The world is constantly changing; we live in financial uncertainty, and yes, that is linked to governmental decisions regarding tax benefits in different countries. It’s a reality that money today is the best guarantee of security. So, in this video, we will explore 5 options of countries with no taxes or low taxes, both at the corporate and personal levels, where you can establish yourself in 2024 to save a lot of money thanks to their fiscal policies.
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Why choose countries with no income tax or very low-tax?
It’s no secret that in the West, the vast majority of taxes we pay end up being wasted in the hands of our politicians. These individuals, who increasingly deteriorate the continent both at the European level with permissive and senseless policies, cause taxpayers’ money to largely dissolve into inefficient projects.
At Nomad Tax, we are aware of your thoughts and ideologies on this matter. We also understand that you are here because you are seeking a change in life that allows you to improve your quality of life, increase your wealth, and ultimately ensure your personal security.
When we talk about paying fewer taxes, whether in Dubai, Cyprus, or another country, we are not advocating for leaving a hole in the state’s finances. We mean choosing to live in places where it’s possible to enjoy a considerable quality of life, compared to exaggerated tax rates that stifle and limit our economic freedom.
If we calculate how much tax we pay in countries like Spain, France, England, or Sweden, considering VAT, we realize that we could end up paying up to 70%. Doesn’t that seem ridiculous, nomad? Because to me, it seems like one of the most absurd situations I’ve witnessed in years.
Today, we will share information about 4 countries where you will not only reduce tax payments but could even avoid them if you structure your tax strategy appropriately. These countries, offering a decrease in taxes and an increase in quality of life, are located in Europe or very close to it. I won’t keep you waiting any longer.
Starting with the country that has been most popular among entrepreneurs and comes with important news: Portugal, with its Non-Habitual Resident (NHR) regime.
The End of Portugal’s Non-Habitual Resident (NHR) Program
Portugal has been one of the most attractive options for those seeking a country with no income or dividend tax. We have a comprehensive blog.
However, among the benefits of this regime was the offer of a 0% tax rate for foreign passive incomes and only 20% for qualified incomes earned in Portugal for more than ten years, including tax exemptions on donations and no wealth tax.
Portugal was one of the most appealing choices for those wanting a country with low income taxes. Now, as you may have noticed because I have spoken in the past tense: the regime is closing! Yes, you heard it right.
To enjoy these benefits, you must move to Portugal before December 31, 2023, and then register within the available period (until March 31, 2024) to benefit from NHR status. However, in any case, you won’t be able to proceed if you have been a tax resident in Portugal for the last 5 years for any reason.
That’s why, Nomad, probably when you read this blog (because it has positioned well on Google), you may already be considering the possibility of looking for a new country that offers significant tax benefits. A place free from capital gains, income taxes, or with reduced corporate rates. So, without further ado, we continue with our list.
Today, we will discuss four attractive tax destinations like the United Arab Emirates, Estonia, Romania, and Cyprus, each with its own advantages. Let’s explore them.
Taxes in Dubai (United Arab Emirates): Is All That Glitters Gold?
Firstly, let’s talk about the United Arab Emirates (UAE). The most relevant aspect here is that there is no personal income tax, and corporate taxes are low. What does this mean for you?
Taxes for companies in Dubai: Corporate Tax
Dubai, known for its attractive absence of taxes for both individuals and companies. Although the city has been a magnet for businesses and investments, recent tax changes aim to align it with international standards and diversify the state’s income.
The tax, approved in January 2022 and effective from June 2023, sets a standard rate of 9%. However, a three-tier system allows rates of 0% for profits less than 375,000 AED (100,000 $) and 9% for higher amounts.
Exemptions are clarified, including dividends, capital gains, and intra-group transaction benefits. The tax applies to all companies in the United Arab Emirates, with specific exceptions.
Companies in free zones may be exempt if they do not conduct business on the mainland. This raises the question: Is it worth moving to Dubai after this change? Despite the tax, Dubai remains internationally competitive, with an attractive tax system and strategic exemptions.
We have a dedicated blog about this country on our website (here).
Taxes for Residents in Dubai: VAT
You will only pay a 5% Value Added Tax (VAT) applied to goods and services supplied within the UAE. Currently, the UAE does not impose currency exchange controls or restrictions on fund remittances. Entities in the UAE Free Zone are authorized to repatriate 100% of their profits from the UAE in accordance with current regulations.
Who can benefit from Dubai TAX benefits?
If you are considering a change in your tax residence or expanding your business, Dubai could be the perfect destination for you. This metropolis, famous for its impressive skyscrapers, unparalleled luxuries, and absence of taxes both at the personal and business levels, has evolved to become a global epicenter for various business opportunities.
- If you are an International Entrepreneur or Digital Nomad, Dubai offers you a strategic location as a global business hub, providing you with a unique platform to expand your global presence.
- Investors and High Net Worth Individuals will find in Dubai a stable investment environment and the allure of the absence of personal taxes, ensuring solid and sustainable financial growth.
- Technology Entrepreneurs and Startups, this is where innovation and technology converge. Dubai supports you through acceleration programs and technology-focused events, such as Expo 2020, connecting you with bright minds and exceptional opportunities.
- If you are part of the Real Estate and Construction Sector, join Dubai’s rapid development and participate in innovative projects that set the industry standard.
- Cryptocurrency and Blockchain Professionals will find in Dubai a conducive environment for the growth of these emerging technologies, backed by a progressive mindset and advanced technological infrastructure.
- Tourism and Hospitality Entrepreneurs, this is your paradise! With abundant opportunities in a booming industry, your entrepreneurial vision will find fertile ground to flourish.
- For Companies Seeking Tax Benefits, Dubai offers attractive tax structures, especially in its free zones, allowing you to optimize your tax burden and enhance your economic growth.
- And finally, for Professional Athletes and High-Profile Individuals, Dubai not only offers you a world-class sports environment but also a luxurious lifestyle that complements your success.
In summary, regardless of your business profile, considering Dubai as your next destination could be the key to unlocking a future full of opportunities and success. But we understand that not everyone may want to reside here; that’s why, nomad, we now bring you a new destination, this time colder. We’re talking about Estonia.
Estonia, Ideal for Growing Your Business
Next, we have Estonia, a model where you would want to retain earnings for the future. In Estonia, income tax is not calculated on profits earned each year. It is calculated monthly and only when profits have been distributed (such as paying dividends, for example).
The corporate tax rate is generally fixed at 20%, calculated as 20/80 of the net taxable payment. The downside of this option, of course, is the maintenance cost.
But for what profile of entrepreneur is Estonia?
Firstly, for Digital Era Entrepreneurs, Estonia offers them the opportunity to operate in a digital environment without the need to reside in the country. Next, for Innovators and Digital Nomads, e-Residency grants a digital identity that allows access to digital services and running businesses from any corner of the planet.
If you are a Fiscal Efficiency Seeker, Estonia stands out with its attractive 0% corporate tax on profits, paying only when distributing dividends, making its tax strategy truly unparalleled.
And for those Entrepreneurs who Value Flexibility, forget worries about maintaining authorized capital or a permanent physical presence. Estonia provides the freedom to operate online without restrictions.
Moreover, if your company has global ambitions, International Businesses, Estonia, with double taxation avoidance agreements with 59 countries, becomes a strategic point to expand your operations.
We have a comprehensive blog talking about Estonia; I’ll leave it here for you to check out. Now, let’s travel to the land of the Carpathians, Romania.
Romania, a nation known for its low taxes for micro-businesses.
In the fascinating landscape of international tax planning, Romania stands out as a gem to discover, offering a unique balance between tax benefits, economic stability, and business flexibility. This country, situated at the crossroads of Central and Eastern Europe, has emerged as a preferred offshore destination for those seeking a robust tax strategy and an efficient operational base.
Romania offers low tax rates, especially for micro-businesses. Micro-businesses here can pay taxes ranging from 1 to 3%, depending on their turnover. How will it specifically work in 2024?
The tax rate will be 1% for micro-businesses with a turnover below 300,000 RON, approximately 60,200 EUR. However, you are eligible for this tax option only if the company’s activity is not in the field of (excluding some activities such as information technology, hospitality, legal or medical services).
The tax rate will be 3% for micro-businesses with a turnover between 300,000 and up to 2.5 million RON, which is between approximately 60,200 and 500,000 EUR for those in the fields of IT, hospitality, legal, and medical services.
An additional benefit of Romania is that it has signed many treaties to avoid double taxation with other countries.
Expenses related to business activities are deductible, although there are legal restrictions for certain types of expenses. As mentioned, Romania is a good choice for entrepreneurs as it stands out for having a favorable tax system, with less bureaucracy and ease of establishing businesses.
A great country with no capital gains and low corporate taxes: Cyprus
Last but not least, we have Cyprus. Here, the corporate tax is 12.5%, and the dividend tax is 2.65%. In Cyprus, there is a non-domiciled status that will allow you to enjoy tax exemptions on dividends, interest income, and foreign income. This status will guarantee you tax benefits for 17 years, facilitating long-term planning.
It is also important to note that Cyprus does not impose inheritance and donation taxes, similar to countries like Ireland and Malta. This is an additional advantage to consider in your tax strategy. The best part is that you can become a resident by staying only 60 days in Cyprus.
Additionally, Cyprus stands out as one of those countries that exempts income tax for the first €19,500. However, if you wish to explore in more detail the tax rates and their different brackets in Cyprus, I invite you to visit our blog through this link.
Tell us in the comments which country you found most interesting. If you are thinking of moving to any of these countries to reduce your taxes, in the video description, you can schedule a call with us to discuss your case and determine together which option suits you best. Follow us to stay up to date with news about the tax world, and remember, we are here to help you minimize your taxes and maximize your wealth.
Our Personal Opinion on These Low-Tax Countries
In summary, we live in an era where flexibility and tax optimization are essential for those seeking economic prosperity. Changes in tax policies and the opportunities offered by various countries can make a difference in your quality of life and the growth of your wealth. Destinations we explored, from Dubai to Cyprus, not only offer tax advantages but also environments conducive to both personal and business growth.
When considering your next destination, assess not only the tax benefits but also the fit with your business profile and personal goals. Each country has its own characteristics and advantages, and the choice will ultimately depend on your specific situation and objectives.
Remember, tax planning is a powerful tool, but it is also crucial to be informed and comply with local laws and regulations. Seeking advice from tax and legal professionals can be key to making the most of these opportunities.
Frequently Asked Questions about Tax-Free Countries
- What is the main change in Portugal’s tax regime? Portugal’s Non-Habitual Resident (NHR) regime, which offered significant tax benefits, will close as of December 31, 2023. To benefit from this regime, you must move to Portugal before that date and register within the available timeframe (until March 31, 2024).
- What is the corporate tax rate in Dubai after the 2023 tax changes? Starting June 2023, Dubai implemented changes in corporate tax, setting a standard rate of 9%. However, there are 0% rates for profits below 375,000 AED and 9% for higher amounts.
- What are the highlighted sectors in Dubai for establishing businesses? Dubai is attractive for International Entrepreneurs, Digital Nomads, Investors and High Net Worth Individuals, Technology Entrepreneurs and Startups, Cryptocurrency and Blockchain Professionals, Entrepreneurs in Tourism and Hospitality, and High-Profile Individuals.
- What features make Estonia appealing for digital entrepreneurs? Estonia offers Digital Era Entrepreneurs the opportunity to operate in a digital environment without the need to reside in the country, with a corporate tax rate of 20%, calculated only when profits are distributed.
- How does the tax regime for micro-businesses work in Romania in 2024? Romania offers low tax rates, especially for micro-businesses. The rate will be 1% for micro-businesses with a turnover below 300,000 RON and 3% for those with turnover between 300,000 and 2.5 million RON, with additional benefits like double taxation avoidance treaties.
- What is the non-domiciled status in Cyprus, and how long does it take to obtain it? Cyprus offers non-domiciled status, guaranteeing tax benefits for 17 years. You can obtain residency by staying only 60 days in Cyprus.
