In this article, we will discuss the 17 Countries with Zero Income Tax.
Business Opportunities in Countries with Zero Taxes
Imagine living in a country where your entire paycheck remains untouched by income taxes, offering unparalleled financial freedom. The total tax wedge in OECD countries was around 34.8% in 2023, while some nations have adopted a different approach, forgoing income taxes altogether. These tax havens, including the United Arab Emirates, Qatar, and the Bahamas, attract expatriates, entrepreneurs, and retirees seeking to maximize their earnings and enjoy a higher standard of living.
In comparison to OECD countries where taxes are quite high, new startups prefer to establish businesses in countries with low taxes. Even though the average corporate income tax rate in the high-income countries across the OECD dropped from 47% in 1980 to 23% in 2021, the average taxes in OECD countries are still high compared to countries with zero income tax.
Countries including the United Arab Emirates, Qatar, and Saudi Arabia are some of the best countries for expats with low taxes and high quality of life. The International Monetary Fund highlights that these countries frequently experience higher rates of foreign investment and economic diversification. For instance, Qatar and the United Arab Emirates have thrived by leveraging their natural resources and strategic economic policies, contributing to their impressive GDP per capita figures. Qatar has a GDP per capita of $112,280, which is the fourth largest in the world, making it one of the richest countries in the world by GDP per capita in 2024.
Similarly, Saudi Arabia is investing heavily in various industries such as tourism and sports. Bloomberg reported that the Saudi government plans to spend over $800 billion on tourism over the next decade. The goal is to attract around 150 million tourists a year by 2030, with nearly 70 million visiting from abroad.
According to the EY Q1 2024 IPO report, the markets in the Middle East and North Africa (MENA) saw 10 new IPOs. The companies with IPOs in MENA countries have had the highest returns in 2023 and 2024 so far, compared to the rest of the world. In MENA, the 2023 IPOs had a median net profit of 12%, followed by China at 11%. The 2024 IPOs so far have returned a median net profit of 17% which is 6% higher than China, the second-best market.
Out of the 10 new IPOs during Q1 2024 in MENA, nine of them took place in Saudi Arabia, raising a total of $724 million. The Dubai Financial Market (DFM) welcomed one listing in Q1 2024, namely Parkin Company PJSC (DFM:PARKIN), raising $429 million in the government and infrastructure sector. This is the third RTA asset that is listed alongside Salik and Dubai Taxi Company (DTC). Despite the ongoing tensions in the region, MENA has been at the top when it comes to IPO activity. Investors have shown interest in these tax-free countries, considering their high economic development. In addition, around 25 private companies and 10 funds intend to list on the MENA exchanges in 2024. Companies from the Gulf Cooperation Council (GCC) have announced their listing plans including Lulu Group, Spinneys, and Etihad Airways PJSC.
The New Listing on DFM
Parkin Company PJSC (DFM:PARKIN) made its debut on the Dubai Financial Market on March 21, at a par value of 0.02 AED with 3 billion issued shares. PARKIN is trading for 3.18 AED and has a market capitalization of 9.72 billion AED, as of July 31. Parkin Company PJSC (DFM:PARKIN) shares soared over 30% on March 21, raising a record $429 million on its IPO.
Parkin Company PJSC (DFM:PARKIN) is Dubai’s leading public parking provider with 100% on and off-street paid public parking market share. The company has a 91% share of Dubai’s overall on-and off-street paid parking market. The company has over three decades of track record, making it a market leader. Parkin owns around 197,000 paid parking spaces across Dubai with the majority of its parking areas under long-term contracts. The company offers six digital payment channels and four payment methods. In addition, Parkin Company PJSC’s (DFM:PARKIN) 49-year Concession Agreement with the RTA allows the company exclusive rights to operate all of the RTA’s paid public on- and off-street parking. Around 61% of people in Dubai travel via private cars compared to 14% that use public transport. With affordable car prices in Dubai, it is easy for the majority of people to own a car.
During 2023, the company served over 4 million unique customers with over 95% customer satisfaction rating. Parkin operates in high-density areas of Dubai including Deira, Business Bay, and Jumeirah. In the first half of 2023, Dubai recorded a 63% year-over-year increase in residency visas issued by the government. Whereas, golden visas saw a 52% increase, visit visas soared by 34%, and tourist visas by 21%. Parkin Company PJSC (DFM:PARKIN) has control over the market with no competition at all. On March 21, the Chairman of the company, Ahmed Hashem, told CNBC’s Dan Murphy that Dubai is on a growth trajectory, and Parkin being an integral part of the city will naturally grow as well.
In 2023, Parkin Company PJSC (DFM:PARKIN) generated a revenue of 779 million AED. The company has a cash conversion of 99% and 57% EBITDA margin, as of 2023. The public parking demand is expected to grow by 60% over the next 10 years and Parkin Company PJSC (DFM:PARKIN) is prepared to make massive profits.
Parkin is also offering a dividend of 100% of profit or free cash flow to equity, subject to distributable reserves requirements.
The United Arab Emirates is gaining investors attention with increased business activities. Without further ado, let’s take a look at the 17 countries with zero income tax.
Copyright: eugenesergeev / 123RF Stock Photo
Our Methodology
To compile our list of the countries with zero income tax in the world, we shortlisted the countries with no personal income taxes. The data for personal income taxes was taken from the PwC and cross-checked with the Trading Economics database. The income tax data for countries is updated as of 2022, 2023 and 2024. The GDP per capita of countries was taken from the International Monetary Fund (IMF) database. For the countries whose GDP per capita data was not available on IMF, we took it from the World Bank. The GDP per capita (PPP) for the British Virgin Islands was not available on the above-mentioned sites so we took the data from CIA.gov.
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17 Countries with Zero Income Tax
17. Vanuatu
GDP Per Capita (2024): $2,940
Vanuatu is considered a tax haven with zero income tax and has a GDP per capita of $2,940, as of 2024. Vanuatu is a state free from capital gains tax, inheritance tax, and wealth tax. Vanuatu ranks 17th among the countries with zero income tax.
16. Antigua and Barbuda
GDP Per Capita (2023): $21,510
Antigua and Barbuda relies on tourism, offshore banking, and investment incentives to sustain its economy. Antigua and Barbuda has a GDP per capita of $21,510 with zero income tax.
15. Turks and Caicos
GDP Per Capita (2023): $24,820
Ranked 15th among the countries with zero income tax, Turks and Caicos is a British overseas territory in the Caribbean, known for its pristine beaches and luxury resorts. The island offers a zero-income tax policy and has a GDP per capita of $24,820.
14. Anguilla
GDP Per Capita (2022): $28,312
Anguilla, another British overseas territory in the Caribbean, is celebrated for its tranquil beaches and crystal-clear waters. It features a zero-income tax policy with a GDP per capita of $28,312 and makes it to the list of countries with zero income tax.
13. British Virgin Islands
GDP Per Capita (2017): $34,200
The British Virgin Islands is also a British overseas territory in the Caribbean famous for its stunning natural landscapes and thriving financial services sector. The British Virgin Islands is a tax-free jurisdiction.
12. Saint Kitts and Nevis
GDP Per Capita (2024): $38,870
Saint Kitts and Nevis, a dual-island nation in the Caribbean, is famous for its lush landscapes and vibrant culture. Saint Kitts and Nevis has low taxes with only VAT on goods and services and a property tax.
11. Oman
GDP Per Capita (2024): $39,860
Oman is one of the richest countries in the Middle East having a GDP per capita of $39,860. The country charges a 15% duty on corporate income and has zero individual income tax. Oman ranks 11th among the countries with zero income tax.
10. Bahamas
GDP Per Capita (2024): $46,520
The Bahamas is one of the few states in the Caribbean with no income taxes, including both personal and corporate. The Bahamas has a GDP per capita of $46,520 and is one of the countries with no income taxes in the world.
9. Kuwait
GDP Per Capita (2024): $52,270
Kuwait is one of the smallest countries in the world. The Middle Eastern country has a strong economy with a GDP per capita of $52,270. Kuwait charges a 15% tax on corporate income and has zero personal income tax. Kuwait ranks ninth among the countries with zero income tax.
8. Bahrain
GDP Per Capita (2024): $62,270
Bahrain has zero income and corporate taxes. In addition, Bahrain doesn’t have any sales tax, capital gains tax, or property tax. The country has a GDP per capita of $62,270.
7. Saudi Arabia
GDP Per Capita (2024): $70,330
Saudi Arabia is one of the countries that is heavily investing in various industries, especially sports and tourism. Saudi Arabia has zero personal income tax and charges a 20% corporate income tax. Saudi Arabia positions seventh among the countries with zero income tax.
6. Brunei
GDP Per Capita (2024): $77,530
Brunei has zero personal income tax and has no export, sale, payroll, or manufacturing taxes. However, Brunei has an 18.5% corporate personal tax. Brunei has a GDP per capita of $77,530 and ranks among the countries with no income tax.
5. Cayman Islands
GDP Per Capita (2022): $85,168
The Cayman Islands contains three islands in the western Caribbean Ocean. The Cayman Islands has zero individual and corporate personal taxes. The state does not have any other taxes including inheritance tax, capital gains, or gift tax. With a GDP per capita of $85,168, the Cayman Islands ranks fifth among the countries with zero income tax.