Countries With No Income Tax: The Verified 2026 List
By John Rush
Checked November 4, 2026 · How we score
There are about 15 countries and territories with no personal income tax in 2026. Fewer than you'd think are realistic places to actually live and run a company — and if you hold a US passport, none of them gets you to zero on its own. Here's the verified list, what each one actually charges, and the "near-zero" alternatives most founders end up choosing.
Which countries have no income tax in 2026?
"No income tax" here means no tax on individuals' employment, business or investment income for residents (with exceptions noted).
| Country / territory | Personal income tax | Corporate tax | Realistic residency route | Notes |
|---|---|---|---|---|
| United Arab Emirates | 0% | 9% above AED 375,000; 0% qualifying free-zone income | Employment, company owner, freelance, golden visa | The default choice for founders |
| Saudi Arabia | 0% | 20% (foreign-owned); zakat for Saudi/GCC owners | Employment, Premium Residency | Social security for employees |
| Qatar | 0% | 10% | Employment-sponsored | Hard to self-sponsor |
| Kuwait | 0% | 15% on foreign companies | Employment-sponsored | Limited for foreign entrepreneurs |
| Bahrain | 0% | 0% (except oil/gas; 15% domestic minimum tax for large groups) | Employment, investor, golden residency | Small, affordable, GCC access |
| Oman | 0% until 2028 | 15% | Employment, investor residency | 5% tax on income above OMR 42,000 from Jan 1, 2028 |
| Monaco | 0% (French nationals excepted) | 25% if >25% of turnover is outside Monaco | Residence card with proof of funds and housing | Very expensive housing |
| Bahamas | 0% | 0% (15% domestic minimum for large MNEs) | Annual or permanent residence via investment | VAT is the main tax |
| Bermuda | 0% | 15% CIT for groups ≥ €750M only (since 2025) | Work permit, residential certificate | Payroll tax applies to employment |
| Cayman Islands | 0% | 0% | Residency by investment / independent means | High cost of living |
| British Virgin Islands | 0% | 0% | Work permit, residency is restrictive | Payroll tax applies to employment |
| Turks and Caicos | 0% | 0% | Permanent residence by investment | On the EU blacklist (Oct 2026) |
| Anguilla | 0% | 0% | Residency limited | On the EU blacklist (Oct 2026) |
| St Kitts and Nevis | 0% | Corporate tax applies to local companies | Citizenship by investment | No tax on individuals' income |
| Antigua and Barbuda | 0% (abolished 2016) | 25% | Citizenship by investment | Residence requirement for CBI is minimal |
| Vanuatu | 0% | 0% | Citizenship by investment, residency | On the EU blacklist |
| Brunei | 0% | 18.5% | Employment only | Not practical for most |
Not on this list, despite what you may read: the Maldives introduced personal income tax in 2020 (progressive up to 15%); Western Sahara isn't a functioning tax jurisdiction; and Oman is only on it until the end of 2027. Payroll taxes and social security in Bermuda, the BVI and the GCC mean "no income tax" doesn't always mean nothing deducted from a salary — but founders paying themselves dividends are typically unaffected.
Our live countries with no income tax list is filterable by cost and residency ease.
Which no-tax country is best for founders?
For most founders the shortlist is short:
| UAE | Bahamas | Monaco | Cayman | |
|---|---|---|---|---|
| Can you set up a company remotely? | Yes (free zones) | Partly | No | Partly |
| Typical company setup cost | ~AED 12,000–20,000 free-zone licence | Moderate | High | High |
| Cost of living | Medium–high | High | Very high | Very high |
| Time zone for EU/Asia clients | Excellent | Poor | Excellent | Poor |
| Banking | Good, but slow onboarding | OK | Private banks | Good |
| Double tax treaties | 140+ | Few | Few | Few |
The UAE wins for most people because you can form a company, get a residence visa through it, and obtain a tax residency certificate — all without a huge minimum investment. The trade-off: 9% corporate tax above AED 375,000 for mainland and non-qualifying income, and real substance requirements. Compare it with Georgia on UAE vs Georgia.
Does "no income tax" mean no taxes at all?
No. Zero-income-tax countries fund themselves through:
- VAT / consumption taxes — e.g. 5% in the UAE, 15% in Saudi Arabia, 10% in the Bahamas.
- Import duties — high in many Caribbean islands, which pushes up the cost of living.
- Corporate tax — often only on certain sectors or large multinationals since Pillar Two.
- Fees — residency, licences, property stamp duties.
- Social security for employees in some places.
What are the "near-zero" alternatives?
If you can't or don't want to live in the Gulf or the Caribbean, territorial tax countries often get you to near zero on foreign income. They tax only income earned inside the country, so a remote founder whose clients and company are abroad may owe little or nothing locally.
| Country | Foreign-source income for residents | Notes |
|---|---|---|
| Panama | Not taxed | Friendly Nations visa; USD economy |
| Paraguay | Not taxed | 10% flat on local income; cheap residency |
| Costa Rica | Generally not taxed | High quality of life |
| Georgia | Not taxed for individuals | 1% turnover regime for small entrepreneurs up to GEL 500,000 |
| Malaysia | Exempt for individuals (until 2036) | Good infrastructure |
| Hong Kong | Not taxed | Max 15–17% on local salary |
| Uruguay | Tax holiday on foreign passive income for new residents | Stable democracy |
Thailand used to be on this list but since 2024 taxes foreign income when it's remitted. Details on territorial tax countries.
Can Americans avoid income tax by moving abroad?
Not by moving alone. The US taxes its citizens and green card holders on worldwide income no matter where they live (citizenship-based taxation — Eritrea is the only other country with a version of it).
What Americans abroad can use:
- Foreign Earned Income Exclusion (FEIE): exclude up to $132,900 of earned income for 2026 (up from $130,000 for 2025), if you pass the physical presence test (330 days abroad in 12 months) or bona fide residence test.
- Foreign housing exclusion on top for high-cost cities.
- Foreign tax credit for tax paid elsewhere (useless in zero-tax countries).
The FEIE doesn't cover dividends, capital gains or self-employment tax (15.3%, unless a totalization agreement applies — the UAE has none). The only full exit is renouncing citizenship, which can trigger the US exit tax for covered expatriates. More in digital nomad taxes.
How do you actually stop paying tax in your home country?
Moving to a zero-tax country doesn't end tax residency at home automatically. You usually need to:
- Break residency at home — pass your country's exit tests (day counts, home, family, "centre of vital interests"). Some countries, like Spain or Germany, keep taxing you if your ties remain.
- Establish residency in the new country — residence permit, home lease, and ideally a tax residency certificate.
- Watch exit taxes — several countries (Canada, Germany, France, Norway, the US for covered expatriates) tax unrealized gains when you leave.
- Restructure the company — a company still managed from your old country may remain taxable there.
This is the part where an adviser in your departure country pays for itself.
Not tax or legal advice; rules change — verify with a local adviser.
Frequently asked questions
Which country has the lowest taxes in the world?
For individuals, the UAE, Monaco, the Bahamas, the Cayman Islands, Bahrain, Kuwait, Qatar and Saudi Arabia levy no personal income tax. For companies, the Cayman Islands, BVI, Bahamas and Vanuatu have 0% corporate tax for most businesses.
Does Dubai have income tax?
No. The UAE, including Dubai, has no personal income tax on salaries, dividends or capital gains for individuals. Companies pay 9% corporate tax on profits above AED 375,000, and qualifying free-zone income can be taxed at 0%.
Is there any country in Europe with no income tax?
Monaco is the only European country with no personal income tax for residents (French nationals are taxed by France). Andorra caps personal income tax at 10%, and several EU countries offer special regimes for new residents.
Will Oman introduce income tax?
Yes. From January 1, 2028, Oman will tax individuals at 5% on annual income above OMR 42,000 (about $109,000), making it the first GCC country with personal income tax. Most residents earn below the threshold.
Do I need to live in a no-tax country to benefit?
Yes. Tax residency, not citizenship or company location, decides personal income tax for most nationalities. You generally need a residence permit, a home and real presence, and you must break residency in your previous country.
Related
Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.