A strong reason for moving overseas is paying less tax – but which countries do not have any income tax, and would you really want to live there?
Looking around the globe, 20 countries charge no tax on income, but that’s often because the places are so tiny that collecting tax would cost more than the amount raised.
So where are these zero-tax places, and why would expats want to live there?
Zero-Tax Countries For Expats
Here’s a list of countries that have no personal taxes:
Antigua and Barbuda
A delightful sunshine island that lies at the meeting of the Caribbean Sea and the Atlantic. The islands are renowned for fine beaches, sumptuous rainforests and first-class resorts. The islands have a population of 95,000, which includes 2,800 British expats.
Bahamas
An up-market island chain in the West Indies that’s a haunt of the rich and famous. Living in the Bahamas is expensive – especially in the capital, Nassau. The population numbers 400,00, and around 4,100 are British expats.
Bahrain
Bahrain is one of the smaller Gulf States fringing the Arabian Sea that’s popular with British expats. Around 11,000 Brits live and work in Bahrain out of a population of 1.25 million, although many only stay a year or two on assignment.
Brunei
Another island nation, this time in the Asia Pacific, sharing Borneo with Indonesia and Malaysia. Some 400,00 people live in Brunei, but few are British expats. Like Bahrain, the major export is oil and gas.
Cayman Islands
The Caymans are trying to shrug off the reputation of a secretive tax haven even though the main trade is financial services and banking. The population is around 80,000, but with few British expats. Like the Bahamas and Antigua, the Caymans lie north of the Caribbean.
Kuwait
Another of the tax-free Gulf States that attracts planeloads of expats. Some 7,000 or so Brits live in the country among the population of 4.25 million. Kuwait is oil-rich and voted by expats as one of the most unfriendly countries in the world.
Monaco
The famed playground for the rich and famous on the French Riviera. Tiny Monaco is home to just under 40,000, including 300 wealthy Brits. According to the CIA World Factbook, Monaco has more millionaires and billionaires per head than anywhere in the world and the most expensive real estate.
North Korea
This secretive Asian country has a massive military but little else. The borders are closed to visitors and expats, while the country is ruled by the dictator Kim Jon-Un. Visitors are unwelcome.
Oman
Another oil-rich Gulf State that relies on the skills of an expat workforce. The population numbers 4.5 million, but most are expat workers, including about 8,000 Brits.
Pitcairn Islands
Literally, life in the Pitcairns involves clinging to some small rocks in the huge Pacific Ocean. With a population of about 50, many descended from the Bounty mutineers who landed on the islands in 1789.
Qatar
A small Gulf State relying on oil and gas production to fuel the economy. Like other desert states in the Gulf, the economy is run by thousands of expats from a population of 2.8 million. About 10,000 are Brits mainly on assignment than long-term residents.
Saint Barthelemy
A small French island colony in the Caribbean where 10,000 people live. The economy is based on tourism and selling duty-free goods to visitors. Few British expats visit or live on the island.
St Kitt’s and Nevis
St Kitt’s and Nevis are neighbouring islands in the Caribbean Leeward Islands. The main trades are tourism and agriculture—the population numbers 55,000, including around a thousand British expats.
Saudi Arabia
The largest and most populous Gulf State with a population of nearly 40 million, including 30,000 expats. Recent changes have relaxed rules on expats moving to the country. The economy is based on oil and gas exploitation.
Turks and Caicos Islands
These Caribbean islands rival the Cayman Islands as an offshore financial centre. The population is some 44,000, with a couple of hundred British expats. Some historians suggest the islands may have been a landfall for Christopher Columbus’ voyage of discovery in 1492.
United Arab Emirates
One of the largest Gulf States with a near 10 million population, the UAE includes cities like Dubai and Abu Dhabi. Both cities are home to more than 65,000 British expats, many of whom live in the UAE permanently.
Vanuatu
A small island group in the South Pacific relying on raising cattle, agriculture and financial services to boost the economy. Some 250 Brits live on the islands among the population of 300,000 people.
Vatican City
Home to the Catholic Church in Rome, few people realise the Vatican is an independent state and tax haven. There’s no room for expats in this tiny state, with a population of less than 1,000 boosted by outside workers from Rome.
Wallis and Futuna
Wallis and Futuna are a string of small islands in the South Pacific. The beaches and seascapes are beautiful, but the population is only 11,000 and shrinking due to lack of work.
Western Sahara
As the name suggests, this arid desert country is somewhere to work but hardly anywhere to visit or live. The country is south of Morocco on the western shores of Africa. The population is around 500,000, with few Western visitors.
Tax-Free Countries For Expats FAQ
Find answers to frequently asked questions about living in tax-free countries and the implications for expatriates. From tax avoidance to Vatican City’s unique tax status, we address common queries to help you better understand the world of tax-free living.
A tax-free country is somewhere that doesn’t levy income tax or other personal taxes on earnings, savings or investments.
It’s not illegal to live, work or earn an income in any country as long as you disclose the information when required.
Tax avoidance is arranging your financial affairs to pay less tax. Tax evasion is deliberately not telling a tax authority about your finances so you don’t have to pay taxes. Avoidance is legal, but evasion is not.
Headquartered in the zero-tax Vatican City, the church does not pay taxes, mainly because charities are not businesses and do not make taxable profits. The Pope takes a vow of poverty and owns little. The last four popes had their possessions returned to their families in shoe boxes.
Tax is paid according to the rules of the country where you live. Residence is a complex topic and is decided by many factors. If you want to become a resident in another country, take advice from a specialist adviser in that country.
Related Information
Below is a list of related articles you may find of interest.
Resources
- HM Revenue & Customs (HMRC) – https://www.gov.uk/government/organisations/hm-revenue-customs
- Office for National Statistics (ONS) – https://www.ons.gov.uk/
- The Treasury – https://www.gov.uk/government/organisations/hm-treasury
- Bank of England – https://www.bankofengland.co.uk/
