5 Superb Low-Tax Countries for US Expats

If you’re an American looking to move abroad, taxes are no doubt at the top of your mind. While much of the world has higher taxes than the US, there are several low-tax countries that can help you save big on your tax bill.

And thanks to the tax benefits the US offers Americans abroad, living in these countries can often make your taxes even lower than they would be if you had stayed in the US. Best of all, you can do so in a completely above-board way.

Read on for a list of the best tax countries for expats — plus tips on how to lower your US tax bill.

1. The Cayman Islands

If you’ve ever researched what country has the lowest taxes, you may already be familiar with the Cayman Islands’ famously favorable tax laws. While regulations have increased slightly to meet international tax cooperation objectives, the Cayman Islands is still among the most tax-friendly nations in the world. And with stunning beaches, a low crime rate, and a generally laid-back pace of life, you may just want to make it your new home.

Individual taxes

• Nonresident tax rate: 0%
• Resident tax rate: 0%
• Tax residence definition: None — as the government doesn’t levy personal income taxes, they don’t have a formal definition of tax residence, either. However, foreign residents can request a tax certificate to comply with foreign tax obligations or obtain foreign tax benefits

On top of having no personal income taxes, the Cayman Islands imposes no capital gains tax, value-added tax/VAT (aka sales tax), annual property taxes, or inheritance/estate/gift taxes. Stamp duty taxes (typically 7.5% on property transactions) are among the few taxes you may encounter as an American in the Cayman Islands.

B!T note: While not a direct tax on individuals, import tax rates of 22% to 27% do have a major effect on the price of goods in the Cayman Islands.

Corporate taxes

Corporate tax rate: 0%

Beyond having no corporate income taxes, the Cayman Islands has no payroll or withholding taxes either. The only direct taxes businesses would potentially need to pay include the aforementioned stamp duty and import taxes.

These practices have garnered controversy in the past — the EU and Financial Action Task Force (FATF) previously had the Cayman Islands on their blocklist and “grey list” (respectively). This status has since been removed, however, in part due to stricter government standards about registering a business in the Cayman Islands.

Visas, residency, and citizenship

A few of the most popular options for Americans hoping to make a long-term move to the Cayman Islands include:

The Residency Certificate for Persons of Independent Means: Allows holders to live (but not work) in the Cayman Islands for up to 25 years. To qualify, you must have an annual passive income of at least KYD 120,000 (~$146,341) or have made deposits of at least KYD 400,000 (~$487,804) in a local financial institution

Certificate of Permanent Residence for Persons of Independent Means: Allows holders to live and work in the Cayman Islands indefinitely. To qualify, you must invest at least KYD 2 million (~$2,439,020) in Cayman Islands real estate and have enough existing financial resources to support yourself and your family (if applicable)

Certificate of Direct Investment: Allows holders to live and work on their own business in the Cayman Islands for up to 25 years. To qualify, you must invest at least KYD 1 million (~$1,219,510) in a new or existing Cayman business that will create jobs

Residency Certificate (Substantial Business Presence): Allows holders to live and work on their business in the Cayman Islands for up to 25 years. To qualify, you must hold at least 10% of shares or hold a senior management position in an approved Cayman business

Holders of the certificates above can generally apply for permanent residence after eight years (excluding Certificate of Permanent Residence holders, who receive it immediately). After another seven years (15 years total), they can apply for citizenship.

2. The United Arab Emirates (UAE)

The UAE ranks right up there with the Cayman Islands in terms of tax-friendliness. Although in recent years, the government has been attempting to partner with other nations on anti-tax evasion measures, living in the UAE is still very favorable from a tax perspective.

The UAE is also quickly becoming one of the world’s top expat hubs, with most centered in Dubai, where ~75% of residents are foreigners. Dubai boasts safety, diversity, a thriving digital nomad community, and excellent transportation.

Individual taxes

Nonresident tax rate: 0%

Resident tax rate: 0%

Tax residence definition: None, although those who meet the following requirements can obtain a tax residency certificate:

• You’ve spent 183 days or more in the UAE during a 12-month period
• Your principal place of residence & the center of your personal/financial interests is the UAE, OR
• You’ve spent 90 days or more in the UAE as a UAE citizen, resident, or Gulf Cooperation Council (GCC) national AND you have either a permanent place of residence in the UAE OR you have a job/business based in the UAE

In addition to a 0% income tax for individuals, the UAE has no capital gains tax or inheritance/estate/gift taxes. The few taxes American expats living in the UAE may encounter include:

• VAT: 5% on most goods and services
• Real estate-related taxes: Vary by emirate, but those in the Emirate of Dubai include property taxes (5%), rental occupation taxes (5%), and transfer taxes (4%)
• Tourism taxes: Vary by emirate, but those in the Emirate of Dubai include AED 7 to 20 (~$2 to ~$6) on hotel stays per night in the Emirate of Dubai

Corporate taxes

Corporate tax rate: 0% to 15%

The first AED 375,000 (~$102,099) of corporate income is tax-free, with anything above taxed at 9%. Only multinational enterprises (MNEs) are charged the top corporate tax rate of 15%. And if your business meets the Qualifying Free Zone Person criteria, all of your qualifying income is tax-free.

As a bonus, the UAE makes it fairly easy to set up a business. According to the UAE’s Ministry of Economy, you can register a business in the UAE online in as little as 15 minutes.

Visas, residency, and citizenship

Some of the most popular visa options for Americans living in the UAE include:

The Gold visa: Allows investors, entrepreneurs, and other outstanding individuals to live and work in the UAE for between five and 10 years. To qualify, you must:

• Deposit at least AED 2 million (~$544,514) in a UAE investment fund or business, OR
• Purchase a property worth at least AED 2 million (~$544,514), OR
• Have a technical or innovative economic project worth at least AED 500,000 (~$136,129) backed by a UAE business accelerator

Other outstanding individuals (e.g. scientists, doctors, artists, students) may be able to apply by providing evidence of their qualifications and a letter of recommendation

The Green visa: Allows self-employed individuals earning at least AED 360,000 (~$98,013) annually and employees earning at least AED 15,000 (~$4,084) monthly to live in the UAE for five years. This visa does not require an employer sponsor, but applicants must have a concrete job offer in the UAE to qualify

Virtual work residence visa: Allows those working remotely for a company/companies located outside of the UAE and earning at least $3,500 monthly to live anywhere in the UAE for a year

• Note: Dubai’s virtual working program serves a similar function — the difference is that a) holders may only live and work in Dubai and b) the income requirements increase to $5,000 per month

Residence visa for the retired: Allows those who a) have worked for 15+ years or b) are ages 55+ to live in Dubai for five years provided that they have:

• At least AED 1 million (~$272,257) in assets, OR
• A monthly income of at least AED 20,000 (~$5,445) — or AED 15,000 (~$4,084) for Dubai

The UAE doesn’t offer permanent residence per se, but all of the visas above can be renewed for the same duration of time provided you continue to meet the requirements. 

Unfortunately, the UAE has very strict citizenship requirements. Unless you’ve made outstanding contributions (e.g. research breakthrough, international award), you must typically live in the UAE for 30+ years before you can apply for UAE citizenship.

3. Montenegro

People don’t normally think of European countries as low-tax, but Montenegro is one of the few exceptions. When you’re not busy working, you can enjoy Montenegro’s incredible natural landscapes including beaches, mountains, and lush forests, as well as its great hospitality and amazing food. As a bonus, Montenegro offers an excellent quality of life at an affordable cost.

Individual taxes

Nonresident tax rate: 0% to 15% on Montenegro-sourced income; 0% on foreign-sourced income

Resident tax rate: 0% to 15% on worldwide income

Tax residence definition: Montenegro defines tax residents as those who:

• Spend at least 183 days in a tax year there
• Have a domicile there
• Have Montenegro as the center of their personal & economic activities

At 15%, Montenegro’s top marginal tax rate is significantly lower than that of the US (37%). On top of that, their top capital gains rate is 15% compared to 20% in the US. If that weren’t enough, gifts and inheritances are exempt from taxation for spouses, children, and parents of the deceased — all others face a 3% tax.

Corporate taxes

Corporate tax rate: 9% to 15%

In addition to reasonable corporate tax rates, Montenegro’s tax brackets are quite generous. Income up to €100,000 (~$104,819) is subject to the lowest marginal tax rate, while the top rate only kicks in at €1.5 million (~$1,572,253). All income in between those figures is subject to a 12% tax.

Those who operate in certain industries and have set up shop in a “non-developed region” can also exclude up to €200,000 (~$209,638) in income over eight years. And setting up a business as a foreigner in Montenegro is pretty simple. To start an LLC, you need just €1 (~$1.05) of startup capital.

Visas, residency, and citizenship

To stay in Montenegro for more than 90 days, you’ll need a residence permit. Two of the easiest ways to qualify for a temporary residence permit are by owning real estate in Montenegro or forming a business there.

The temporary residence permit lasts one year and is renewable upon expiration as long as you continue to meet the requirements. After five years, you can apply for permanent residence in Montenegro. After five years of permanent residence (10 years in Montenegro total), you can apply for citizenship.

4. Singapore

Singapore is incredibly safe and clean, with advanced digital and physical infrastructure and a world-renowned food scene. Add to that a tropical climate, an abundance of green spaces, and low taxes, and it’s no wonder nearly 30,000 Americans live in Singapore.

Individual taxes

Nonresident tax rate: 24% on Singapore-sourced income; 0% on foreign income

Resident tax rate: 0% to 24% on Singapore-sourced income; 0% on most foreign income

Tax residence definition: Anyone who meets the following conditions qualifies as a Singaporean tax resident:

• Singaporean nationals who reside in Singapore
• Singaporean nationals who spend 183 days or more per tax year in Singapore
• Foreigners who hold a Singaporean work permit, reside in Singapore across three calendar years, or reside in Singapore across two calendar years and spend 183 days or more in Singapore during the tax year in question

Tax rates on Singaporean-sourced income max out at 24%, a full 13 percentage points less than the top US marginal tax rate. What’s more, residents pay 0% on foreign income as long as they didn’t receive it through a Singaporean partnership. Nonresidents, on the other hand, pay a flat 24% tax on Singapore-sourced income, and no taxes on foreign income. 

And with no capital gains or estate taxes, you can see even more savings on your tax bill.

Corporate taxes

Corporate tax rate: 17%

Singapore has a favorable tax system for businesses as well. Foreigners can start and register businesses just as easily as residents, with a flat corporate tax rate of 17%. Businesses can exempt up to SGD 102,500 (~$76,412) of income from taxation. Startups get an even better deal, with the ability to exclude up to SGD 125,000 (~$93,185) for three years.

Visas, residency, & citizenship

Singapore has a variety of ways for Americans to move there long-term, including the following:

Overseas Networks & Expertise Pass: Allows highly-skilled employees who earn at least SGD 22,500 (~$22,368) per month to live in Singapore 

• Note: The pass does not require an employer sponsor, but applicants must have a concrete job or job offer to qualify

Personalized Employment Pass (PEP): Allows self-employed individuals who earn at least $22,500 per month to live in Singapore for up to three years, nonrenewable

EntrePass: Allows those who have started/plan to start a private company registered that is either venture-backed or focused on innovative technology to live in Singapore for one year, renewable upon expiration

• Note: Applicants must hold at least 30% of the shares in their company

Global Investment Program (GIP): Grants permanent residence to those who make a qualifying investment of:

• SGD 10 million (~$7,456,260) in a new or existing Singapore-based business of at least 30 employees
• Invest SGD 25 million (~$18,640,024) into a Singapore Economic Development Board-approved fund
• Establish a Singapore-based family office that manages assets of at least SGD 200 million (~$149,120,191)

Tech.Pass: Allows tech workers with at least five years of experience in a leading role at a highly-valued tech company and a monthly salary of at least $22,500 to live in Singapore for up to two years. The pass is renewable once upon expiration for an additional two years

5. Bermuda

The Cayman Islands isn’t the only island paradise with favorable tax laws. Beyond the low taxes, expats living in Bermuda love the white sand beaches, active lifestyle, mild year-round weather, and exquisite food scene.

Individual taxes

Non-resident tax rate: 0%

Resident tax rate: 0%

Tax residence definition: None, although those who work from or in Bermuda may request a tax residency certificate

Bermuda levies no personal income taxes, capital gains taxes, value-added taxes, or gift taxes (among others). Some of the few taxes you may face as an American living in Bermuda include:

• A payroll withholding tax of .5% to 12.5%
• Social insurance taxes ($35.92 per week for employees, $71.84 per week for the self-employed)
• Stamp duty (2% to 7% for property transfers, 0% to 20% for inheritances, .25% to 1% for mortgages)

Corporate taxes

Corporate tax rate: 0% for most; 15% on multinational enterprises (MNEs)

Foreigners can start businesses in Bermuda fairly quickly and easily. While Bermuda had no corporate tax rate for many years, the government passed legislation in December 2023 imposing a 15% corporate income tax from 2025 onward. The good news? It only applies to MNEs earning €750 million (~$786,071,250) or more annually.

Other taxes corporations may face in Bermuda include:

• Payroll tax: .5% to 12.5%, depending on salary and exempt/non-exempt status
• Social insurance taxes: $35.92 per week
• Corporate services tax: 7%

Visas, residency, and citizenship

Pathways to permanent residency and citizenship in Bermuda include the:

One-Year Residential Certificate: Allows those with sufficient financial means to live in Bermuda for one year. While you can’t renew it, you can apply for a new certificate after the initial one expires (assuming you continue to meet the requirements)

• Note: There are no concrete income requirements. Immigration officials assess sufficient financial means at their discretion

Economic Investment-Based Residency: Allows those who make certain investments in Bermuda worth at least $2.5 million to live there indefinitely. Upon expiration, you can apply for the Economic Investment Certificate to stay another five years

Gaining Bahamian permanent residence/citizenship is exceedingly difficult for Americans. Generally, the only way to do so is by being born to Bermudian parents or marrying a Bermudian.

Tax breaks for US expats

All Americans who meet the minimum-income reporting threshold must file a federal tax return each year.

If you’re subject to taxes in another country as well, this may require you to pay taxes on the same income to both governments. However, there are several ways to avoid double taxation by reducing or even eliminating your US tax liability.

Tax treaties and benefits

Unfortunately, there are no US tax treaties with any of the countries mentioned above. That said, the benefits of such treaties are often limited anyway. This is due to a tricky “savings clause” which gives the US government the right to tax American citizens as if the treaty didn’t exist.

For most US expats, the better option is to leverage one or both of the two main tax breaks available for Americans living abroad:

The Foreign Tax Credit (FTC)

The FTC gives Americans dollar-for-dollar tax credits for any foreign income taxes they have paid. They can then apply these credits to their US tax bill, essentially allowing them to subtract what they have paid in foreign taxes from their US tax liability. To qualify for the FTC, the foreign taxes you’ve paid must be income-based, legal, and made out to you specifically.

The Foreign Earned Income Exclusion (FEIE) for US Expats

The FEIE, on the other hand, allows you to exclude a portion of your foreign-earned income from taxation. For the 2024 tax year (aka the taxes you pay in 2025), you can exclude up to $126,500 — for tax year 2025, that limit increases to $130,000. Keep in mind that passive income (e.g. rental income, interest, dividends, royalties, etc.) is not eligible for the FEIE since it is unearned.

To qualify for the FEIE, you must pass one of the following tests:

• Physical Presence Test: Requires you to have spent 330 days out of a 365-day period outside the US
• Bona Fide Residence Test: Requires you to prove you have been an official residence of a foreign country for at least a year through official documents like a residency permit

Passing either of these tests also makes you eligible for the Foreign Housing Exclusion/Deduction. With the FHE/FHD, you can write off qualifying foreign housing expenses like rent, utilities, parking spaces, and more.

Frequently Asked Questions