The Best Offshore Tax Havens for Families
November 4, 2024
When deciding where to live offshore, taxes are one of the biggest concerns for some people.
The overall taxes you will need to pay will play a big part in determining the total cost of living in a country.
To make things more complicated, there is considerable variation in tax rates across the globe, with some countries offering more favourable tax policies than others.
However, some countries are known as tax havens for families because they offer particularly favourable tax policies, sometimes with little to no tax on certain types of income, investments or inheritance.
These countries are also economically friendly to foreigners and wealthy families, as they provide room for investment and multiple financial opportunities.
But choosing a tax haven for families is about more than just minimizing taxes. It’s about finding a place where your family is also treated best. Things like excellent schools, safe communities and a welcoming culture are sometimes just as vital as lower tax rates.
This article will explore the best offshore tax havens for families, examining not just their financial perks, but also the lifestyle benefits they deliver.
Why Should Your Family Consider Moving to an Offshore Tax Haven?
There are many reasons why one should consider living in a tax haven country .
First of all, tax havens tend to provide many financial perks, such as lower payable taxes on your
personal and corporate taxes.
For business owners, these lower corporate tax rates can help them save a lot of money, which they can use to help them further expand their business.
A lower tax rate also means that your income levels rise as a smaller percentage of your income goes on taxes. If your income levels are high, then your purchasing levels are higher too.
Additionally, lower taxes on goods further enhance purchasing power. Altogether, this means that you can benefit from a higher standard of living than what you would in a traditionally high-tax country. .
Notably, there is also an absence of other taxes, such as inheritance and estate taxes. This means that you can purchase property at a higher rate without having to worry about additional tax burdens later.
The 8 Best Offshore Tax Havens for Families
The countries listed below are frequently regarded as both tax-friendly and family-friendly places to live. Although they might not be the typical tax havens that people envision, they are the best options because they cater to both families and wealthy individuals.
1. Cayman Islands
The Cayman Islands, located near the USA, is a self-governing British territory that has flown under the radar for many years. In fact, only recently has the island become extremely popular to move to amongst billionaires and foreigners, and there’s a good reason for this.
Despite being a British territory, the island enjoys a degree of independence and offers numerous benefits.
One of these benefits is the Cayman Islands’ status as a transparent, tax-neutral jurisdiction. Essentially this means that if you plan your financial matter the right way you can slash your taxes down to single digits. However, it is not completely a tax haven, as there are some taxes you’ll have to pay.
Nontheless, the overall tax burden is lower than many anticipate.
Despite its small size, the Cayman Islands offers a plethora of real estate opportunities.
To make things better, the houses in the Cayman Islands are very affordable, compared to some cities in the US, at about half a million dollars.
The food prices also are very affordable, and there are fewer import taxes on the luxury goods that you purchase. This means that you can have a lifestyle like those in the Hamptons, without spending like you are living in the Hamptons.
For our full guide on how to get residency in the Cayman Islands, click here .
2. Jersey
Jersey, a UK island with French flair, offers a blend of European charm and tax benefits.
While not as widely recognised as some traditional tax havens, Jersey has carved a niche for itself due to the tax-friendly possibilities it has for wealthy families.
Unlike many tax-haven jurisdictions, Jersey presents a low-tax environment without completely eliminating taxes. While that may seem counterintuitive, it means that essential public services remain properly funded and that they provide just the right tax benefits to attract wealthy investors. Key tax benefits include:
- The absence of capital gains tax.
- No inheritance tax.
- A 0% corporate rate applies to most companies, with financial services firms subject to 10% rate.
- Moderate property taxes.
To learn more about gaining residency in Jersey, read our full guide here .
3. Portugal
Portugal has long held a siren’s call for those seeking sun-drenched shores, spirited culture and, yes, tax advantages.
While the famed Non-Habitual Resident (NHR) regime may be a thing of the past, don’t write off Portugal just yet. Even without the NHR’s ten-year tax break for foreign income, Portugal still has some excellent tax perks and a new replacement is in the works for the old NHR program. In fact, current speculations suggest that the new program will be in place by 2025 with a reduced corporate tax rate for new businesses.
Furthermore, Portugal has double-taxation treaties with numerous countries, including the US. Say you’re a US citizen with rental income from a property back home. This treaty can help you avoid being taxed twice on the same income.
And let’s not forget the Portuguese Golden Visa program , which grants you and your family residency through investment. The other added benefit of this program is that you and your family can eventually apply for citizenship as long as you meet the requirements of spending enough time in the country and learning the local Portuguese language.
4. Ireland
Ireland, with its rolling green hills, fresh air and friendly locals, might just be the perfect place to raise a family. And while leprechauns or pots overflowing with gold might be hard to come by, tax benefits are a bit easier to find.
While not your typical ‘tax haven’. Ireland strategically uses its tax system to attract businesses and high-net-worth people and families to reside here.
Its secret weapon in this strategy is its territorial tax system, which prevents you from paying taxes on income earned overseas.
For families, Ireland also has some pretty generous tax deductions and credits. These take the form of deductions for childcare, education and even medical expenses, all while offering you access to world-class social services.
Of course, Ireland isn’t just a great spot for families due to its taxes. It’s a country brimming with history, culture and natural beauty. The locals are famous for their warmth and hospitality, so your family will feel right at home in no time.
And the education system? Top-notch.
From prestigious universities to charming village schools, Ireland has a fantastic range of options for your little ones.
5. Austria
Austria: where the hills are alive with the sound of tax savings.
All clichés about lederhosen and yodeling aside, this country’s tax system can be music to the ears of families seeking financial peace of mind in a country where they might be treated best.
While Austria has a progressive tax system, it offers a range of benefits that can significantly reduce your tax liability. Families, in particular, can benefit from the family allowance, a monthly payment that helps offset the costs of raising children.
Furthermore, Austria incentivises long-term investment in property with its capital gains exemption. If you hold onto real estate for ten years or more, any profit you make from selling it is typically tax-free.
And that’s not all. Austria also gives you a range of tax deductions for expenses like education, healthcare and charitable donations, further reducing your taxable income.
These benefits, combined with Austria’s stable economy and high standard of living, make it an attractive destination for families seeking financial stability and a balanced lifestyle.
6. UAE
A few years ago, if you asked us to list these countries, then the UAE would have been a lot higher on this list. However, the recent introduction of a VAT tax and corporate tax rate has bumped it down the list to number 6.
Still, it remains quite attractive due to the UAE’s favourable tax regime.
With a corporate tax rate of 9%, it’s significantly lower than many other popular destinations.
Even better, the UAE has economic free zones where you can slash that corporate tax rate to zero, opening up lucrative opportunities for entrepreneurs and investors.
However, the best part of all is the absence of personal income tax, which means more money stays in your pocket to invest, save or simply enjoy.
To top it all off, the country is equipped with world-class-leading infrastructure, with state-of-the- art healthcare, education and transportation systems. For families, this translates to a high quality of life, with access to top-tier international schools, modern hospitals and a safe, clean environment.
To learn more about gaining residency in the UAE, read our full guide here .
7. Malaysia
Malaysia often flies under the radar when discussing the best tax havens for families.
But as many nomads already know, this Southeast Asian nation offers a compelling mix of tax benefits, affordability and cultural richness that’s hard to beat.
Like many countries on this list, Malaysia operates using a territorial tax system, but unlike some of the countries, it does tax what you remit while living here.
For families with international businesses, foreign investments or remote income streams, this can translate to substantial tax savings.
Aside from its tax efficiency, Malaysia also offers a rich mix of Malay, Chinese, and Indian cultures, making it a dynamic and diverse place for families to flourish. Your children will have the opportunity to learn new languages, experience unique traditions and develop a global perspective – all while enjoying a safe and welcoming community.
Lastly, let’s talk about affordability. Compared to other popular expat destinations, Malaysia offers a significantly lower cost of living. This means your family can enjoy spacious housing, quality healthcare and excellent international schools without the exorbitant price tag.
To learn more about gaining residency in Malaysia, read our full RBI guide here .
8. Singapore
Next up on our list is Malaysia’s neighbouring country, Singapore .
Singapore often tops our “best places to live” lists, but it’s also a strategic haven for families seeking tax advantages and a springboard for their children’s success.
Singapore’s biggest draw for families is its education system, which consistently ranks among the world’s best. This system is famous for its extensive curriculum, strong emphasis on STEM fields and focus on developing students into well-rounded human beings. It’s probably the only country in the world that puts so much emphasis on building character.
In fact, the system is so good that graduates from Singaporean schools are highly sought after by universities and employers worldwide, giving your children a distinct advantage in their future careers.
While your children are thriving in school, you can focus on building your wealth in Singapore’s territorial tax system. For entrepreneurs, investors or location- independent business owners with international income streams, this can result in significant tax savings.
These savings can be reinvested in your business, your children’s education or simply provide more financial freedom for your family.
Best Offshore Tax Havens for Families: FAQs
Offshore tax havens allow individuals and corporations to reduce their tax liability by registering assets, companies or accounts in foreign countries with minimal or no taxes. This lets you benefit from favourable regulations.
Some of the best British offshore tax havens include the Cayman Islands, Jersey and the British Virgin Islands. All of these places are known for their tax neutrality and privacy laws.
Some of the most popular offshore havens for corporations include Ireland, Singapore, the Cayman Islands and Hong Kong due to their low corporate taxes and favourable business environments.
The Disclosure of Tax Havens and Offshoring Act is proposed US legislation aimed at increasing transparency by requiring companies to report on how they use of tax havens and offshore practices.
Yes, offshore tax havens are completely legal as long as you use them correctly. They’ll also be subject to scrutiny and regulation depending on the tax laws of your home country.
While the number can only be estimated, there is likely around $21 to $32 trillion held is offshore tax havens around the world.
Explore the Various Tax Havens for Families before Deciding Where to Stay
If you plan on moving with your family out of your home country to benefit from lower taxes, then these places are the ones to consider.
Not only do they offer you massive tax benefits, but they also cater to the needs of a family.
Remember, careful research and professional advice are extremely valuable when making such an important decision.
If you’re ready to explore your options and find the perfect tax haven for your family, get in touch with us . Our team of experts can guide you through the process and help you make the best decision for your family’s future.
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