Where in the World Can You Live Tax-free?

By  Karen Banes

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We’ve talked before, here at Wealthtender, about how many countries are welcoming remote workers from the US and elsewhere on what are becoming known as digital nomad visas. We’ve also talked about how American retirees are stretching those retirement dollars by living in other countries around the world. Today we’re looking at how some countries will let you live there, work (remotely or locally, depending on your visa) and pay no income tax whatsoever.

How Does a Tax-free Country Even Work?

It couldn’t really, could it? All governments need some form of tax revenue. So it’s important to note that what we consider tax-free countries simply don’t require their residents to pay income tax. There may still be plenty of indirect taxes, such as sales tax, import duties, and, in tourist destinations, arrival and departure tax. There may also be corporate tax, along with other corporate fees such as registration and renewal fees, and of course, revenues from other sources. But income tax, as we know it in the US and most other countries, simply doesn’t exist.

Do You Have to Be Rich to Live Tax-free?

The short answer is yes, but the full answer is more complicated. While some tax havens, and Caribbean islands, in particular, will basically ‘sell’ you long-term residency in return for investments in property or local businesses, there are other places where ‘ordinary’ working people can secure a work contract, complete with a work permit that will allow them to work in the country and live tax-free.

Obviously, these people are not low-income individuals working minimum wage jobs. But they’re not necessarily the uber-wealthy elite of the world, either.  The millions of foreign workers living in UAE and other Middle Eastern countries, for example, simply have the right skills to work there. They are not required to ‘pay their way in’ as in some tax-free countries.

Do You Really Not Have to Pay Any Tax to Your Home Country?

That depends on your circumstances and where you hold your citizenship. Most countries do not require their citizens to pay income tax on money earned while living abroad. The US is the exception, but your tax obligations will generally be different (and if you’re working, usually greatly reduced) if you are living overseas.

There is something called the Foreign Earned Income Exclusion  (FIEI) for US residents living outside the US, which means you don’t have to pay tax on your earned income, such as your salary (including bonuses and commissions) earned outside the US, up to a certain threshold. This does NOT apply to unearned income (such as investments) but will include self-employment income in most cases. As is often the case with tax issues, it is probably more complicated than it should be, so do consult a financial professional to make sure you’re not missing any important details. You’ll also have to prove that you really are resident in the country you claim to be living in.

So if you’ve sought advice and found that yes, you can live free of income tax given your current circumstances, where should you head? The choice is yours.

The Bahamas

A popular choice for American ex-pats, no doubt because of the country’s proximity to the US, The Bahamas does not charge its residents income tax. Getting a work permit and a local job in the Bahamas is tough, but they are one of the countries that offer a remote work visa, which makes sense given that affluent remote workers bring spending money in the country will potentially benefit the economy overall. To obtain one, you will have to prove you have an income that’s adequate to live off, either as a remote worker or a self-employed freelancer, but the regulations don’t currently specify a specific amount.

Other Caribbean islands such as the Cayman Islands and St Kitts and Nevis also have a no-income-tax model, although the most common way to secure residency in those countries seems to be via a substantial investment in the local economy. Numerous Caribbean countries, including Barbados, Antigua & Barbuda, and The Cayman Islands, are, however, all now offering some form of remote work visa for at least a year.


The United Arab Emirates has long been seen as a country where Americans and Europeans can find work contracts for a few years at a time, earn some tax-free money and then (often) head home. Many foreign workers stay long-term, however, and this situation has now become extreme, to the point that 89% of the population is now comprised of foreign workers and ex-pats, with the locally born accounting for just 11% of the population.

While many of the non-locals come from other Asian and Middle Eastern countries, there is also a significant North American and European community, especially in Dubai. Other Middle Eastern countries such as Oman, Bahrain, and Kuwait also have large communities of foreign workers living tax-free.


This tiny European country is safe, luxurious, and expensive but charges its residents no income tax. It’s a common choice for ex-pats with money from all over the world, who don’t want the isolation of island life, given that so many tax havens are islands. Nestled on the south coast of France, overlooking the Mediterranean sea, and just a ten-mile drive from the border with Italy, this glitzy, glamorous little country feels far from isolated.

Monaco is known as the playground of the rich and famous, and it’s easy to assume that residence is reserved for the very wealthy. It’s true the government requires proof of funds, and you’ll generally need at least 500,000 Euros on deposit with a bank to even be considered for residency, but honestly, most people who’ve been there would assume it would take a lot more than that.


Another island paradise with a huge tax benefit, Bermuda is a common choice for both American and Canadian ex-pats. It’s important to note that while it doesn’t have income tax as such, there is a payroll tax levied from employers that can be ‘passed on’ to workers by deducting it at the source. This tax applies if you’re self-employed too.

Work permits are issued to those who qualify, usually for one to five years initially. You can also qualify for long-term residency by investing in property on the island, which is really the only practical option if you’re an ex-pat looking to retire here.


This one is not for everyone, and certainly not for every US citizen, as Vanuatu, apart from being a somewhat isolated island community, is way down in the South Pacific, making it a more popular choice for ex-pats from Australia and New Zealand than the USA.

If that doesn’t bother you, however, and you’re looking to live tax-free on a tropical island, Vanuatu has a very easy-to-navigate ‘Citizenship by Investment’ program that is cheaper overall than most others and can result in a Vanuatu passport in your hand within a few months. The country is also fine with dual citizenship, so you won’t have to give up your US passport.

Should I Move to a Tax-free Country?

It was once the case that only the extremely rich would even consider the possibility of moving to a whole other country to avoid paying income tax. But things have changed. With so many people having the freedom to work remotely, often on very good incomes, along with the expansion of foreign worker visas, ‘digital nomad’ visas, and ‘citizenship (or residence) by investment’ programs, living overseas is much more doable for ordinary people with the right skills, or the money to invest.

There’s a lot more than living abroad than simply saving on income tax, of course. If you’re considering it, you’ll need to look at every aspect of the countries you’re interested in, including healthcare facilities, the cost of living, language, and culture. You’ll come across plenty of drawbacks as well as some big advantages in each country. If you’ve researched it in-depth and are still interested, that could be a sign you’re ready to give it a go.

About the Author

Karen Banes

I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog to learn how to run your own (very) small business on your own terms. You can also connect with me at my website or follow me on

To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Learn more. Wealthtender is not a client of these financial services providers.
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