Tax-friendly Countries for Expats
5 Most Tax-Friendly Countries in Europe for Expats and Digital Nomads
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With the rise of remote work, many individuals seek destinations that offer a higher quality of life while reducing living costs. This has led to an exploration of optimizing digital nomad taxes.
It is important to note that most individuals are liable to pay taxes in some form or another. However, it is possible to legally minimize your tax burden by relocating to a country where income earned outside of that country is subject to low or no taxation.
Disclaimer: It is crucial to seek professional advice from a tax attorney regarding financial and digital nomad tax matters. They can provide tailored guidance based on your specific circumstances, especially regarding taxes for digital nomads.
That being said, it is beneficial to be aware of your options so you can discuss them with a tax expert and determine the best course of action. Here are the top five countries that offer favorable tax conditions for digital nomads.
1 | Greece
Greece is rapidly emerging as an enticing destination for aspiring digital nomads to watch closely. Not only does the country boast breathtaking beauty, but it also offers generous tax incentives and actively seeks to attract remote workers.
For the first time, Greece‘s Immigration Code (Law 4251/2014) officially acknowledged the concept of “digital nomads” on September 4, 2021. With the implementation of Law 4825/2021 on the same day, remote employees from other countries are now eligible to relocate to Greece. This policy includes a remarkable 50 percent reduction in income tax and social security payments. For instance, individuals earning $40,000 will see their maximum tax rate decrease from 44 percent to a mere 22% under this program.
Therefore, this tax incentive for digital nomads is certainly worth considering, especially if your plans involve savoring gin and tonics while basking in the Mediterranean sunset.
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2 | Portugal
Portugal is a true haven for digital nomads, offering a multitude of benefits. Expats are drawn to this vibrant country for its safety, exquisite cuisine, and charming ambiance. The Portuguese Passive Income Visa, also known as the D7 Visa, and the Non-Habitual Residence Tax are two powerful tools employed by the government to attract remote workers. Enjoy the advantages of tax-free overseas income and cryptocurrency, among other perks. What sets Portugal apart is its lower income requirements and minimum stay compared to many other European countries.
The Non-Habitual Residency (NHR) policy in Portugal is highly sought after by those seeking to relocate and capitalize on tax benefits. It’s no wonder that Portugal is renowned as one of the most tax-friendly countries for digital nomads, attracting individuals from both EU and non-EU nations.
3 | Malta
Malta, with its mild climate, relaxed atmosphere, and rich history, is an idyllic destination for digital nomads. Last year, Malta introduced the Nomad Residence Permit, allowing remote workers to enjoy the beauty of this island for up to a year (with the option to renew for up to 3 years).
One of the most significant advantages of relocating to Malta is the remittance-based tax system. Non-residents only pay taxes on their local income and a portion of their profits, but they are exempt from paying taxes on their global income that remains outside of Malta. Additionally, capital gains are not subject to taxation, even if the funds are repatriated to Malta. Furthermore, earnings from remote work are not subject to local tax filings.
And that’s not all – by taking advantage of available subsidies and tax relief programs and registering your business in Malta as a digital nomad, you may be eligible for a reduced tax rate of just 5%. Malta also offers the lowest cost for an EU-wide transferable company license.
In conclusion, Malta is a tax-friendly haven for digital nomads, offering an array of benefits and opportunities.
4 | Cyprus
Nestled in the eastern Mediterranean, Cyprus is a sun-kissed and coveted destination in Europe. Starting January 2022, non-EU citizens working remotely for companies or clients outside of Cyprus have been eligible to apply for a Digital Nomad Visa with exceptional tax incentives for digital nomads.
Cyprus has always been appealing to those interested in their “non-dom tax residency.” For those unfamiliar, non-dom tax residents are not required to pay taxes on overseas earnings, passive interest income, or profits from the sale of securities. This serves as an incentive to attract and retain highly skilled and highly paid expats to Cyprus. Additionally, there have been proposals to exempt new resident workers earning up to €55,000 per year from paying 50% of their taxable income in 2022. While this has yet to be implemented, we eagerly await updates and will keep you informed.
If the idea of indulging in delectable halloumi cheese paired with sweet dessert wine while immersing yourself in one of the oldest cultures in the Mediterranean appeals to you, stay tuned for further updates!
5 | Georgia
Tbilisi, the capital of Georgia, is a vibrant city that embodies the rich history and cultural heritage of Europe. Nestled in the stunning Caucasus highlands, it offers the perfect blend of adventure with trekking and skiing opportunities, while the black seashore provides a serene escape from the sweltering summer heat.
Introducing “Remotely From Georgia,” an innovative initiative that invites individuals from around the world to work in Georgia. To qualify, your monthly income should be at least $2,000, or you can provide a bank statement confirming $24,000 in savings. This program offers digital nomads an enticing opportunity with its remarkably low tax rate of just 1% on your business’s gross revenue, up to $155,000.
What sets Georgia apart is not only its favorable tax benefits but also its remarkably affordable cost of living, making it one of the most budget-friendly options in Europe. By choosing Georgia, you can enjoy excellent connectivity to the rest of the continent from Tbilisi, all without the hassle of unnecessary visa runs or excessive bureaucracy. The application process is simple and can be completed online with just a few clicks.
If the streamlined digital nomad visa, generous tax incentives, and breathtaking landscapes aren’t enough to entice you, perhaps the delectable cuisine and Georgia’s distinction as the birthplace of wine will captivate your senses.
So there you have it, an invitation to explore the possibilities of optimizing your digital nomad tax status while embracing a high-quality lifestyle in Europe. Let these tax-friendly countries inspire you to embark on a journey where work and leisure blend seamlessly.