This article discusses the best countries without taxes in Asia and how moving there can add value to your life.
When we think about countries with no income tax, our brain often goes to the Cayman Islands: The British overseas territory, Saint Kitts and Nevis, the island nation, or Europe, where a web of historical treaties, legal exemptions, and whatnot has created many areas exempt from taxation.
Generally, Asia is a difficult place to get citizenship but easy to immigrate to if you have money.
The Asian economy is entrepreneurial, so they’re all too happy to let you in if you can help the local economy.
Given the wide range of choices available, with some proper planning, it can be very tax-friendly.
If you want to establish residency in Asia, start a business there, or invest in one of the Asian countries, set up a call with us today. We’ll handle everything while you sit back and relax.
Zero-Tax Countries in Asia
One of the primary reasons a country might decide to have a zero tax policy is because they want to incentivize entrepreneurship, and/or they have income from other sources and don’t need the personal income tax revenue.
Both of these are often true in the Middle East, where an abundance of oil and an exceptional oil and gas industry positioning has created very wealthy states without having an immediate need for income taxes or taxes for all that matters.
As the world is increasingly shifting away from oil, though, countries want to have other means of funding themselves, which usually means that they want to promote entrepreneurship.
So, while the Middle East might not be the first place you think of when you look at Asia, it is home to many of the tax-free countries in Asia and the world – including Bahrain, Kuwait, and the UAE (home of both Abu Dhabi and Dubai).
Whether you would want to live in many of these countries is another matter entirely, as some are very traditional, and Westerners that can’t speak Arabic might not feel at home.
If the Middle East doesn’t appeal to you, you can also go to Brunei in Southeast Asia.
You may not find entirely zero-tax countries in Asia, but there are plenty of tax-friendly countries in the region.
The Best Option – The UAE
A good middle ground between exotic and Western creature comforts is the UAE.
It’s well-used to foreign influence, and English is widely spoken.
UAE is among the best countries for high-net-worth expats, as well as being among the most livable countries with no personal income tax whatsoever. However, the country does impose a 9% corporate tax.
The country is extremely business-friendly and has several free zones with tax exemptions and other perks.Getting UAE citizenship as a foreigner is almost impossible. However, the country offers 5 and 10-year residence permits to a variety of foreign individuals depending on their motives for living in the UAE.
Territorial Tax Countries in Asia
What Are Territorial Tax Countries?
Now, here’s an option that people don’t often consider. For the average person, taxes are binary – you either live in a tax haven or you don’t.
A country with a no-tax system tends not to be the strongest geopolitical player.
In contrast, territorial-tax countries simply tax the economic activity which happens locally.
This means that your foreign-sourced income isn’t taxed, but if you were to buy a local apartment and rent it out, it would be.
The same applies if you buy a water bottle in a local store and you have to pay VAT.
Because of this, most locals would not classify their country as a tax haven because their economic life happens most (if not entirely) within the country.
As such, they do not benefit at all from the government’s tax policy.
However, wealthy foreigners from all over the world see these beneficial tax policies and decide to go where they are treated best.
It’s a win-win for both parties: expats get to live in a desirable country with very few taxes beyond the taxed goods that they buy, while the governments get a stimulus to their local economy.
From a political standpoint as well, it’s a smart move.
Given that the locals are likely not aware of the territorial nature of their taxes, these policies can be enacted without summoning an angry mob.
Hong Kong is one of these “tax-free” countries in Asia, and it’s among one of the best countries with a territorial tax system.
The rest of the tax-free nations that follow are mostly located in Southeast Asia – Singapore, the Philippines, and Thailand.
But this is not a “plug and play” system wherein you can just get a visa and live in the country without a concern in the world.
Each one is unique and will require you to investigate its specific nuances.
For example, in Thailand, money that you remit to yourself is taxable in that year.
As such, while the bulk of your wealth might be locked away in a foreign corporate account, and you may pay yourself to an offshore account, the second it reaches Thai territory, it becomes taxable.
Whether these are valid options for you primarily depends on how your assets and your income are structured.
It might be Thailand’s corporate tax rate or the Singapore corporate tax rate that works best for you.
However, if you have any business with these countries, it might be worth looking elsewhere or accepting that you won’t live entirely in a zero-tax country.
Countries Without Taxes Around The World
Gone are the days when you could simply live in a tax-haven and pay no taxes – forever.
Today, if you are a seven or eight-figure entrepreneur, you must have a tax residence where you are consistently paying taxes. The tax rate could be as low as 1%, but you must pay it.
Creating a holistic strategy involves tax planning, residence planning, and diversifying passport portfolios in a manner that each aspect of your life complements the other. And that’s exactly what we excel at.
Set up a call with us today to legally reduce your taxes and generate more wealth.
Countries with Low-Income Tax – FAQ
Tax-free countries are not always completely tax-free. They might charge a lower tax rate than other countries. These countries generally charge high customs or import duties or change travelers’ departure taxes when leaving the countries.
There is no income tax or capital gains tax on individuals in Saudi Arabia.