This article discusses tax residency in Antigua and Barbuda, including how to become a tax resident in Antigua and Barbuda and ways to achieve tax reduction thanks to the favorable Antigua and Barbuda tax regime.
Antigua and Barbuda is a warm and welcoming base for foreign investors with personal income tax rates that are as low as zero. If you want to lower your taxable income legally, joining the tax residents in Antigua and Barbuda might be your best move.
Antigua and Barbuda is often misclassified as a tax haven. More accurately, it is a low-tax jurisdiction; one of many in the Caribbean competing for your business. With so many choices and so little time, we know how difficult choosing the right offshore jurisdiction can be, but as a Nomad Capitalist client we can help make your choices easier.
Antigua and Barbuda Country Overview
Antigua and Barbuda are a pair of islands in the Lesser Antilles in the eastern Caribbean Sea, at the southern end of the Leeward Islands chain. The country is a constitutional monarchy with a parliamentary government featuring two legislative houses: the Senate and the House of Representatives.
While there is a Governor-General in Antigua and Barbuda, the official head of state is Britain’s King Charles III. The capital of Antigua and Barbuda is St. John’s in Antigua. Roughly 101,000 inhabitants live on the islands.
Antigua and Barbuda became independent from Britain 1981. Soon afterward, the country joined the Commonwealth and United Nations. It also became a member of the Organisation of Eastern Caribbean States along with fellow Caribbean countries such as Anguilla, Dominica, and Saint Kitts and Nevis.
Antigua and Barbuda – Climate
Arid Antigua is not much like the other Leeward Islands due to being predominantly flat and forest free. A vacation destination all year round, the island experiences winter lows of 77 °F (25 °C) and summer highs of 90 °F (32 °C). Antigua’s Galleon Beach is a great spot to soak up the sunshine.
Barbuda, 25 miles (40 km) to the north of Antigua, is even drier. A coral island, there is only one settlement, Codrington, which lies on a lagoon. Inland, water features are absent, and the climate mirrors that of Antigua.
Antigua and Barbuda – Economy
Where once agriculture flourished, particularly the sugar cane plantations in Antigua, tourism is now the key economic player. The country’s currency is the Eastern Caribbean dollar (XCD), which it shares with its neighbors Anguilla, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. The Eastern Caribbean Dollar is pegged to the US original at 2.70 XCD/USD.
Antigua and Barbuda is transitioning to a more sustainable green economy with less reliance on fossil fuels. The country’s economy grew by 8.3% in 2022. Antigua and Barbuda have established themselves as one of the leading financial powerhouses in the region.
Antigua and Barbuda Tax Residency Benefits
Antigua and Barbuda offers numerous tax benefits. There are no capital gains or inheritance taxes in Antigua and Barbuda and no wealth tax. However, gifts may be subject to transfer tax. The biggest of all the tax incentives is that there’s no personal income tax. The government abolished this in 2016.
There are no Controlled Foreign Corporation rules in Antigua and Barbuda, and the ownership of an offshore company by a person resident in the country will have no impact on that company’s tax status. The exception to the rule is if that company is managed and controlled from Antigua and Barbuda.
Antigua and Barbuda Tax Residency Requirements
Personal Income Tax Obligations in Antigua and Barbuda
To become a tax resident on the islands, where no personal income tax is levied, there are two methods. Firstly, since Antigua and Barbuda follows the standard 183-day rule, you will automatically become tax resident if you stay more than 183 days in the country.
The second method is more interesting and works great for perpetual travelers, you will have to apply for permanent residency. This investment program’s definition of permanent residence means you only need to spend 30 days a year in Antigua and Barbuda. You will have to pay a flat tax of $20,000 USD per annum. Here are the documents you need to provide:
- A copy of your birth certificate
- A copy of the primary page of your passport
- Two passport-sized photographs
- A copy of your marriage certificate
- The original police report from the country where you have lived for the past two years
- Bank reference and account statement showing a minimum annual income of $100,000
- Two testimonials from persons who have known you for a number of years (preferably over five)
- Medical report from a general physician, ensuring that the applicant has a clean bill of health (no major communicable diseases, etc.)
- Copy of your certificate of naturalization (if applicable)
- Lease or title to property of residential accommodation in Antigua and Barbuda.
The Inland Revenue Department (IRD) is the Antigua and Barbuda Government’s revenue collection agency. A Commissioner of Inland Revenue heads up this Ministry of Finance and Corporate Governance Department.
You must register with the Inland Revenue Department. The IRD will then issue you with a Tax Identification Number. The TIN is a six-digit number.
As elsewhere, Antigua and Barbuda tax residents must file tax returns and pay taxes punctually. Section 49 of the 2018 Tax Administration and Procedure Act stipulates the triggering of a debt if a tax payment has not been made within 30 days of the due date.
Antigua and Barbuda International Business Corporations
An Antigua and Barbuda IBC is a tax-exempt company requiring only one shareholder and one director who can be the same natural person or legal entity from any country. Thus, foreigners may own all of the corporate shares in an IBC. There is a fifty-year tax exemption for Antigua and Barbuda IBCs. This exemption applies to most forms of income, dividends, interest, and royalties paid by and to foreigners.
While there is no requirement to file audited accounts or annual returns with the authorities, a company must keep financial records that should reflect the financial position of a company.
Antigua and Barbuda IBCs cannot trade within Antigua and Barbuda or own real estate there. They cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship, the rendering of investment advice, or any other activity that would suggest an association with the banking or insurance industries. They cannot offer their shares for sale to the public.
Antigua and Barbuda Sales Tax
Antigua and Barbuda sales tax (ABST) is a corporate tax levied on goods and services selling price (cost price + markup). It is value added tax. The standard rate of this VAT is 15%, but there is a special rate of 14% for tourist businesses. Also, some goods are zero-rated. The likes of financial services, medical services, prescription medicines, educational services, and transportation around Antigua and Barbuda are exempt from this corporate tax.
You must register to pay Antigua and Barbuda sales tax if:
- You have an annual turnover of $300,000 XCD or more in taxable income
- You are a professional such as a lawyer, solicitor, accountant, auditor, architect, surveyor, or engineer.
Non-resident companies who earn income sourced from Antigua and Barbuda, including dividends, interest, and royalties, are liable for a 25% withholding tax. This income tax rate also applies to other payments made to non-residents.
Antigua and Barbuda Tax Residency Conclusion
Benefits for Antigua and Barbuda tax residents include the following:
- No income tax on worldwide income or assets
- No capital gains taxes on worldwide income or assets
- No inheritance tax on worldwide income or assets
- No wealth tax on worldwide income or assets
- Avoidance of double taxation with certain jurisdictions.
There is a flat tax of $20,000 USD for holders of a permanent residency certificate.
The corporate tax rate is 25%. Antigua and Barbuda sales tax is an income tax similar to VAT. The basic rate of this sales tax is 15%. However, this sales tax is reduced to 14% for hotels and restaurants and 0% for certain goods and services.
Go Where You’re Treated Best
The lack of personal income tax in Antigua and Barbuda, plus the fact there is no capital gains tax to pay on your worldwide income, makes it an attractive tax regime.
That said, we always say it’s worth shopping around to find the best solution for your exact needs. As this can be extremely time-consuming, not to mention confusing, our company exists precisely to help speed up the process and ensure you make the best decision. Talk to us about becoming a Nomad Capitalist client today.
Antigua and Barbuda Tax Residency FAQ
Antigua and Barbuda is regularly referred to as a tax haven. More accurately, it is a low-tax jurisdiction. That’s because you don’t have to pay personal income tax, wealth tax, capital gains tax, or inheritance tax.
Yes, you do pay taxes in Antigua and Barbuda. But the tax rates in the country are lower. You pay less income tax, for example.
You will have to obtain permanent residence. Also, you will need to acquire a Tax Identification Number from the country’s Inland Revenue Department. This will qualify you for the Antigua and Barbuda tax residency program.
We can help you with much more than establishing tax residency in Antigua and Barbuda. We can advise on everything from capital gains tax to property tax and beyond.