If you’re interested in moving abroad, you should understand the country’s tax system, including its capital gains tax rates. These taxes usually apply when you sell your house, stocks or other assets for above the original price you paid. While U.S. capital gains rates depend on factors such as your tax bracket and the length of asset ownership, other countries set their own rules.
Keeping in mind you’ll need to meet tax residency requirements, take a look at seven top countries that have no capital gains tax, or a 0% rate for certain situations.
1. The Bahamas
Known for its many islands and sandy beaches, the Bahamas is a popular destination for investors and expats due to its tax advantages. The country has no capital gains tax at all, and estate and income taxes don’t apply, either. You’ll just need to become a tax resident by gaining a residency permit or buying real estate worth $750,000 or more.
Andorra is a small, landlocked European country with a lower cost of living than the U.S. It’s ideal for avoiding taxes on stock investments since the usual 10% doesn’t apply if your ownership stake is below 25%, or your ownership period exceeds 10 years. Taxes on real estate are 0% to 15% depending on how long you’ve owned the property. Plus, the country’s top income tax rate is just 10%.
There are passive and active options for obtaining tax residency. The latter option requires having a full-time job.
Having many landmarks and a low cost of living, Malaysia just charges taxes on domestic income sources. You’ll pay taxes on investments like stocks only if the country classifies your activity as a business, and there are several exceptions. Typically, gains on foreign and Malaysian stocks, bonds and trusts are tax-free. For Malaysian real estate disposals and regular income, taxes of up to 30% do apply.
The paths to tax residency involve physical presence requirements. There’s also a family investment visa program available.
Monaco stands out as an exotic European destination for avoiding taxes. The country has no capital gains tax or income tax to pay. However, living in and gaining residency in Monaco can be challenging due to the country’s high cost of living.
You have to be a resident for six months or longer to get tax residency status. This first requires showing the government you’ve got money for everyday expenses and you’ve secured housing.
5. New Zealand
New Zealand offers beautiful scenery and a similar cost of living to the U.S. You won’t pay any capital gains tax associated with personal property sales, online business sales or Australian and New Zealand stocks. The country also doesn’t charge taxes if the asset is something you didn’t obtain to resell. However, you might have to pay taxes if your activity occurs often. Regular income taxes range from 10.5% to 39%.
You’ll have to first become a legal New Zealand resident and meet physical presence requirements for tax residency.
While it has a high cost of living, Switzerland is known for its strong economy and famous Swiss Alps. Unless you treat investing as your job, the country shouldn’t charge capital gains taxes on your investments. While you won’t pay capital gains taxes on personal movable assets, there are taxes on real estate and business asset sales. The country’s regular income tax rates top out at just 11.5%.
To become a tax resident, you might consider Switzerland’s programs for business investors and other aspiring residents who have significant money to put into the economy.
7. The United Arab Emirates
The United Arab Emirates offers a high standard of living alongside a lower cost of living than the U.S. It’s known as a tax haven for individuals since there are no income taxes and capital gains tax to worry about. However, disposed business assets are taxed at the corporate tax rates ranging from 0% to 9%.
Another benefit is the country’s several options for obtaining tax residency. A few include getting a domestic job, starting a company or making a significant real estate investment.
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