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Financial Planning > Tax Planning

15 Top Tax Havens Around the World

by Michael S. Fischer

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Merchant Machine, a payment processor in the U.K., recently analyzed 20 territories that are known as tax havens or present similar characteristics to tax havens to determine which places have the best tax regimes for individuals.

Researchers selected the top 12 countries and territories from the Corporate Tax Haven Index 2021 and added eight more places that are famous for being considered individual tax havens. They ranked all 20 countries across nine categories, then found the average across all the categories to create an overall score.

What Makes a Country or Territory a Tax Haven?

These countries and territories are characterized by a high degree of secrecy, even when that has been pared back, as in the case of Switzerland. Low corporate and personal income taxes make them attractive to investors and wealthy individuals.

It’s important to note that U.S. citizens or resident aliens living or traveling outside the U.S. generally are required to file income tax returns, estate tax returns and gift tax returns and to pay estimated tax in the same way as those residing in the U.S., according to the Internal Revenue Service.

List of Top Tax Haven Countries and Territories

Here are 15 tax haven countries and territories where individuals who wish to pay less in taxes may want to relocate:

15. Cyprus

  • Overall score: 7.12
  • Personal income taxes: 35%
  • Social security taxes: 15.6%
  • Capital gains taxes: 20%
  • Property taxes: 0
  • Average monthly salary: $2,427
  • Cost of living, excluding rent, for one person: $775

According to company administration firm Fidesta, Cyprus’s 12.5% corporate tax rate is one of the lowest in Europe. This can be further reduced to as low as zero by a wide range of incentives, making the country a tax haven for several types of cross-border businesses, Deloitte notes. Tax incentives also attract high-net-worth individuals who are willing to relocate to the country.

(Image: Adobe Stock)

14. Thailand

  • Overall score: 7.43
  • Personal income taxes: 35%
  • Social security taxes: 5%
  • Capital gains taxes: 35%
  • Property taxes: 12.5%
  • Average monthly salary: $2,804
  • Cost of living, excluding rent, for one person: $518

Income generated outside Thailand is not taxed as long as it is not transferred into the country within one year of being earned. According to Newsweek, iIt has double taxation agreements with 61 countries, which appeals to foreign investors and those who want to live in the country on their savings. Thailand is considered highly secretive.

(Image: Shutterstock)

13. Malta

  • Overall score: 7.48
  • Personal income taxes: 35%
  • Social security taxes: 15%
  • Capital gains taxes: 10%
  • Property taxes: 8%
  • Average monthly salary: $5,193
  • Cost of living, excluding rent, for one person: $841

Malta has long been considered a traditional tax haven because it has some of the lowest tax on profits among EU countries. GoBankRates notes that local companies pay a corporate tax rate of 35%, and that some foreign entities pay between 0% and 6.25%. The island nation of the coast of Sicily is an attractive offshore fund destination because of its links to the EU, English as the main language and double taxation agreements to many countries. However, revelations about money laundering in the 2016 Panama Papers leak have made it a jurisdiction of concern, according to Newsweek.

Image: Adobe Stock)

12. Isle of Man

  • Overall score: 7.58
  • Personal income taxes: 20%
  • Social security taxes: 11%
  • Capital gains taxes: 0
  • Property taxes: 50%
  • Average monthly salary: $5,669
  • Cost of living, excluding rent, for one person: $899
  • Average monthly salary: $5,669
  • Cost of living, excluding rent, for one person: $899

The Isle of Man, a self-governing British Crown dependency in the Irish Sea, does not tax capital gains or inheritances, nor does it levy taxes on companies, many of which hold pension benefits there because beneficiaries can collect benefits starting at age 50. As noted by GoBankingRates, stories from the Paradise Papers, which began to leak out in 2017, shed light on how wealthy individual sheltered assets in the dependency.

(Image: Adobe Stock)

11. Switzerland

  • Overall score: 7.70
  • Personal income taxes: 19%
  • Social security taxes: 5.3%
  • Capital gains taxes: 0
  • Property taxes: 0.15%
  • Average monthly salary: $10,775
  • Cost of living, excluding rent, for one person: $1,521

Switzerland is responsible for about 4% of the global market for offshore financial services, according to Newsweek. Its low taxes and reputation for secrecy have made it a tax haven of choice. Although some of the country’s secrecy laws dating to 1934 are now gone, its reputation for reasonable taxation remains. The corporate tax rate is just 8.5%, and GoBankingRates notes that 35% of Fortune 500 companies have at least one subsidiary operating in Switzerland. Its political neutrality also makes Switzerland a safe jurisdiction.

(Image: Shutterstock)

10. Bermuda

  • Overall score: 7.73
  • Personal income taxes: 0
  • Social security taxes: 11.3%
  • Capital gains taxes: 0
  • Property taxes: 50%
  • Average monthly salary: $1,537
  • Cost of living, excluding rent, for one person: $1,781

Without corporate, capital gains or estate taxes, Bermuda has become a favorite tax haven for some of the wealthiest people in the world — ideally located between the U.S. and Europe. The Paradise Papers in 2017 revealed that the island hosted some notable tax avoidance schemes by the likes of Nike and Apple, according to SmartSearch.

(Image: Shutterstock)

9. Singapore

  • Overall score: 7.85
  • Personal income taxes: 22%
  • Social security taxes: 17%
  • Capital gains taxes: 0
  • Property taxes: 20%
  • Average monthly salary: $6,076
  • Cost of living, excluding rent, for one person: $955

GoBankingRates notes that Singapore is considered by many one of the best countries for taxes, with a 17% corporate income tax — not including incentives — and no tax dividends. And according to Investopia, under Singapore law, private and financial institutions are not required to provide access to personal data about individuals, though the country allows exceptions to banking confidentiality agreements upon request by foreign authorities in cases where accounts were used to shield criminal activity.

(Image: Shutterstock)

8. Jersey

  • Overall score: 7.93
  • Personal income taxes: 20%
  • Social security taxes: 12.5%
  • Capital gains taxes: 0
  • Property taxes: 0
  • Average monthly salary: $6,861
  • Cost of living, excluding rent, for one person: $1,134

Jersey, the largest of the Channel Islands, is home to many international banks, trust companies and fund managers. Its offshore trusts are believed to control some $1.2 trillion in assets, according to Newsweek. Banking secrecy procedures and general secrecy in matters of government and justice are the order of the day. Foreign and domestic companies that have been permanently established on the island pay no corporate taxes, Investopedia notes, nor do they pay taxes on dividends or capital gains.

(Image: Adobe Stock)

7. Hong Kong

  • Overall score: 8.08
  • Personal income taxes: 17%
  • Social security taxes: 5%
  • Capital gains taxes: 0
  • Property taxes: 15%
  • Average monthly salary: $4,551
  • Cost of living, excluding rent, for one person: $1,052

Hong Kong’s appeal stems from its reluctance to sign up to transparency standards and its promise to uphold the principle of “keeping intervention into the way in which the market operates to a minimum,” according to Newsweek. The island does not tax income earned beyond its borders. Investopedia estimates that those who earn salaries in Hong Kong pay an income tax between 2% and 17%, and corporations pay a tax of 8.25% or 16.5%, depending on profit levels generated in Hong Kong. The government does not charge tax on capital gains, interest or dividends.

(Image: Adobe Stock)

6. Panama

  • Overall score: 8.09
  • Personal income taxes: 25%
  • Social security taxes: 9.75%
  • Capital gains taxes: 10%
  • Property taxes: 0.9%
  • Average monthly salary: $2,046
  • Cost of living, excluding rent, for one person: $501

Panama is considered a highly secure pure tax haven. Investopedia highlights the country’s offshore jurisdiction law, which allows offshore companies to conduct business operations within and outside the jurisdiction. Offshore Panamanian companies and their owners are not subject to income, corporate or local taxes, and people of any nationality may incorporate within the country. Privacy of offshore trusts and foundations are strictly protected by law. The Panama Papers leak in 2016 confirmed that the country was a primary location for money laundering, according to Newsweek.

(Image: Shutterstock)

5. United Arab Emirates

  • Overall score: 8.67
  • Personal income taxes: 0
  • Social security taxes: 15%
  • Capital gains taxes: 0
  • Property taxes: 5%
  • Average monthly salary: $5,158
  • Cost of living, excluding rent, for one person: $813

The United Arab Emirates is extremely secretive. Its secrecy jurisdiction is based in Dubai, and comprises a network of offshore facilities that include free-trade zones, a low-tax environment and numerous secrecy facilities. According to Newsweek, some have accused it of operating an ask-no-questions approach to financial crimes and regulation. Dubai charges no tax on corporate income and profits, and offers double tax treaties to UAE-incorporated entities.

(Image: Shutterstock)

4. The Bahamas

  • Overall score: 8.79
  • Personal income taxes: 0
  • Social security taxes: 3.9%
  • Capital gains taxes: 0
  • Property taxes: 1%
  • Average monthly salary: $3,762
  • Cost of living, excluding rent, for one person: $1,068

The Bahamas is a popular tax haven for residents of the U.S. and European countries. As SmartSearch notes, the government does not enforce income, sales, gifts, estate or capital gains taxes. It provides offshore banking, registration of offshore companies, registration of ships and offshore trust management. Because of its strict banking secrecy laws, information on offshore bank account holders can be disclosed only by the specific order of the Supreme Court of the Bahamas, according to Investopedia.

(Image: Adobe Stock)

3. British Virgin Islands

  • Overall score: 9.02
  • Personal income taxes: 0
  • Social security taxes: 4%
  • Capital gains taxes: 0
  • Property taxes: 1.5%
  • Average monthly salary: $1,769
  • Cost of living, excluding rent, for one person: $829

For anyone wanting to set up an offshore bank account, the BVI is the perfect spot, as it does not impose tax on offshore accounts and it has no tax treaties with other countries, thus protecting the financial privacy of bank account holders. In addition, Investopedia notes that there are no taxes on offshore companies, and BVI international business companies pay no taxes on profits or capital gains generated from outside of the BVI. As well, there are no exchange controls for offshore banking customers and offshore companies incorporated in the BVI, making it easier to transfer funds from one place to another for trading and investment purposes while protecting financial privacy.

(Image: Adobe Stock)

2. The Cayman Islands

  • Overall score: 9.10
  • Personal income taxes: 0
  • Social security taxes: 0
  • Capital gains taxes: 0
  • Property taxes: 0
  • Average monthly salary: $3,753
  • Cost of living, excluding rent, for one person: $1,456

Considered highly secretive, Newsweek notes that the Cayman Islands account for nearly 5% of the global market for offshore financial services. In fact, according to Investopedia, it’s among the top five largest offshore financial centers, with some of the biggest banks, hedge funds and corporations bringing their business to the low-tax territory. Offshore companies are not taxed on income earned abroad, and there is no taxation of Cayman international business companies. The Caymans have no income, corporate, estate or inheritance tax, and no gift tax or capital gains tax. Offshore corporations in the U.K. territory are not required to submit financial reports to any local government authority. There are also no exchange controls in the Caymans restricting money transfers in any way, according to Deloitte.

(Image: Adobe Stock)

1. Qatar

  • Overall score: 9.16
  • Personal income taxes: 10%
  • Social security taxes: 0
  • Capital gains taxes: 10%
  • Property taxes: 0
  • Average monthly salary: $4,167
  • Cost of living, excluding rent, for one person: $849

Qatar has a 0% personal tax rate, according to Newsweek, and income generated outside the Arab country is not liable to corporate taxation. It is considered extremely secretive, and is currently on an EU tax haven watchlist.

(Image: Adobe Stock)

Michael S. Fischer

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