Avoid War by Living in One of These Tax Friendly Countries
Neutral countries are not something we’ve had to think about much since the end of the second world war. But in times of increasing danger worldwide some of us may prefer to live in countries that won’t be involved in wars. In Europe, Ukrainian men are being forced into the military. Even those who escaped the war zone are under threat of arrest and extradition back to Ukraine.
If you’re looking for a neutral country which is liveable and has low taxes, here are a few options:
Switzerland is the most long standing neutral country. Switzerland has maintained its neutrality since 1815. It’s constitution prohibits it from getting involved in foreign conflicts or even sending troops overseas. The only exception to this is the Swiss Guard which protects Vatican City and the Pope.
Costa Rica is one of the few neutral countries that doesn’t even have an army. It abolished its military in 1949. It coded its neutrality into law in 2014. Costa Rica is the oldest democratic country in Latin America. It never had a military dictatorship like many other countries in the region. Costa Rica is a territorial tax country. Anyone can move to Costa Rica and pay no tax on their foreign income.
Lichtenstein has had no military since 1868. The country is landlocked between Austria and Switzerland, which are both neutral countries too. Liechtenstein is a low tax country and a banking haven. New residents are only taxed based on their expenditure in Lichtenstein, not worldwide income.
Panama became a neutral country in 1989 following the American invasion. Panama is a territorial tax country. It uses the US dollar as its currency and is home to the Panama canal. Panama is increasingly becoming the financial hub of Latin America.
Ireland has been a neutral country since 1989. While Ireland is not considered a tax haven, it has one of the lowest corporate tax rates in Europe at 12.5%. Ireland also has the remittance based tax system for new residents. It’s possible to structure your affairs to live in Ireland tax free.
San Marino is a landlocked microstate in Southern Europe, surrounded by Italy. It is the oldest surviving sovereign state and constitutional republic in the world. The country has an area of 61 square km and a population of around 34,000 people. The official language is Italian and its currency is the Euro. It’s been neutral since 1815, although it did declare war on Germany after they invaded during the second world war. San Marino is a low tax country, overseas income can be taxed at rates as low as 3%.
Malta has been a neutral country since 1980. Neutrality became part of the constitution on 1987. Malta is a leading offshore services provider within the EU. Tax efficient residency can be arranged in Malta and most foreign income kept out of the tax net.
Mexico has never formally declared itself as a neutral country. However it has a long standing policy of staying out of international conflicts. Mexico is increasingly recognised as having more personal freedom than its US and Canadian neighbours to the north. Mexico is not a territorial tax country but you can structure your affairs to keep overseas income tax free.
Serbia has been a neutral country since 2007. It has no ambitions to join NATO like other European countries. It has walked a tightrope during the Russia Ukraine conflict and not imposed sanctions on Russia. Serbia has also remained outside the Common Reporting Standard and as a result is becoming somewhat of a banking haven. It’s possible to set yourself up in Serbia in a tax efficient way.
Singapore has a long-standing policy of neutrality and non-alignment in its foreign relations. It trys to maintain good relations with all nations and promote peace and stability in the region. Singapore is a member of various regional organizations such as ASEAN and the Non-Aligned Movement, and it has maintained a neutral stance in regional and international conflicts. Singapore has become a regional banking haven in recent years. Singapore is a territorial tax country so income earned outside Singapore is not taxed when you’re a Singapore resident.
The micro-state of Monaco is a Neutral country. It doesn’t get involved in international conflicts. As it is surrounded by France, however, it tends to follow what France does in international relations. As a micro-state, Monaco is entirely dependent on France for its external security. Neutrality is not coded into Monaco law but it did manage to stay neutral for most of the second world war. Monaco is a zero tax country and the last pure tax haven in Europe.
Neutral countries are rarer than ever. With an increasingly polarised world, many countries find it difficult to avoid choosing a side. Even Switzerland, one of the longest standing neutral countries, was pressured into sanctions against Russia over the Ukraine conflict. This is something that it avoided, even during the second world war. Neutrality was never a major consideration in selecting a country to seek residency or citizenship in the past. I suspect that it will become much more important in the future.