If you are considering having second citizenship is something many want to achieve. But if you think getting dual citizenship will save you from more tax obligations, you are dead wrong! For example, US citizens have to play worldwide tax no matter where they live, and no matter how many citizenships they have (believe it or not, US citizens can have unlimited numbers of passports). Wherever you are, if you are an American, you are liable to report and pay taxes to the IRS. You might ask "Are there any tax free countries?"
Unlike in the US, many countries only tax their citizens if they are living in the country. So, the moment you leave or change your residency, you can also change your tax status. Sound interesting, right? But how can you play your cards, so you pay zero taxes based on your residency? We’ll share with you two secrets:
- Earn residency to a country that imposes only income taxes and taxes on the income you earn within its borders. Also, make sure it doesn’t have a CFC or Controlled Foreign Corporation Law so you can keep your profits you earn outside its borders
- Earn residency to a tax-free country that doesn’t impose capital gains tax, income tax, or dividends. Such places allow you to move your taxes from a corporate level to a personal level and viola-tax free!
- It may sound too good to be accurate, but some countries impose no income tax on their residents. Of course, these tax-free countries are only a handful-nine to be exact; however, some places also have fewer taxes. Since we already talked about that, let’s talk about the tax-free countries
9 Tax Free Countries
This quaint country borders France and Italy and is part of the French Riviera. Although accessing the country is not as simple as jumping on a plane (it has no airport), if you are looking for a tax-free country, this is the place. Trains are available, and you can also use boats or helicopters to explore the area.
The only way you can sneak your way into becoming a resident of Oman is through employment or an Omani family member. If you can earn your residency permit, you can finally get a tax-free of personal revenue tax. One quick note, though- anyone who applies for residency must get a Non-Objection certificate and have it signed by the sponsor and the government.
The best way to gain residency in the United Arab Emirates is to set up a 100% foreign-owned company in one of its more than 40 free trade areas. Another option is to set up an offshore company in either Dubai, Ajman, or Ras Al Khaimah. If you set a foreign company in Dubai, you even get to own real estate in some of Dubai’s development projects. Residents of Dubai do not pay personal income tax or corporate tax except for a few activities like financial services and gas. If you have any genius business start-up ideas, UAE is the place to be.
Turks and Caicos
Becoming a resident of Turks and Caicos is pretty straightforward- all you need is $300,000 to build a home or $750,000 as an investment. If you have that amount, the authorities will let you become part of the economic residency program and give you quick resident permits. And off course, we wouldn’t be mentioning this country if it had tax.
A lot of things might come to your mind when you think of Vanuatu, but you probably never thought it would make this list. Obtaining residency and even citizenship to Vanuatu is as simple as donating. The Economic Citizenship program of the country started in 2017 intending to make residency very straightforward. If you invest $89,000, you get a one-year residence visa that you can renew annually! If you have long-term plans in mind, all you need to do is make a more substantial investment. The next time you go on vacation, why not make Vanuatu your destination? Who knows- you might have a prosperous future awaiting you in this tax-free country.
This typical holiday country has more to offer than pristine waters and white beaches. The Bahamas also has no income tax and gets most of its revenue from tourism. No matter where their residents get their income from, the government does not impose any tax. You can get temporary residency for only $1,000, and once it expires, you can easily renew it. For long-term permanent residency, you’ll need to invest $250,000 in real estate.
Part of the island of Borneo, Brunei, is another country that has a no-tax policy and a lot of banking options. In 2014, the years of residency required to gain citizenship for those married to Brunei women was reduced from 15 years to 10 years. However, if you are not married to a Brunei woman but have contributed to the economic development of the country, you may also be granted citizenship.
The British Virgin Islands
Known for its fund management industries and robust incorporation, The British Virgin Islands is a favorite destination for entrepreneurs who want to avoid high taxes. Investing in the country requires proof of your financial stability and wealth, which usually requires showing your bank statements. If your finances are acceptable, you then have to pay a $1,000 surety bond, and viola-you are issued a residency permit
The Cayman Islands
If you watch movies, you may have noticed that The Cayman Islands are often featured as the place to send money securely and for a good reason. Although the authorities have made it challenging to incorporate into their state, it is usually used for fund management. To become a resident of the Cayman Islands, you need to show an annual income of up to $150,000 and invest in $500,000 worth of real estate or local companies.
If you are thinking of migrating to another country or establishing a business elsewhere, these are the nine tax free countries you ought to keep in mind. Many of the mentioned countries only require a reasonable amount of investment in either real estate or in their economy to make you eligible for temporary residency. Permanent residency often requires higher investment but is also possible. So if you are tired of high-income tax and want to have access to all of your earnings, pack your bags and fly to these nine tax free countries.