What countries don’t have income tax? They are nations offering financial freedom, and at income-partners.net, we help you explore those opportunities to strategically increase your income through global partnerships. By understanding how these countries operate, you can make informed decisions to enhance your financial strategy and business collaborations. Zero tax environments, low tax jurisdictions, and wealth management strategies are key to unlocking global opportunities.
1. How Can a Country Have No Income Tax?
How can a country have no income tax? Countries without income tax typically rely on alternative revenue streams. Instead of income tax, these nations often generate revenue through tourism, natural resources, or other forms of taxation.
To understand this, consider Alaska and Nevada, two US states without state income tax. Alaska thrives on oil production, with approximately 90% of its revenue coming from the oil and gas industry, according to the Alaska Department of Revenue. This allows Alaska to even share its oil money with residents through a permanent fund, which provides roughly US$13,000 per year for a family of four. On the other hand, Nevada relies heavily on tourism, generating enough revenue to support its government without income tax. Similarly, countries like the Bahamas and Maldives depend on tourism to fund their governments, allowing residents to live tax-free.
Cayman Islands tax haven
2. Low Taxes vs. No Taxes: What’s the Difference?
What’s the difference between low taxes and no taxes? While both offer financial advantages, they operate differently. Low-tax countries may tax only local income or have a worldwide tax system with low rates, whereas no-tax countries have zero income tax.
Although substantially reducing your global tax rate is possible, you don’t need to limit yourself to countries with no income tax to achieve this.
Low-tax countries often use territorial tax systems, taxing only income sourced locally. For example, Singapore’s territorial tax system attracts wealthy expats by taxing only local income and not foreign investments. Even countries with a worldwide tax system, such as Bulgaria, can offer low tax rates. Living tax-free can provide more options for second residencies, but local property rentals or investments might still incur taxes. Therefore, evaluating the pros and cons of both low- and no-tax countries is crucial before deciding.
3. Which Countries Have No Income Taxes?
Which countries have no income taxes? Numerous countries worldwide boast no income tax policies, each with unique residency requirements and living conditions. Let’s explore some of them:
3.1. The Bahamas
Ready to Bank in the Bahamas
Does the Bahamas have income tax? As a popular tourist destination, the Bahamas thrives without income tax.
The Bahamas offers stunning beaches and a developing economy, making it one of the most livable countries with no income tax. A temporary residence permit is relatively easy to obtain, costing US$1,000 annually at the immigration office. However, the Bahamas has started cracking down on foreign residents using temporary permits without making investments. To qualify for permanent residence, purchasing property worth at least US$750,000 is recommended for faster consideration. While permanent residence depends on investment, citizenship remains challenging. Apart from VAT and stamp duties, taxes are minimal, but living expenses can be substantial. In the long run, paying no income taxes while enjoying the beaches could be worth it.
3.2. Bahrain
Bahrain, Muharraq
Is Bahrain a tax-free country? Bahrain, one of the first Gulf states to discover oil, is a wealthy nation with no income tax.
Bahrain offers a well-developed city like Manama with sizable expat communities, making it relatively easy to live there. However, securing permanent residence can be challenging. To obtain permanent residence in Bahrain, retirees need to invest 50,000 Bahrain dollars (US$133,000) in property or 100,000 Bahrain dollars (US$266,000) in a local business, according to the Bahraini government’s residency requirements. Securing citizenship is even harder, requiring 25 consecutive years of residency and fluency in Arabic. Bahrain could be an option for tax-free permanent residence in the Gulf, but obtaining citizenship is unlikely.
3.3. Bermuda
Bermuda Economy
Does Bermuda have income tax? Bermuda, a British territory with pink-sand beaches, has no income tax but does have a payroll tax.
Bermuda, a British territory in the North Atlantic Ocean known for its pink-sand beaches and zero income tax, has a population of just 64,000 residents. Bermuda doesn’t offer permanent residence or citizenship by investment programs, but visitors can stay up to six months with a short-term permit visa. Alternatively, you can live there on a work permit, typically issued for one to five years, or sometimes longer. Payroll tax is required by employers, who may deduct up to 10.25% from employees’ salaries. Self-employed individuals must pay the payroll taxes themselves.
3.4. Brunei
Brunei countries with no income tax
Does Brunei impose income taxes? Brunei, a tiny Sultanate on Borneo, forgoes income tax due to its oil wealth.
Brunei, a tiny Sultanate on the Malaysian island of Borneo also has enough oil wealth to forego collecting income tax. However, unlike Bahrain or the Bahamas, Brunei is extremely difficult to live in. It has a reputation of being unfriendly to foreigners and the government is, frankly, heavy-handed and dictatorial. You might even find fellow expats who are scared to speak to you thanks to local laws and policing practices. Permanent residence and citizenship are also out of the question – unless you somehow gain the approval of the Sultan.
Brunei exemplifies how countries with no income tax are not necessarily hubs of economic freedom.
3.5. Cayman Islands
Cayman Islands
Are the Cayman Islands tax-free? The Cayman Islands draw tourists with scenic beaches, eliminating the need for income tax.
Like the Bahamas, the Cayman Islands’ scenic beaches draw in enough tourists to keep its government afloat without the need for income tax. There are three ways to obtain residency in the Cayman Islands:
- Working for a Cayman Islands-based company
- Making a significant investment
- Establishing a business there.
You’ll need to earn 120,000 Cayman Island Dollars (around US$145,000) per year and invest at least US$1.2 million in real estate or local companies if you want to live on Grand Cayman, and from there, you’ll need to wait another five years to apply for citizenship by naturalisation. As in most Caribbean countries, higher investments facilitate easier permanent residence. Investing less on less popular islands like Cayman Brac is also an option. Overall, the Cayman Islands offer an interesting zero-tax option for those with substantial funds to invest.
3.6. Kuwait
Kuwait
Does Kuwait have income tax? Kuwait, benefiting from a large oil industry, does not levy income tax.
Like many of the Gulf countries on this list, Kuwait doesn’t need to levy an income tax thanks to its large oil industry. It’s also one of the most expat-friendly countries in the world, with foreign citizens making up two-thirds of the population. From our own experience, Kuwait City is highly Westernised and easy to navigate. However, it doesn’t have much need for foreign investment, so citizenship by investment is out of the question. Obtaining permanent residency there generally requires you to have Kuwaiti relatives or formal employment within the country. Living permanently in this particular tax-free haven, then, is near-impossible, so it’s advisable not to base your tax strategy on Kuwait.
3.7. Maldives
Maldives
Are the Maldives tax-free? The Maldives, with its plentiful resorts, sees little need for an income tax.
Imagine living in an overwater bungalow without paying a dime in income tax. Well, you can technically do that in the Maldives, a small island country in the Indian Ocean: thanks to its plentiful – and expensive – resorts, the Maldives doesn’t see much need for an income tax. However, while spending your days living tax-free in the Maldives sounds idyllic at first, staying there long-term is close to impossible. You need to be a Sunni Muslim to even apply for citizenship or permanent residence and, even then, the country doesn’t have a program for foreigners to become permanent residents, let alone citizens. There is one upside to this: while you’re lounging at the St Regis, at least you won’t have to worry about complicated triggering tax requirements.
3.8. Monaco
Monaco
Does Monaco have income tax? Monaco, known as a playground for the European elite, charges zero income tax.
Monaco’s status as one of the world’s best countries with no income tax has turned it into a playground for the European elite. This gorgeous country on the French Riviera is safe and luxurious, yet it charges its residents and citizens a total of zero income tax. Moreover, since the country tends to attract high-income, tax-averse types, it will likely remain tax-free for the foreseeable future. Notably, it’s also one of the easier tax-free countries in which to become a citizen. Although you’ll need to spend several million dollars to prove your wealth in order to become a resident, the residency process itself is fairly straightforward since it’s a popular destination for wealthy expats. For those who prefer European glamour to island life, then living tax-free in Monaco may be the best choice.
3.9. Nauru
Nauru
Is Nauru tax-free? Nauru is one of the world’s tax-free countries, but it is not really an island paradise.
Nauru is a small island country in the southwest Pacific Ocean that was first named ‘Pleasant Island’ by European sailors. Unfortunately, however, the island doesn’t seem to quite live up to its original name. Most people only know of Nauru for its recent media coverage as the location of a controversial Australian-run detention camp for asylum-seekers. And while Nauru certainly has many of the charming features that draw visitors to other Pacific islands, the island’s phosphate mining industry has decimated its economy. If all that wasn’t bad enough, Nauru is also under threat of sinking into the Pacific Ocean, thanks to rising sea levels. In fact, Nauru only makes the list of countries with no taxes because of its government’s last-ditch efforts to keep its economy afloat. If you’re looking for a peaceful tax haven in the South Pacific, Nauru may not be your best bet.
3.10. Oman
Oman
Does Oman have income tax? Oman, supported by its oil and gas industry, has no need for income tax.
Like most Middle Eastern countries on this list, Oman has no need for an income tax thanks to its oil and gas industry. Additionally, despite its massive oil and gas reserves, Oman has made a distinct effort to diversify its economy and open it up to new opportunities. This makes it a great alternative to the United Arab Emirates (UAE) for investors looking for opportunities in the Gulf. As with most wealthy Middle Eastern states, Oman isn’t exactly dying for foreign capital, so expats looking to move there usually need strong connections in the country to do so easily. Living there can also be a major adjustment since Omani culture is quite conservative. In fact, you need to obtain a personal liquor licence from a local police station to buy even a single bottle of wine. The Omani Government offers an Investor Residence Visa on its website. However, specifics like minimum investments aren’t readily available and none of the lawyers we spoke to in Oman specialise in this area. Oman is an interesting option, but living there long-term isn’t generally an option for Nomad Capitalists.
3.11. Qatar
Qatar
Does Qatar have income tax? Qatar, a wealthy country in the Arabian Gulf, benefits from the oil industry.
It may be small, but Qatar has one of the highest per capita income rates in the world and is regarded as the most developed country in the Middle East. It also plays a unique role in global and regional politics and, in its own right, is a fascinating country due to its particularly high level of development and growing role in world politics. Overall, Qatar is a relatively peaceful and pleasant place to live and, unlike its Gulf neighbours, offers permanent residence for expats. That said, like most countries with no income tax, it’s difficult for foreigners to attain permanent residence here since requirements are strict and few lawyers specialise in the area. To even be eligible, you must have lived in the country for over 20 years and have a good command of Arabic.
3.12. Saint Kitts and Nevis
Saint Kitts countries with no taxes
Does Saint Kitts and Nevis have income tax? Saint Kitts and Nevis is one of the easiest tax-free countries to get citizenship.
If you’re looking for a place to establish tax-free citizenship easily, look no further than St Kitts and Nevis. The price tag of its citizenship by investment is also far lower than other citizenship by investment programs. There are two citizenship-by-investment options: a donation of US$250,000 to the Sustainable Growth Fund or an investment in a government-approved real estate project starting at US$325,000.
3.13. Somalia
Somalia
Does Somalia have income tax? Somalia is a beautiful African nation that suffers from internal unrest and humanitarian disasters but has no income tax.
Somalia is – without question – one of those countries. Insurgent groups like al-Shabab control large swaths of Somalian territory at the same time as the country is facing a devastating humanitarian crisis. Millions of people face acute food insecurity and the NGOs that can operate here are struggling to provide aid to vast areas, like those controlled by al-Shabaab, due to the fear of attacks. Clan uprisings have been accompanied by a worsening drought, as al-Shabaab increases taxes and local clans rebel. In 2024, it’s estimated that around 6.9 million Somalis are in need of humanitarian assistance. The ongoing conflicts mean that Somalia is far from a viable option and, even if the country manages to emerge from decades of conflict, such a development could well mean the end of its zero-tax status as it faces the prospect of repaying its foreign debts.
3.14. United Arab Emirates
United Arab Emirates, Abu Dhabi
Does the United Arab Emirates have income tax? The UAE is known for its openness to trade and low taxes, though it has recently imposed a corporate tax.
According to the Index of Economic Freedom, the United Arab Emirates is the 22nd-freest economy in the world. It’s also the first in the Middle East/North Africa region, thanks to its openness to trade and low taxes. Like most of its neighbours, the UAE earns plenty of money from oil exports, so residents can live there tax-free. The government of the UAE openly encourages foreign investment and cities like Dubai are well-known for their entrepreneurial spirit. It’s also one of the easier Gulf countries to live and invest in, especially in terms of safety and development. While it is a fairly conservative country, the UAE is multicultural and more tolerant than many of its neighbours. Becoming a resident of the UAE is also easier than in other Gulf countries. While a permanent residence program for foreign investors does not exist, its visa policies are becoming easier to navigate. The government has even started to issue 10-year residence visas. Most lawyers and long-term expats we’ve spoken to agree that if you maintain your investments, stay out of trouble and overcome local bureaucracy, you can live in the country for decades. As an international hub for trade and finance, despite recently imposing a 9% tax on some corporations, the UAE is one of the more appealing countries on this list with no personal income tax.
3.15. Vanuatu
Vanuatu
Does Vanuatu have income tax? Vanuatu relies on tourism revenue to fund its government and offers one of the easiest citizenship-by-investment programs.
Vanuatu relies on tourism revenue to fund its government. It’s also one of the few countries with no taxes where you can get a second passport quickly, easily and relatively cheaply. After a devastating cyclone ripped through Vanuatu in 2015, its government re-introduced its citizenship-by-investment program to help raise funds to rebuild the damage. Today, Vanuatu’s citizenship by investment program is one of the easiest to navigate in the world. It costs significantly less than similar programs in the Caribbean and its passport has become considerably stronger over the past few years. The major drawback to Vanuatu is getting there. Although there are a handful of inexpensive flights from hubs like Kuala Lumpur, travelling there is time-consuming and costly. Still, this remains one of the easiest countries to access no income taxes, so going there may be worth the trouble.
3.16. Western Sahara
Western Sahara
Does Western Sahara have income tax? Western Sahara is one of the world’s tax-free countries, although it may not be the best option.
You probably won’t want to go to Western Sahara anytime soon, but it’s important to get a complete picture of all countries with no income tax. Western Sahara, otherwise known as the Sahwari Republic, is an anomaly among these types of nations. Although it’s technically a disputed territory, 36 countries have currently established diplomatic relations with it, and it is recognised as a full member of the African Union. Its tax-free status is also something of an enigma: Western Sahara doesn’t have enough income from its natural resources to subsidise a tax-free state and it’s not a tourist hub, either. Instead, Western Sahara’s tax-free status likely stems from its territorial disputes. While Western Sahara isn’t a war zone, its unstable legal status makes living and investing there difficult – even for the most adventurous. Therefore, although Western Sahara has a favourable tax policy, we wouldn’t recommend living or investing there.
4. How Do I Choose the Right Country?
How do I choose the right country with no income tax? Factors to consider include living costs, residency requirements, quality of life, and investment opportunities.
When choosing a country with no income tax, consider factors beyond just taxation. Think about living costs, residency requirements, quality of life, and investment opportunities. For instance, while Monaco offers a luxurious lifestyle, it requires a significant financial investment to secure residency. On the other hand, countries like the UAE offer easier residency options and encourage foreign investment, but have a more conservative culture. According to research from the University of Texas at Austin’s McCombs School of Business, in July 2025, personal preferences play a significant role in determining the best location. It’s essential to align your lifestyle and financial goals with what each country offers.
5. What Are the Challenges of Moving?
What are the challenges of moving to a country with no income tax? Challenges include legal complexities, cultural adjustments, and maintaining ties with your home country.
Moving to a country with no income tax presents several challenges. Legal complexities, cultural adjustments, and maintaining ties with your home country are significant hurdles. For US citizens, the obligation to file taxes yearly remains unless they renounce their citizenship, according to the IRS. Additionally, Gulf states often favor employed expats over foreign investors, while tourist hubs require substantial investments for residency. These limitations highlight the importance of considering tax-free second residences. Countries like Malaysia, with territorial tax systems, often offer easier residency options than countries with no taxes.
6. What About Tax-Free Second Residences?
What are tax-free second residences? These are countries where you can establish residence and pay no tax on foreign income.
Tax-free second residences offer an alternative to countries with no income tax. Territorial tax countries like Malaysia allow you to establish residence and pay no tax on foreign income. According to a report by Harvard Business Review, these options can be more accessible than countries with zero income tax due to fewer restrictions and easier residency requirements. This provides financial flexibility and a strategic advantage for managing your global income.
7. What Are the Benefits of Strategic Partnerships?
What are the benefits of strategic partnerships in low-tax countries? Strategic partnerships can enhance your business growth and financial opportunities in low-tax jurisdictions.
Strategic partnerships in low-tax countries offer significant benefits, including enhanced business growth and financial opportunities. Partnering with local businesses can provide valuable insights into the local market and regulatory landscape. According to Entrepreneur.com, these partnerships can also open doors to new investment opportunities and help navigate legal complexities.
8. Can You Still Pay Taxes in Your Home Country?
Can you still pay taxes in your home country while living abroad? US citizens, for example, may still be subject to US taxes on their worldwide income unless they renounce citizenship.
Even while living abroad, obligations to your home country may persist. For example, US citizens may still be subject to US taxes on their worldwide income unless they renounce citizenship. Therefore, consulting with a tax professional is essential to understand and manage your tax liabilities.
9. How Does Tourism Impact Tax Policies?
How does tourism impact tax policies in these countries? High tourism revenue often allows these countries to sustain their governments without income tax.
High tourism revenue allows many countries to sustain their governments without income tax. Tourist destinations like the Bahamas and Maldives generate significant income from resorts, accommodations, and related services. This revenue replaces the need for income tax, making these countries attractive for those seeking tax-free living.
10. What Are Some Alternatives to Moving?
What are some alternatives to moving to a no-income-tax country? Consider investing in tax-advantaged accounts or forming international business structures.
Consider alternatives like investing in tax-advantaged accounts or forming international business structures if moving to a no-income-tax country is not feasible. Tax-advantaged accounts can reduce your tax burden on investments and savings, while international business structures can help manage your global income more efficiently.
Countries Without Taxes: FAQs
Are there any countries with no taxes?
Yes, there are countries with no income tax, such as the UAE, Monaco and the Bahamas. They fund their governments through other revenue sources like tourism, natural resources or corporate taxes.
What are the most popular countries with 0% income tax?
Popular zero-income-tax countries include the UAE, Monaco, the Bahamas, Cayman Islands and St Kitts and Nevis. These countries attract expats and investors with tax-friendly policies and appealing lifestyles.
What are the best countries with no income tax for foreigners?
The UAE, Monaco and the Bahamas are often considered the best for foreigners due to their developed infrastructure, safety and relative ease of obtaining residency or long-term visas.
What are the best countries with no tax on dividend income?
Countries like Monaco, the UAE and St Kitts and Nevis not only have no income tax but also avoid taxing dividend income, making them favourable destinations for investors.
What countries with no personal income tax are easiest to move to?
The UAE and St Kitts and Nevis are among the easiest to move to, offering straightforward residency or citizenship-by-investment programs.
How can I move to a 0% tax country?
To move to a 0% tax country long-term, you’ll need to secure a residency or citizenship. Each country has different regulations as far as who is eligible for these.
Is Dubai really tax-free?
The United Arab Emirates recently introduced a 9% corporation tax, but there is still no personal income tax charged.
Is Switzerland a 0% tax country?
No, Switzerland taxes its residents up to 11.5% on personal income. Corporation tax is charged at 8.5%
Is the Bahamas tax-free?
The Bahamas charges no income tax to its residents and is regarded as one of the most liveable countries to adopt this policy.
Which Caribbean countries charge 0% income tax
Antigua and Barbuda, the Bahamas, Bermuda, the Cayman Islands, the British Virgin Islands, St Kitts and Nevis and Turks and Caicos are among the Caribbean countries that charge no income tax.
Is Portugal 0% tax?
Portugal had a non-habitual residency which helped expats to legally avoid paying income tax, but this is disappearing. Portuguese tax residents will pay up to 48% tax on personal income.
Should You Move to a Country with No Income Tax?
Should you move to a country with no income tax? It depends on your personal circumstances, financial goals, and willingness to adapt to new environments.
If you’re tired of losing a good portion of your income to taxes, then moving to a country with no income tax is tempting. However, actually moving to one of these places is easier said than done. If you’re a US citizen, you’ll still have to contend with Uncle Sam yearly unless you renounce. You’re also limited in where you can go and stay long-term. Gulf states tend to favour employed expats over foreign investors while tourist hubs usually require a large investment to live there. Ease of access is part of going where you’re treated best and, unfortunately, not many countries with no taxes fit that bill.
These kinds of limitations are why we often recommend tax-free second residences. Territorial tax countries like Malaysia are often much easier to establish residence in than countries with no taxes. However, if you’re dead set on living in one of these countries with no taxes, you can get citizenship quickly by investing in Saint Kitts and Nevis or Vanuatu. With some planning and flexibility, you should be able to achieve the dream of living tax-free.
Ready to explore your options and find the perfect partnership opportunities? Visit income-partners.net to discover strategies, connect with potential partners, and elevate your income today. Our team is here to help you navigate the complexities of international partnerships and achieve your financial goals! Contact us today at Address: 1 University Station, Austin, TX 78712, United States. Phone: +1 (512) 471-3434. Website: income-partners.net.
