There are many countries in the world where you can legally avoid paying income tax while enjoying all the benefits of a second citizenship. Some jurisdictions not only exempt you from income taxation but also offer investment programs that pave the way to a passport. For entrepreneurs, investors, and freelancers, this is a real opportunity to reduce tax burdens, protect assets, and increase mobility.
Take advantage of a unique opportunity: obtain citizenship by investment in countries with zero income tax, eliminate double taxation, and protect your assets. Enjoy freedom of movement and simplified banking services worldwide. Our legal team will help you choose the optimal jurisdiction for tax residency, legally arrange a second passport through CBI programs, and support you through the entire process — from application to receiving your passport — without risks and bureaucracy.
What Does “Tax Freedom” Mean?
Tax freedom is a conditional concept that refers to a situation in which an individual or legal entity is either completely exempt from a certain type of taxation or resides in a jurisdiction with a minimal tax burden. In practice, the term most often refers to the absence of income tax for individuals or a very low rate of such tax. However, full tax freedom is a relative concept. Even in countries with no income tax, other charges may still exist: VAT, capital gains tax, corporate tax, stamp duties, etc.
Income tax is a mandatory payment to the budget that an individual pays on income received from various sources: salary, business, investments, rent, and so on.
The rates and structure of income tax depend on the specific jurisdiction and can be:
- Progressive — increasing with income (e.g., in Germany and France);
- Proportional — a flat rate for everyone (e.g., in Bulgaria);
- Zero — no income tax as a class (e.g., in the UAE or Bahrain).
It is important to understand that taxes are paid not only depending on where the income is earned but also on tax residency. Tax residency is a legal status that determines in which country an individual is obligated to report their global income and pay taxes. As a rule, residency is assigned based on:
- Actual presence (e.g., staying more than 183 days per year);
- Center of vital interests (family, business, real estate);
- Formal registration (residence permit, tax number).
To benefit from a country with no income tax, it is not enough just to open an account or buy property. You need to become a tax resident of that country and cease residency in a high-tax country. This requires legally correct planning.
Many people confuse low-tax countries with zero-tax countries. The difference is fundamental:
- Low-tax countries offer minimal income tax rates, but it is still levied. Examples: Bulgaria (10%), Georgia (tax on certain sources, preferential regime for individual entrepreneurs), Cyprus (does not tax foreign dividends, but overall income tax up to 35%).
- Zero-tax countries have completely exempted their tax residents from paying personal income tax. This does not mean the absence of all taxes, but it makes such jurisdictions extremely attractive from a tax planning perspective.
The term “tax-free country” does not always mean the complete absence of all taxes. As a rule, it refers to countries where:
- There is no personal income tax (the main criterion);
- No capital gains tax or tax on dividends;
- No inheritance or gift tax;
- A simple and transparent tax system exists.
Nevertheless, even in such countries, there may still be fees, duties, excise taxes, value-added tax (VAT), and corporate taxes. In addition, changing tax residency requires compliance with all procedures, including exiting residency in the previous country, proper registration in the new jurisdiction, and confirmation of actual presence.
Top Countries With Zero Income Tax in 2025
In a world where the tax burden on individuals continues to grow, more and more wealthy people and entrepreneurs are looking for an alternative — countries with no income tax.
1. United Arab Emirates
The UAE consistently ranks among the best tax-free countries. The country has no income tax whatsoever for residents and non-residents alike, including freelance income, dividends, investments, and salaries. There is also no capital gains tax or dividend tax.
You can become a resident by registering a company in a free economic zone or obtaining a Freelance Permit. Both options allow you to get a residence visa for 2–3 years with the right of renewal and opening a bank account. Staying in the country does not have to be permanent, but it is recommended to spend at least 183 days a year to confirm tax residency.
2. Vanuatu
Vanuatu is one of the few countries with no income tax, no corporate tax, no dividends tax, and no capital gains tax. Vanuatu actively promotes its tax-free country status while offering simple legalization conditions.
You can obtain citizenship through the Citizenship by Investment program. In 2025, the minimum contribution to the state fund starts from $130,000. Applications can be submitted remotely, and the passport is issued in just 1–2 months without the need to live in the country.
3. The Bahamas
The Bahamas is a true tax haven with zero income tax, no capital gains tax, no inheritance or dividend taxes. It is one of the most stable and respected jurisdictions in the Caribbean region. The country only imposes VAT and certain service fees.
To obtain residency, you must purchase real estate worth at least $750,000 and apply for Permanent Residency. This status does not require annual renewal and allows you to stay on the islands without time limits.
4. Cayman Islands
The Cayman Islands ranks among the best tax-free countries in the world thanks to its complete exemption from income tax, dividend tax, capital gains tax, and inheritance tax. It is a recognized jurisdiction for international funds, hedge funds, and high-net-worth individuals.
To obtain permanent residency, you need to invest at least $2.4 million in real estate and apply for a 25-year residence visa with the possibility of renewal. There is also a “Certificate of Direct Investment” program for investors in local businesses.
5. Bahrain
Bahrain is another Persian Gulf country with zero income tax and a liberal policy toward expats. The tax system is transparent: no taxes on salaries, income, investments, or capital.
To obtain a residence visa, you need to open a business in the country, secure an employment contract, or invest in real estate. The visa is issued for 2 years and can be renewed. Since 2023, a Golden Residency is also available, granted for purchasing real estate from $200,000 or making long-term investments.
6. Kuwait
Kuwait offers full exemption from income tax for individuals, including foreign nationals. Income from freelancing, business, investments, and salaries is not taxed. However, there is a corporate income tax (for foreigners — 15%).
Foreigners can obtain a residence permit through employment, business registration, or real estate purchase. Citizenship, however, is highly restricted and practically unattainable. Long-term residence is entirely possible with legal income and support from an employer or local partner.
7. Saint Kitts and Nevis
There is no income tax, no dividends tax, no capital gains tax, and no inheritance tax, making it one of the best jurisdictions for relocation. Citizenship can be obtained by contributing to the Sustainable Growth Fund from $250,000 or purchasing real estate from $400,000. Processing time is 4 to 6 months. Citizenship is lifelong and does not require living in the country.
If you are considering relocation or expanding your tax planning — consult with our legal team. We will help you choose the optimal jurisdiction, arrange residency or citizenship, and guide you through the entire process from start to finish.
Citizenship and Residency by Investment Programs in Tax-Free Countries
A golden passport (citizenship by investment) is a program that allows an investor to obtain full citizenship of a country by meeting specific investment requirements. By obtaining a passport, you become a full-fledged citizen: you gain the right to visa-free travel to numerous countries, open bank accounts, receive state protection, and pass the passport on to heirs.
A golden visa (residency by investment) grants a residence permit, allowing you to legally live in the country, use services, run a business, and, in some cases, apply for citizenship after several years. However, residency requires renewal, can be revoked if conditions are no longer met, and does not always offer the same rights as citizenship.
Below is an overview of popular tax-free countries with active investment programs.
Vanuatu
Vanuatu is one of the few countries where you can obtain a passport by investment in just 1–2 months. There is no income tax, capital gains tax, or inheritance tax here.
Requirements: contribution to the National Development Fund starting from $130,000 (for a single applicant). The process is fully remote and does not require residence.
Status: full citizenship without tax residency (if not living permanently).
United Arab Emirates (UAE)
The UAE is one of the most well-known countries with no income tax, with no personal income tax, dividend tax, or capital gains tax. Residency can be obtained by registering a company in a free economic zone, obtaining a Freelance Permit, or investing in real estate (starting from AED 750,000).
Advantages:
- Opportunity to obtain tax residency (if staying at least 183 days per year);
- Opening corporate and personal bank accounts;
- No requirement for permanent stay, though active presence is recommended.
Status: golden visa, with the possibility of long-term renewal (2–10 years).
Bahamas
The Bahamas is one of the oldest tax havens in the Caribbean region. There is no income tax, capital gains tax, inheritance tax, or dividend tax.
Status: golden visa, without automatic transition to citizenship.
How to obtain residency:
- Purchase real estate worth at least $750,000.
- Option to apply for Permanent Residency.
- Unlimited stay permitted. However, to qualify for tax residency, actual presence of at least 183 days per year is required.
Cayman Islands
The Cayman Islands is a global leader in transparent tax systems with a zero income tax rate. There are no taxes on income, capital gains, inheritance, or dividends.
How to obtain residency:
- Invest in real estate starting from $2.4 million.
- Possibility to obtain a 25-year resident certificate, renewable.
- The Certificate of Direct Investment is also available with business investments from $1 million.
Status: long-term residence, with the possibility of permanent living and tax residency.
Although countries like Bahrain, Kuwait, and Oman are also among the best tax-free countries, they do not offer full citizenship-by-investment programs. However, residency in these countries can be obtained through employment, business immigration, or real estate purchase.
Who Should Consider Tax-Free Countries: Pros and Cons
Tax-free countries are often seen as tools for tax optimization, capital protection, and building an international lifestyle free from fiscal pressure. However, this choice is not universal. Such migration requires a clear understanding of who truly benefits, what limitations may arise, and what to consider at the planning stage.
Relocating to a country with no income tax can be a powerful move to preserve wealth and simplify life. The absence of income tax is the key advantage. Many tax-free jurisdictions also offer a high level of banking confidentiality, no inheritance tax, and strong property protection — which is important for family offices and business owners.
However, tax-free countries are not a one-size-fits-all solution. The UAE, Cayman Islands, and Bahamas are high-cost, high-standard-of-living destinations. Moreover, investment citizenship programs can range from $100,000 to $2.5 million.
How to Choose the Ideal Tax-Free Country
1. Define Your Goals: Citizenship or Residency?
The first step is to understand what you really need: a second passport or residency (RBI)? This will determine your approach to choosing a country and the set of rights you’ll receive.
CBI (citizenship by investment) is suitable if you want an alternative passport, independence from a single state, lifelong status that can be inherited, and visa-free access to other countries.
RBI (residency by investment) is suitable if you plan to live in the chosen country, want to use its infrastructure (banks, healthcare, business), and are ready to meet the conditions for renewing residency
2. Check Double Taxation Agreements (DTA)
The absence of income tax in your new country of residence is not a guarantee of full tax freedom if you still have financial ties to your previous jurisdiction. If your former country still considers you a tax resident, it may demand taxes on your worldwide income.
DTA agreements regulate in which country taxes are paid and help avoid double taxation.
Check if the chosen tax-free country has a DTA agreement with your home jurisdiction. If needed, arrange for an exit tax and document your new residency status.
3. Don’t Confuse the Absence of Taxes With the Absence of Obligations
One of the common mistakes is to assume that countries with no income tax have no reporting requirements. In reality, many jurisdictions have obligations for transparency and declarations.
Possible obligations include:
- Declaring foreign assets: even if no taxes are due, you may still need to report foreign bank accounts, property, or business shares.
- Financial reporting: especially if you own a business or earn investment income.
- Participation in CRS and FATCA systems: most tax-free countries participate in international information exchange systems, meaning your account data may be accessible to other tax authorities.
4. Consider the Actual Living Conditions and Migration Barriers
Financial aspects are important, but not the only ones. When choosing a country, don’t forget about the quality of life, ease of migration, banking and legal infrastructure, political stability, and property rights protection.
How We Can Help You Choose the Ideal Tax-Free Country
Our lawyers will help you assess whether the chosen country aligns with your goals: obtaining citizenship, tax optimization, asset protection, or relocating your entire family. We conduct a detailed analysis of double taxation agreements, check tax risks, migration conditions, and the legal implications of changing residency.
We also assist you in properly exiting your previous tax jurisdiction, avoiding violations of international CRS standards, selecting the optimal investment structure, and legalizing your income in the new country. You will receive recommendations on choosing between citizenship and residency, a clear explanation of all reporting obligations, and guidance in selecting the right CBI or RBI program. We work with both individual clients and businesses, tailoring solutions to specific needs.
Our team supports you at every stage: from legal assessment to submitting documents and obtaining status. All processes are carried out in full compliance with the law, with maximum transparency and confidentiality.
Ready to take the first step toward tax freedom? Contact us — and we will find the optimal solution for you.
