Culture & Travel
22 August 2024Digital nomads can enjoy a more comfortable and relaxed lifestyle, especially in places with low income taxes. This is why many in fields like information technology, advertising, media, and public relations choose the digital nomad lifestyle. However, selecting a country to settle in as a digital nomad requires attention to various criteria. While taxes are an important factor, they aren't the only consideration. For example, the minimum stay required to become a tax resident is important. It’s also crucial to check whether the country’s laws support your work and lifestyle.
Climate can also be an important factor for digital nomads. If you’re required to stay in a very hot or cold country for more than 100 days, you should consider how well you can adapt. Therefore, conducting thorough and accurate research to choose the most suitable location for your digital nomad journey is essential. As a first step, you can start by exploring countries where taxes won’t be a burden. Here are the countries where digital nomads can live with low taxes.
Malta
With its stunning Mediterranean views, renowned culture, and cuisine, Malta is one of the most ideal places for digital nomads. The country’s recent tax regulation specifically designed for digital nomads is one of the factors that makes it particularly attractive. So, how does the income tax regulation work in Malta? Currently, under the “permitted work” category, income tax is levied at 10%. However, to qualify as a tax resident, you must spend at least 6 months on the island. Corporate tax is set at 35%, but since 30% is refunded by the state, the effective tax rate is around 5%.
Albania
Another country favored by digital nomads due to its low cost of living is Albania. To qualify as a tax resident, you need to stay for a minimum of 183 days. With a strong internet infrastructure, Albania is an ideal country for those working in digital fields. The income tax rate for freelancers in Albania is set at 15%. If you receive dividends from a business, an 8% dividend tax applies. Capital gains are also subject to a 15% tax.
Cyprus
Cyprus is another attractive country with low taxes, breathtaking scenery, and a livable atmosphere. To qualify for income tax in Cyprus, you need to stay for a minimum of 183 days. No tax is applied during this 183-day stay. The tax rates can vary depending on your income level. There is no tax on income up to €19,500. The corporate tax rate is just 12.5%, making the country even more attractive for investors.
Paraguay
In Paraguay, you must obtain a tax residency permit to benefit from tax advantages. The minimum stay required for this is set at 120 days. The income tax rate in Paraguay is set at 10%. If you register as a freelancer or business manager, social contributions become optional, which is a significant opportunity for digital nomads. The standard VAT rate of 10% applies to goods and services offered within the country.
Romania
With its highly developed internet infrastructure and low tax rates, Romania attracts digital nomads like a magnet. You can live in Romania with a 183-day rental or personal residency requirement. The income tax rate in Romania is set at 10%. Social security and health insurance contributions vary depending on income. The standard corporate tax rate is 16%, and the dividend tax rate is 8%.
United Arab Emirates
The United Arab Emirates is one of the most tax-friendly countries. However, the cost of living varies depending on the region, making the choice of where to live important. Especially in some parts of the country, renting a home, participating in activities, and enjoying nightlife can be quite expensive. Aside from taxes, this could be an important consideration for digital nomads. There is no income tax in the UAE, but tax residency rules can vary based on the number of days you reside in the country.
Bermuda
Bermuda, with its renowned natural beauty and vibrant nightlife, is another country on the radar of digital nomads. While the cost of living is somewhat high, the lack of income tax makes it an ideal place. Additionally, a $200 customs fee is charged each time you enter the country. With so many advantages, Bermuda has become a top choice for digital nomads.
Czech Republic
Being part of the Schengen Area, the Czech Republic has procedures that don’t burden residents of other Schengen countries. The Czech Republic, known for its culture, nature, and lively nightlife, requires a 183-day stay to qualify as a tax resident. There are two tax brackets. The first bracket covers income up to €82,000, taxed at 15%, and any income above that threshold is taxed at 23%. Investment income is subject to a fixed tax rate of 15%.
Georgia
Georgia is one of the most beautiful countries in the Caucasus, offering low taxes for digital nomads. This Caucasian country also boasts a vibrant social scene, with many places to explore and see. Its geographic appeal further attracts digital nomads. So, what is the tax rate for digital nomads in Georgia? The country’s income tax is set at a flat rate of 20%. However, this tax only applies to income from Georgian sources, meaning income from foreign clients and investors is tax-free.
Brunei
Brunei’s low cost of living and tax-free environment make it an extremely attractive place to live. Essential needs like food and drink are very affordable. Activities in the country are mostly nature-oriented, making it a great choice for those seeking a peaceful atmosphere. There are no tax obligations for digital nomads in Brunei, but you do need to reside in the country.
