Registering and relocating a business abroad is not only an opportunity to take it to a new level, and find promising partners and contractors, but also to significantly reduce tax pressure. Many countries are interested in attracting ambitious entrepreneurs and businessmen, as this brings new jobs for local residents, tax revenues for the treasury, and the implementation of projects beneficial to society and the economy.

Conducting business in another country is impossible without obtaining resident status. Often, this becomes the basis for obtaining a residence permit or permanent residency. To become a tax resident in the chosen country, in most cases, one needs to spend more than 183 days per year in the country.

Which countries offer favorable tax regimes for entrepreneurs? Experts from the licensed agency GARANT.in analyzed the tax policies of various countries and compiled a list of countries with minimal tax rates or the complete absence of taxation on certain types of income.

Principles of countries with minimal tax rates

Most countries replenish their treasury through the taxation of individuals and legal entities. However, several countries can function without burdening existing businesses, citizens, and residents with tax obligations. What factors and mechanisms help these countries maintain a tax-free status or a position with minimal tax rates?

Income from state enterprises

Countries with abundant natural resources (minerals, gas, oil, diamonds, gold) generate high levels of income by selling these reserves to state organizations.

Consumption and services taxation

Instead of imposing income tax, countries increase their budget through the introduction of VAT (value-added tax) or by taxing specific goods or services.

The inflow of foreign capital

Some countries offer zero income tax to attract foreign investments. Additionally, some offer residence permits, permanent residency, or citizenship in exchange for investment contributions to the economy—such as purchasing real estate, placing a certain amount on deposit in a local bank, investing in the capital of a local business, or purchasing a share in a hotel.

Tourism

Tourism is a profitable source of income for countries that are safe and attractive for travel. Analysts estimate that by 2031, the global tourism and travel sector will reach a scale of $16.2 billion. Tourists bring money into the treasury not only through purchasing local goods and services but also by paying for entry visas.

Non-tax revenue sources

These include fees collected from issued work permits, interest on debts and loans, fees for using transportation, local services, and other infrastructure factors.

Countries with zero or minimal taxation

The most popular destinations with favorable tax regimes for business registration or relocation include countries in the Caribbean, Europe, the Middle East, and Asia.

Antigua and Barbuda

In Antigua and Barbuda, tax benefits vary depending on the legal entity and resident status. Tax residents are exempt from paying personal income tax. There is no taxation on dividends, interest, or royalties. Non-residents are subject to a 25% tax on dividends, interest, and royalties. Antigua and Barbuda is an attractive jurisdiction for both individuals and legal entities seeking to reduce tax pressure.

An investment program with multiple participation options is one of the most popular ways to obtain citizenship in the country. Note: Investors must spend at least five days in the country within five years of obtaining citizenship. Failure to comply with this requirement may result in revocation of citizenship and related privileges.

Saint Kitts and Nevis

Saint Kitts and Nevis does not tax its residents on personal income, inheritance, or capital gains (this applies to both residents and non-residents). Companies are subject to corporate tax at a rate of 33% depending on income level. There is also a 15% tax on interest, royalties, and dividends paid to non-tax residents. In this country, these are citizens who do not reside permanently in Saint Kitts and Nevis.

Despite not having the lowest rates, Saint Kitts and Nevis is a popular destination for businessmen. The country’s passport is one of the strongest in the Caribbean, allowing visa-free travel to over 150 countries. Its investment program, established in 1984, is one of the oldest of its kind.

Cayman Islands

It is another popular location for businessmen and investors. There are no tax obligations on capital, inheritance, income, capital gains, or corporate taxes here. The offshore jurisdiction offers favorable tax conditions.

Bahamas

Bahamas residents are exempt from paying corporate income tax. Companies registered here must obtain a business license and pay taxes depending on their annual turnover.

United Arab Emirates

Since the discovery of oil, the UAE has undergone significant changes, transforming from a small desert region with modest buildings to a highly developed country with a high standard of living. Several Free Trade Zones in the UAE allow companies to engage in export, import, and production without customs duties or tax obligations. For companies registered outside the free zones, income tax has been imposed as of June 1, 2023. If the annual turnover exceeds $102,100, the tax rate is 9%; if it is lower, the rate is 0%. VAT is calculated at a rate of 5%.

Foreign investors are attracted by the absence of tax obligations on interest, royalties, dividends, and other income for individuals. Transferring an existing business to the UAE or registering a new company can be done in less than two weeks. The UAE is now a global hub for trade, finance, and tourism, offering some of the best programs for foreign investment and business.

Monaco

Monaco is an excellent choice for those looking to conduct business in Europe while optimizing taxation. The country does not impose personal income tax on residents (except for French citizens), nor does it tax property, wealth, or capital gains on foreign dividends. If a resident inherits or is gifted assets located in Monaco, they are subject to taxation unless the recipients are direct relatives. Financially independent individuals are fully exempt from paying taxes on worldwide income.

Business owners also benefit from registering companies in Monaco. They are 100% exempt from profit taxes for the first two years. Over the next three years, they are subject to a reduced tax rate.

Andorra

Another tax-friendly jurisdiction in Europe is the small state of Andorra. Personal income and corporate taxes are levied at a floating rate of 0-10%. The VAT rate is one of the lowest in Europe at only 4.5%. Certain goods (such as education and healthcare) are subject to a reduced rate of 0%. Andorra does not impose taxes on inheritance, gifts, or wealth for residents, and there is no currency control.

Malta

Malta’s tax regime is quite favorable for investors and businessmen of various levels. Corporate tax is levied at a rate of 35% on company income and personal worldwide income. However, by registering a company in Malta, the owner can receive a refund of up to 100% of the corporate tax paid.

To attract wealthy investors from third countries, Malta offers residence permits under its investment program.

Cyprus

Cyprus is one of the most tax-friendly jurisdictions for residency based on length of stay. One can become a Cypriot tax resident by living on the island for only 60 days, provided they do not spend more than 183 days per year in another country. Cypriot tax residents are exempt from tax obligations on income earned outside the state, inheritance, capital gains, interest, and dividends. The corporate tax rate is one of the lowest in Europe at 12.5%.

Residents can also reduce their tax rate by 20% on income earned from renting out property. There are favorable tax rates for premiums, royalties, and lottery winnings.

Spain

Spain has successfully recovered from a prolonged recession and is now recognized as a great location for aspiring entrepreneurs. The general corporate tax rate is 25%. Startup owners benefit from a reduced rate of 15% for the first four years, provided it is a new company. Individual entrepreneurs also pay a reduced rate of 15%.

Digital nomads can optimize their taxes as well, with a rate of 24%, provided the total annual income does not exceed €600,000.

Vanuatu

A Vanuatu passport means almost no taxation for companies. By registering a business in the island jurisdiction, the owner pays an annual fee of $300 and a one-time registration fee of $150 for 20 years. Importantly, the company must not conduct business in Vanuatu or earn income in this country. Registering a company here allows for zero taxation on wealth, any income, export and capital gains, property, or dividends paid to shareholders. VAT is fixed at 12.5%. The company must have a registered office, representative, director, or shareholder in Vanuatu.

Singapore

Singapore's tax system is designed to be highly favorable for business development while remaining competitive. Income tax is levied only on profits earned within Singapore. Since 2010, the corporate tax rate has been set at 17%. With the use of state benefits, subsidies, and grants, this rate can be further reduced.

Italy

Italy offers financially independent residents an effective flat tax system. By obtaining tax resident status in Italy, the taxpayer can annually pay a fixed tax of €100,000 on all worldwide income earned outside the country for 15 years.

Additional privileges include exemption from paying inheritance tax on foreign assets, wealth tax, and taxes on gifts and donations. The activation of this preferential tax regime also allows for no tax on money transfers and removes the requirement to report foreign-held assets.

Greece

New entrepreneurs and digital nomads can take advantage of a favorable tax regime, receiving a 50% discount on income tax payments. This option is available to legal entities that were previously tax residents of EU or EEA countries. Applicants must prove that they were previously engaged in business activities and demonstrate their intention to remain in Greece as tax residents for at least two years. Additionally, these residents can use foreign tax loans and are exempt from taxation on imputed income.

Assistance with business registration/relocation to another country

Obtaining the advice and support of experienced professionals ensures the success of your business relocation abroad. GARANT.in experts guarantee the preparation of a personal business relocation plan, assistance with business registration, and support in obtaining the necessary licenses and permits.