Top Entrepreneur Friendly Places To Live
Hello Everyone,
As some of you noticed, I like to travel. As you travel you do become aware of how different countries treat entrepreneurs — some make it easier to go into business and frankly some appear to make it more difficult.
I live in the UK and while it is far from perfect it is a good place to start a business – registering a new business is pretty straight forward and easy.
That said, many of us like to dream of one day living in a much more Entrepreneur friendly country — not just for business reasons but also for lifestyle reasons (Better weather appears to be one of the top reasons) So for this post I had my VA do some research on Cool Places For Entrepreneurs To Live — I have to say, I was surprised by some of her suggestions. (For Example, the Falklands Islands is a bit too cold for me — but I’m sure the scenery is great)
Let me have you thoughts on the views and suggestions, in particular:
1) Is there a particular country you would like to move to? (if it is not listed, please suggest it)
and
2) What would be your reasons for moving there? Lifestyle? Friendlier Taxation rules for entrepreneurs? Better Climate?
or
3) Are you really happy where you currently live?
On a side note: One question I get asked over and over is for my thoughts on Business Structure? Should you set up a company or trade as an individual for example? Also do I have any views or suggestions on setting up businesses ‘offshore”?
I am quite clear on this — I do not and will not give any advice on Legal or Accounting Matters. For a start I have no professional qualification and therefore I am not qualified and secondly the rules and regulations vary so much from country to country that frankly I would be getting into a minefield if I ever attempted to do this.
Therefore – please contact a relevant Professional in your country and seek advice from them.
Finally — please note, the list below is not exhaustive – clearly you should do your own Due Diligence before moving to another country — not matter how good the weather or taxation rules are
To Our Success
Michael
1. Andorra – Tax Haven
Andorra is a well-known European tax haven, and people who claim residency here have no income tax and inheritance tax. However, the country recently introduced a capital gains tax making it less popular amongst the world’s richest people. That said when compared with the price of purchasing property in other popular tax havens, Andorra is still a wise move for some.
Source: ArticlePro and independent.co.uk
2. Bahrain – Tax Haven
Bahrain has a highly favorable tax environment, with no taxes on personal or corporate income, and no withholding or VAT. Unlike some other tax havens, Bahrain allows 100% foreign ownership of companies. And as a result thousands of global corporations have made Bahrain the location of their Middle East headquarters.
Source: BahrainGateway
3. Gibraltar
Gibraltar was once a very popular tax haven for British business. As a self governing territory Gibraltar offered its “residents” and domiciled businesses no capital gain tax, no wealth tax, no sales tax and no VAT. But as of 2006 Gibraltar has agreed not to issue any more Exempt Company certificates.
Source: ShelterOffshore
4. The Bahamas
The Bahamas takes pride in offering part-time “residents” and wealthy retirees a break from taxes. This island nation has no corporate income tax, no capital gains tax, no personal income tax, no sales tax, and no inheritance tax. Businesses domiciled in the Bahamas do pay payroll taxes and a few other minor levies.
Source: Lowtax.net
5. Switzerland
Switzerland is made up of 26 Cantons, member states that were entirely sovereign until 1648. This historical legacy of independence has created an amazing tax haven. Wealthy foreigners who gain resident status can negotiate the amount of their income that is subject to taxation with the canton where they purchase property!
Source: Wikipedia
6. Monaco – Tax Haven
Under Monegasque law, there is no income tax imposed in this country. There is also no withholding tax. Its rental properties are taxed at 1% plus a service charges. This tax is payable by the tenant. There are no capital gains. Monaco does not levy wealth taxes.
Source: GlobalPropertyGuide
7. Cayman Islands – Tax Haven
The Cayman Islands are a British overseas territory, a group of three islands located in the Caribbean between Cuba and Central America. They are one of the largest offshore banking centres in the world with over 600 banks. There is no property tax, income tax, corporate tax, sales tax, capital gains tax, inheritance tax, or any other kind of direct taxation in the Caymans. They only impose tax for the following: Departure tax, which is CI$10 or US$12.50 for travelers aged 12 and above and a one-time “stamp duty” which is charged on real estate purchases at a range of between 7.5% and 9%.
Source: Expatfocus
8. Cook Islands
There is a moderate income tax in Cook Islands. Non-residents are taxed only on their income from sources in Cook Islands. Income and capital gains earned by non-residents is taxed at progressive rates, from 20% to 30%. Income tax is payable by those residing and working in the Cook Islands and is charged on a maximum rate payable set at 30% and a personal allowance of NZ$6,000. Any earnings over NZ$30,000 are taxed at 30%. There are no property tax, capital gains tax, estate tax and property tax.
Source: MyDeltaQuest
9. Hong Kong
Rates of personal taxation in Hong Kong are amongst the lowest in the Asia Pacific. There are no sales tax, capital gains tax, no VAT, a maximum salary tax of 20% and a profit tax maximum of 16%.
Source: About
10. American Anguilla(British West indies)
Anguilla is a Caribbean tax haven. It is an ideal tax-free haven for foreign and American investors. There are no personal income tax imposed and no tax information exchange agreement (TIEA) signed with IRS/US Treasury.
11. Mariana Islands
Independent but politically linked to the US, it is a tax haven. Residents’ tax rates peak at 9%. The income tax is generally charged at progressive rates. Its taxable income is computed by deducting income-generating expenses and depreciation costs from the gross income. All of the income from the islands produced by non-residents which are not effectively connected with a business is charged at a flat rate of 30%. Although if the taxpayer files an income tax return in the islands, he is entitled to 100% rebate on this tax. This country is a tax haven and a tourist heaven.
Source: CNMI Department of Finance
12. Brunei
A tiny yet oil-rich sultanate on the northern coast of Borneo — has aspirations as an offshore financial centre. Brunei has no personal income tax. What you earn is all yours. Though, Chinese, who make up an estimated 16% of the population, are excluded from citizenship, and these benefits. They are either stateless or hold British protected persons passports. Only corporations are subject to taxation. Companies pay 30% tax on earnings. Depending on the size of the capital investment, companies with Pioneer Certificate are exempted from 30% tax for two to five years.
Source: NationsEncyclopedia
13. Malta
Tax here is moderate. Non-residents are liable to tax on all their income sourced in Malta. There is no property rate; its remittances of a capital nature are not taxable. Though, temporary residents, who extend their stay in Malta beyond six months in any one calendar year, will be subject to Malta tax on remittances of income made to the Island during the period of stay. Non-resident individuals are subject to a withholding tax of 25%. Capital Gains Tax is generally levied at a flat rate of 12% on the transfer value or the selling price.
14. Isle of Man
The Isle of Man is a low tax area with a standard rate of income tax of 18% and a higher rate of 20% depending on the level of income. There are no general capital gains tax, turnover tax or stamp duties.
Source: LowTax
15. Saint Vincent and the Grenadines
This is also one of the world’s tax havens. There is no capital gains tax. The individual income tax is contributions for the national insurance plan (social security) which is 5% of income per year. Its corporate income tax is 10% to 35%. This tax haven is considered to be low to moderate.
Source: ExpatIntelligence
16. Grenada
The tax in this country for residential properties is levied at 0.1% on land value and 0.15% on the structure/building value. The income that is earned by non-resident individuals is subject to a flat rate of 15% withheld at source. The property tax is charged on all real property in Grenada. The tax is levied on the market value of the property and a taxable rate is applied based on the classification of the property.
Source: GlobalPropertyGuide
17. Mauritius
Mauritius, as of 01 July 2008, a flat tax rate of 15% will be applied on all taxable income. All rental income of non-residents is taxed at a flat rate of 15%, withheld by the tenant. Income-generating expenses are deductible when computing for the taxable income. The royalties paid by offshore companies to non-residents, and dividends from Mauritius by nonresident companies are tax free.
Source: IntercontinentalTrust
18. Nauru
Nauru does not impose any taxes; it did not also sign any income tax treaties with any nation. To provide for a secure economic future, the government has invested much of the phosphate revenue overseas in projects ranging from a skyscraper in Melbourne to phosphate plants in the Philippines and India.
Source: Offshore Manual
19. Dutch Antilles (Netherlands Antilles)
Those that derive all their income from outside the Netherlands Antilles are liable to tax rates of between 2.4% and 6%, dependent upon activity. Local workers pay 2 % with the income of $3,300. There are no withholding taxes on dividends interest and royalties, capital taxes, exchange control restrictions and no required debt-to-equity ratio.
Source: EscapeArtist
20. United Arab Emirates
There are no income taxes on UAE. Rental income earned on residential properties located in Dubai leased to foreign nationals is taxed at 10%. There are no capital gains and property tax in UAE.
Source: KPMG
21. Solomon Islands
For Individual taxation, depending on their income peaks at 40% that is if the income is up to $60,000 and up. $15,000 is charged at 11%. Residents are taxed on their worldwide income. Non Residents are taxed on income sourced from the Solomon Islands.
Source: IMF
22. Antigua and Barbuda
The income tax in this country is at its progressive rates. It is categorized in three which is: employment, self-employment and other income. For Income up to $4,444, it is charged 10% and for over $53,333, it is charged 25%, this is on all income over US$53,333. Also, each taxpayer is entitled to a personal tax-free allowance of $13,333.
Source: GlobalPropertyGuide
23. Aruba
Aruba’s law of Imputation payment System and Dividend withholding tax is levied at 11.8%. Aruba is considered as a dormant tax haven compared to other tax haven. The tax haven companies located in Aruba are exempt from tax.
Source: LowTax
24. Cyprus
The corporate tax rate in Cyprus is the lowest in EU. The tax regime provides many exemptions. Cyprus is more than just an attractive holding company jurisdiction. There is no personal income tax if the income is at lb 0-10.000. But Chargeable Income which is greater than lb 20.000 is charged at 30%. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus. An individual is tax resident in Cyprus if he spends in Cyprus more than 183 days in any one year.
Source: BDO
25. Fiji
Income is taxed in progressive rates in Fiji. The taxable income is gross rent less income-generating expenses. Non-residents are entitled to the following allowances: Wife allowance of $658, provided that the wife does not elect for a separate assessment; Widow or widower allowance of $548.
Source: GlobalPropertyGuide
26. Ukraine
Non-residents in this country are generally taxed in 15% on all their income. Same is for the gross rental income earned by the residents. The Value added Tax, leasing and sales of buildings are subject to 20% VAT. The property tax is levied on Ukrainian land and property at 1% payable by the owners or users of the property. For corporate tax it is taxed at a rate of 25%. A 1% tax is levied on the capital gains.
Source: GlobalPropertyGuide
27. Islands of Guernsey and Jersey (Channel Islands)
The individual taxation here is normally 20%. There are no capital gains, no gifts or wealth tax, no real estate and VAT. Social security is levied at a rate of 12.5%
Source: KPMG
28. Falkland Islands
This is another moderate tax haven. The individual income tax is free for the first lb12,000. The next lb12,000 is charged at 20% and any amount thereafter is charged at 25%. The tricky system of individual deductions and allowances previously in place has been removed.
Source: Falklands
29. Jamaica
Income tax in Jamaica is 25%. For residential tax, a person’s company payroll system is not required to file an income tax.
Source: KPMG
30. Montserrat
The tax rates for this tax haven are not low, but fair. For the nonresidents who’s earning rental income in Montserrat is taxed at a flat rate of 10%. For the residential properties, taxes are charged at 1.65% land tax on market value of land, 0.3% house tax market value of the building infrastructure. No tax for capital gain. For Non-resident companies (lending money for “approved development) it is charged 20%. Resident companies are also charged 20%. There are no other taxes on the income of a corporation resident in Montserrat.
Source:
http://www.globalpropertyguide.com/Caribbean/Montserrat/Taxes-and-Costs
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This is a very interesting list. I would imagine, though, that if you’re going to go through the motions of setting up a business in another country it would likely mean that you want to settle there? You say you like to travel but it seems that this would be more about relocation. For a lot of nomadic, location independent people, their business remains officially located in their home country while they travel the world freely. Their taxes continue to be paid at home. I realize this may not be as financially advantageous as what you’re describing here but it seems like it would give more freedom of mobility.
Hi Carmen – Very Good point
I think for many freedom of mobility is the driving factor — and even if they do move to another country to locate their business many will still continue with the nomadic existence
Interesting, the places that are best for tax reasons are also amazing looking places!
It’s a win, win situation
Why don’t you try Bali? In Bali, there is a lot of places where we can go relax and enjoy the life. So, you better check it out! Bali is a recommended place for entrepreneurs to live in!
Awesome list, Michael!
Personally I’ve developed a bit of a love for HK after I went there last year, so it’s nice to see that on the list! I think anywhere sunny would be nice though :p
Wondering how may great places offer tax reductions! sure Let us start our foreign branches in future in one of those places.
Micheal, you left out the most popular for italians, San Marino http://en.wikipedia.org/wiki/San_Marino
Wow, that is really cool. I would love to move to almost any of those places!
I don’t care much about the tax shelters this places offer, but they are awesome sights!
I’ve always wondered which countries would be the cheapest to live (cost of living, rental accomodation etc.) in for a ‘have internet connection will travel’ style entrepreneur – especially those, like me, who aren’t super wealthy. Maybe your next list?
I’m an American citizen by birth, but I already voted with my feet for the Philippines. Cost of living is 40% or less than the US, all foreign-earned income for foreigners is exempt from Philippines taxation, and banks here are very stable and they have a very strong banking secrecy act .. especial y with UBS’s recent capitulation, Philippines banking is way, way more private than Switzerland’s.
Permanent residency visas for a foreigner are relatively easy and cheap, and English is one of the official languages, so you can read the laws, and the signs.
For those interested in Hong Kong, be sure to check out Hong Kong’s “sister” Special Administrative Region, Macau, a 20 minute ferry ride away. Most of the same opportunities of Hong Kong but with clean air and much more laid back, easy going attitude.
Hi Michael ~ Great post! We too wonder where else we could call “home” while we travel about and work from anywhere with an internet connection. Some of the places on your list are on our “must see” list so these facts are good to know as business owners. I agree with Clive and would love to see a cost of living comparison of these same places … which could narrow down the choices. LOL. Thanks for the info. *SmiLes* Suzanne
Hello Suzanne and Clive,
Definitly a good idea to do a comparison on the cost of living in these places, will look in to getting this done. For myself, I love England and would hate to leave although the idea is quite tempting since becoming successful.
Michael
Andorra is definitely the best choice : 2 hours from Barcelona (Spanish side), or 2 hours from Perpignan (French side) in both cases 2 hours from the Mediterranean sea ! And great ski stations. A dream !
For a very quick but extremely reliable cost of living comparison, look no farther the “The Economists’ “Big Mac Index. (available free with registration). Sounds simplistic, but the Economist is one of the world’s leading economics resources and they have been publishing, updating and analyzing the “Big Mac Index” for more than 25 years now.
It is heartening to see ‘the light coming on’ to many entrepreneurs. Where you live need not have anything to do with where you earn.
Hello Dave,
Exactly, I live in England, although around 99% of my earnings are in dollars because most of my customers come from America and the fact that the Internet currency is USD. With the Internet, your marketplace should be everywhere now, not just your local town your country.
Michael
PS. Thanks for the tip to check out The Economists
Hello Michael,
I received your E-mail , so here I am.
Great places for Retirement and Vacations.
I am relocating soon also.I am going to
Seattle , Washington to Retire..Seattle has
the Mountains , Forests and the Ocean of
course.
Good Post Michael.Keep up the good
work..
Gary,
These countries are good for big corporations with a lot of money. But for entrepreneurs that just get started (and are often an one-man operation, like most online businesses), these places will prove harder than countries like UK. That is because (in the case of an online business) a lot of companies just don’t like doing business with countries other than the main 4: US, UK, Canada & Australia.
A lot of times I wanted to buy something from eBay.com and have it shipped to Germany (when I was living there) and the seller said “No shipping outside North America”. Also, registering for CJ and other affiliate networks is very hard unless you have a UKUSA address (even if you are approved from say, Brunei, receiving and cashing checks is a Major Pain; I and many people prefer direct deposits).
The solution? A company, bank accounts + mailing address and phone in the USA (the best country for business, IMO). Yes, you pay higher taxes and have to spend more money than usual, but at least you can live free wherever you want. And it’s not that hard to set up, there are a lot of companies that manage your taxes and annual filings for a fee and MyUS and Skype provide you with the address & phone.
You’ll need to go to the US to open your bank accounts, but the rest can be done online.
J makes a good point – many of these countries are not really an option is you are just starting out or have limited funds.
Australia, Canada, UK and the USA make it pretty easy to set up a business — the challenge (especially if you are a resident) is that if you become very successful you will pay a fair amount of tax or if you sell the business and make a large capital gain, then again the Tax man comes knocking
I am not against paying taxes — and agree it is all about compromise and convenience in the end — but I have met a good number of successful online business people who all basically say the same thing again – that if they had their time again, they would have given a lot more thought to the Legal location of their business.
The challenge is that as you start out you often don’t have the money to consider the ‘alternative options” — but then when you can afford to it is too late.
Of course the other point is that you only get to pay all that Tax is you make loads of money in the first place
Personally I am increasingly looking at Life from a LIFESTYLE point of view and places that allow me to live cheaply (without being too frugal) are what I am looking for — so maybe thats the next list Michael Should do — a sort of ‘quality of life’ list of places for entrepreneurs to live.
After all if I can live for half the money in one location it means I don’t have to earn so much money (and pay so much tax) in the first place
Great post.
Points above well taken re: U.S. Businesses.
As it turns out the U.S. is one of the best tax havens …provided you are NOT a U.S. Citizen. You can be a citizen of another country AND own a U.S. based company entity sometimes WITHOUT U.S. taxes. In addition getting a U.S. bank account MAY NOT require that you come to the U.S. to do so.
There are also U.S. based firms you can partner with for relatively small percentages who can assist with banking and merchant accounts. Some of these “partners” are run by the same operations people behind some of the biggest name Internet Marketers.
Before you talk with a legal or tax professional you might seek out a professional strategist who can help you see all the possibilities.
With a little research you can find the best solution.
C
I dislike taxes as much as the next guy, but don’t know how so many people have the idea that US taxes are high. Especially for small business, they are among the lowest … and as has been pointed out you do not need to be a US citizen to own a business or as bank account there. and you do not have to visit the USA to open a US bank account. Regarding shipping? I order stuff sent to a shipping company in the US and forwards mail and packages overseas for me … all my business is done as if I still lived in the USA, including my USA phone number via Skype.
Bosnia and Herzegovina has 10% income tax absolutely regardless of how much money you make. VAT is 17% and the prices of labour, rent and everything else are very low indeed. That beats some of the above.
Great list….
But just wondering Internet facility is available at Andorra???
Correct me if I’m wrong…:)
OZ, Romania has a 13% income tax (introduced recently, lowered from 16%), and is another good candidate. Greece and Cyprus are also good. The problem there is that it is hard to open, say, a Paypal account and perform international transactions using their banks (at least it was so 3 years ago, maybe everything changed).
Chuck, you are right about that, except that for a foreign person to own a US company AND not pay taxes, he needs a partner who is an US citizen (who will pay taxes). The result is that the company as a whole pays less taxes, so it is a good option.
But if you are a citizen of another country and want a US company all to yourself, the company will pay all the taxes that are required by law (because corporations are separate entities subject to US laws, no matter who owns and runs them).
Actually, I never found the taxes very high. If you list everything from apartment rent to buying a new PC and ordering food (like John Chow does as business expenses, you’ll find that you pay very little to the tax man.
Great article! I plan on working around the globe sometime in the near future.
I wanted to point out something nitpicky: The image of Montserrat you have is of a monastery near Barcelona, Spain – I believe the Montserrat you were speaking of is different.
Cheers!
Nice List! I wonder if Barcelona is another place…
Excellent list, and love that you got your VA to compile it. TIm Ferriss would be proud!
It’s not just about taxation of course. Out of the places on your list I would choose HK due its unbeatable entrepreneurial spirit.
Those places are amazing! But staying for good is not a good idea for me. Thanks for the list though.
Hi Michael,
Nice list – but most of the places you listed have a high cost of living. So you would more or less save on taxes but still use the money to maintain a descent standard of living.
Countries which have relaxed tax laws and reasonable rates of living along with scenic beauty and a lovely climate would be Srilanka (pretty safe now that the terrorism part has been taken care of ), Indonesia, Malaysia, Thailand and the andoman and nicobar islands – most of these places are in Asia – which give you a great internet connection, have great VA’s to assist you and you basically double/triple your income with the low cost of living.
Hope this helps…I also know great VA’s who want work – so if anyone needs a specialized VA – drop me an email…
Cheers
you forgot to add qatar
reasons:
highest gdp in the world
0% taxation, complete tax heaven
big heaven for development and enterpruners
very highly developed city
friendly people
good tourist spot
oh btw i live here:P
[p.s there is no paypal here, so its not that friendly lol]
Michale, an interesting blog post, but I think I have far more to learn from you about making money online than I do about geography!
You talk about taxes on the value of property in Montserrat, but there isn’t much property to be taxed on, as the capital, Plymouth, was destroyed by a volcano in 1997.
Your picture is of Montserrat near Barcelona, Spain – both are great places to visit in their own way, I could write you a few pages on either, but they are on completely different sides of the Atlantic.
Happy blogging, James
Enjoyed the list…thanks, and added a few more places to the wish list to visit
How about Tahiti in the summers, not sure what the financial situation is there but I’ve always dreamed of going.
Winters would have to be in the states, in the Colorado Rockies, some of the best skiing & snowboarding around.
Reasons, Lifestyle, Climate
In term of taxes I think it’s a great list, but about available resources and incentives?
It’s nice to read good stuff that isn’t a waste of my time. My team has been using this company – dnavertical.com for our outsourced
business development. You might want to check them out. They rock.
Can you post more on this subject. Great read.
Wow man, no panama ?
I don’t live there, but I keep my cash there
Helps me save 40% every year.
Tax havens are very handy providing you are careful. With the constantly changing agreements to force offshore havens to disclose, it’s well worth establishing exactly how and where you domicile yourself, your company and indeed your assets before rushing off with the thought that one can live relatively tax free.
http://www.ipinglobal.com/ipin-live/blog/270058/expats-abroad-taxes-and-liabilities
Very interesting list and some great places. But I wonder how it is with getting residence in these locations. It’s all very well to visit with a laptop and stay in a hotel or furnished apartment on a one month visa. But you can’t get to enjoy the benefit of the low taxes of these destinations unless you are actually domiciled there.
Hong Kong for example is a great place to be based, but trying to get a residence visa as an entrepreneur is very difficult. As far as I know you have to be planning to invest a great deal of money there and intending to employ a number of people locally. Not the kind of enterprise most internet entrepreneurs are involved in running.
We need to consider these destinations from the residency permit point of view, not just the level of taxation.
Just a small correction. Cypress does not have to lowest tax in the Eu. Since 2008, Bulgaria has had a flat tax rate of 10% both corporate and personal income tax. It suprises me how few people actually know this since it easy to find out. Just try wiki taxes in Europe…
Chris