There are certain countries in the world that have very stable economies. Thus, their governments do not need to collect taxes from their citizens. These nations are a perfect choice for people who are seeking to optimise their tax burdens.
There are several income tax-free countries around the world, and some are even quite pleasant places to live in. Here’s a detailed idea of the best tax-free countries in the world.
Which countries are tax-free?
Here is a list of the world’s best tax-free countries:
1.The Bahamas
The Bahamas is one of the most attractive countries with no tax in the West Indies. Here, obtaining citizenship is not mandatory for enjoying a tax-free life. For permanent residents, there is a minimum residency requirement of 90 days.
Expatriates must own a residence for at least 10 years. Moreover, that residence must also meet a minimum purchase amount of greater than BSD $750,000 in order to get “speedy consideration”.
Furthermore, Bahaman citizens do not have any tax obligations on income, capital gains, inheritance and gifts. Instead, the government of this nation uses VAT and stamp tax revenue to take care of its expenses. In addition, illegal financial activities like money laundering are strictly prohibited here.
If you consider the lifestyle in the Bahamas, it is relatively less expensive. It offers proper services as well as infrastructure. However, when it comes to medical services, they can be a bit lacking.
2. Panama
Panama is a Central American country with a wide array of skyscrapers, beaches and casinos. It has tax-saving laws and an extremely flexible legal structure that make it a coveted tax haven. Offshore companies that engage in business only outside the nation’s jurisdiction enjoy a range of benefits like no income, corporate or estate taxes. Furthermore, they even do not have to pay taxes on capital gains.
Only when these companies take part in local businesses, do they have to pay local taxes. This nation also has strict banking secrecy laws that protect the privacy of the account holders.
Moreover, Panama has no exchange control laws or tax treaties with other countries.
3. Cayman Islands
The Cayman Islands are a tax haven in the Caribbean Sea. Apart from having no income tax, this country also has no payroll, capital gains and withholding tax. Additionally, this island nation has no corporate tax, making it a haven for multinational companies to have subsidiaries that will protect them from taxation. Thus, you can say that this country is one of the best tax-free countries for business.
However, life here can be very expensive. You will need a huge sum of money in order to gain long-term residency. Although, if you are up for making huge investments in local businesses or real estate, this could be the place for you.
4. Dominica
Dominica is another nation on the list of countries with no tax on income. There are no corporate, estate or withholding taxes in this nation. Furthermore, there is no taxation on gifts, inheritance, and income earned abroad.
It has legislative policies that facilitate the creation of offshore foundations, trusts and corporations. It provides privacy-protected and tax-friendly offshore banking services.
Notably, people from any country can form offshore corporations, and Dominica has laws that protect the identity of the owners and directors of these companies. Furthermore, this country does not share information on any of its offshore account holders with the tax authorities of any other nation.
Is Dubai a tax-free country?
Yes, Dubai is a tax-free nation when it comes to imposing income tax on most of its citizens. However, if you own an oil business, there is a tax rate of 55%. There are entertainment taxes and import duties.
Is Qatar a tax-free country?
Qatar does not impose income tax on an individual’s allowances, salaries and wages. Instead, this nation employs a territorial taxation system, under which individuals are only applicable for taxation if their earnings qualify as Qatar-source income.
Is UAE a tax-free country?
Yes, UAE is a tax-free country. Apart from having no tax implications on personal income, this nation has no obligations for tax registration or reporting.
Is Singapore a tax-free country?
No, Singapore is not a tax-free nation. It follows a progressive taxation policy that ranges from 0% to 22% (for income above S$320,000). But, there is no taxation on inheritance or capital gain.
Is Kuwait a tax-free country?
Kuwait does not impose any personal taxes on its citizens. But, foreign companies are applicable for corporate taxes.
Is Oman a tax-free country?
Currently, Oman is a tax-free nation, as there is no taxation on personal income. Moreover, there are no taxes on income from property, wealth, capital gains or death.
However, the Oman Government is currently evaluating a Personal Income Tax Regime as a part of its 2020-2024 Medium Term Fiscal Plan.
Is Canada a tax-free country?
No, Canada imposes income tax on its resident’s worldwide income. Furthermore, if you are a non-resident in this country, there will be taxes on income gained from employment, business activities and capital gains.
Is Switzerland a tax-free country?
Individuals and businesses in Switzerland will have to pay income and corporate taxes. The Swiss government sets a base level upon which individual Swiss cantons set their own rates. However, tax rates in Switzerland are way less than most other countries in the world.
There are many other viable options in the tax-free countries list that you can take into account before making your final decision. However, there are a few things that you must keep in mind.
You may face difficulties in opening corporate bank accounts if you are residing in a tax haven. This is because many reputable banks consider tax haven companies as high-risk clients. Furthermore, you may also face problems attracting outside investors as they may feel reluctant to invest in a firm that operates via an offshore tax haven.
