resident if you spend there 60+ days a year while not spending more than 183 days a year in any other country. Taxes in Cyprus are significantly lower than in many other countries.

Malta. The Global Residence Programme allows one to get a Malta residence permit. The residency entitles you to pay taxes on Malta, which are different from the standard tax rates: for example, if you make an income outside of Malta and don’t transfer it to the country, you don’t pay an income tax on it in Malta. 

The investors participating in the GRP pay €15,000+ annually as a tax on foreign income transferred to Malta.

However, make sure to check if your primary country of residence has a double tax treaty with the country you want to move or open a business in. If there is no such treaty, then instead of tax optimisation, you may end up paying your taxes in both countries.

Frequently asked questions

How do countries make money without taxes?

The most popular alternative sources of income for the country are tourism, trade, or money from international businesses drawn to the country by its low taxes and interesting investment opportunities.

Where should I move to not pay the income tax?

There are currently 14 countries with no income tax in the world. When choosing between them, you should probably consider the lifestyle, the ease of immigration, as well as business and travel opportunities. Some of these countries will grant residency for investment; others may even give you citizenship.

Do I have to move abroad to optimise my taxes?

Not necessarily. In some cases, you might become a tax resident in a short period of time, so it’s more of travelling than actually moving abroad. In other cases, you can move your business abroad and decrease your tax load without relocating.

Do I have to pay taxes when obtaining second citizenship by investment?

Yes, you will still have to pay taxes in your respective countries. However, if the countries have a double tax treaty, you can avoid paying taxes twice — you will just have to pay it in one country or lessen their amount in both countries.

Which countries are tax free?

There are currently 14 countries with zero income tax in the world: Antigua and Barbuda, St. Kitts and Nevis, United Arab Emirates, Vanuatu, Brunei, Bahrain, the Bahamas, Bermuda, Cayman Islands, Monaco, Kuwait, Qatar, Somalia, and Western Sahara.

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Countries with no income tax: where to move to minimise the tax burden