If you are working remotely and getting taxed a lot in your home country, have you ever thought how much more you would be making if you were living in another country and taxed at 0 percent? 🙂
Is it worth moving?
The answer to this question will depend on how much taxes you pay annually. I have given an example below where it might make sense for you to move –
Let’s say you are living in the UK and making about 200K USD.
You will end up paying approximately 70K USD in taxes as a UK resident but if you were living in a tax-free country that 70K USD goes straight to your pocket!
If you were able to save an additional 70K for 10 years – it would be 700K!
Living in a tax-free country starts to make more sense if you are expecting your income to increase significantly.
Countries with no income tax
Here are some countries you can consider moving to –
- Bahamas – English speaking; North America
Bahamas is an island country located very close to Florida, United States and if you end up moving there, you will see a lot of American and Canadian tourists. The weather is nice and warm throughout the year! The Cost of living is moderate. Bahamas is a developed country and most regions are considered safe (some regions depending on the islands might be risky to live). While there is no income tax; you do have to pay social security.
- Costa Rica – Spanish speaking; North America
Costa Rica is a small Spanish-speaking country in Central America. The Cost of living is low. Costa Rica wouldn’t tax you on foreign income but if your income was generated otherwise, you might get taxed.
Other advantages to consider Costa Rica include cheap healthcare.
- United Arab Emirates – English speaking (in Dubai); Asia
While located in the Middle East, UAE is considered a developed country with Dubai being well known around the world for its extravagant lifestyle. The Cost of living in the UAE is moderate.
Please note that the UAE culture and laws are influenced largely by Islam, and it would be good to look into what kind of lifestyle you can expect living there.
- Bermuda – English speaking; North America
Bermuda is a British Overseas Territory but follows a different tax system. Bermuda is suitable for folks who deal primarily with North American/European customers. The cost of living in Bermuda is very high. Bermuda is considered a developed territory and most areas are considered safe for living.
- Monaco – French speaking; Europe
Considered to be one of the wealthiest countries in the world. This might be a suitable option if you work primarily on the EU timezone.
Cost of living in Monaco is high. Country is considered very safe for living. Certain parts of Monaco speak Italian as well.
Things to consider before moving
- Consider travelling before moving
- Residency period – Usually you need to reside for more than 6 months in the country every tax year to be considered a resident for tax purposes.
- Moving costs – The more stuff you have, the higher the moving costs.
- Import costs – Some countries can charge you import fees if you are planning to import a car.
- Culture – Would you fit in well in the new country
- Language – How hard would it be for you to talk to the locals
- Work contracts and taxes – If you work for certain clients (government); you might need to figure out your work contracts and how you will report your income.
- Friends – You most likely don’t know anyone in the new country!
- Family – If you have family members, you will have to see if your new residence will work well for them or not.
- Healthcare – If you are reliant on healthcare systems often, it would be good to look into what coverage you would get on the public/private healthcare system of your new residence.
- Lifestyle – Check what the locals do for fun/entertainment
Do you really want to move?
Your new residence might work out well for you! But it’s important to consider that you take good care of yourself and are able to enjoy your time there! A lot of people drop the idea of moving because certain things don’t work out well for them. If you were to ask me, I would consider doing it only for the short term!