In this article we will talk about the 9 Tax-Free Countries in 2024.
Tax-Free Economies
Taxes are something that nobody loves to pay, especially when you have put in a lot of effort throughout the year to earn the money. Tax-free countries provide you with financial freedom and do not tax your income or capital gains. Countries with zero income tax attract people from different backgrounds including high-net-worth individuals, entrepreneurs, freelancers, and retired individuals, among others. In 2023, the OECD countries had a total tax wedge of almost 34.8%. Whereas, countries such as the Bahamas, the British Virgin Islands, and the Cayman Islands are some of the top offshore tax havens in the world.
Corporate tax rates have been falling worldwide to support business growth and discourage tax revenue from moving out of the corporations’ home countries. Despite the average corporate income tax rate being reduced from 47% in 1980 to 23% in 2021 across high-income countries, the average taxes across high-income countries are still higher than countries with zero income tax. In the US, corporate taxation as a percentage of GDP has consistently dropped since World War 2. From 2000 to 2016, corporate tax receipts averaged about 1.7% of total GDP in the US. In 2019, the corporate tax-to-GDP ratio was around 1%.
One of the reasons for the reduction in corporate taxes around high-income countries is tax-free economies. According to research from UC Berkeley and the University of Copenhagen, around 40% of multinational profits are shifted to tax havens each year, this was around $1 trillion in 2019. This reduces the global corporate tax receipts by 10%. According to documents filed at the Dutch Chamber of Commerce, Google moved around $23 billion through a Dutch shell company to Bermuda in 2017. Google shifted this amount to reduce its foreign tax bill as Bermuda is a tax-free country.
Freelancing is one of the fastest-growing markets in the world. According to WYSE Travel Confederation, the estimated number of digital nomads was expected to surpass 40 million in 2023 and is anticipated to reach around 60 million by 2030 as the market evolves. According to another report by MBO Partners, nearly 70 million Americans express a desire to become digital nomads, with 24 million mentioning it’s a definite positive, and the remaining saying it is a likely consideration for 2024. Upwork’s Freelance Forward survey found that freelancers contributed nearly $1.27 trillion in annual earnings to the US economy in 2023. A total of 64 million people freelanced in 2023, which represents a staggering 38% of the US workforce.
Tax-free countries are among the best places for digital nomads to move to, with those countries getting the opportunities to invest in their economies.
One of the Top Companies for Freelancers
Upwork Inc. (NASDAQ:UPWK) is the largest freelancing platform in the world, providing remote work opportunities to millions of freelancers in more than 180 countries. In 2023, freelancers through Upwork’s talent community earned over $3.8 billion. The freelancing platform offers more than 125 categories of work, including Generative AI, Design & Creative, and Web, Mobile, and Software Development, among others. Upwork Inc. (NASDAQ:UPWK) is a global market player that helps the company attract millions of freelancers and clients each year. The freelancers on the platform offer more than 10,000 skills, assisting clients and organizations around the world.
Considering the freelance market potential, Upwork Inc. (NASDAQ:UPWK) has a first-mover advantage. Freelancers have earned over $23 billion in lifetime earnings on Upwork, as of 2023. Upwork Inc. (NASDAQ:UPWK) continues to perform significantly well considering the challenging macroeconomic conditions. UPWK has announced its earnings for the second quarter of 2024 and surpassed analyst estimates. The company reported an EPS of $0.26, beating estimates by $0.03 per share, while the revenue came in at $193.13 million, which was slightly higher than the expected revenue of $193.04 million. Continuing with strong financial progress in 2024, Upwork reported its highest-ever net income of $22.2 million, while the adjusted EBITDA margin more than doubled to 21% from 9% year over year. Upwork is focusing on AI tools and scaling its services via AI to assist clients and companies and meet the growing market demand. Here is what the management said during the Q2 2024 earnings call:
“Compared to studies that show only 15% of corporate employees have the AI-related skills and training they need, more than half of freelance professionals on Upwork are already familiar with and using AI tools to deliver high-quality outcomes. It’s no surprise then that a recent report from our Upwork Research Institute found that nearly half, 48% of C-suite executives have already brought in freelancers to get delayed AI-related projects back on track.
Upwork is serving a range of businesses, including leading companies like Scale AI, with the expert talent they require for their AI initiatives. And we are evolving our offerings to meet this growing market demand. While GSV from AI-related work was up 67% year-over-year in Q2, what excites us most is the opportunity ahead for this business and our customers. The tangible benefits for talent on our platform who are leaning into these opportunities are compelling. As just one example, freelance professionals working on AI-related projects earned 47% more per hour than those working on non-AI-related projects in Q2.”
With more than half of Gen Z professionals working as freelancers and from remote working places, Upwork has a competitive advantage as it is a go-to freelance platform.
With that said, let’s take a look at the 9 tax-free countries in 2024, where freelancers can move and work without worrying about taxes.
Our Methodology
To compile our list of tax-free countries in 2024, we shortlisted the countries with a combined zero personal income tax, corporate income tax, and capital gains tax. The data for all types of taxes was taken from the PwC and cross-checked with the Trading Economics database. The tax data for countries is updated as of 2023 and 2024. The countries are ranked in ascending order of their GDP per capita. The GDP per capita data of countries was taken from the International Monetary Fund (IMF). 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. Similarly, the GDP per capita (PPP) of the Wallis and Futuna Islands was taken from the European Commission database.
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9 Tax-Free Countries in 2024
9. Vanuatu
GDP Per Capita (2024): $2,940
Vanuatu is one of the few tax havens with zero individual and corporate income tax. Vanuatu does not tax capital gains income and does not have an inheritance tax and wealth tax. Vanuatu ranks ninth among the tax-free countries in 2024.
8. Wallis and Futuna Islands
GDP Per Capita (2021): $11,400
Officially the Territory of the Wallis and Futuna Islands is a French island collectivity in the South Pacific. The island is a tax-free country with no income taxes and capital gain tax. With a GDP of around $11,400, the Wallis and Futuna Islands ranks among the tax-free countries in 2024.
7. Turks and Caicos Islands
GDP Per Capita (2023): $24,819
Turks and Caicos Islands is a British Overseas Territory located southeast of the Bahamas. Turks and Caicos offers a safe place for wealthy people with no income taxes and capital gains tax. Turks and Caicos Islands ranks seventh among the tax-free countries in 2024.
6. Anguilla
GDP Per Capita (2022): $28,312
Anguilla features a zero-income tax policy with a GDP per capita of $28,312 and is one of the tax-free countries in 2024. Anguilla, another British overseas territory in the Caribbean, is celebrated for its tranquil beaches and crystal-clear waters.
5. British Virgin Islands
GDP Per Capita (2017): $34,200
The British Virgin Islands is a tax-free jurisdiction with stunning natural landscapes and a thriving financial services sector. With a GDP per capita of around $34,200, the British Virgin Islands ranks fifth among the tax-free countries in 2024.
4. Bahamas
GDP Per Capita (2024): $46,520
The Bahamas is one of those states in the Caribbean with no individual income tax or corporate income tax. The state does not levy capital gains income and is one of the few tax-free countries in 2024.
3. Bahrain
GDP Per Capita (2024): $62,270
Bahrain is one of the smallest countries in the Arab world. Bahrain does not have a personal income tax or capital gains tax. The Arab country does charge a 46% corporate income tax on oil corporations and for the rest of the companies, there is no corporate income tax.
2. Cayman Islands
GDP Per Capita (2022): $85,168
The Cayman Islands is a tax-free jurisdiction and has zero individual and corporate taxes. The state also doesn’t have any other taxes such as inheritance tax, capital gains, or gift tax. The Cayman Islands ranks second among the tax-free countries in 2024.
1. Bermuda
GDP Per Capita (2022): $106,866
Bermuda is a tax-free jurisdiction and does not have any sort of taxes. It does not have an income tax, net wealth tax, inheritance tax, withholding tax, and VAT. Bermuda is a small, tourism- and construction-based, territorial-island economy. The country is a tourist destination and is a known offshore banking hub.
Bermuda only assesses a payroll tax on employers per the Payroll Tax Act of 1995. The country has a GDP per capita of $106,866 and ranks first among the tax-free countries in 2024.
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