Curated list · updated 2026
Countries with territorial tax systems
Territorial systems that only tax local income and leave your foreign earnings alone. Click any column to sort, click any row to open the country.
| Country ▾ | Income tax ▾ | Corporate ▾ | VAT ▾ | Type |
|---|---|---|---|---|
 Gibraltar | 39% | 15% | 0% | Territorial |
 Namibia | 37% | 30% | 15% | Territorial |
 Zambia | 37% | 30% | 16% | Territorial |
 Uruguay | 36% | 25% | 22% | Territorial |
 Ethiopia | 35% | 30% | 15% | Territorial |
 Malaysia | 30% | 24% | 8% | Territorial |
 Nicaragua | 30% | 30% | 15% | Territorial |
 El Salvador | 30% | 30% | 13% | Territorial |
 Seychelles | 30% | 25% | 15% | Territorial |
 Grenada | 30% | 28% | 15% | Territorial |
 Panama | 25% | 25% | 7% | Territorial |
 Costa Rica | 25% | 30% | 13% | Territorial |
 Dominican Republic | 25% | 27% | 18% | Territorial |
 Honduras | 25% | 25% | 15% | Territorial |
 Botswana | 25% | 22% | 14% | Territorial |
 Belize | 25% | 25% | 12.5% | Territorial |
 Lebanon | 25% | 17% | 11% | Territorial |
 Angola | 25% | 25% | 14% | Territorial |
 Singapore | 24% | 17% | 9% | Territorial |
 Hong Kong | 17% | 16.5% | 0% | Territorial |
 Bolivia | 13% | 25% | 13% | Territorial |
 Guatemala | 7% | 25% | 12% | Territorial |
Territorial tax countries in Europe
Europe stays within easy reach of the EU while still trimming your tax bill, which is why it draws so many nearby movers. 1 of the 22 territorial-tax countries on this list is in Europe:
Territorial tax countries in the Caribbean
The Caribbean is home to the classic zero-tax islands where there is no income, corporate or capital gains tax at all, sunshine included. 2 of the 22 territorial-tax countries on this list are in the Caribbean:
Territorial tax countries in the Middle East
The Gulf states pair 0% personal income tax with fast residency, modern cities and direct flights to almost anywhere. 1 of the 22 territorial-tax countries on this list is in the Middle East:
Territorial tax countries in Asia-Pacific
Asia-Pacific blends territorial tax systems, low living costs and some of the fastest-growing economies on earth. 3 of the 22 territorial-tax countries on this list are in Asia-Pacific:
Territorial tax countries in the Americas
The Americas offer territorial regimes and low-cost living within the same time zones as the United States. 9 of the 22 territorial-tax countries on this list are in the Americas:
Belize, Bolivia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Uruguay.
Territorial tax countries in Africa
A small group of African jurisdictions rounds out the low-tax map, usually through territorial or resource-driven regimes. 6 of the 22 territorial-tax countries on this list are in Africa:
Countries with territorial tax systems: frequently asked questions
What is a territorial tax system?
It is a system that taxes income sourced inside the country and does not tax income earned abroad. Someone living there who earns from foreign clients, foreign dividends or foreign rentals can often pay little or no local tax on that money.
Which countries have territorial taxation?
Panama, Costa Rica, Nicaragua, Guatemala, Paraguay, Georgia, Hong Kong, Singapore (with conditions), Malaysia and Thailand are the usual names, though the rules on remitted income differ from one to the next.
Is foreign income really tax-free in these countries?
Only if it stays foreign. Some pure territorial systems ignore foreign income entirely. Others, called remittance systems, tax it once you bring the money into the country, so timing and banking setup matter.
Do digital nomads pay tax in territorial countries?
Frequently very little, because their clients and income are abroad. The catch is tax residency in their home country and any remittance rules, so most set up local residency and keep foreign earnings offshore.
Structure territorially
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