Taxes for Expats in 2026: Which Countries Offer Favorable Conditions

The UAE topped the ranking of tax conditions for internationally mobile individuals by Global Citizen Solutions. In Europe, Malta and Cyprus lead the way, while Germany ranked last among the 48 jurisdictions surveyed. The study takes into account not only tax rates but also the rules governing the taxation of foreign income and relocation options. Let’s take a closer look at why countries received these ratings and what these results mean for future expats.

In the previous article, we provided a ranking of the richest countries in the world in 2026 by GDP.

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Which countries offer the most favorable tax conditions for foreigners?

The UAE, Antigua and Barbuda, and Paraguay topped the ranking of tax conditions for expats. The researchers compared 48 jurisdictions across 11 indicators. The tax burden and tax structure each account for 42.5% of the score, while investment migration accounts for 15%. A higher score indicates a more favorable assessment according to the study’s methodology, rather than a specific percentage of savings.

Who are the global leaders?

The top five spots were taken by:

- United Arab Emirates – 82.7 points out of 100

- Antigua and Barbuda – 82.2 points

- Paraguay – 77.2 points

- Hong Kong – 76.9 points

- The Bahamas – 76.2 points

Malta and Cyprus were the European representatives in the global top ten, ranking sixth and tenth, respectively.

Learn more about European countries with the highest corporate tax rates by following the link.

Why did Malta and Cyprus outperform other European countries?

Their advantage stems from special tax regimes for certain categories of new residents, particularly regarding foreign income. Both countries received 82 points for tax burden and 63 points for tax structure. For investment migration, Malta scored 83 points, while Cyprus scored 78.

Rounding out the top five in Europe are Monaco with an overall score of 68.6 points, Georgia with 68.3, and Bulgaria with 62.8. The remaining European jurisdictions scored less than 60 points. Among Europe’s five largest economies, Italy has the best result: 56.9 points and 26th place globally.

In our previous article, we discussed how to start a business in Belgium in 2026.

Where is the highest score specifically for the tax burden?

In Europe, the leaders in this specific indicator are Monaco with 93 points, Bulgaria with 92, and Andorra with 89. The score takes into account taxes on personal income, capital gains from publicly traded securities, net assets, and inheritance.

However, favorable tax conditions after relocation also depend on rules regarding foreign income and the availability of tax breaks. The index does not account for social security contributions, the network of tax treaties, or the stability of special tax regimes. Therefore, its results help narrow down the choice of countries but do not replace a calculation based on specific income.

Learn more about the top 5 EU countries for starting an offline business in 2026 by following this link.

Why did Germany end up at the bottom of the ranking?

Germany ranked 48th primarily due to its rules on the taxation of foreign income and the consequences of terminating residency. For the structure of its tax system, it received only 17 points out of 100. At the same time, its score for the tax burden is 40 points, higher than that of Spain, France, and Denmark. Therefore, the last position does not mean that all taxes in Germany are the highest among the countries surveyed.

Three factors influenced the result:

1. Taxation of residents’ worldwide income. Tax obligations may include income from abroad, not just earnings in Germany.

2. Inheritance tax. The transfer of assets may create additional tax liabilities. The specific calculation depends on the value of the assets, the family relationship, and applicable exemptions.

3. Exit tax. Under certain conditions specified by law, the termination of residency may result in the taxation of unrealized capital gains on assets.

The exit tax from Germany does not apply to everyone who leaves the country. Specifically, Section 6 of the German Foreign Tax Act applies to certain ownership interests in companies. One of the conditions is at least seven years of unlimited tax liability during the preceding twelve years. For business owners, this is a reason to assess the implications of relocation before changing their residency.

Alongside Germany at the bottom of the overall ranking are Denmark (47th), the United States (46th), and Japan (45th). This comparison focuses on tax conditions for internationally mobile individuals, rather than an assessment of these countries’ overall attractiveness as places to live.

In our previous article, we discussed how to start a business in the Czech Republic in 2026: taxes, costs, and a step-by-step guide.

Who is eligible for tax benefits after moving?

Tax benefits for expats depend on the type of income, the individual’s status, and the requirements of the specific tax regime. An employee of a local company and an investor receiving dividends from abroad may have different tax obligations in the same country. Moving alone does not guarantee tax exemption.

Individuals with Foreign Income

In Malta, for individuals who meet the conditions of the remittance basis, foreign income is taxed only on the portion received in the country. At the same time, income from Maltese sources is taxed regardless of where it is earned. Therefore, simply leaving earnings in a foreign account is not enough; the source of the income also matters.

For certain individuals without a Maltese domicile, a minimum tax of €5,000 per year applies if foreign income amounts to at least €35,000. There are exceptions to this rule, particularly for participants in certain special programs.

In our previous article, we discussed why Portugal has become one of the most attractive destinations for the world’s wealthiest people.

Investors Receiving Dividends and Interest

In Cyprus, tax residents with “non-dom” status may qualify for an exemption from the special defense contribution on dividends and interest. This status is tied to the concept of domicile, not merely to foreign citizenship. The exemption should not be interpreted as an automatic exemption from all taxes and contributions.

Learn more about the ranking of the safest countries for investors in 2026 by following the link.

Employees and Entrepreneurs

For this group, it is necessary to separately review the taxation of income after relocation: salaries, business profits, and payments from one’s own company. The exemption for investment income does not imply a similar treatment for wages.

For example, Malta’s “remittance basis” rules do not exempt local income from taxation simply because it is paid abroad. Therefore, when choosing a country, it is important to determine how it will classify your specific employment and income.

In our previous article, we discussed how to legally diversify your finances within jurisdictions not included in the CRS in 2026.

What should you check before changing your tax residency?

A change in tax residency does not occur automatically upon obtaining a residence permit. The new country may recognize a person as its resident, while the previous country will continue to consider them a taxpayer. The OECD explicitly states that the right to residence or citizenship does not, in and of itself, terminate prior tax residency.

Before moving, you should determine:

1. Residency criteria in both countries. Check the requirements regarding length of stay, housing, and family and economic ties.

2. The rules for each type of income. Analyze separately your salary, dividends, rental income, pension, and gains from the sale of assets.

3. The mechanism for avoiding double taxation. Determine whether a relevant tax treaty is in effect and how it applies to your situation.

4. The full cost of the preferential tax regime. Take into account minimum payments, social security contributions, the duration of the benefits, and the requirements for their renewal.

5. Consequences of moving abroad. Check for any taxes that may apply upon termination of residency and obligations regarding final tax filings.

Taxes after moving abroad should be evaluated alongside living costs and quality of life. The study highlights seven jurisdictions that rank in both the top half of the tax rankings and the global top 50 for quality of life: Malta, Cyprus, Portugal, Switzerland, Uruguay, Costa Rica, and Mauritius. For example, Portugal ranked 23rd in terms of tax conditions and 11th in quality of life, while Malta ranked 6th and 28th, respectively. The Global Passport Index 2026 was used for this comparison.

Investments, opening a company in another country, remote launch of a representative office or team relocation require a clear legal strategy. A personal business lawyer accompanies the entire process: from choosing a jurisdiction and tax model to visa processing and asset protection.

Engage a personal business lawyer and ensure safe relocation and development of your company abroad!

We remind you! Are you planning to invest in real estate under the Golden Visa program? We have already told you which programs in 2025 have become the most profitable for investors. The article compares the UAE, Greece, Turkey, Latvia and Asian countries, the real return on real estate and key risks that should be considered before investing.