31 Countries That Don't Tax Foreign Income

You could keep closer to 100% of what you earn if you live abroad, and plan your new home and financial situation correctly. These 31 destinations let foreign tax residents skip the bill on overseas income, but the passive income rules, and how your favorite destinations tax, might surprise you.

The Bottom Line(s) Up Front

Seven places charge no personal income tax: the UAE, Bahrain, Kuwait, the Bahamas, the Cayman Islands, Turks and Caicos, and Monaco (for non-French nationals).
Everywhere else, the exemption covers foreign-sourced income only. Work you do while physically in the country is taxed in most of them, even for a foreign client.
Digital nomads must remember: most countries tax based on where you perform the work, not where payment comes from
Foreign passive income is the easiest to keep untaxed. Watch for the gotchas: Costa Rica’s pending bill, Panama’s Law 526, and remittance rules in Malta and Ireland.
US citizens still file in the US wherever they live.

The first time I started living and working abroad and reached the end of my first year, I was surprised to realize I could have paid zero dollars in taxes, if I had planned correctly, to stay out of the US for 330 days and properly move out of California.

The second time I lived in a single place abroad (in Bali), I was shocked to find out that they had plans to tax my worldwide income, even my income from the US, and no one warned me.

Now that I live abroad as a flexpat and have strategically chosen my new home country, I rarely pay taxes in my country of residence now, and the US, because I finally started planning where I live and travel based on what I want my life to look like financially.

This article, and the list of countries and information that follow, is designed to empower you to do the same. In this article, you’ll discover the most tax-friendly countries for expats aiming to live a life abroad, and the clarifications on popular countries with nomads and expats that are riddled with “gotchas” and tax landmines.

Save this article as a reference to return to, to double-check how life in your target country will affect your bank account from a tax standpoint, and find the right questions to take to your tax advisor.

Disclaimer: This guide is intended for general education and research. It is not tax, legal, investment, or personalized financial advice, and it does not take your circumstances into account. Tax rules change often and depend on your citizenship, residency, and income type. Information in this article is current as of October 2026. Confirm every figure with the official sources linked in each section, and speak with a qualified cross-border tax professional before you move, change your residency, or restructure your income.

At a Glance: How Each Country Taxes Foreign Income

Each line gives the country, how it taxes (worldwide, territorial, or remittance), and the main opportunity or catch. The sections below give the details and the sources.

Panama: Territorial. Foreign income is untaxed, but work done in Panama is taxed, and Law 526 taxes foreign passive income of entities without economic substance from fiscal year 2027.
Costa Rica: Territorial. Foreign income is exempt today, but Bill 25.796 would tax residents’ foreign passive income, and work done in Costa Rica is taxed.
Paraguay: Territorial. Foreign income is exempt, and the 120-day residency test is low, but work done in Paraguay is taxed at 8% to 10%.
Nicaragua: Territorial. Foreign income is exempt, and living costs are low, but political risk is high, and banking access is limited.
Guatemala: Territorial. Foreign income is exempt with no remittance tax, and services performed in Guatemala are taxed at 5% to 7%.
Belize: Territorial. Only Belize-source income is taxed, and pay for work done in Belize counts as Belize income wherever you are paid.
El Salvador: Territorial. A March 2024 reform excludes foreign-source income by statute, while local-source income is taxed at up to 30%.
Malta: Remittance. Non-domiciled residents pay tax on foreign income only when it is brought into Malta, subject to a minimum annual tax with exceptions.
Ireland: Remittance. Only non-domiciled residents qualify; foreign income is taxed when brought into Ireland, and work done in Ireland is taxed when earned.
United Kingdom: Worldwide, with a four-year window. New arrivals pay no UK tax on foreign income and gains for four years under the FIG regime, then worldwide taxation applies.
Georgia: Territorial. Foreign income is not taxed, local income is taxed at a flat 20%, and freelancers can elect a 1% turnover regime.
Monaco: No personal income tax. Zero tax for residents who are not French nationals, while French nationals stay taxable in France and residency needs proof of means.
United Arab Emirates: No personal income tax. All personal income is tax-free, but a 9% corporate tax applies to individuals whose business turnover exceeds AED 1 million.
Qatar: Territorial. Salaries and foreign income are not taxed, but self-employed individuals owe tax on Qatari-source income.
Bahrain: No personal income tax. No tax on any category of personal income, and no corporate tax on most businesses.
Oman: No personal income tax until 2028. From 1 January 2028, residents pay 5% on worldwide income above OMR 42,000.
Kuwait: No personal income tax. No tax on any personal income, though residency is mostly tied to employer sponsorship.
Hong Kong: Territorial. Only Hong Kong-source income is taxed, salaries tax tops out at 17%, and capital gains are not taxed.
Singapore: Territorial. Foreign-sourced income received by resident individuals is not taxed unless it comes through a partnership in Singapore, and local income is taxed at up to 24%.
Malaysia: Territorial, with a remittance catch. Foreign income received in Malaysia is taxable in principle, but resident individuals are exempt on most of it through 2026.
Philippines: Territorial (for foreigners). Aliens are taxed only on Philippine-source income, so pay for work done in the Philippines can still be taxed.
Thailand: Remittance. Foreign income earned from 2024 is taxed when brought into Thailand, unless a Long-Term Resident visa exemption applies.
Macao: Territorial. Foreign-source income is not taxed for individuals, and Professional Tax on work done in Macao tops out at 12%.
The Bahamas: No personal income tax. No tax on income, capital gains, or inheritance for residents.
Cayman Islands: No personal income tax. No income tax, capital gains tax, or corporate tax on most businesses, and work permit fees apply instead.
Turks and Caicos: No personal income tax. No tax on income, capital gains or inheritance, and work permit fees apply.
Bermuda: No personal income tax, but payroll tax applies. Payroll tax of up to 12.5% applies to pay for work done in Bermuda, and investment income is not taxed.
Seychelles: Territorial. Only Seychelles-source income is taxed, with business tax of 0%, 15% or 25% for sole traders and partnerships.
Mauritius: Remittance. Residents pay tax on foreign income only when it is received in Mauritius, and local rates run from 0% to 20%.
Malawi: Territorial. Individuals pay tax only on Malawi-source income, and passive foreign income is outside the charge.

How to use this guide

1. This guide is a starting point for research. It presents general facts to help you build a shortlist of tax-optimized destinations.

2. Use this guide to become generally aware of countries that lean tax-friendly, to shortlist destinations that may be tax-friendly for your situation, and to gather research and questions about your tax situation to bring to your tax strategist.

3. For each country, read the tax residency test first, then the active income and passive income taxation treatment lines, because one country can treat employment, business, and investment income differently. Then check the treaty line and the sources.

Essential tax bits to understand before we start

What generally triggers taxation: Most countries decide to tax you when you trigger one of three qualifying reasons:
1. You become a tax resident (usually by spending about 180 to 183 days a year there, or by keeping a permanent home or your family and economic ties there)
2. You earn income sourced in that country
3. You do work while physically there, even if the client or employer isn’t located in the country. Each country section below states its own residency test.

Tax treaties, and how they help you: A tax treaty between your home country and your target destination country decides which country gets the first claim to tax your income when two countries both say you owe tax, and it often lowers withholding on dividends, interest, and royalties. Generally, these treaties are intended to avoid double taxation or make clear when double taxation will happen. Treaties matter even where a country exempts foreign income, because your home country may still tax you. US citizens are taxed on worldwide income, and the saving clause in US treaties generally lets the US keep taxing its own citizens. Find US treaties on the IRS table of US income tax treaties. Each country section below states whether a US treaty exists.
Active income versus passive income: “Active Income” and “Passive Income” are taxed differently. Active income (or earned income) is income you earn by performing work, and includes employment income, freelance income, and business income. Passive income is received from activities that you do not materially participate in, such as rental income or business income received as a silent partner. Countries often treat and tax the two differently. Work you perform while physically inside a country is taxed in most of the countries below that levy any income tax, even when the client or employer is overseas.
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Social security income is a separate category from active income and passive income tax: Pension and social security contributions follow their own rules. Without a totalization agreement, you can owe contributions in two countries, and an employee sent abroad temporarily by an employer can often stay in the home system (US Social Security Administration, International programs). Ask whether your home country has an agreement with your destination. Note that capital gains may have different tax rules and criteria as well.
Tax residency is not immigration status: A visa or residence permit does not necessarily decide where you owe tax, and a tax residency test does not give you a right to live in the country. You can meet the tax residency test of two countries at the same time, which is why treaty tie-breakers and your day count both matter.
The difference between taxation on worldwide income, taxation on local income (territorial taxation), and taxation on remitted income:
1. A worldwide system taxes residents on income from anywhere.
2. A territorial system taxes only income sourced from inside the country.
3. A remittance system taxes foreign income only when you bring it into the country.

Most countries below use a territorial or remittance system, but the details differ by type of income.

Leaving home permanently could be a tax event too: Many countries keep treating you as a tax resident if you keep a home, family, or economic ties there, and if you decide to break those ties, thus potentially avoiding further taxation, some charge an exit tax. The US, for example, applies an exit tax to expatriates who give up citizenship or long-term residence (IRS, Expatriation tax). Check your home country’s exit rules before you leave.
Living tax-free abroad does not mean being invisible to your home/residence country: Under the OECD Common Reporting Standard, participating countries exchange financial account information automatically with the tax authority of the account holder’s residence (OECD, Automatic exchange of financial account information). US persons also report foreign accounts under FATCA (IRS, FATCA).

Rules change frequently, so verify before hard planning: Several countries in this guide changed or proposed changes recently, including Portugal, the United Kingdom, Costa Rica, and Oman. Check the current-year rule on the official source linked in each section before you commit to a move.

Most tax systems punish global mobility, but 31 countries built their codes differently.

If you establish tax residency in the right jurisdiction, your foreign-earned income can flow to you completely untouched by local tax authorities. These aren’t loopholes or gray zones. They’re official territorial tax systems with foreign income exemptions written directly into national tax law. But the mechanics vary wildly. Some countries give blanket exemptions on all foreign income. Others carve out exceptions for passive streams like dividends and capital gains.

These distinctions matter more than most expats realize. A country that exempts your foreign consulting income might still tax your stock portfolio gains at 30%. Another might let your retirement pension through tax-free while hitting your rental income. The rules shift based on income type, residency duration, and how you structure your presence.

What follows is a breakdown of the 31 most attractive destinations for anyone earning income outside their country of residence.

Not every country below exempts all foreign income. Portugal, Ireland, Malta, Mauritius, Malaysia, Thailand, the UK, and Oman tax foreign income in some form, and Costa Rica has a bill pending that would tax the foreign passive income of residents. Each section notes the condition that applies. Information in this article is current as of October 2026.

US citizens and green card holders are taxed by the US on worldwide income wherever they live, so none of the exemptions below removes a US filing obligation. The Foreign Earned Income Exclusion covers foreign earned income such as wages, salaries, and professional fees. It does not cover passive income such as dividends, interest, and capital gains. The Foreign Tax Credit reduces US tax only where foreign tax is actually paid. Confirm the current-year exclusion limit on irs.gov. (Source: IRS, Foreign earned income exclusion)

A Note for Digital Nomads: Most countries still tax income from remote work, even if the client or employer is foreign

Of the 31 countries on this list, only the UAE, Bahrain, Kuwait, the Bahamas, Cayman Islands, Turks and Caicos, and Monaco truly do not tax remote work for a foreign client or employer that is not located in the country. In many of the other situations, if you perform remote work in that country, it will be taxed.

To make the point that digital nomads and foreign remote workers need to consider carefully where and how they work, here are the verdicts from the Big Four financial firms on how remote work, or work as a digital nomad, is taxed in some popular destinations.

Thailand: PwC says services performed in Thailand are taxable whether paid inside or outside, with no concession for foreigners or short-term visitors.
Malaysia: PwC and KPMG say employment exercised in Malaysia is taxed wherever it is paid. PwC also gives non-residents a flat 30%.
Philippines: KPMG says pay for services performed in the Philippines is Philippine-source regardless of payer or payment location.
Belize: Section 5(3) of the Income Tax Act treats work performed in Belize as Belize income even when paid elsewhere.
Nicaragua: the tax authority (DGI) treats income from services in Nicaraguan territory as Nicaraguan-source even when received abroad.
Guatemala: PwC says compensation for services performed in Guatemala is taxed.
Malta, Ireland, UK: the guide says employment exercised there is taxable. The UK and Ireland notes concern residents, though, so the non-resident position needs checking.

Latin American Territorial Tax Havens

Latin America offers some of the most straightforward foreign income exemptions on the planet. These jurisdictions built their tax codes to attract retirees, remote workers, and offshore professionals, with explicit carve-outs that protect income earned beyond their borders. Some go further and extend favorable treatment to certain passive income categories, while others draw hard lines around investment gains and dividends.

1. Panama

Panama operates one of the cleanest territorial tax systems in the Western Hemisphere, and the Panama tax office has refined it over decades to attract foreign residents who earn from global sources but want to live in Panama.

Zero tax on foreign-sourced active income. If you consult for a UK company, trade stocks through a US brokerage, or run a Shopify store from a Panamanian apartment, the income never appears on a Panamanian tax return as long as the economic activity happens outside Panama. Panama’s tax law does not care about your citizenship or where the client is located. It cares about where the work occurred and where the income originated.

Panama’s tax system rests on a single principle: only income derived from Panamanian sources or Panamanian economic activity gets taxed. Foreign-sourced salary, business income, royalties, and professional fees remain untouched. The country does not operate on a remittance basis, so transferring foreign income into a Panamanian bank account does not trigger tax liability. This makes Panama one of the few jurisdictions where you can live full-time, bank locally, and still keep your foreign income stream completely outside the tax net. If you do earn income in Panama from Panamanian sources, resident tax rates are 0% up to $11,000, 15% from $11,000 to $50,000, and 25% above $50,000.

Passive income taxes in Panama:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed if the underlying assets are held and traded outside Panama
Foreign rental income: Not taxed
Foreign pension and retirement income: Not taxed

Active income taxes in Panama:

Employment income from work done abroad: Not taxed. Panama taxes only income from activities undertaken in Panamanian territory, so salary for work performed outside Panama stays off the Panamanian return.
Freelance or self-employment income from foreign clients: Not taxed when the work is performed outside Panama for a client outside Panama.
Foreign business profits: Not taxed when the operations or services are performed outside Panama. From fiscal year 2027, Law 526 taxes foreign-source passive income of qualifying entities at 15% when they cannot show economic substance (real activity in the country where it books its income, not just a registered address and a mailbox), so check any company structure.
Work you do while physically in Panama: Taxed as Panamanian-source income at the resident rates above (0% to $11,000, 15% to $50,000, 25% above).
A nuance on “digital nomad income” on remote work performed while in Panama for companies or clients outside of Panama: There is a “statutory nuance,” and while the tax exemption on foreign-sourced earnings is widely accepted as an application of Panama’s territorial tax code, Decree 198 itself does not contain an explicit individual tax-exemption clause written into the decree text covering remote work performed in Panama. If you will be a remote worker or digital nomad earning income while living in Panama, consult a Panamanian tax advisor about your specific case, asking if you will or will not be liable for taxes.

The cleanest exemption structure applies when your brokerage account, fund manager, and trading activity all sit outside Panama. If you hold Panamanian real estate or Panamanian securities, those generate locally-sourced income and fall under domestic tax rules.

Visa & Residency Options in Panama

Panama’s Friendly Nations residence is open to nationals of the countries on the government’s friendly list. The applicant first receives a two-year provisional permit and can then convert to permanent residence. The qualifying routes are a registered property worth at least US$200,000, a US$200,000 bank fixed deposit held free of liens for three years, or a work-based route supported by an employer (Servicio Nacional de Migración). To add dependents, the applicant must show income of at least B/.1,000 a month plus B/.100 per dependent. The list of eligible countries was amended in August 2026 (Gaceta Oficial Digital No. 30601-B), so confirm that your nationality is on it before you apply.

Panama Tax residency test: A person is treated as resident when physically in Panama and earning income there for more than 183 days during the year (Source: PwC).

US tax treaty: None. Panama does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

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2. Costa Rica

Costa Rica runs a strict territorial tax system that exempts foreign income entirely, but the residency pathways feel very different from Panama.

All foreign-sourced income is exempt. Whether you are pulling a salary from a US employer, earning affiliate commissions, collecting dividends from a European brokerage, or receiving pension payments, Costa Rica does not tax it. The only income that lands on a Costa Rican tax return is income generated from Costa Rican sources, which typically means employment with a Costa Rican company, business operations conducted within Costa Rica, or rental income from Costa Rican real estate.

Update (October 2026): On 22 September 2026, the Costa Rican Executive filed Bill 25.796, which would extend taxation to foreign-source passive income (capital income, real estate income, and capital gains on assets held abroad) of resident individuals and companies. The bill has not been passed and is not law. If it passes, the passive income lines below will change. Separately, Law 10.381 (2023) already taxes foreign passive income received by entities in multinational groups that lack adequate economic substance in Costa Rica.

Passive income taxes in Costa Rica:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed
Foreign pensions: Not taxed
Foreign rental income: Not taxed

Active income taxes in Costa Rica:

Employment income from work done abroad: Not taxed. Income earned abroad while a tax resident in Costa Rica is not taxable if it is not from Costa Rican sources (PwC).
Freelance or self-employment income from foreign clients: Not taxed when the activity is carried out outside Costa Rica, because only income generated within Costa Rican territory is taxed.
Foreign business profits: Not taxed under the territorial principle. Law 10.381 (2023) is the exception for foreign passive income received by multinational group entities that lack economic substance.
Work you do while physically in Costa Rica as a remote worker or digital nomad: Taxed. Salary for services performed while in Costa Rica, even for foreign clients or employers, is taxed at graduated rates up to 25% (a 15% withholding applies to non-domiciled individuals), and business profit can reach a 30% maximum ordinary rate.

Visa & Residency Options in Costa Rica

Costa Rica grants residence to investors, rentistas (people with a fixed income from abroad), and pensionados (pensioners) under Law 9996. The law lowered the minimum investment for investor residence from US$200,000 to US$150,000, which can go into real estate, registrable assets, shares, securities, or productive projects (Instituto Costarricense de Turismo). The conditions for each category are set in Executive Decree 43926-MGP-H-TUR, published in La Gaceta on 23 February 2023 (EY). Residents can apply for naturalization after seven years of official residence, or five years for Central American, Ibero-American, and Spanish-by-birth applicants (Tribunal Supremo de Elecciones).

Costa Rica Tax residency test: You are a tax resident of Costa Rica if you spend more than 183 days in Costa Rica in the same fiscal year, continuously or not. Short absences still count toward the total unless you prove tax residence elsewhere with a residency certificate from that country’s tax authority. Spouses are assessed separately because joint filing is not allowed (PwC).

US tax treaty: None. Costa Rica does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates, and you may be subject to double taxation. US citizens should rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

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3. Paraguay

Paraguay offers one of the lowest-cost, least-bureaucratic residency programs in Latin America, combined with a territorial tax system that leaves foreign income completely alone.

Only Paraguayan-source income gets taxed. If you earn from consulting, remote work, investments, royalties, or business operations performed outside Paraguay, the income stays off your Paraguayan tax return. However, remote work that is performed while in Paraguay is taxable, even if the client or employer is abroad. One exception: services performed abroad are treated as Paraguayan-source income when they are provided to Paraguayan IRE or IRP taxpayers, so consulting for a Paraguayan client is taxable. The local tax system is designed to fund government operations from domestic economic activity, not from global income tracking.

Paraguay applies a progressive personal income tax (IRP) to locally-sourced income. Personal services income is taxed at 8% up to PYG 50 million, 9% up to PYG 150 million, and 10% above that, and capital income and gains are taxed at 8%. These are among the lowest rates in South America. Most foreign residents never trigger this tax because they do not engage in Paraguayan employment or business operations. If you have no Paraguayan-source income, you typically do not file.

Passive income taxes in Paraguay:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed
Foreign rental income: Not taxed
Foreign pensions: Not taxed

Active income taxes in Paraguay:

Employment income from work done abroad: Not taxed, because only Paraguayan-source income is taxed.
Freelance or self-employment income from foreign clients: Not taxed when the client is outside Paraguay. Services performed abroad are taxed as Paraguayan-source income when the payer (client or employer) is a Paraguayan IRE or IRP taxpayer.
Foreign business profits: Not taxed when the business operates outside Paraguay.
Work you do while physically in Paraguay as a remote worker or digital nomad: Taxed as income from activities carried out in Paraguay. Personal services income is taxed at 8%, 9%, or 10%, and PwC says taxpayers whose gross personal services income does not exceed PYG 80 million (~$13,800 USD) are not required to pay.

Visa & Residency Options in Paraguay

Paraguay’s residency process is fast and inexpensive. The roughly $5,000 bank deposit route ended when the migration law of October 2022 repealed Law 978. Applicants must now show solvency and an intent to settle in Paraguay, receive a temporary residence permit valid for two years, and can then convert to permanent residency. Investors who put at least US$70,000 into a business and create at least five jobs for Paraguayan workers can obtain an investor certificate (constancia) that supports a permanent residence application. Confirm current requirements with Paraguay’s Dirección Nacional de Migraciones.

Paraguay Tax residency test: You are a tax resident of Paraguay if you spend more than 120 days in a year in Paraguay (Source: PwC).

US tax treaty: None. Paraguay does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

For more details on Paraguay as a long-term destination, read our Complete Guide to Moving to Paraguay.

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4. Nicaragua

Nicaragua runs a territorial tax system that taxes only income sourced from inside Nicaragua and exempts all foreign-sourced income. It pairs that with one of the cheapest costs of living in Central America, with life in Managua costing less than $1,500 a month in 2024.

Foreign income is fully exempt. Salary, business income, capital gains, dividends, interest, rental income, and pensions earned outside Nicaragua are not subject to Nicaraguan income tax. Only income generated from Nicaraguan sources, such as local employment or real estate rental income, falls under the domestic tax regime. The Nicaragua General Revenue Directorate (DGI) defines Nicaraguan-sourced income as income from goods, services, assets, and rights inside Nicaraguan territory, even when it is received abroad, and its own guidance treats income earned abroad with no Nicaraguan economic link as extraterritorial and outside the tax.

Passive income taxes in Nicaragua:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed
Foreign pensions: Not taxed
Foreign rental income: Not taxed

Active income taxes in Nicaragua:

Employment income from work done abroad: Not taxed. Nicaragua taxes income originating in Nicaragua, and the DGI treats income earned abroad with no Nicaraguan economic link as extraterritorial.
Freelance or self-employment income from foreign clients: Not taxed when the services are performed outside Nicaragua and have no Nicaraguan economic link.
Foreign business profits: Not taxed when the business and its assets are outside Nicaragua.
Work you do while physically in Nicaragua: Taxed. The DGI treats income from services in Nicaraguan territory as Nicaraguan-source even when it is received abroad. Resident rates run from 0% up to NIO 100,000 to 30% above NIO 500,000.

Visa & Residency Options in Nicaragua

Nicaragua offers a Pensionado residency visa for retirees with at least $600 per month in pension income and a Rentista option for individuals with $750 per month in passive income. Both programs provide a path to permanent residency and eventual citizenship eligibility. The country also grants generous tax incentives to retirees, including exemptions on the import of household goods and vehicles.

Nicaragua Tax residency test: You are a tax resident if you stay in Nicaragua more than 180 days in a calendar year, continuously or not, or if your main economic interests are in Nicaragua. You can dispute the DGI’s economic-interest test (and try to avoid tax residency) with a certificate of residence or tax domicile from another country’s tax authority, but not where Nicaragua treats that country as a tax haven (Source: PwC).

US tax treaty: None. Nicaragua does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

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5. Guatemala

Guatemala applies a territorial tax system, taxing only income sourced in Guatemala, that exempts foreign-source income across all categories, and the residency process is very accessible.

Foreign income stays outside the tax base. Whether you are earning consulting fees, investment returns, royalties, or pension distributions from abroad, Guatemala does not tax it, as long as the work is performed outside of Guatemala. The tax system only reaches income derived from Guatemalan economic activity, which means local employment, Guatemalan real estate income, or business operations conducted within the country.

Guatemala does not operate a remittance-based system, so transferring foreign income into a Guatemalan bank account does not create tax liability. This makes it one of the cleanest territorial systems in Central America from a cash flow perspective.

Passive income taxes in Guatemala:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed
Foreign pensions: Not taxed
Foreign rental income: Not taxed

Active income taxes in Guatemala:

Employment income from work done abroad: Not taxed. Guatemalan tax base is territorial.
Freelance or self-employment income from foreign clients: Not taxed when the work is performed outside Guatemala.
Foreign business profits: Not taxed when the business is run outside Guatemala.
Work you do while physically in Guatemala: Taxed. Guatemala taxes compensation for services performed in the country at 5% up to GTQ 300,000 and 7% above it.

Visa & Residency Options in Guatemala

Guatemala offers a Pensionado visa that requires proof of $1,000 per month in pension or Social Security income. The Rentista permanent residence requires proof of at least US$1,250 in monthly income, plus US$300 for each dependent, and proof of continued income every five years. Both programs lead to permanent residency, and citizenship becomes available after five years of legal residence.

Guatemala Tax residency test: A foreign individual is resident when present in Guatemala for more than 183 days in a calendar year, or when their fixed place of business is in Guatemala, unless they show a tax certificate from another country.

US tax treaty: None. Guatemala does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

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6. Belize

Belize taxes income that is sourced in Belize and does not apply to income earned or sourced outside the country.

Only Belize-source income is taxed. The Income and Business Tax Act charges income tax “accruing in or derived from Belize, whether received in Belize or not.” Income from work done outside Belize, investments held outside Belize, and businesses run outside Belize do not accrue in or derive from Belize. Pay for work performed in Belize counts as Belize income even when someone pays you elsewhere, so a remote worker who works from Belize pays tax on that work.

A person is treated as a Belize resident after more than 182 days in Belize in a basis year, or when domiciled in Belize.

Passive income taxes in Belize:

Foreign dividends: Not taxed when the income arises outside Belize
Foreign interest: Not taxed when the income arises outside Belize
Foreign rental income: Not taxed when the property is outside Belize

Active income taxes in Belize:

Employment income from work done abroad: Not taxed. The Act taxes income “accruing in or derived from Belize”, and pay for work done outside Belize does not.
Freelance or self-employment income from foreign clients: Not taxed when the work is performed outside Belize.
Foreign business profits: Not taxed when the business is run outside Belize.
Work you do while physically in Belize: Taxed. Pay for work performed in Belize counts as Belize income even when someone pays you elsewhere (Section 5(3)).

Visa & Residency Options in Belize

Belize grants permanent residence after one year of continuous residence, with no absence of more than 14 consecutive days, and citizenship after five years as a permanent resident (Organization of American States). Retirees can use the Qualified Retired Persons program. Applicants must be 45 or older, receive at least US$2,000 a month from a pension, annuity, or other income from outside Belize, and stay at least 30 consecutive days a year in Belize. Income from outside Belize is exempt from tax under the program, and the card renews for BZD 50 a year (Belize Tourism Board). The program document reviewed is the 2017 version, so confirm current terms with the Belize Tourism Board.

Tax residency test: You are a tax resident if you spend more than 182 days in aggregate in Belize in the basis year, or if you are domiciled in Belize (Income and Business Tax Act, as summarized by the OECD).

US tax treaty: None. Belize does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

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7. El Salvador

El Salvador taxes income from Salvadoran sources and, since March 2024, excludes foreign-source income in its tax law.

Foreign income is excluded by statute. A reform that took effect on 22 March 2024 excludes from taxable income values received from abroad, including dividends, capital gains and interest from foreign securities and financial instruments. EY reports that it applies to taxpayers domiciled in El Salvador and to those who are not.

Resident individuals pay income tax only on Salvadoran-source income. A person is resident after 200 days in the country in a year. Salvadoran-source income is taxed at progressive rates from 0% to 30%, and work you perform inside El Salvador is Salvadoran-source income.

Passive income taxes in El Salvador:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed

Active income taxes in El Salvador:

Employment income from work done abroad: Not taxed. Resident individuals pay income tax only on Salvadoran-source income.
Freelance or self-employment income from foreign clients: Not taxed when the work is performed outside El Salvador. Work you perform inside El Salvador stays Salvadoran-source income.
Foreign business profits: Not taxed. A reform effective 22 March 2024 excludes values received from abroad (EY).
Work you do while physically in El Salvador: Taxed at progressive rates from 0% to 30% (Deloitte).

Visa & Residency Options in El Salvador**

Tax residency test: You are a tax resident if you reside in El Salvador more than 200 consecutive days in a calendar year, or if El Salvador is your main source of income (PwC).

US tax treaty: None. El Salvador does not appear in the IRS table of US income tax treaties. Without a treaty, there are no treaty tie-breaker rules or reduced withholding rates. US citizens rely on the Foreign Earned Income Exclusion (earned income only) and the Foreign Tax Credit (useful only where foreign tax is paid).

For more on El Salvador as a long-term destination, read our full Guide to Moving to El Salvador.

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European Territorial and Remittance-Based Tax Systems

Europe offers fewer pure territorial tax systems than Latin America, but several countries have carved out remittance-based or partial foreign income exemptions designed to attract high-net-worth individuals, retirees, and investors. These programs tend to come with higher costs, stricter compliance requirements, and more robust enforcement, but they also sit inside the EU or offer visa-free Schengen access.

9. Malta: Remittance-Based Taxation for Foreign Residents

Malta allows non-domiciled residents to use a remittance basis of taxation, meaning foreign income is only taxed if remitted to Malta.

Keep it offshore, keep it untaxed. If you earn consulting fees, investment returns, or business income abroad and never bring the funds into Malta, you pay zero Maltese tax on that income. Income remitted to Malta is taxable, but capital remitted is not. Remittances for ordinary living expenses are presumed to be income unless you prove otherwise, so document the source of the funds. This creates a two-tier financial structure where you keep foreign earnings in offshore accounts and only bring in what you need for living expenses.

Malta also offers special tax programs for high net worth individuals, including the Global Residence Programme for third-country nationals who hold a qualifying property in Malta, and the Highly Qualified Persons Rules for senior staff of licensed companies. Non-domiciled residents also face a minimum tax of €5,000 a year, including Maltese tax withheld at source. It does not apply if foreign income is under €35,000 (combined for couples), and beneficiaries of certain special schemes are exempt from it.

Passive income taxes in Malta:

Foreign dividends: Not taxed unless remitted to Malta
Foreign interest: Not taxed unless remitted
Foreign capital gains: Not taxed in Malta, whether or not the proceeds are remitted, if the assets are located outside Malta
Foreign pensions: Taxed only on amounts remitted, often at reduced rates under special programs
Foreign rental income: Not taxed unless remitted

Active income taxes in Malta:

Employment income from work done abroad: Not taxed unless remitted to Malta. Pay for services rendered outside Malta by persons not domiciled or not ordinarily resident in Malta should not be liable to tax in Malta.
Freelance or self-employment income from foreign clients: Not taxed unless remitted to Malta.
Foreign business profits: Not taxed unless remitted to Malta, on the same general rule.
Work you do while physically in Malta: Taxed, regardless of whether or not the client is foreign. Income from employment arising in Malta is usually fully taxable.

Visa & Residency Options in Malta

Malta is an EU member state with visa-free Schengen access, which makes it a valuable residency base for people who want European mobility. The country also offers citizenship by naturalization after five years of residence, completed via 12 months of continuous residence plus at least four years of residence in the previous six, and at the Minister’s discretion. However, the process of getting citizenship is expensive, and the residency requirement is strict.

Tax residency test: Malta has no single statutory day-count test in the sources reviewed. PwC reports that domicile generally follows where you have your permanent home, and that ordinary residence depends on living in Malta in the ordinary or regular course of your life. The remittance basis applies to people who are resident but not domiciled in Malta. The Malta Tax and Customs Administration has also been reported as applying a day-count benchmark that is not publicly available. Confirm with the MTCA guidelines and a local Maltese tax professional before crafting a tax strategy for Malta.

US tax treaty: Yes. IRS: Malta tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

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10. Ireland (Remittance Basis for Non-Domiciled Residents)

Ireland allows non-domiciled tax residents to use the remittance basis, shielding foreign income from Irish tax as long as it stays offshore. However, note that this requires having a tax domicile elsewhere first.

Foreign income is only taxed when brought into Ireland. If you are a tax resident but not domiciled in Ireland (domicile is a separate legal concept tied to long-term intent and family origin), you can elect remittance basis treatment. Under this system, your worldwide income is not automatically taxed. Only income and gains remitted to Ireland face Irish income tax, which ranges from 20% to 40% depending on the amount. Foreign employment income for duties performed in Ireland is taxed when earned, so a remote worker who lives and works in Ireland is taxed and gets no remittance benefit. Irish citizens cannot use the remittance basis for foreign income.

This makes Ireland attractive for high earners who can afford to keep most of their wealth offshore and only bring in what they need for living expenses. The remittance basis is commonly used by executives on short-to-medium-term assignments in Ireland and by high-net-worth individuals who maintain significant offshore assets.

Passive income taxes in Ireland:

Foreign dividends: Not taxed unless remitted
Foreign interest: Not taxed unless remitted
Foreign capital gains: Not taxed unless remitted
Foreign rental income: Not taxed unless remitted
Foreign pensions: Typically taxed on an arising basis, though certain treaty exemptions apply

Active income taxes in Ireland:

Employment income from work done abroad: Not taxed unless remitted to Ireland, for a resident non-domiciled individual. Employee PRSI of 4% applies to all employment income whether or not it is remitted (KPMG).
Freelance or self-employment income from foreign clients: Taxed only when remitted to Ireland if the trade or profession is carried out abroad.
Foreign business profits: Taxed only when remitted to Ireland, on the same condition.
Work you do while physically in Ireland: Taxed when earned, whether or not remitted. KPMG states that income from employment duties exercised in Ireland is taxable, so a remote worker who lives and works in Ireland gets no remittance benefit.

Revenue describes domicile as a much more permanent concept than residence: everyone has a domicile of origin at birth and keeps it unless they clearly show an intention to take on a new one. Most expats moving to Ireland remain non-domiciled unless they actively acquire Irish domicile of choice by demonstrating permanent intent to stay.

Ireland does not charge an annual remittance basis charge. The €200,000 figure is the Domicile Levy, which is paid by Irish-domiciled individuals who meet Revenue’s income, property and Irish-tax thresholds.

Visa & Residency Options in Ireland

Ireland offers a path to citizenship after five years of residence, and Irish citizenship provides full EU mobility.

Tax residency test: You are an Irish tax resident if you are present in Ireland for 183 days or more in a tax year, or for 280 days or more across the current and previous tax years combined, with at least 30 days in each year. Domicile, which decides whether the remittance basis applies, is a separate test and refers to your permanent home (Source: PwC).

US tax treaty: Yes. IRS: Ireland tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

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11. United Kingdom: Previously on Remittance Basis, Abolished 6 April 2025 for the Foreign Income Gains regime

The UK abolished the remittance basis and the non-domicile regime on 6 April 2025. A residence-based foreign income and gains (FIG) regime replaced them, and it gives new arrivals four years of tax relief rather than an open-ended remittance election.

New arrivals who were not UK tax resident in any of the previous 10 tax years can claim the 4-year FIG regime. For their first four tax years of residence, they pay no UK tax on foreign income and gains, but they must report the amounts to HMRC (His Majesty’s Revenue and Customs). After those 4 years, they are taxed on worldwide income and gains as they arise.

The annual remittance basis charge applied only up to and including the 2024/25 tax year. From 6 April 2025, the remittance basis no longer exists.

Passive income taxes in the United Kingdom:

Foreign dividends: Not taxed during the first four years of UK residence if the FIG regime is claimed; taxed as it arises afterwards
Foreign interest: Not taxed during the first four years of UK residence if the FIG regime is claimed; taxed as it arises afterwards
Foreign capital gains: Not taxed during the first four years of UK residence if the FIG regime is claimed; taxed as it arises afterwards
Foreign rental income: Not taxed during the first four years of UK residence if the FIG regime is claimed; taxed as it arises afterwards

Active income taxes in the United Kingdom:

Employment income from work done abroad: Not taxed during the first four tax years of UK residence if the FIG regime is claimed, and Overseas Workday Relief covers earnings for duties done outside the UK for the same period. After that, it is taxed as it arises. Earnings from non-UK duties that arose before 6 April 2025 are taxed when remitted.
Freelance or self-employment income from foreign clients: Not taxed during the four-year FIG window when the trade is carried on wholly outside the UK; taxed afterwards. Self-employment income is taxable. A freelancer who does the work in the UK is likely to have UK-source profits. (Source: KPMG)
Foreign business profits: Not taxed during the four-year FIG window when the profits are foreign income; taxed as they arise afterwards.
Work you do while physically in the UK: Taxed from day one. FIG relief covers foreign income, not earnings for duties performed in the UK, and KPMG states that income earned during UK residence is taxed.

Transition rules: foreign income and gains that arose before 6 April 2025 are still taxed when remitted to the UK, and a temporary repatriation facility offers a reduced charge for bringing those funds in. New arrivals can also claim Overseas Workday Relief for their first four tax years, capped at the lesser of £300,000 or 30% of qualifying employment income each year.

Visa & Residency Options in the United Kingdom

British citizenship requires five years of residence, and the naturalization process is strict. The process generally requires 12 months of residence after receiving indefinite leave to remain, and indefinite leave usually follows five years in the UK. The government has proposed doubling the standard qualifying period for settlement to 10 years, with shorter routes for high earners, entrepreneurs and skilled public service workers, and has not yet finalised it. The UK does allow dual citizenship, and a UK passport provides strong global mobility, though it no longer includes automatic EU rights post-Brexit.

Tax residency test: The Statutory Residence Test decides. You are automatically UK resident if you spend 183 or more days in the UK in a tax year, have your only home in the UK for a long continuous period, or work full time in the UK over 365 days, unless you meet an automatic overseas test (for example, fewer than 16 days in the UK in a year in which you were UK resident in one of the three previous years). If neither set applies, the sufficient ties test weighs your family, accommodation, work, 90-day, and country ties against your days in the UK (Sources: GOV.UK; PwC).

US tax treaty: Yes. Likely thanks to the tea party in Boston. IRS: United Kingdom tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

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12. Georgia

Georgia offers one of the most expat-friendly tax systems in Europe, with a territorial tax structure that exempts foreign-source income for most individuals.

Foreign income is not taxed. If you earn consulting fees, business income, investment returns, or royalties from sources outside Georgia, the income is not subject to Georgian tax. Only income derived from Georgian sources (such as employment with a Georgian company or rental income from Georgian real estate) is taxed.

Georgia taxes local-source personal income at a flat 20% rate for most individuals, though self-employed individuals and freelancers can elect to use the small business tax regime, which taxes turnover (not profit) at 1% up to GEL 500,000 of annual turnover, rising to 3% above that.

Passive income taxes in Georgia:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed
Foreign rental income: Not taxed
Foreign pensions: Not taxed

Active income taxes in Georgia:

Employment income from work done abroad: Not taxed. Overseas income of resident individuals, meaning income not from a Georgian source, is exempt from income tax. (Source: KPMG)
Freelance or self-employment income from foreign clients: Not taxed when it is not from a Georgian source. Georgian-source income is taxed at 20%, or at 1% of turnover under the small business regime up to GEL 500,000 (3% above).
Foreign business profits: Not taxed when they are not from a Georgian source, and the micro business status is exempt from income tax (KPMG).
Work you do while physically in Georgia: Taxed. Employment income is taxed at 20% through withholding, and individual entrepreneurs can use the small business regime.

Visa & Residency Options in Georgia

Georgia offers visa-free entry for citizens of over 90 countries for stays of up to one year. Temporary residency is available through various pathways, including employment, business ownership, real estate purchase, and freelance activity. Georgia grants a permanent residence permit after 10 years of living in the country on a temporary permit, and naturalization requires 10 consecutive years of lawful residence, a test in the Georgian language, history, and basic law, and a job, real estate, or business in Georgia, according to the Public Service Development Agency.

Tax residency test: You are a tax resident if you are in Georgia for 183 days or more in any continuous 12-month period. Status is set separately for each tax period, and days counted as resident in the previous period are excluded from the next test (Source: PwC).

US tax treaty: Yes, through the 1973 US-USSR income tax treaty, which the IRS lists as covering Georgia. IRS: Georgia tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents.

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13. Monaco

Monaco levies no personal income tax on residents, though French nationals are subject to French income tax even while living in Monaco due to a bilateral tax treaty.

Non-French residents pay zero income tax. Salary, business income, dividends, interest, capital gains, rental income, and pensions are not taxed for residents who are not French nationals. Monaco funds its budget through VAT, corporate taxes on certain businesses, and real estate transfer taxes. Businesses that carry on industrial or commercial activity are subject to business profit tax if more than 25% of their turnover is generated outside Monaco.

Passive income taxes in Monaco:

Dividends: Zero tax (except for French nationals)
Interest: Zero tax (except for French nationals)
Capital gains: Zero tax (except for French nationals)
Rental income: Zero tax (except for French nationals)
Pensions: Zero tax (except for French nationals)

Active income taxes in Monaco:

Employment income from work done abroad: Not taxed for residents who are not French nationals. French nationals remain taxable in France.
Freelance or self-employment income from foreign clients: Not taxed at the personal level for residents who are not French nationals.
Foreign business profits: The business profit tax applies to industrial or commercial activity if more than 25% of the turnover is generated outside Monaco.
Work you do while physically in Monaco: Not taxed at the personal level for residents who are not French nationals.

Visa & Residency Options in Monaco

Residency in Monaco requires proof of financial self-sufficiency and a clean criminal record. Applicants must demonstrate sufficient funds to support themselves through employment or professional income, savings, or support from a spouse, partner, or close relative. The majority of residents are retirees, investors, or business owners with income generated outside Monaco.

Citizenship is hard to obtain. It comes through Monegasque parentage, through marriage to a Monegasque after 20 years (10 if married before 1 July 2022), or through naturalization, which requires at least ten years of ordinary residence after age 18, is granted at the discretion of the Sovereign Prince, and requires renouncing your previous nationality. Most residents hold residency status indefinitely without any path to citizenship.

Tax residency test: The Monaco government states that Monegasque nationals and residents are not liable for income tax, with French nationals as the exception under the 1963 France and Monaco Convention, and that the exemption applies only to persons genuinely established in Monaco.

US tax treaty: None. Monaco does not appear in the IRS table of US income tax treaties.

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Middle Eastern Tax-Free Jurisdictions

The Middle East offers some of the most straightforward zero-tax environments for foreign residents (with exceptions: Qatar taxes income from Qatari sources, and Oman will tax the worldwide income of high earners from 2028). These jurisdictions fund government operations through oil revenue, VAT, and corporate taxes on specific sectors, creating less pressure to tax citizens or tax residents.

14. United Arab Emirates

The UAE levies zero personal income tax on residents, regardless of income source, and this applies to every emirate, including Dubai and Abu Dhabi.

All income is tax-free. Salary, business profits, consulting fees, investment returns, rental income, royalties, and pensions are not taxed at the individual level. The UAE does not distinguish between local-source and foreign-source income because it does not tax personal income at all. This makes it the cleanest tax environment for high earners, entrepreneurs, and investors who want complete simplicity.

The UAE introduced a federal corporate tax in 2023 at a 9% rate on business profits exceeding AED 375,000 (~$100,000 USD). Freelancers and sole proprietors who run a business in the UAE become subject to the corporate tax once their business turnover exceeds AED 1 million in a calendar year. Wages, personal investment income, and real estate investment income do not count toward that threshold.

Passive income taxes in the United Arab Emirates:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in the United Arab Emirates:

Employment income from work done abroad: Not taxed. There is currently no personal income tax in the UAE (Source: PwC).
Freelance or self-employment income from foreign clients: Not taxed at the personal level, but a natural person who runs a business is subject to 9% corporate tax once annual business turnover exceeds AED 1 million. Wages and personal investment income do not count toward that threshold.
Foreign business profits: Not taxed at the personal level, but the same 9% corporate tax applies above AED 1 million of business turnover.
Work you do while physically in the UAE: Not taxed at the personal level. Salary and wages carry no income tax.

Visa & Residency Options in the United Arab Emirates

The UAE offers multiple residency pathways, including the Golden Visa (10 years for public-investment investors and exceptional talent, and 5 years for real estate investors and entrepreneurs). The UAE government states that Golden Visa holders can stay outside the UAE for more than the usual six months without losing the visa.

Naturalization is only available in rare cases (typically after decades of residence or through marriage to a UAE national). Most expats use the UAE as a tax-efficient base while holding a second passport from another country.

Tax residency test: Under Cabinet Decision No. 85 of 2022 (effective 1 March 2023), you are a UAE tax resident if you meet any one of three tests: your usual or primary residence and your center of financial and personal interests are in the UAE; you are in the UAE 183 days or more in any consecutive 12 months; or you are in the UAE 90 days in any consecutive 12 months and are a UAE national, a valid UAE residence permit holder, or a GCC national who also has a permanent residence in the UAE or works or runs a business there (PwC). The UAE has no personal income tax, so residency matters mainly for treaty claims and tax residency certificates.

US tax treaty: None. The UAE does not appear in the IRS table of US income tax treaties.

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15. Qatar

Qatar operates an income tax system that does not tax employees’ salaries or foreign-source income. Only income from Qatari sources is taxed.

Salaries and wages of employees are not taxed. A self-employed individual may owe income tax on qualifying income from Qatari sources, and the General Tax Authority taxes gross income from Qatari business activities and Qatari property, including capital gains on the disposal of that property. The tax base is limited to income from sources within Qatar, so foreign-source income is outside it.

Qatar’s income tax rate is 10% of taxable income, with a minimum of 35% for petroleum and petrochemical activities. Employees are not taxed on salaries, but self-employed individuals can be taxed on qualifying Qatari-source business income.

Passive income taxes in Qatar:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Not taxed on foreign assets; gains on the disposal of Qatari property are taxable
Rental income: Rental income from Qatari property is taxable; foreign rental income is outside the tax base
Pensions: Zero tax

Active income taxes in Qatar:

Employment income from work done abroad: Not taxed. Income tax is not imposed on employed individuals’ salaries, wages, and allowances. (Source: PwC)
Freelance or self-employment income from foreign clients: Not taxed when the income has no Qatari source. A self-employed individual may be taxed on qualifying income from Qatari sources. (Source: PwC)
Foreign business profits: Not taxed when the income has no Qatari source. Income from Qatari business activity is taxed at 10%.
Work you do while physically in Qatar: Employees’ salaries are not taxed. A self-employed individual who earns qualifying income from Qatari sources can be taxed on it, regardless of tax residence.

Visa & Residency Options in Qatar

Residency in Qatar is typically tied to employment or business ownership. Qatar’s Real Estate Regulatory Authority says a property purchase of at least QAR 730,000 (about US$200,000) gives residency tied to the property, and a purchase of at least QAR 3,650,000 (about US$1 million) gives permanent residency. Residency permits are renewable as long as the sponsoring employment or business remains active.

Tax residency test: Under Tax Law No. 11 of 2022, you are resident if you meet any one of three tests: a permanent home in Qatar, more than 183 days in Qatar in a year (continuous or split), or Qatari nationality (PwC).

US tax treaty: None. Qatar does not appear in the IRS table of US income tax treaties.

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16. Bahrain

Bahrain has no personal income tax on any category of income, making it one of the most tax-efficient jurisdictions in the Gulf.

Zero tax on all personal income. Salary, business income, investment returns, rental income, and pensions are completely exempt from taxation. Bahrain does not distinguish between local and foreign income because it does not tax individuals at all.

Bahrain does not impose corporate income tax on most business activities, though oil and gas companies face a separate tax regime. For individual entrepreneurs and professionals, the tax environment is as clean as it gets.

Passive income taxes in Bahrain:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in Bahrain:

Employment income from work done abroad: Not taxed. Bahrain does not tax individuals.
Freelance or self-employment income from foreign clients: Not taxed. Bahrain does not tax individuals.
Foreign business profits: Not taxed at the individual level. Bahrain does not impose corporate income tax on most business activities.
Work you do while physically in Bahrain: Not taxed. Salary and professional income carry no personal income tax.

Visa & Residency Options in Bahrain

Residency in Bahrain is accessible through employment sponsorship, business ownership, or property investment. Bahrain offers one of the more flexible residency programs in the Gulf, with lower property investment thresholds than the UAE. A property worth at least BHD 50,000 (roughly US$133,000) supports a self-sponsorship residence permit that can be issued or renewed for 2, 5, or 10 years.

Tax residency test: Bahrain has no personal income tax, so residence is not defined for personal income tax purposes.

US tax treaty: None. Bahrain does not appear in the IRS table of US income tax treaties.

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17. Oman

Oman does not currently levy personal income tax, but a 5% personal income tax on net income above OMR 42,000 a year takes effect on 1 January 2028 under Royal Decree 56/2025. Tax residents, meaning anyone in Oman for more than 183 days in a tax year, will be taxed on income earned in Oman and abroad, so the foreign income of high earners becomes taxable from 2028. Non-residents will be taxed only on income earned in Oman. Oman also applies corporate tax to business entities.

Personal income is tax-free until 31 December 2027. Employment income, self-employment income, investment returns, rental income, and pensions are not taxed. Oman funds its budget through oil revenue and VAT, leaving individual income outside the tax system.

Passive income taxes in Oman:

Dividends: Zero tax through 2027
Interest: Zero tax through 2027
Capital gains: Zero tax through 2027
Rental income: Zero tax through 2027
Pensions: Zero tax through 2027

Active income taxes in Oman:

Employment income from work done abroad: Not taxed through 31 December 2027. From 1 January 2028, a tax resident (more than 183 days) pays 5% on net income above OMR 42,000 a year on income earned in Oman and abroad.
Freelance or self-employment income from foreign clients: Not taxed through 2027. From 2028, the same 5% charge applies to a resident’s worldwide income above OMR 42,000.
Foreign business profits: Not taxed at the personal level through 2027, and counted as worldwide income of a resident from 2028 when it is above the threshold.
Work you do while physically in Oman: Not taxed through 2027. From 2028, it is taxed at 5% above OMR 42,000, and non-residents are taxed only on income earned in Oman.

Visa & Residency Options in Oman

Residency in Oman is typically tied to employment or business ownership. Oman offers a long-term investor residency of up to 10 years (category 1, with at least OMR 500,000 in qualifying shares or government bonds, among other routes) or up to 5 years (category 2, with assets of at least OMR 250,000), and property owners can apply for a two-year residence visa. Oman is more restrictive than the UAE in terms of long-term residency options, and most expats hold renewable work permits tied to their employer.

Tax residency test: Tax residents are expats with 183 or more days in Oman. The personal income tax that starts on 1 January 2028 applies to tax residents.

US tax treaty: None. Oman does not appear in the IRS table of US income tax treaties.

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18. Kuwait

Kuwait levies no personal income tax on individuals, making it one of the few Gulf states with a zero-tax structure that extends to all income types.

All personal income is tax-free. Salary, business income, investment income, rental income, and pensions are completely exempt. Kuwait applies corporate tax to foreign companies operating in Kuwait, but Kuwaiti nationals and foreign individuals face zero personal income tax.

Passive income taxes in Kuwait:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in Kuwait:

Employment income from work done abroad: Not taxed. Kuwait levies no personal income tax.
Freelance or self-employment income from foreign clients: Not taxed at the individual level.
Foreign business profits: Not taxed at the individual level, though Kuwait taxes foreign companies that operate in the country.
Work you do while physically in Kuwait: Not taxed. Salary carries no personal income tax.

Visa & Residency Options in Kuwait

Residency in Kuwait is almost exclusively tied to employment sponsorship. A residency law announced in November 2024 allows a ten-year permit for real-estate owners, though the Amiri Diwan summary does not say who qualifies. Foreign residents are typically employees of Kuwaiti companies or government contractors.

Tax residency test: PwC states that Kuwait’s tax law does not define individual tax residence because Kuwait does not levy personal income tax.

US tax treaty: None. Kuwait does not appear in the IRS table of US income tax treaties.

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Asian Territorial And Remittance Systems

Asia offers a mix of territorial tax systems, remittance-based regimes, and special tax incentives designed to attract expats, retirees, and high-net-worth individuals. The tax treaty networks vary widely, which makes the practical experience of each jurisdiction very different despite similar legal frameworks.

19. Hong Kong

Hong Kong operates a pure territorial tax system with no tax on foreign-source income, and it has one of the most efficient, low-rate tax regimes in the world.

Only Hong Kong-source income is taxed. If you earn consulting fees from clients outside Hong Kong, trade stocks through a foreign brokerage, receive dividends from a US company, or collect rental income from overseas property, that income is not subject to Hong Kong tax. The Inland Revenue Department (IRD) applies a sourcing test that looks at where the income-generating activity occurred, not where you are tax resident or where the payer is located.

Hong Kong taxes local-source employment income at progressive rates up to 17%, with a standard rate cap of 15% on the first HK$5 million of net income and 16% on the remainder (from 2024/25). Most expats pay far less due to generous deductions and allowances. The corporate tax rate is 16.5%, but this only applies to profits sourced from Hong Kong business activity.

Passive income taxes in Hong Kong:

Foreign dividends: Not taxed
Foreign interest: Not taxed
Foreign capital gains: Not taxed (Hong Kong has no capital gains tax)
Foreign rental income: Not taxed (Hong Kong rental income is subject to property tax at 15% of net assessable value)
Foreign pensions: Not taxed if the pension fund and activity were offshore

Active income taxes in Hong Kong:

Employment income from work done abroad: Not taxed when all the services are performed outside Hong Kong, whatever the employer’s location (KPMG, IRD). If the employment is Hong Kong-located, all of that income is taxable, even when some services are performed abroad.
Freelance or self-employment income from foreign clients: Not taxed when the profits do not arise in or derive from Hong Kong or activities in Hong Kong.
Foreign business profits: Not taxed when the profits do not arise in or derive from Hong Kong. Profits tax applies to a trade, profession or business at the rates above.
Work you do while physically in Hong Kong: Taxed. Salaries tax applies to income from services rendered in Hong Kong, with an exemption for visits of 60 days or less in a year (Sources: KPMG, IRD).

Hong Kong also does not tax local capital gains, which makes it one of the best jurisdictions in the world for investors and traders. You can actively trade stocks, crypto, or real estate from a Hong Kong base and face zero tax on the gains as long as the activity does not constitute a trade or business (which would reclassify gains as business income).

Since January 1, 2023, Hong Kong’s foreign-sourced income exemption (FSIE) regime treats certain foreign-sourced passive income (interest, dividends, intellectual property income and disposal gains) received in Hong Kong by members of multinational groups as Hong Kong-sourced unless an exception applies. It does not tax individuals directly, but it matters if you hold investments through a company.

Visa & Residency Options in Hong Kong

Residency and right of abode: Hong Kong offers several visa categories, including employment visas, investment visas (the New Capital Investment Entrant Scheme opened on March 1, 2024 and requires a HK$30 million investment), and the Quality Migrant Admission Scheme (QMAS) for highly skilled individuals. Permanent residency is available after seven years of continuous ordinary residence. The Hong Kong SAR passport is limited to permanent residents who hold Chinese nationality, so non-Chinese permanent residents keep their own passport.

Tax residency test: You are generally treated as resident if you ordinarily live in Hong Kong, stay more than 180 days in a year of assessment, or stay more than 300 days across two consecutive years of assessment (Source: PwC).

US tax treaty: None. Hong Kong does not appear in the IRS table of US income tax treaties.

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20. Singapore

Singapore does not tax foreign-sourced income received in Singapore by resident individuals, unless it is received through a partnership in Singapore.

If you earn consulting income from a foreign client and keep the funds in an offshore account, Singapore does not tax it.

Passive income taxes in Singapore:

Foreign dividends: Not taxed for resident individuals, unless received through a partnership in Singapore
Foreign interest: Not taxed for resident individuals, unless received through a partnership in Singapore
Foreign capital gains: Not taxed (Singapore has no capital gains tax)
Foreign rental income: Not taxed for resident individuals, unless received through a partnership in Singapore
Foreign pensions: Not taxed for resident individuals, unless received through a partnership in Singapore

Active income taxes in Singapore:

Employment income from work done abroad: Not taxed when the services are performed entirely outside Singapore, unless the work is an extension of Singapore duties (KPMG). Foreign-sourced income received in Singapore by a resident individual is also exempt.
Freelance or self-employment income from foreign clients: Foreign-sourced income received by a resident individual is not taxed, unless it is received through a partnership in Singapore. Business income is taxable in the hands of the sole proprietor or self-employed person. (Source: PwC)
Foreign business profits: Not taxed for resident individuals when it is foreign-sourced income, unless it is received through a partnership in Singapore.
Work you do while physically in Singapore: Taxed. Employment income for work exercised in Singapore is taxable wherever the employer is, or the pay is made, with a 60-day exemption for short-term visiting employees. (PwC)

Singapore taxes local employment income and business income at progressive rates up to 24%, though effective rates are often lower due to deductions and tax relief schemes. The first SGD 20,000 of income is taxed at 0%, the next SGD 10,000 at 2%, and rates rise in steps to 24% on income above SGD 1 million.

Visa & Residency Options in Singapore

Residency pathways in Singapore include employment passes, entrepreneur passes, and investor schemes. Permanent residency is available by application to the Immigration and Checkpoints Authority, which weighs length of residence among other factors, and a permanent resident can apply for citizenship after at least two years as a PR. Singapore does not allow dual citizenship, so naturalization requires renouncing other passports.

Tax residency test: You are a Singapore tax resident if you are physically present or work in Singapore (other than as a company director) for 183 days or more in the calendar year before the year of assessment. A foreigner who stays or works in Singapore over a period spanning three calendar years is also treated as resident, and a foreigner holding a work pass valid for at least a year is treated as resident, subject to review at tax clearance (Source: PwC).

US tax treaty: None. Singapore does not appear in the IRS table of US income tax treaties.

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21. Malaysia

Malaysia operates a territorial tax system that exempts foreign-source income from taxation. Since January 1, 2022, foreign-sourced income received in Malaysia is taxable in principle, but resident individuals are currently exempt on most of it (see below).

Only Malaysian-source income is taxed. If you earn from consulting, remote work, or business operations conducted outside Malaysia, the income is not subject to Malaysian tax. Foreign dividends, interest, rental income, and capital gains also remain outside the Malaysian tax net as long as they are not received in Malaysia, and resident individuals are currently exempt even when they are received.

Malaysia used to exempt foreign income remitted to Malaysia. From 1 January 2022, foreign-sourced income received in Malaysia became taxable, but the Inland Revenue Board’s guidelines (amended June 2024) exempt all foreign income other than partnership income received by a resident individual from 1 January 2022 to 31 December 2026, provided the income was taxed in its country of origin or falls within the listed cases where the foreign country does not tax it.

Passive income taxes in Malaysia:

Foreign dividends: Not taxed (exempt for resident individuals through 2026 if already taxed abroad or otherwise within the Inland Revenue Board’s exemption conditions)
Foreign interest: Not taxed
Foreign capital gains: Not taxed (Malaysia only taxes real property gains; other capital gains are exempt)
Foreign rental income: Exempt for resident individuals through 2026 under the same conditions when received in Malaysia; not taxed if kept abroad
Foreign pensions: Not taxed

Active income taxes in Malaysia:

Employment income from work done abroad: Not taxed. Salary for work abroad is not taxable unless it relates to duties incidental to a Malaysian employment. Foreign income received in Malaysia by residents is exempt through 2026 under the conditions above.
Freelance or self-employment income from foreign clients: Exempt for resident individuals through 2026 under the conditions above, and not taxed if kept abroad.
Foreign business profits: Exempt through 2026 on the same conditions, except for income received through a partnership business in Malaysia.
Work you do while physically in Malaysia: That income for work performed in Malaysia is taxed whether it is paid in Malaysia or from outside.

Visa & Residency Options in Malaysia

Malaysia’s MM2H (Malaysia My Second Home) programme offers a renewable long-term residence pass in the Platinum, Gold and Silver categories to applicants aged 25 or older who place a fixed deposit in a licensed Malaysian institution. The program was restructured in 2021 with higher financial requirements, making it less accessible than before. Alternative residency options include employment passes and dependent visas.

Tax residency test: You are a Malaysian tax resident if you spend 182 days or more in Malaysia in a calendar year, and separate stays within the year are added together. Residents pay progressive rates up to 30% (above MYR 2,000,000), and non-residents pay a flat 30% (Source: PwC).

US tax treaty: None. Malaysia does not appear in the IRS table of US income tax treaties.

For more on Malaysia as a long-term destination, read our full Guide to Moving to Malaysia.

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22. Philippines

Under Section 23 of the Tax Code, resident citizens are taxed on worldwide income, while nonresident citizens and all aliens, whether resident or not, are taxed only on income from sources within the Philippines.

Foreign nationals are taxed only on Philippine-source income, whether or not they are residents. If you live in the Philippines but earn all your income from foreign sources (such as investment income) and the work is not physically performed in the Philippines, your foreign income is not subject to Philippine tax. Pay for services performed in the Philippines is Philippine-source income regardless of where the payer is located or where payment is made, so a remote worker who is physically working in the Philippines for a foreign employer can owe Philippine tax.

Passive income taxes in the Philippines:

Foreign dividends: Not taxed if income is not Philippine-sourced
Foreign interest: Not taxed if the income is not Philippine-sourced
Foreign capital gains: Not taxed
Foreign rental income: Not taxed (rental income from Philippine property is taxable)
Foreign pensions: Foreign pensions of aliens are foreign-source income and outside Philippine tax

Active income taxes in the Philippines:

Employment income from work done abroad: Not taxed for an alien, because aliens are taxed only on Philippine-source income (Section 23).
Freelance or self-employment income from foreign clients: Not taxed when the services are performed outside the Philippines. Pay for services performed in the Philippines is Philippine-source income, so a freelancer working from the Philippines can owe tax. The sources reviewed do not address freelance rules for aliens in detail. (Source: KPMG)
Foreign business profits: Not taxed when the business is outside the Philippines and has no Philippine source.
Work you do while physically in the Philippines: Taxed. Pay for services performed in the Philippines is Philippine-source income regardless of where the payer is located or where payment is made (KPMG).

Visa & Residency Options in the Philippines

The Philippines offers the Special Resident Retiree’s Visa (SRRV), which provides long-term residency for retirees aged 35 and older who deposit US$10,000 to US$50,000, depending on the category, age, and pension. The Classic category requires US$50,000 at ages 35 to 49, US$20,000 at 50 and over without a pension, and US$10,000 at 50 and over with a pension of at least US$800 a month (US$1,000 for a couple), and the Smile category requires US$20,000 in a Philippine bank or a qualifying investment.

Tax residency test: PwC describes a resident alien as a foreign national living in the Philippines with no definite intention as to length of stay who is not a mere transient or sojourner. Most expatriates on fixed-term assignments are nonresident aliens. An alien present for more than 180 days in a calendar year is considered to be engaged in business in the Philippines (PwC).

US tax treaty: Yes. IRS: Philippines tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

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23. Thailand: Foreign Income Taxed When Remitted

Thailand taxes residents, meaning anyone present in Thailand for more than 180 days in a calendar year, on Thai-source income and on foreign-source income brought into Thailand. For income earned in tax years starting 1 January 2024 or later, it is taxable if it is remitted in the same year or any later year.

The old strategy of holding foreign income offshore for a year and then remitting it tax-free no longer works for income earned from 1 January 2024. Foreign income earned before 2024 and remitted now is generally not taxed.

Departmental Instruction 161/2566 sets the current rule, and it has applied since 1 January 2024. In June 2025, the Revenue Department proposed exempting foreign income earned from 2024 onward if it is brought into Thailand within two tax years of being earned.

However, the Long Term Visa categories of Wealthy Global Citizen, Wealthy Pensioner, and Work from Thailand Professional allow tax exemption of foreign-earned income, even when remitted to Thailand.

Passive income taxes in Thailand:

Foreign dividends: Taxable if remitted to Thailand, in the same year or a later year, for income earned from 2024; not taxed while kept offshore
Foreign interest: Taxable if remitted to Thailand, in the same year or a later year, for income earned from 2024; not taxed while kept offshore
Foreign capital gains: Generally taxable if remitted on the same terms as other foreign income earned from 2024; not taxed while kept offshore
Foreign rental income: Taxable if remitted to Thailand, in the same year or a later year, for income earned from 2024; not taxed while kept offshore
Foreign pensions: Taxed at progressive rates if remitted, but exemptions apply under some countries’ tax treaties

Active income taxes in Thailand:

Employment income from work done abroad: Taxable if remitted to Thailand, in the same year or a later year, for income earned from 1 January 2024. Not taxed while kept offshore.
Freelance or self-employment income from foreign clients: Taxable if remitted on the same terms for income earned from 2024. Income from a business carried on in Thailand is Thai-source and taxable.
Foreign business profits: Taxable if remitted on the same terms for income earned from 2024, and not taxed while kept offshore.
Work you do while physically in Thailand: Taxed. Income from hire of services performed in Thailand is taxable whether it is paid from sources inside or outside Thailand, with no concessions for foreigners or short-term residents.

Visa & Residency Options in Thailand

Thailand offers multiple long-term visa options, including the Long-Term Resident (LTR) Visa for high earners, retirees, and remote workers. LTR holders in the Wealthy Global Citizen, Wealthy Pensioner, and Work-from-Thailand Professional categories are exempt from personal income tax on foreign-sourced income remitted to Thailand. The 17% flat rate applies only to Highly-Skilled Professionals (LTR-H) on employment income from work for companies in targeted industries.

Tax residency test: You are a tax resident if you are in Thailand for 180 days or more in total in a calendar tax year (PwC).

US tax treaty: Yes. IRS: Thailand tax treaty documents. Under the saving clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

For more details on life in Thailand as a long-term destination, read our Complete Guide to Moving to Thailand.

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24. Macao

Macao taxes income from work done in Macao and does not tax individuals on foreign-source income.

Only income arising in Macao is taxed. Professional Tax applies to employment and professional income from work in Macao, and it treats residents and non-residents alike. Income is Macao-source when it pays for services performed in Macao. For 2026, the rates start at 0% on income up to MOP 144,000 and climb in steps to a maximum of 12% at MOP 424,000 and above.

Macao’s Complementary Tax follows the same territorial logic. PwC reports that foreign-source income is generally outside it, with one exception: Macao tax residents that belong to multinational enterprise groups stay taxable on foreign dividends, interest and gains from disposing of property abroad.

A remote worker who does the work in Macao pays Professional Tax on it, whatever the location of the employer.

Passive income taxes in Macao:

Foreign dividends: Not taxed for individuals; Macao-resident members of multinational groups are the exception
Foreign interest: Not taxed for individuals; Macao-resident members of multinational groups are the exception
Foreign capital gains: Not taxed for individuals; Macao-resident members of multinational groups are the exception

Active income taxes in Macao:

Employment income from work done abroad: Not taxed. Professional Tax applies to income from work done in Macao, and income is Macao-source when it is paid for services performed in Macao.
Freelance or self-employment income from foreign clients: Not taxed when the work is done outside Macao. Professional Tax covers professional income from work done in Macao.
Foreign business profits: Not taxed for individuals. PwC reports that foreign-source income is generally outside Complementary Tax, except for Macao tax residents in multinational groups.
Work you do while physically in Macao: Taxed through Professional Tax, from 0% on income up to MOP 144,000 to 12% at MOP 424,000 and above.

Visa & Residency Options in Macao**

Tax residency test: Residence and domicile are irrelevant for Macao Professional Tax purposes. Residents of treaty partner countries should check the treaty.

US tax treaty: None. Macao does not appear in the IRS table of US income tax treaties.

Sources:

Caribbean Zero-Tax Jurisdictions

Several Caribbean nations offer zero personal income tax combined with residency and citizenship by investment programs. These jurisdictions fund government operations through tourism, financial services licensing, and citizenship fees rather than personal taxation.

25. The Bahamas

The Bahamas levies no personal income tax, capital gains tax, or inheritance tax on residents.

All personal income is tax-free. Salary, business income, dividends, interest, capital gains, rental income, and pensions are not taxed. The Bahamas funds its budget through VAT, import duties, and various business and professional licensing fees.

Passive income taxes in the Bahamas:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in the Bahamas:

Employment income from work done abroad: Not taxed. The Bahamas has no personal income tax.
Freelance or self-employment income from foreign clients: Not taxed. The Bahamas has no personal income tax.
Foreign business profits: Not taxed at the individual level. Businesses pay licensing fees.
Work you do while physically in the Bahamas: Not taxed. Salary carries no income tax.

Visa & Residency Options in the Bahamas

Residency in the Bahamas is available through the Annual Residence Permit, which requires proof of financial self-sufficiency (typically ownership of Bahamian real estate valued at $500,000 or more). Separately, the Economic Permanent Residence program requires an investment of at least BSD 1,000,000 (BSD 750,000 before 1 January 2025), held for 10 years. Permanent residence is available through routes such as the Economic Permanent Residence investment of at least US$1 million, and naturalization requires 10 years of legal permanent resident status.

The Bahamas does not offer citizenship by investment. Citizenship comes only through discretionary naturalization after at least 10 years of legal permanent residence.

Tax residency test: There are no residency or domicile requirements for tax purposes in The Bahamas, which has no personal income tax. (Source: PwC)

US tax treaty: None. The Bahamas does not appear in the IRS table of US income tax treaties.

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26. Cayman Islands

The Cayman Islands impose no personal income tax, capital gains tax, or corporate tax on most businesses.

All personal income is tax-free. Employment income, business profits, investment returns, rental income, and pensions are completely exempt from taxation. The government funds operations through indirect taxes, work permit fees, and financial services licensing.

Passive income taxes in the Cayman Islands:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in the Cayman Islands:

Employment income from work done abroad: Not taxed. There are no income or withholding taxes on individuals in the Cayman Islands. (Source: PwC)
Freelance or self-employment income from foreign clients: Not taxed. No income tax applies to individuals.
Foreign business profits: Not taxed at the individual level.
Work you do while physically in the Cayman Islands: Not taxed. Work permit fees apply instead.

Visa & Residency Options in the Cayman Islands

Residency in the Cayman Islands is typically tied to employment or business ownership. The Cayman Islands offer a Certificate of Permanent Residence for Persons of Independent Means and a Residency Certificate (Substantial Business Presence) under the Immigration (Transition) Act, but confirm the investment thresholds with the Cayman Islands immigration department before planning on this. Permanent residency is available after eight years of continuous legal and ordinary residence.

Tax residency test: The Cayman Islands has no personal income tax and has no tax residency criteria for individuals. (Source: PwC)

US tax treaty: None. The Cayman Islands does not appear in the IRS table of US income tax treaties.

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27. Turks and Caicos

Turks and Caicos levies no personal income tax, capital gains tax, or inheritance tax.

All personal income is tax-free. Salary, business income, dividends, interest, capital gains, rental income, and pensions are not taxed. The government funds its budget through import duties, tourism taxes, and work permit fees.

Passive income taxes in Turks and Caicos:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in Turks and Caicos:

Employment income from work done abroad: Not taxed. Turks and Caicos has no personal income tax.
Freelance or self-employment income from foreign clients: Not taxed. Turks and Caicos has no personal income tax.
Foreign business profits: Not taxed at the individual level.
Work you do while physically in Turks and Caicos: Not taxed. Work permit fees apply.

Visa & Residency Options in Turks and Caicos

Residency in Turks and Caicos is available through the Permanent Residence Certificate (PRC), which requires an investment, with routes starting at $300,000 for a home on Grand Turk, Salt Cay, South Caicos, Middle Caicos, or North Caicos and $1,000,000 elsewhere, or $750,000 to $1,500,000 for a business investment that meets local employment conditions. The government states that PRC holders may qualify to apply for naturalization 12 months after obtaining the PRC, subject to further criteria.

Tax residency test: Turks and Caicos has no personal income tax, so no income tax residency test applies.

US tax treaty: None. Turks and Caicos does not appear in the IRS table of US income tax treaties.

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28. Bermuda

Bermuda imposes no personal income tax on residents, though it has one of the highest costs of living in the world.

There is no personal income tax, but wages carry payroll tax. Bermuda funds government operations through payroll taxes paid by employers and employees, import duties, and tourism-related fees.

For April 1, 2026 to March 31, 2027, employees pay payroll tax on marginal bands: 0.25% up to $48,000, 7.75% to $96,000, 10.75% to $200,000, 11.5% to $500,000 and 12.5% to $1,000,000, with nothing on remuneration above $1,000,000. Employers pay separate rates that run as high as 9.75%. Dividends, interest, capital gains, rental income and pensions are not subject to income tax. Homeowners and long-term tenants also pay Land Tax twice a year.

Passive income taxes in Bermuda:

Dividends: Zero tax
Interest: Zero tax
Capital gains: Zero tax
Rental income: Zero tax
Pensions: Zero tax

Active income taxes in Bermuda:

Employment income from work done abroad: No income tax applies, and payroll tax is not levied on individuals ordinarily employed outside Bermuda whose Bermuda work does not exceed four consecutive weeks (Source: KPMG).
Freelance or self-employment income from foreign clients: No income tax applies. Payroll tax applies to a self-employed person on the greater of actual or notional remuneration for services rendered wholly or mainly in Bermuda.
Foreign business profits: No income tax or capital gains tax applies to individuals.
Work you do while physically in Bermuda: Taxed through payroll tax on remuneration for work done wholly or mainly in Bermuda, at the rates above.

Visa & Residency Options in Bermuda

Residency in Bermuda is restrictive and typically requires employment sponsorship from a Bermudian company or proof of substantial economic value.

Tax residency test: Bermuda has no personal income tax, and so there is no tax residency test for individuals. (Source: PwC)

US tax treaty: None. Bermuda does not appear in the IRS table of US income tax treaties.

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Africa’s Zero Tax Jurisdictions

29. Seychelles

Seychelles taxes only income sourced in Seychelles.

Seychelles’ taxation approach is territorial by design. The Seychelles Revenue Commission describes a territorial regime in which only income sourced in Seychelles is liable to tax. Income is Seychelles-sourced when it arises from activities conducted, goods situated, or rights used inside the country. Sole traders and partnerships pay Business Tax of 0% on the first SCR 102,666, 15% up to SCR 1 million, and 25% above that.

Companies in multinational groups follow a revised approach from 16 September 2021, including an economic substance test for passive income from non-residents, so check your structure if you hold investments through a company.

Passive income taxes in Seychelles:

Foreign dividends: Not taxed, because only income sourced in Seychelles is liable to tax
Foreign interest: Not taxed, because only income sourced in Seychelles is liable to tax
Foreign capital gains: Not taxed on assets and activities outside Seychelles, under the same source rule
Foreign rental income: Not taxed when the property is outside Seychelles

Active income taxes in Seychelles:

Employment income from work done abroad: Not taxed. Only income sourced in Seychelles is liable to tax.
Freelance or self-employment income from foreign clients: Not taxed when the work is done outside Seychelles.
Foreign business profits: Not taxed when the activities are conducted outside Seychelles. Sole traders and partnerships pay Business Tax of 0%, 15% or 25% on Seychelles-sourced income.
Work you do while physically in Seychelles: Taxed. Income is Seychelles-sourced when it arises from activities conducted inside the country.

Visa & Residency Options in Seychelles**

Tax residency test: You are resident if you normally reside in Seychelles, have spent 183 days or more there in a tax year, or are domiciled there, unless you keep a permanent place of abode outside Seychelles. (Source: OECD)

US tax treaty: None. Seychelles does not appear in the IRS table of US income tax treaties.

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30. Mauritius: Remittance-Based Taxation for Residents

Mauritius taxes residents on foreign income only when they bring it into the country.

Foreign income is taxed only when remitted. The Mauritius Revenue Authority says a resident individual pays income tax on income derived in Mauritius or remitted to Mauritius. PwC puts it the same way: income derived from outside Mauritius is taxable only to the extent that it is received in Mauritius. The Supreme Court held on 8 May 2024 that the remittance basis applies only to individuals who are tax residents of Mauritius, and remitted foreign employment income keeps its character as income. (Sources: Mauritius Supreme Court, PwC)

From July 1, 2025, resident individuals pay 0% on the first MUR 500,000 of chargeable income, 10% on the next MUR 500,000 and 20% on the rest. A Fair Share Contribution of 15% applies to net income above MUR 12 million for three income years, and PwC does not say whether foreign income counts toward that threshold.

Passive income taxes in Mauritius:

Foreign dividends: Not taxed unless remitted to Mauritius
Foreign interest: Not taxed unless remitted to Mauritius
Foreign rental income: Not taxed unless remitted to Mauritius
Foreign pensions: Not taxed unless remitted to Mauritius

Active income taxes in Mauritius:

Employment income from work done abroad: Taxed only when remitted to Mauritius, for a tax resident. Remitted foreign employment income keeps its character as income. (Source: PwC)
Freelance or self-employment income from foreign clients: Taxed only when remitted to Mauritius, for a tax resident.
Foreign business profits: Taxed only when remitted to Mauritius, for a tax resident.
Work you do while physically in Mauritius: Taxed at 0% on the first MUR 500,000 of chargeable income, 10% on the next MUR 500,000 and 20% above that.

Visa & Residency Options in Mauritius

Mauritius offers a Premium Visa for remote workers, retirees and investors from eligible countries. It is valid for one year and renewable, requires evidence of long-stay plans and adequate travel and health insurance, requires your main place of business and source of income to be outside Mauritius, and does not allow you to enter the local labour market (Mauritius Tourism Promotion Authority).

Tax residency test: You are a tax resident of Mauritius if you are domiciled in Mauritius (unless your permanent place of abode is outside the country), or present for 183 days or more in the income year, or present for 270 days or more across that year and the two preceding income years (Sources: Mauritius Revenue Authority; PwC).

US tax treaty: None. Mauritius does not appear in the IRS table of US income tax treaties.

Sources:

31. Malawi

Malawi taxes individuals only on Malawi-source income.

Only Malawi-source income is taxed. Regardless of residence, an individual is taxed only on Malawi-source income and not on passive foreign income. An employee is resident after 183 days in Malawi in a year, or on obtaining a business residence permit, an employment permit, or a temporary residence permit. (Source: PwC)

Passive income taxes in Malawi:

Foreign dividends: Not taxed
Foreign interest: Not taxed

Active income taxes in Malawi:

Work you do while physically in Malawi: Taxed as Malawi-source income.

Visa & Residency Options in Malawi

Malawi’s Business Residence Permit lets a person live in Malawi while running a business or practising a profession for gain as a self-employed person, partner or proprietor. It requires investment funds from a legal source outside Malawi of at least US$50,000, is valid for five years, and renews for successive five-year periods (Department of Immigration). Short-term consultants and visitors who need to stay beyond the 90-day maximum can apply for a Temporary Residence Permit (Temporary Residence Permit). A Permanent Residence Permit also exists.

Tax residency test: An employee is resident if they are, or intend to be, in Malawi for an aggregate of not less than 183 days in a year, and also on obtaining a business, employment, or temporary residence permit. (Source: PwC)

US tax treaty: None. Malawi does not appear in the IRS table of US income tax treaties.

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Countries commonly mentioned that don’t make the cut

Competing lists include countries that tax residents on some foreign income. Each of the eight below appears on at least one of them, and each fails the test for the reason shown in bold. Each entry also states which type of foreign income stays untaxed, passive or active. The Philippines, Malaysia, and Thailand also draw this mistake, and they already appear in the main list with their conditions.

Portugal: The Non-Habitual Residency has closed to New Applicants, and the IFICI Replaces It with taxes on most income

Portugal’s Non-Habitual Resident (NHR) program previously offered a 10-year tax exemption on most foreign-source income for qualifying foreign tax residents, and was a highlight of moving to Portugal, from a tax standpoint. However, NHR was revoked as of January 1, 2024 (Autoridade Tributária, Non-habitual residents: registration for tax purposes (regime repealed as of 1 January 2024, Law 82/2023)), and it survives only for people already registered or covered by the transitional rules, who keep it for their 10-year term. New arrivals are taxed on worldwide income at progressive rates of 12.5% to 48%, plus a solidarity surcharge of 2.5% to 5% on income above €80,000 and €250,000, unless they qualify for the narrower IFICI regime.

IFICI (Incentivo Fiscal à Investigação Científica e Inovação), sometimes called NHR 2.0, replaced it and is much narrower. It applies to people who were not Portuguese tax residents in the previous five years and who carry out eligible activities listed in Article 58-A of the Tax Benefits Statute. Net employment and self-employment income from those activities is taxed at a special 20% rate for 10 consecutive years. It does not exempt foreign-source income across the board.

Foreign pensions no longer qualify for the 10% flat rate that applied under the old NHR rules and are taxed at progressive rates under the revised rules. People already inside the NHR regime keep their existing treatment for their 10-year term.

Passive income taxes in Portugal:

Foreign dividends, interest, rental income and capital gains: Residents are taxed on worldwide income at the rates in Portuguese law unless a treaty or IFICI applies. IFICI covers only employment and self-employment income. Treaty relief and the foreign tax credit can reduce double taxation.

Active income taxes in Portugal:

Employment income from work done abroad: Taxed. Residents are taxed on worldwide income, and that income from a foreign employer is subject to tax, with a foreign tax credit that cannot exceed the Portuguese tax on that income. IFICI taxes qualifying employment income at 20% for 10 years.
Freelance or self-employment income from foreign clients: Taxed as self-employment (Category B) income of a resident. That income can be taxed under a simplified regime for taxpayers below EUR 200,000 of turnover or on the basis of accounts.
Foreign business profits: Taxed on a worldwide basis. A treaty or the foreign tax credit can reduce double taxation.
Work you do while physically in Portugal: Taxed at progressive rates, or at the 20% IFICI rate for qualifying activities.

What shifted in 2024: Portugal closed NHR to new entrants as of January 1, 2024. New arrivals now face worldwide taxation at progressive rates, with the narrower IFICI regime available only to people in qualifying activities.

Visa & Residency Options in Portugal

Portugal offers a path to permanent residency through its Golden Visa (though real estate purchase options have been removed in favor of fund investments), and citizenship becomes available after 7 years of legal residence for EU and Portuguese-speaking-country (CPLP) nationals and 10 years for everyone else, with a test of Portuguese language and culture. Changes to the nationality law apply to applications submitted from 19 May 2026 (Source: EY).

Portugal Tax residency test: You are a tax resident in Portugal if you spend more than 183 days, consecutive or not, in any 12 months that starts or ends in the tax year, or if on any day of that period you hold a home in Portugal that you intend to keep as your habitual residence (Source: Article 16 of the personal income tax code).

US tax treaty: Yes. IRS: Portugal tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

Sources:

Uruguay

Why Uruguay doesn’t qualify as tax friendly:

Uruguay taxes residents on foreign passive income. Interest, rents, royalties, and capital gains from investments abroad fall under a flat 12% personal income tax.

The 2025 to 2029 Budget Law also widens the source rule from 1 January 2026 to cover foreign capital gains and foreign rental income of residents, but Forvis Mazars describes the change as a proposal, so confirm the enacted text.

Taxed and not taxed: Passive foreign income is taxed. Pay for services performed abroad is taxed at progressive rates up to 36% when a Uruguayan taxpayer is the payer. Active income paid by foreign clients or employers is not taxed, but if the work is performed while in Uruguay, the income is taxed.

Why people mistake Uruguay’s tax situation: New tax residents from 1 January 2026 can elect to pay nothing on foreign capital income for the election year plus ten years, but only if they buy real estate above about US$2 million or put about US$100,000 a year into an approved fund. Headlines drop the conditions and overlook the tax that follows.

US tax treaty: None. Uruguay does not appear in the IRS table of US income tax treaties.

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Sources:

Dominican Republic

Why the Dominican Republic does not qualify as tax friendly:

The Dominican Republic follows a territorial concept, yet residents pay tax on foreign investments and financial gains.

What is taxed and not taxed: Passive foreign income is taxed, and a new resident is taxed on it only after the third year. Active foreign-source income is generally not taxed, as the system is territorial and foreign-source income is generally outside the charge, unless the work is performed while in the Dominican Republic. (Source: PwC)

Why people mistake the Dominican Republic for being tax-friendly: The early exemption for new residents reads as a permanent one in most overviews, and the taxes after year three get overlooked.

US tax treaty: None. The Dominican Republic does not appear in the IRS table of US income tax treaties.

Sources:

PwC Worldwide Tax Summaries
Dominican Republic

Gibraltar

Why Gibraltar does not qualify as tax friendly:

Gibraltar taxes income accruing in or derived from Gibraltar, and it also taxes the dividends, pensions, salaries, and financial compensation that an ordinarily resident individual receives from outside Gibraltar. A person is resident after 183 days in a year, or more than 300 days across three consecutive years.

Taxed and not taxed: Foreign dividends, pensions, salaries, and financial compensation are taxed. Other foreign income, active or passive, that was taxed where it arose and is not received in Gibraltar is not taxed.

Why people mistake it: Category 2 status limits tax to the first £118,000 of assessable income, with a minimum tax of £37,000 a year. It requires approved residential accommodation in Gibraltar and a certificate from the Finance Centre Director. The territorial label and the cap hide the foreign income that is taxed.

US tax treaty: None. Gibraltar does not appear in the IRS table of US income tax treaties.

Sources:

Gibraltar Income Tax Office
PwC Worldwide Tax Summaries, Gibraltar

Andorra

Why Andorra does not qualify as tax friendly:

Andorra taxes residents on worldwide income. The personal income tax (IRPF) charges 10% on income of a worldwide character, with a personal minimum of €24,000, and a person who stays more than 183 days in a calendar year is resident.

What is taxed and not taxed: Neither active nor passive income is exempt. Active and passive foreign income are both taxed once income passes the €24,000 personal minimum.

Why people mistake Andorra’s tax situation for friendly: A flat 10% rate and a tax-haven reputation read as an exemption, but the bottom-line numbers aren’t as enticing as the headline sounds.

US tax treaty: None. Andorra does not appear in the IRS table of US income tax treaties.

Sources:
Govern d’Andorra
IRPF guide

Greece

Why Greece does not qualify as tax friendly:

Greece taxes permanent residents on worldwide income at progressive rates from 9% to 44% on salaries, pensions, and business profits.

What is taxed and not taxed: Neither active nor passive income is exempt. Active and passive foreign income are both taxed under the worldwide rule.

Why people mistake Greece for a tax-friendly jurisdiction: Greece promotes a 7% flat tax for foreign pensioners and a €100,000 lump sum for high-net-worth newcomers. Those programs replace or cap the tax rather than exempt foreign income.

US tax treaty: Yes. IRS: Greece tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

Sources:

PwC Worldwide Tax Summaries, Greece

Bulgaria

Why Bulgaria does not qualify as tax friendly:

Bulgaria taxes tax residents on worldwide income at a flat 10%, with some exceptions.

What is taxed and not taxed: Nothing is exempt. Active and passive foreign income are both taxed at the flat rate, subject to the exceptions (Source: PwC).

Why people mistake Bulgaria for tax-friendly: A 10% flat rate looks like a low-tax or no-tax system.

US tax treaty: Yes. IRS: Bulgaria tax treaty documents. Under the savings clause in US treaties, the US can generally still tax its own citizens and residents, so treaty relief matters mainly for non-US persons.

Sources:

PwC Worldwide Tax Summaries, Bulgaria

Botswana

Why Botswana does not qualify as tax friendly:

Botswana taxes a resident citizen on dividends and interest from investments made outside Botswana. PwC says foreign dividends are taxed at a flat 10%.

What is taxed and not taxed: Foreign dividends and interest of resident citizens are taxed. The tax system is territorial, so other foreign-source income, including active income earned abroad, is generally outside the charge. (Source: PwC)

Why people mistake Botswana for tax-friendly: A source-based system reads as a territorial one, and the foreign dividend and interest rule applies to resident citizens, so it is easy to miss.

US tax treaty: None. Botswana does not appear in the IRS table of US income tax treaties.

Sources:

PwC Worldwide Tax Summaries
Botswana: income determination

PwC Worldwide Tax Summaries, Botswana

Common countries for expats and nomads that are less tax-friendly

Tax considerations are rarely the first factor flexpats, nomads, and expats consider when choosing a new home abroad. They prioritize sunshine, quality of life, and comfort, and rightly so. However, if you do plan to go to one of the top destinations for expats, such as Thailand, Bali, Mexico, and so on, go in knowing the taxes you may be exposed to and the criteria that make you a tax resident, so that you can navigate them smartly and intentionally.

Several of the most popular expat destinations are not on this list because they tax residents on worldwide income or tax foreign income when it is remitted. Each entry below states only two things: who counts as a tax resident, and how the country taxes active income from clients or employers abroad and passive income sourced abroad, with the headline rates the sources give. Thailand and Malaysia also appear in the main list because they exempt or defer tax on some foreign income. Türkiye’s new regime for first-time residents changes its position, as the entry shows.

Indonesia, including Bali

Tax residency: You are a resident taxpayer if you have a residence in Indonesia, are present in Indonesia more than 183 days in any 12 months, or are present in a tax year and intend to reside there (Article 2 of the Income Tax Law; PwC).
Active income from clients or employers abroad: Residents are taxed on worldwide income, which includes pay from foreign employers and clients, at progressive rates of 5% (to IDR 60 million), 15% (to IDR 250 million), 25% (to IDR 500 million), 30% (to IDR 5 billion) and 35% above that. PwC notes that a foreigner who becomes resident and meets certain skill requirements may be taxed only on Indonesian-source income for the first four years, and that active business income from abroad (other than from a permanent establishment or subsidiary) is not taxable if invested in Indonesia within a set period.
Passive income sourced abroad: Foreign dividends, interest, and capital gains of residents fall under the worldwide rule.

Sources: (Directorate General of Taxes, Income Tax Law No. 36 of 2008; PwC Worldwide Tax Summaries, Indonesia: residence; PwC Worldwide Tax Summaries, Indonesia: taxes on personal income; PwC Worldwide Tax Summaries, Indonesia: income determination)

Morocco

Tax residency: Three tests apply in a fixed order: your permanent home, then your centre of economic interests, then more than 183 days in a rolling 365-day period (Source: PwC).
Active income from clients or employers abroad: Residents are taxed on worldwide income, so pay from foreign employers and clients is included. The annual scale is 0% up to MAD 40,000, then 10% to MAD 60,000, 20% to MAD 80,000, 30% to MAD 100,000, 34% to MAD 180,000, and 37% above (Source: PwC).
Passive income sourced abroad: Taxed as part of worldwide income. (Source: PwC)

Sources: (PwC Worldwide Tax Summaries, Morocco: residence; PwC Worldwide Tax Summaries, Morocco: taxes on personal income)

Argentina

Tax residency: There is no day-count test for foreigners. A foreign national assigned to work in Argentina is resident if the assignment exceeds five years and non-resident if it is shorter, and a foreigner living in Argentina for reasons other than work becomes resident from the 13th month of presence (Source: PwC).

Active income from clients or employers abroad: Residents are taxed on worldwide income at progressive rates of 5% to 35%. The 35% rate applies above ARS 53,153,257 of annual taxable income for fiscal 2025, and thresholds are now indexed semi-annually (above ARS 60,750,914 for the first half of 2026). Residents can claim a credit for tax paid on foreign-source income (Source: PwC).

Passive income sourced abroad: Foreign-source passive income is part of worldwide income. (Source: PwC)

Sources: (PwC Worldwide Tax Summaries, Argentina: residence; PwC Worldwide Tax Summaries, Argentina: taxes on personal income)

Vietnam

Tax residency: You are a tax resident if you stay in Vietnam 183 days or more in a calendar year or in the 12 consecutive months from your arrival, or if you have a permanent residence in Vietnam, which includes a registered home or a home rented on a fixed-term lease (Source: PwC).

Active income from clients or employers abroad: Residents are taxed on worldwide income, including pay from foreign employers and clients. Employment income is taxed at progressive rates of 5% to 35%, with 35% above VND 100 million of monthly income (Source: PwC). A new Personal Income Tax Law takes effect on 1 July 2026, with some salary and business provisions from 1 January 2026, and reduces the brackets from seven to five while keeping the 35% top rate (Source: PwC).

Passive income sourced abroad: Residents pay flat rates: 5% on dividends and interest (other than bank interest), 5% on royalties and franchising income, 0.1% of proceeds on securities sales, 20% of the gain on capital transfers (or 2% of proceeds when the gain cannot be determined) and 2% of proceeds on real estate sales (Source: PwC).

Sources: (PwC Worldwide Tax Summaries, Vietnam: residence; PwC Worldwide Tax Summaries, Vietnam: taxes on personal income; PwC Vietnam, New Personal Income Tax Law (December 2025))

Colombia

Tax residency: You are a tax resident if you stay in Colombia 183 days or more, continuously or not, within any 365 consecutive days. Colombian nationals can also be resident through other tests (Source: PwC).

Active income from clients or employers abroad: Residents are taxed on worldwide income, including salary and fees from foreign employers and clients, at progressive rates from 0% to 39%, with 39% above 31,000 UVT (Source: PwC).

Passive income sourced abroad: Interest, rent and royalties are taxed in the general basket at the same scale, up to 39%. Foreign pension income is exempt up to 1,000 UVT. For dividends, PwC describes a credit of 19% of income above 1,090 UVT for dividends already taxed at company level, and a 35% flat tax followed by the progressive scale for dividends that were not.

Sources: (PwC Worldwide Tax Summaries, Colombia: residence; PwC Worldwide Tax Summaries, Colombia: taxes on personal income)

Spain

Tax residency: You are a tax resident if you are in Spain more than 183 days in a calendar year (temporary absences count unless you prove tax residence elsewhere), or if Spain is your main base or center of activities or economic interests. Spain is presumed to be your habitual residence if your non-separated spouse and minor dependent children live there (Source: PwC).

Active income from clients or employers abroad: Residents are taxed on worldwide income at progressive rates. The 2026 state withholding scale tops out at 47% above EUR 300,000, and each autonomous community adds its own rates. Employment income for work performed outside Spain for a non-Spanish company is exempt up to EUR 60,100 only if a similar tax applies in the country where the work is done (Source: PwC).

Passive income sourced abroad: Dividends, interest and capital gains are savings income, taxed at 19% up to EUR 6,000, 21% to EUR 50,000, 23% to EUR 200,000, 27% to EUR 300,000 and 30% above (PwC).

Sources: (PwC Worldwide Tax Summaries, Spain: residence; PwC Worldwide Tax Summaries, Spain: taxes on personal income)

Mexico

Tax residency: You are resident if you establish a home in Mexico. If you also have a home in another country, residency follows your center of vital interests, which is in Mexico if more than half of your income in a calendar year comes from Mexican sources or your main professional activities are in Mexico. (Source: PwC)

Active income from clients or employers abroad: Residents are taxed on worldwide income, including pay from foreign employers and clients, at progressive rates up to 35% (above MXN 5,107,703.93 of taxable income) (Source: PwC).

Passive income sourced abroad: Foreign dividends, interest, capital gains, and rent are part of worldwide income. (Source: PwC)

Sources: (PwC Worldwide Tax Summaries, Mexico: residence; PwC Worldwide Tax Summaries, Mexico: taxes on personal income)

Türkiye

Tax residency: You are resident if your legal residence is in Türkiye or you intend to settle there, and a foreign national who spends more than half of a calendar year in Türkiye is also treated as resident. Temporary stays for specific projects, and longer stays forced by illness or arrest, do not make you resident (Source: PwC).

Active income from clients or employers abroad: Under the standard rules, residents are taxed on salary for work performed anywhere, wherever it is paid or remitted, at progressive rates up to 40% (above TRY 5,300,000 for 2026 employment income) (Source: PwC). Law No. 7582, published on 4 June 2026, exempts foreign-source income and gains for 20 years for people who become Turkish tax residents on or after 1 January 2026 and had no residence or tax liability in Türkiye in the three preceding calendar years (Source: EY). The draft implementation communiqué treats services performed from Türkiye for non-Turkish clients as Turkish-source income, so remote work done while living in Türkiye may stay taxable, and an exemption certificate must be requested by the end of the year of becoming resident. The final rules may differ. (Source: Deloitte)

Passive income sourced abroad: Under the standard rules, foreign dividends above TRY 22,000 are declared and taxable (half is exempt if you hold at least 50% of the foreign company and remit by the due date), and foreign interest is declared when it and your other movable and immovable income exceed TRY 22,000. Foreign tax paid can be offset with documentation (Source: PwC). Foreign investment income of qualifying new residents falls under the 20-year exemption above (Source: EY).

Sources: (PwC Worldwide Tax Summaries, Türkiye: residence; PwC Worldwide Tax Summaries, Türkiye: taxes on personal income; PwC Worldwide Tax Summaries, Türkiye: income determination; EY, Türkiye introduces new personal tax regime (June 2026); Deloitte, Türkiye new tax landscape)

Other Territorial Tax Countries

Beyond the top 31 countries, several others apply territorial tax systems or offer significant exemptions on foreign-source income. These jurisdictions are less popular as primary expat destinations due to limited infrastructure, visa restrictions, or geographic isolation, but they still provide tax benefits for the right circumstances and are worth considering for the right plan.

Country	Territorial System Type	Foreign Passive Income Treatment
Bolivia	Pure territorial	Foreign dividends, interest, capital gains, and rental income not taxed
Honduras	Pure territorial	Foreign income not taxed regardless of source type
Macao	Territorial	Foreign dividends, interest, and capital gains not taxed
Namibia (partial)	Territorial with exemptions	Foreign dividends and interest generally exempt; capital gains taxed based on asset type
Lebanon	Territorial	Foreign income not taxed; political and economic instability limits appeal
Liberia	Territorial	Foreign income not taxed; limited infrastructure
Somalia	Territorial (in theory)	Tax enforcement is non-existent; Security risks make it non-viable
Vanuatu	No personal income tax	All income tax-free; citizenship by investment available
Nauru	No personal income tax	All income tax-free; limited services and isolation
Brunei	No personal income tax	All income tax-free; residency difficult to obtain for most expats

Most of these jurisdictions lack the infrastructure, safety, or residency accessibility that make the top 31 practical for long-term expat living. But for individuals with specific ties, business interests, or unique circumstances, they remain viable options for territorial tax treatment.

The common thread across every territorial tax system is the same: governments tax what happens inside their borders and ignore what happens outside. The rules differ in the details, but the principle holds. If you structure your income sources correctly and establish residency in the right place, you can legally reduce your tax burden to zero or near-zero on foreign earnings while maintaining full compliance with the law. This statement does not apply to US citizens, who remain taxable by the US on worldwide income.

The challenge is not finding a territorial tax country. The challenge is finding one that fits your lifestyle, offers the residency pathway you need, and provides the infrastructure to support the life you actually want to live.

Reminder: This guide is general information, not tax or financial advice. Rules change, and the right answer depends on your citizenship, residency, and income mix. Confirm the current rules with the official sources above and a qualified cross-border tax professional before you act.

ABOUT THE AUTHOR

Carlos Grider launched A Brother Abroad in 2017 after a “one-year abroad” experiment turned into a long-term life strategy. After 65+ countries and a decade abroad, he now writes about FIRE, personal finance, geo-arbitrage, and the real-world logistics of living abroad—visas, costs, and tradeoffs—so readers can make smarter global moves with fewer surprises. Carlos is a former Big 4 management consultant and DoD cultural advisor with an MBA (UT Austin) and Boston University’s Certificate in Financial Planning. He’s the author of Digital Nomad Nation: Rise of the Borderless Generation and is currently writing The Sovereign Expat.

Click here to learn more about Carlos's story.

Contents

At a Glance: How Each Country Taxes Foreign Income

How to use this guide

Want to save this article?

Essential tax bits to understand before we start

A Note for Digital Nomads: Most countries still tax income from remote work, even if the client or employer is foreign

Latin American Territorial Tax Havens

1. Panama

2. Costa Rica

3. Paraguay

4. Nicaragua

5. Guatemala

6. Belize

7. El Salvador

European Territorial and Remittance-Based Tax Systems

9. Malta: Remittance-Based Taxation for Foreign Residents

10. Ireland (Remittance Basis for Non-Domiciled Residents)

11. United Kingdom: Previously on Remittance Basis, Abolished 6 April 2025 for the Foreign Income Gains regime

12. Georgia

13. Monaco

Middle Eastern Tax-Free Jurisdictions

14. United Arab Emirates

15. Qatar

16. Bahrain

17. Oman

18. Kuwait

Asian Territorial And Remittance Systems

19. Hong Kong

20. Singapore

21. Malaysia

22. Philippines

23. Thailand: Foreign Income Taxed When Remitted

24. Macao

Caribbean Zero-Tax Jurisdictions

25. The Bahamas

26. Cayman Islands

27. Turks and Caicos

28. Bermuda

Africa’s Zero Tax Jurisdictions

29. Seychelles

30. Mauritius: Remittance-Based Taxation for Residents

31. Malawi

Countries commonly mentioned that don’t make the cut

Portugal: The Non-Habitual Residency has closed to New Applicants, and the IFICI Replaces It with taxes on most income

Uruguay

Dominican Republic

Gibraltar

Andorra

Greece

Bulgaria

Botswana

Common countries for expats and nomads that are less tax-friendly

Indonesia, including Bali

Morocco

Argentina

Vietnam

Colombia

Spain

Mexico

Türkiye

Other Territorial Tax Countries

ABOUT THE AUTHOR

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