In addition to taxation of corporate profits, the taxation of natural persons in the form of income tax, capital gains tax, inheritance tax and wealth tax is one of the most heavy tax burdens.
While most industrialized western countries levy a maximum tax rate of around 50%, citizens in Sweden, Finland, Japan and Austria pay significantly more than half of their income into the state budget.
A tax-free residence ideally reduces the tax burden to 0% or at by a significant portion. While most western nations levy taxes on worldwide income, there are numerous states, particularly in South America, that only tax income generated or earned domestically and thus offer a de-facto tax exemption for international entrepreneurs. The territorial taxation system thus allows for the income from a foreign source to be tax-free.
The most attractive model is certainly the tax-free residence in a country that does not tax its citizens and residents at all. In large parts of Africa, for example, income tax is not a known and applied concept, though few expatriates take African countries into consideration as a permanent residence alternative.
A tax-free residence in the metropolis of Dubai can be easily realized by incorporating a company in the United Arab Emirates. In addition to Dubai, the other Gulf states also offer attractive framework conditions, high quality of life and a complete tax exemption.
List of countries without income tax: