Special Tax Regimes: Which Countries Reward Foreign Residents?

Introduction

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In today’s increasingly mobile world, tax residency has become a powerful planning tool for globally minded individuals. Countries are competing to attract foreign talent, investors, and retirees by offering favourable personal tax regimes. Whether you're a digital nomad, a retiree, or a high-net-worth individual considering a move, understanding how different countries treat foreign residents can help you minimise tax liability while staying fully compliant.


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Here’s a look at eight countries offering special tax treatment to foreign residents — and what makes each regime appealing.

Eight countries that don’t tax foreign income

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🇦🇪 United Arab Emirates – Zero Personal Income Tax

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The UAE is a standout example of a tax-friendly jurisdiction. It levies no personal income tax, capital gains tax, or wealth tax for individuals. This regime applies equally to residents and foreign nationals.


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What makes the UAE particularly attractive is the ease of obtaining residency through business ownership (free zone companies) or property investment. With the introduction of the Golden Visa, long-term residency options are now available for investors, professionals, and retirees.


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Key highlights:

• 0% personal income tax
• No capital gains or inheritance tax
• Multiple residency pathways for expats

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🇦🇺 Australia – Temporary Resident Tax Concessions

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Australia provides generous tax concessions for temporary residents, including most foreign workers on skilled visas. Temporary residents are taxed only on their Australian-sourced income, with foreign income and capital gains generally exempt unless derived from Australian sources.


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This regime can last for several years, depending on visa status, and is ideal for foreign professionals planning a medium-term stay in Australia.


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Key highlights:

• Exemption on foreign income and capital gains
• Only Australian income is taxed
• Valid for many temporary visa holders

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🇳🇿 New Zealand – Transitional Resident Exemption

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New Zealand offers a four-year tax exemption on most foreign income for new tax residents under the Transitional Resident Regime. This includes foreign investment income, overseas salaries, and pension payments.


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After the four-year period, worldwide income becomes taxable, but this provides a valuable tax holiday for new arrivals, especially retirees and investors relocating to New Zealand.


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Key highlights:

• 4-year foreign income exemption
• Ideal for new migrants and retirees
• No capital gains tax even post-transition

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🇬🇧 United Kingdom – The FIG Regime

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Under the FIG regime, new UK residents (who have been non-UK tax residents for the last 10 years) will be exempt from UK tax on foreign income and gains for their first 4 years of UK tax residency — regardless of whether that income is remitted to the UK or not.


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This means foreign individuals moving to the UK can freely use offshore income to fund their lifestyle during the initial years, without triggering UK tax. After the 4-year period, worldwide income and gains will become taxable in the UK under the standard rules.


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Key highlights:

• 4-year exemption from UK tax on all foreign income and gains
• No remittance restriction during this period
• Available to individuals not UK tax resident in the prior 10 years

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🇵🇦 Panama – Friendly Nations Visa & Territorial Tax System

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Panama is a long-time favourite among expats and retirees, offering a territorial tax system. This means only Panamanian-source income is taxed — foreign income is completely exempt, regardless of residency status.


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The Friendly Nations Visa provides a fast-track path to permanent residency for citizens of over 50 countries. Coupled with affordable living and zero tax on offshore income, Panama is a top choice for location-independent earners and retirees alike.


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Key highlights:

• Zero tax on foreign-source income
• Easy residency for many nationalities
• No capital gains or wealth tax on overseas assets

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🇦🇷 Argentina – Tax Benefits for New Residents and Non-Doms

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Argentina applies worldwide taxation to tax residents, but there are significant exemptions for new residents. For example, foreign-source income is not taxed for the first five years, provided it’s not brought into Argentina. 


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In addition, Argentina does not tax foreign pensions or many forms of overseas passive income for non-domiciled residents. With proper structuring, this can result in a low-tax or even zero-tax environment for newcomers.


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Key highlights:

• 5-year foreign income exemption for new residents
• No tax on many foreign pensions
• Favorable treatment for foreign capital and income

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🇸🇬 Singapore – Tax-Friendly with Territorial Principles

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Singapore is one of Asia’s most attractive tax jurisdictions for individuals. It follows a territorial tax system, meaning foreign-source income is only taxed if received in Singapore, and even then, many types of foreign income — such as dividends, branch profits, and service income — may be exempt under specific conditions.


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There are no capital gains taxes, and personal income tax rates are low and progressive, maxing out at 24%. Singapore also offers residency via the Global Investor Programme, which appeals to entrepreneurs and HNWIs seeking stability and tax efficiency in Asia.


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Key highlights:

• Foreign income often exempt from tax (even if remitted under exemptions)
• No capital gains or wealth tax
• Attractive investor visa pathways

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🇹🇭 Thailand – Long-Term Resident Visa (LTR) & Special Exemptions

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Thailand has introduced the Long-Term Resident (LTR) Visa, designed to attract wealthy foreigners, retirees, and digital professionals. One of the key tax incentives is a flat 17% personal income tax rate (versus progressive rates up to 35%) for certain high-skilled professionals.


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Retirees and remote workers can also benefit from territorial taxation, meaning foreign income can be exempt from taxation.


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Key highlights:

• 17% flat rate for qualified professionals
• Territorial taxation for foreign-source income
• 10-year renewable visa for qualifying individuals

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🌐 Explore Tax Regimes in 150+ Countries

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Curious about how other countries compare when it comes to personal taxation, residency rules, or compliance requirements?


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👉 Explore our Global Tax Index – a comprehensive, easy-to-use guide covering over 150 countries.


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Get insights on tax rates, residency options, special regimes, and more — all in one place.