As the cost of living continues to bite, as many as 72% of remote UK workers are considering relocating and operating from a different country as a digital nomad.
In addition to sunnier climbs and a cheaper standard of living, many countries offer improved networking opportunities for professionals and the chance to explore neighbouring countries and cultures.
TaxBite founder and finance expert, Kasra Dash, has revealed the best tax-free countries for remote workers, where you can save as you earn.
Tax-free countries
- Panama – Best for cost-effective Caribbean living
Known for its Friendly Nations Visa, Panama offers a straightforward pathway to residency for citizens from many countries. While not completely tax-free, Panama does not tax foreign-sourced income, which can benefit digital nomads. The country has one of the cheapest standards of living in the Caribbean, meaning you can live the island life at a fraction of the price.
- United Arab Emirates – Best for financial professionals
The UAE offers a 0% income tax rate for individuals, making it a highly attractive option for remote workers. The country also has specific visas for digital nomads, allowing them to live and work there while enjoying the tax benefits. Applicants will need to prove employment with a company outside the UAE and have a minimum monthly salary of $5,000. This can be shown through a contract valid for at least one year, recent salary slips, or bank statements from the last three months
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By GlobalData- Costa Rica – Best for a warm welcome
Costa Ricans, or “Ticos”, are known for their friendly and welcoming nature. The culture emphasises “pura vida” (pure life), promoting a relaxed and positive lifestyle that many remote workers find appealing. The country provides various residency options that are friendly to digital nomads and like Panama, offers tax benefits in that it does not impose levies on foreign-sourced income.
- Malaysia – Best for travel opportunities
Through its MM2H program (Malaysia My Second Home), Malaysia offers long-term residency options and does not tax foreign-sourced income, making it a favourable option for many nomads. Malaysia serves as a strategic base for travelling to other parts of Asia. Its central location offers convenient travel opportunities to neighbouring countries like Thailand, Singapore, Indonesia, and Vietnam.
- Bahrain – Best for healthcare
Like the UAE, Bahrain imposes no personal income tax and is considered one of the more liberal countries in the Gulf region, providing a good base for digital nomads. Bahrain provides a high quality of life with its vibrant cultural scene, historic sites, as well as a wide variety of dining and entertainment options. It also offers excellent healthcare facilities, which is an important consideration for anyone planning to live and work remotely.
Low-tax countries
Portugal – Best for British expats
Portugal is not tax-free but offers the Non-Habitual Resident (NHR) regime, which can result in significantly reduced tax rates for qualifying foreign income for ten years. Portugal is also known for its welcoming and friendly attitude towards non-natives. It has a growing expat community, and the locals are generally open and fluent in English, especially in urban areas.
Thailand – Best for guaranteed weather
Recently, Thailand has been working on schemes to attract digital nomads, including potential tax incentives and specific visas that allow for long-term stays. The country, popular with tourists, boasts a rich culture with exciting street food and amenities, as well as a tropical climate offering warm weather year-round.
Dash concluded: “Remote working in tax-free countries can offer significant financial benefits, including lower living expenses and tax savings, which together enhance savings and disposable income for workers. The combination of these factors makes tax-free countries highly attractive for UK remote workers looking for both financial benefits and an improved lifestyle.
“However, it’s important to consider the full implications, including any potential legal or residency requirements, and possibly the long-term impact on one’s tax situation, before making a move. Consulting with a tax advisor or a financial planner who specialises in expatriate finances can provide valuable guidance.”
