Globalization Guide
← Tax Planning

Countries Without Income Tax

A guide to countries with no personal income tax—and what you should consider before moving to one.

Several countries around the world don't levy personal income tax. For digital nomads and international entrepreneurs, these destinations can be attractive options for tax planning.

Countries with No Personal Income Tax

United Arab Emirates 🇦🇪

  • Corporate tax: 9% (introduced 2023, exemptions available)
  • Cost of living: High (Dubai), Moderate (other emirates)
  • Residency: Various visa options including freelancer visas
  • Banking: Excellent international banking infrastructure
  • Notes: Popular hub for international business; hot climate

Monaco 🇲🇨

  • Corporate tax: Generally none (some exceptions)
  • Cost of living: Very high
  • Residency: Requires substantial investment
  • Notes: Tiny country; primarily for high-net-worth individuals

Cayman Islands 🇰🇾

  • Corporate tax: None
  • Cost of living: High
  • Residency: Requires investment or employment
  • Notes: Popular offshore financial center

Bahamas 🇧🇸

  • Corporate tax: None
  • Cost of living: Moderate to high
  • Residency: Permanent residency available with investment
  • Notes: Close to the US; popular with American expats

Bermuda 🇧🇲

  • Corporate tax: None
  • Cost of living: Very high
  • Residency: Work permits required for employment
  • Notes: British overseas territory; insurance/reinsurance hub

Vanuatu 🇻🇺

  • Corporate tax: None
  • Cost of living: Low to moderate
  • Residency: Various visa options; citizenship by investment available
  • Notes: Remote Pacific location; limited infrastructure

Countries with Territorial Taxation

These countries only tax income earned within their borders—foreign income is tax-free:

Panama 🇵🇦

  • Territorial taxation on personal and corporate income
  • Well-established expat community
  • Friendly Nations Visa program
  • Read our Panama guide →

Paraguay 🇵🇾

Costa Rica 🇨🇷

  • Territorial taxation
  • Popular with American/European expats
  • Various residency options

Georgia 🇬🇪

  • Territorial taxation for individuals
  • Low cost of living
  • One-year visa-free stay for many nationalities
  • Growing digital nomad scene

Malaysia 🇲🇾

  • Territorial taxation
  • MM2H residency program
  • Good infrastructure and quality of life

Important Considerations

1. Don't Just Chase Zero Tax

Moving to a no-tax country for tax reasons alone often backfires:

  • High cost of living may offset tax savings
  • Limited banking/business infrastructure
  • Lifestyle may not suit you
  • May trigger exit taxes in your home country

2. Establish Genuine Residency

Tax authorities look for "substance." If you claim residency somewhere but:

  • Never actually live there
  • Keep your real life elsewhere
  • Only have a "flag of convenience"

...you may still be taxed by your actual country of residence.

3. Consider Your Home Country's Rules

Some countries (like the US) tax citizens on worldwide income regardless of residency. Others have exit taxes or look-back rules that can apply for years after you leave.

4. Banking and Business Practicality

Some no-tax jurisdictions have:

  • Limited banking options
  • Difficulty opening business accounts
  • Reputation issues that affect business relationships

Our Recommendation

For most international entrepreneurs, a territorial tax country (Panama, Paraguay, Georgia) offers a better balance than a pure no-tax jurisdiction:

  • Lower cost of living
  • Easier residency paths
  • Foreign income remains tax-free
  • More practical for day-to-day business

Your US LLC income (if it's not US-source) would typically be tax-free in these countries.

This guide is for educational purposes only. Tax laws change frequently—consult a qualified professional before making residency decisions.