Tax optimization is as pivotal as diversification and asset protection. Savvy investors typically seek to capitalize on all those elements within a single move. Their favorite power play – Plan B citizenships and residencies in the world’s best tax havens. 

From the Caribbean to Europe, many countries have crafted tax codes designed to attract foreign direct investment [FDI] and high-net-worth individuals [HNWIs]. 

The catch is that to leverage the power of a tax haven’s benefits, an investor must replace their current tax residency with residency in the tax haven country.  

For global HNW entrepreneurs, investors, and families, the most effective means of accomplishing everything they need to achieve is to leverage the tax haven’s citizenship through investment or Golden Visa programs. 

The Caribbean tax havens

Historically renowned as tropical paradises, several Caribbean island nations have also solidified their positions as highly competitive tax havens:

  • St. Kitts and Nevis
  • Antigua and Barbuda
  • Dominica
  • Grenada
  • St. Lucia 

Known as the Caribbean Five, all offer enticing tax benefits complimented by the world’s most popular and affordable citizenship by investment programs.

St. Kitts and Nevis

St. Kitts and Nevis is a dual-island federation of the Commonwealth operating a territorial tax system, which means taxes only apply to domestically generated income. 

There is no tax on worldwide income, wealth, gifts, inheritances, or capital gains for tax residents. St. Kitts also offers the original and still the platinum standard of all citizenship by investment programs, which requires either:

  • A donation of $250,000
  • Approved real estate starting at $400,000

St. Kitts and Nevis citizenship provides a pathway to a Plan B passport and access to the globally renowned offshore banking hub of Nevis with citizenship protections. 

Antigua and Barbuda

For tax residents, this twin-island paradise has no:

  • Personal income tax
  • Capital gains tax
  • Estate tax
  • Wealth tax

Businesses pay a flat 25% corporate income tax, and Antigua’s citizenship by investment program is one of the world’s most affordable—a $100,000 contribution for a family of four.

Like many of its Caribbean peers, Antigua also classifies cryptocurrency gains as capital gains and exempts them from taxes—an excellent option for HNW cryptocurrency investors. 

Antigua and Barbuda citizenship provides a pathway to a Plan B passport.

Dominica

Known as “The Nature Isle,” tax residents of Dominica are not subject to taxes on:

  • Personal income
  • Capital gains
  • Wealth
  • Inheritance

The island’s citizenship by investment program represents one of the most affordable options in the Caribbean. A single applicant can obtain Dominican citizenship for a $100,000 contribution.

As Dominica recognizes dual citizenship, Dominican citizenship is a pathway to a Plan B passport. 

Grenada

While Grenada does levy income tax on worldwide income for tax residents who physically live full-time on the island, it does not levy taxes on citizens living abroad. 

Like its Caribbean counterparts, Grenada levies no taxes on: 

  • Capital gains
  • Wealth
  • Inheritance

Grenada’s citizenship by investment program has a donation option of $150,000 or $200,000 for a family of four. 

Citizenship in Grenada provides the right to a powerful Plan B passport, which grants visa-free travel to over 140 countries, including Brazil, China, the EU Schengen area, Russia, and the UK.

St. Lucia

Among the Caribbean Five, St. Lucia offers a unique tax regime. Residents can elect to be taxed on their worldwide income at a flat 30% rate or pay a flat $35,000 lump sum annual tax payment. 

Non-resident citizens are not taxed on global income, and no wealth, capital gains, or inheritance taxes exist. 

St. Lucia citizenship also opens the window to a Plan B passport.

Beyond the idyllic Caribbean lifestyle, Caribbean Five citizenship unlocks numerous financial benefits, including asset protection, tax optimization, global mobility, an alternative legal identity, and diversification tools to secure wealth across jurisdictions.

The Caribbean programs are set to implement a price increase that will require a minimum investment of at least $200K – the deadline for the price increase is “no later than 30 June 2024”

European tax havens

While the Caribbean dominates conversations around tax havens, offshore banking, and HNW tax avoidance opportunities originate in Europe. 

European nations have historically offered incredibly compelling Golden Visas and the world’s best non-dom tax programs to attract internationally mobile capital and talent. 

Italy’s flat tax for foreign HNWIs

HNW entrepreneurs, investors, and families taking up tax residency in Italy can benefit from an attractive flat tax regime for the first 15 years of residency. 

Under the Italian program, new residents pay a flat €100,000 annual tax on all foreign-sourced income and gains regardless of their income, shielding them from Italy’s higher progressive tax rates. 

The flat tax option provides tremendous saving opportunities for those with substantial income sourced outside Italy. 

Physical residency of just 183 days per year is required.

Malta’s citizenship with non-dom options

The island nation of Malta has long been a favored holding jurisdiction, offering some of the most competitive and effective tax rates through its non-dom and expat resident programs. 

Non-domiciled individuals remitting foreign income to Malta can benefit from a flat 15% tax rate after double taxation relief. 

Non-remitted capital is tax-free, as are capital gains from non-Maltese activities, even if remitted. 

Also, Malta offers the only EU citizenship by investment and Plan B passport program, which allows HNWIs to leverage any tax program in the EU they desire. 

In 2022, roughly two-thirds of applicants to the Malta citizenship program cited tax reasons as their primary motivation. 

Greece’s alternative tax regime

Greece has introduced an alternative income tax regime to entice HNWIs to establish residency to attract investors and FDI.

The pensioner program allows qualifying new tax residents to pay a flat 7% tax rate on foreign-sourced income and gains for their first 7 years in Greece. 

Foreign pensions and overseas real estate income are exempt for specific non-residents. 

Greece also offers a lump sum annual payment program of €100,000 for 15 years. 

Greek tax residents also benefit from highly favorable tax treatment on certain business income, dividends, and interest.

The Greece Golden Visa will be increasing the minimum investment amounts as well as changing the program’s investment zones.

Currently, the required investment is €250K and €500K – the new prices will be €400K and €800K.

Additionally the investment zones will also change – currently, Crete and areas of Athens are €250K, however, once the price increase takes effect, all of Crete and Athens will be €800K.

For investors who act fast, the €250K and the €500K investment levels can be kept until 30 August 2024.

Spain’s “Beckham’s Law” 

Known informally as “Beckham’s Law,” Spain has an appealing tax program that allows certain HNWIs to take up Spanish residency and be taxed as non-doms for their first 6 years. 

This flat 24% tax rate applies to the individual’s Spanish-sourced income up to €600K; most worldwide income is tax-exempt.

Business income and capital gains realized before moving to Spain are also tax-exempt.

Cyprus – EU’s best non-dom program

Cyprus is being hailed as the best non-dom program in the EU—some say the world now that the UK regime is gone. 

Cyprus’ non-dom program is a mix of zero taxation and reduced taxation – depending upon the source and class of income. As an example, Cyprus exempts non-doms from interest, dividends, and rental income taxes by eliminating the SDC tax burden for them.

However, even for residency and domiciled investors, the SDC tax only levies a maximum 17% rate on foreign-sourced income.

In addition to the Cypriot non-dom tax option, the country offers:

  • Pensioner program that offers a flat tax rate on qualifying pensions
  • 60-day tax residency program

Tax havens around the world

While the Caribbean and parts of Europe have cultivated reputations as elite tax destinations, numerous other nations have specialized tax programs and systems warranting consideration for globally mobile entrepreneurs and investors:

The United Arab Emirates

The UAE’s zero personal income and capital gains tax policies have transformed Dubai and Abu Dhabi into world-leading financial centers. The UAE also operates an extremely favorable territorial tax system for businesses and has straightforward pathways to tax residency through a Golden Visa program.

Switzerland

Long renowned as a global private banking capital, Switzerland maintains some of the world’s strongest privacy and wealth protection laws. 

A hybrid territorial/residential tax system provides beneficial rates on global income for individuals and very low cantonal taxes for foreign nationals. 

Switzerland also has an interesting lump-sum tax residency program for HNWIs who want to reside there. HNWIs pay a specific annual tax, typically starting at CHF 250,000 [approx. $275k or £225K], depending on the canton. 

Panama

Panama is a zero-tax Central American nation whose tax residents are not taxed on:

  • Personal income
  • Capital gains
  • Interest
  • Estates

Panama also provides high degrees of asset protection, privacy, and business-friendly regulations to attract global HNWIs and American retirees. 

Singapore

Often cited as one of the most business-friendly economies, Singapore has low-income tax rates, no capital gains tax, and an extensive network of double taxation treaties. 

Hong Kong

Hong Kong has served as a prime Asian financial hub, with its territorial tax system providing low rates and no taxes on: 

  • Capital gains
  • Dividends
  • Estate
  • Worldwide income

However, political instability has prompted some investors to pursue alternative residences.

Tax havens for US citizens

American citizens are in a unique position as they are subject to one of the world’s most draconian and repressive tax regimes. 

The United States taxes its citizens on worldwide income, no matter where they reside – the African nation of Eritrea is the only other country on Earth to do this.  

As such, US taxpayers must be very strategic when choosing an overseas tax haven.

While most Caribbean islands have tax treaties with the US to avoid double taxation, some jurisdictions are more favorable for Americans:

  • St. Kitts
  • Antigua
  • Dominica
  • Grenada
  • the Cayman Islands
  • Bahamas
  • Bermuda 

These territories are genuine zero-tax environments. Americans must still report worldwide income to the IRS but have generous options to maximize legal deferral strategies and offshore holdings.

Regarding Plan B citizenship, Antigua, Dominica, St. Kitts, and Grenada have proven very popular with US citizens, as these Caribbean citizenships allow visa-free travel and residency options throughout the UK and European Union.

Furthermore, St. Kitts and Nevis is a world-renowned offshore banking hub whose banks are outside the reach and jurisdiction of US courts. By leveraging the country’s citizenship program, investors can utilize the banks with citizenship protections. 

This would allow US citizens to renounce their US citizenship and break free from the burden of citizenship-based taxation since they now have a robust Plan B citizenship – between 15% and 20% of America’s wealth community have or are actively pursuing Plan B citizenship and residency options in 2024.

Monaco, Andorra, and Vanuatu can provide robust tax advantages for ultra-affluent Americans. These sovereign states have no income taxes and beneficial immigration laws for HNWIs. 

However, clearing the very high financial thresholds for residency and the complexities of achieving tax non-residency as a US citizen typically requires partnering with an expert in the country’s residency and citizenship programs.

Finally, Puerto Rico’s Act 60 continues to gain popularity as an easy, IRS-compliant way to minimize federal taxes for investors who are not quite HNWIs yet. 

Certain qualified individuals can pay just a 4% tax on income from investments and business activities conducted outside the Commonwealth by taking up bona fide residency in Puerto Rico.

UK residents have options after non-dom ends

Following the UK government’s 2022 decision to abolish the long-standing non-domiciled (“non-dom”) tax regime, many wealthy British residents actively seek to re-establish their tax residencies elsewhere. 

Luckily for them, several European nations have quickly positioned themselves as attractive destinations and are ready to welcome them as non-dom residents. 

Greece offers a few options for pensioners and HNW investors:

  • Pensioner program provides a 7% flat income tax rate
  • HNW non-dom program offers a flat fixed annual tax payment of only €100K

And, it cannot be understated, Cyprus is considered the best alternative to the UK non-dom program and the go-to option now that the UK regime is history. 

Malta and Spain also offer attractive residency options tailored for lifestyle-oriented investors. Again, the Maltese citizenship program allows investors to choose from every tax and non-dom program in the European Union.

Astons – 30 years of HNWI Plan B strategies 

Over one-third of the world’s wealth community currently holds multiple passports or residencies [another 30% looking to invest in Plan B citizenship and residency in 2024], and an estimated $8.6 trillion of private wealth is held in offshore jurisdictions.

In today’s world, passports and residency permits are not simply essential but quintessential to diversification.

Pursuing residency or citizenship in low—to no-tax jurisdictions or leveraging tax optimization strategies such as non-dom programs are at the heart of any holistic wealth preservation strategy. 

Astons has been providing comprehensive services for global HNW investors seeking to add Plan B citizenship and residency to their portfolios and leverage the genuine power of tax optimization and legal tax avoidance strategies. 

Whether exploring citizenship by investment or Golden Visa options, HNWIs must meticulously weigh all factors, including:

  • Tax considerations
  • Personal and family priorities
  • Lifestyle demands
  • Access rights to healthcare and education
  • Mobility needs
  • Political & social alignment
  • Economic stability
  • Jurisdictional reputation

For some investors, no single destination may be perfect, yet for others, multiple options could provide everything.

For all HNW investors and families, the versatility and tax benefits of Plan B citizenships and strategic alternative residencies cannot be overstated or underestimated.

The world’s top Golden Visas and citizenship by investment programs go far beyond simply providing visa-free travel privileges – they unlock an entire gateway of access, including tailored tax planning opportunities across multiple jurisdictions.

World events like the recent dismantling of the UK non-dom tax regime and another tumultuous election cycle in the US coupled with growing social unrest and the proliferation of violent crime have only amplified the significance of Plan B citizenships as part of a proactive strategy for lifestyle security with the benefits of tax optimization. 

By synchronizing the right combination of Golden Visas, backup passports, and international banking access, HNWIs leverage the most powerful Plan B strategy money can buy. 

For over 30 years, Astons team of seasoned industry experts have advised and partnered with more than 9000 HNW clients in developing comprehensive, private client Plan B citizenship and residency strategies.

Now it’s your turn – schedule a Free Confidential and Comprehensive Consultation with Astons today.