Top 5 Tax Havens for Wealthy Expats Amidst the Recent Changes to Tax Regimes

In the wake of recent changes to tax regimes in the United Kingdom and Portugal, expatriates are seeking new destinations to safeguard their assets. The UK's abolition of a favorable tax regime allowing residents living abroad to avoid property taxation for 15 years, along with Portugal's plans to scrap its non-resident program, are prompting individuals to explore alternative options. Here's a look at five countries worldwide offering benefits to foreigners.

Antigua and Barbuda

Since the enactment of a new tax law in 2016, residents and non-residents in Antigua and Barbuda enjoy exemption from taxes on income earned within the country and on assets abroad. This legislation has propelled economic growth, attracting affluent investors and bolstering the real estate sector. Furthermore, there are no estate or inheritance taxes in these tropical islands. Citizenship can also be secured for as little as $100,000, granting visa-free access to 154 countries, although the EU is scrutinizing such programs.

United Arab Emirates (UAE)

The UAE, particularly Dubai, has emerged as a magnet for hedge fund managers and bankers due to lenient tax laws and amenities catering to the wealthy. Personal income, capital gains, inheritance, donations, and real estate are not taxed in the UAE, with a corporate tax rate of 9% for companies generating annual profits exceeding 375,000 dirhams ($102,000). The recent expansion of long-stay visa eligibility further enhances its appeal, although Dubai's soaring real estate prices and long waiting lists for schools and clubs pose challenges.

Italy

Italy's favorable tax system for foreigners, implemented in 2017, has proven highly attractive to expatriates. Milan has witnessed a doubling in the number of beneficiaries of these tax breaks, with over 1,300 individuals benefiting in 2021. Residents pay an annual fee of €100,000 ($109,000) and are exempt from taxes on income earned abroad. Additionally, they can enjoy a 50% tax exemption on Italian income if not residing in the country for the preceding two tax years. Despite contributing to rising property prices and living costs, Italy is poised to capitalize on the withdrawal of incentives elsewhere, particularly from the Americas and the Middle East.

Singapore

Singapore's appeal has been somewhat mixed following a rise in property taxes to 60% for foreign buyers. While the personal income tax rate is capped at 22% for residents, the country imposes high taxes on property purchases. For instance, a foreign buyer acquiring a $5 million home would face a tax burden of 65%, significantly higher than in other global hubs. Nonetheless, Singapore maintains competitive corporate tax rates and benefits from China's crackdown on Hong Kong.

Monaco

Monaco continues to allure multi-millionaires with its luxurious lifestyle and favorable tax environment. The principality imposes no taxes on property, personal income, or capital gains, making it a haven for the affluent. Rental properties are taxed at a mere 1% of the annual rent, while dividends from local companies are tax-exempt. Although Monaco boasts the world's priciest real estate, with $1 million purchasing just 172 square meters, obtaining residency requires a substantial investment exceeding €1 million ($1.1 million).

Additionally, for those seeking a balance between taxation and quality of life, countries like France, Belgium, Denmark, and Japan offer high tax brackets alongside robust public services. France and Japan, for instance, levy income tax rates of up to 45%, with additional surcharges on high incomes and capital gains. Denmark's income tax reaches 52%, while Belgium applies a 50% tax rate on income exceeding €46,440. These nations cater to individuals prioritizing social benefits and public infrastructure despite the higher tax burden.

By fLEXI tEAM