Countries with No Income Tax & Lowest Tax Rates in the World

What Are Tax-Free Countries?

Picture this: every dollar you earn is yours to keep. No tax forms, no letters from the tax office. 

Understanding No Personal Income Tax Jurisdictions

So what does “no personal income tax” actually mean? Basically, no tax on salaries, dividends, or capital gains. You get to keep more of what you make. That’s why the idea is so attractive to entrepreneurs, wealthy individuals, and digital nomads.

But remember: there’s no such thing as countries without taxation altogether. What you usually find are countries with less taxes or those that replace income tax with something else.

Differences Between Personal and Corporate Tax-Free Countries

• Not every place operates the same way. For example:

• In the UAE, there’s no personal income tax, but businesses making over 375,000 dirhams pay corporate tax.

• In the Cayman Islands, there’s nothing — no PIT, no corporate tax. Same with the Bahamas, Bermuda, and the British Virgin Islands.

• In Saudi Arabia, people don’t pay income tax, but companies do.

So when you ask what countries are tax free, the real answer depends on whether you’re talking about personal income, corporate tax, or both.

Top Countries with No Personal Income Tax

Popular Tax-Free Countries for Individuals

Some countries attract foreigners with a complete absence of personal income tax (PIT). Here are some popular:

• United Arab Emirates 

• Bahrain 

• Bahamas 

• Bermuda

• Cayman Islands

• Antigua and Barbuda

• Saint Kitts and Nevis 

• Vanuatu 

• Monaco

• Saudi Arabia

• Kuwait 

• Qatar

These are often the first answers when people wonder: which countries have the lowest taxes?

Benefits of Living in Countries with No Income Tax

It’s not just about paying less. Many of these places offer residency or citizenship programs, strong economies, and banking freedom. Some allow you to run a business without even having an office perfect for online entrepreneurs. But the smartest moves aren’t only about the lowest taxation countries lifestyle, cost of living, and stability matter too.

Countries with the Lowest Corporate Tax Rates

Corporate income tax rates can vary from country to country. While the global average sits at around 23–24%, there are places where businesses pay nothing at all or just a token amount.

Overview of Countries with Lowest Corporate Tax

When people ask what countries have the lowest taxes, corporate tax havens always make the list: Cayman Islands, Guernsey, and tiny Tokelau in the Pacific.

Some countries have decided to join the competition by luring entrepreneurs with extremely low rates. In Europe and nearby, there are also some “sweet spots”:

• Hungary — flat 9%

• Montenegro — 9–15%, depending on profit size

• Andorra — 10%

• Bulgaria — steady 10%

• North Macedonia — 10%

And what about emerging economies? In Georgia, small businesses pay just 1% in tax, while Estonia has a unique rule: as long as you don’t distribute profits to shareholders, you don’t pay a cent. Tax is only applied when dividends are paid out.

How Corporate Tax Rates Affect Business

Low corporate taxes are rocket fuel for business growth. When companies get to keep more of what they earn, there’s more money left to reinvest, expand, and take risks. In the real world, that often means extra cash going into new projects, bigger teams, or shareholder payouts. Just look at Ireland, Luxembourg, or Singapore, all of them have built a reputation (and an economy) on the back of attractive corporate tax rates.

Countries with the Lowest Overall Taxation

When discussing lowest taxation countries, it’s about the total tax burden, not just PIT or CIT. In other words, it’s the total tax burden you’d face living or doing business there, not just one headline rate.

Comparing Personal, Corporate, and Other Taxes

Personal income tax is zero in some places. The UAE and several other Gulf states don’t tax salaries, capital gains, or dividends at all. Likewise, many Caribbean tax havens such as the Bahamas, Bermuda, the Cayman Islands, the BVI, and Turks & Caicos have no personal income tax whatsoever. Others keep rates flat and low Bulgaria at 10% across the board, Georgia at 20% with special incentives for certain income.

Corporate tax can vary wildly from country to country. In the Cayman Islands, it’s a flat 0%, while Hong Kong sets it at 16.5%. Some places, like Panama, follow a territorial tax system meaning they only tax money earned locally, so any profits you make abroad aren’t touched.

When it comes to capital gains and wealth taxes, many low-tax destinations simply don’t have them. Singapore and Bahrain, for example, skip capital gains tax altogether, which makes them especially appealing for investors. A lot of offshore hubs also skip wealth and inheritance taxes.

Low income taxes often come with higher consumption taxes (Sales and VAT). The UAE introduced a 5% VAT, and Saudi Arabia pushed theirs to 15% to diversify revenue all while keeping personal income tax at 0%. In Europe, low-tax countries like Bulgaria and Georgia keep VAT around 18%, below the EU average. But even some zero-income-tax nations charge VAT or import duties the Bahamas, for example, has VAT up to 12%.

Even without income tax, there can be meaningful costs. Bermuda has no income tax or VAT, but companies pay annual fees based on their share capital. Monaco famously charges no personal income tax for residents, but corporate tax can reach 33% (with exemptions for many smaller businesses).

Which Countries Have the Lowest Taxes Overall?

By tax burden the absolute lowest are mostly oil-exporters and small offshore territories. According to global data:

• UAE collects only about 0.6% of GDP in taxes, the lowest in the world.

• Iraq and Kuwait are next, around 1–1.5%.

• Bahrain sits near 2.8%.

Caribbean hubs like the Cayman Islands or Bahamas have no personal or corporate tax at all, only VAT or import duties. European cases include Monaco (no personal tax on residents) and Andorra (10% flat personal income tax, no capital gains tax). However, such microstates are exceptions.

So if you’re hunting for the country with the lowest taxes, you’re usually looking at oil exporters or small offshore states.

Factors to Consider When Choosing a Low-Tax Country

Moving or investing in a low-tax jurisdiction requires weighing non-tax factors as well. Three key considerations are quality of life, legal and regulatory environment, and immigration rules.

Quality of Life and Infrastructure

In many countries, the taxes you pay directly affect the quality of public services you get. But there are places where you can enjoy both low taxes and a great quality of life:

• In Singapore and the UAE, you get low taxes plus modern hospitals, top schools, and spotless streets. 

• Bermuda or Panama are popular for expats seeking a benign tax climate plus amenities (warm climate, good hospitals, etc.). 

• Montenegro, boasts low tax rates along with scenic coastlines and efforts to align with EU standards. 

However, other “tax-free” places have very poor conditions. Somalia is a failed state with ongoing conflict, clearly not an appealing destination despite 0% tax. Similarly, Western Sahara has no formal tax system but is unsafe. In general, extremely low taxation can correlate with lower public investment in roads, schools or rule-of-law. 

Legal and Regulatory Environment

Low-tax countries aren’t all cut from the same cloth, the level of transparency and rule of law can be completely different from one place to another.

Take Singapore or the Cayman Islands: both are well-established financial hubs with strong legal systems you can actually rely on. Bahamas or the BVI have a reputation for secrecy and light oversight. As the OECD notes, that lack of transparency can make foreign tax authorities suspicious and even block access to certain treaty benefits.

Then you’ve got well-regulated, low-tax countries like Ireland, the UAE, or Qatar. These places have clear rules, enforce contracts, and make setting up a business fairly straightforward. 

Residency and Citizenship Rules

Some low-tax destinations offer residency or even citizenship if you’re willing to invest, but the price tag can be steep.

• Antigua & Barbuda, for example, you and your family can get citizenship with a donation of about USD 100,000–130,000.

• Saint Kitts & Nevis has a similar program, starting around USD 250,000.

• Vanuatu is one of the fastest ways to get a passport, with investments of roughly USD 130,000–180,000.

Some countries are more about residency than full citizenship.

• The UAE’s Golden Visa, for instance, gives you long-term residency if you invest in real estate or a business starting at AED 750,000 (about USD 205,000).

• Bermuda and the Cayman Islands? You’re looking at multi-million-USD properties just to qualify.

And then there are places like Qatar and Kuwait that don’t offer any formal investment immigration programs at all.