Europe is the second smallest continent in the world. Despite that, it attracts a huge number of tourists. At least 7 out of the world’s top 10 most visited countries are in Europe and they see almost 480 million international visitors per year, for various purposes. Well-built infrastructure, cultural diversity & inclusion, and international interactions make it the perfect destination for vacation, investments, and retirement.
The number of tax-free countries in Europe also makes it a tax haven for investors, entrepreneurs and for people looking for second citizenship. Capital gains tax levied on income from sale of capital assets, is also avoidable in some of the Europen countries, making it a more sought-after option for citizenship by investment and a dream country for many people looking to move to a different country.
Tax-free countries in Europe
Here is a list of top 5 countries that levy no, or very less taxes and are the popular tax-havens of Europe:
Great Britain: For non-British individuals, London is considered to be a tax-haven. Amongst all the tax-free countries in Europe, London is one of the best countries to live in. A relatively low corporate tax of 20 percent has attracted many big companies to expand here. On investments outside the country, no income tax is charged.
Ireland: Artists in Ireland enjoy tax-free income and the business tax rate here is also low. People who live in Ireland but are non-residents for taxation purposes also enjoy the benefits of its attractive tax system. Due to its low tax rate system, Ireland has been the home for some companies that operate on paper from Ireland but are not physically located here to enjoy these tax benefits.
Switzerland: Owing to the privacy of financial information offered by the country, Switzerland is also another tax haven famous for international companies and people with significant financial assets. Altogether, the income taxes at various levels in Switzerland do not exceed 40 percent. Federal tax on capital gains is not charged in Switzerland. Tax privileges have always been a highlight for foreign investors. It is also one of those countries with no capital gains tax on worldwide income.
Malta: The country of Malta practices a territorial taxation system as income earned outside the country is not taxable in the country. Even the capital gains outside the country are not taxable. There is no property tax, inheritance tax or wealth tax charged anywhere in Malta. However, the foreign income that is remitted to Malta is chargeable at a flat rate of 15 percent. Due to its low tax rates, Malta has been included in the tax havens of Europe. Germany: In Germany as well, foreign investors are free of the tax burden. The account-holders in German banks are offered financial privacy. All foreign income, whether from dividends or income from foreign branches is exempted from tax. Only 5 percent of dividends and capital gains are taxed.
Benefits of Citizenship by investment in Europe
Every country in the Europen Union has different criteria for citizenship by investment program and getting a second passport. The more benefits offered in terms of tax-saving and low cost of living, the costlier is the minimum investment levels to get a second citizenship. However, the processes are being made simpler every day and countries like Montenegro, Greece, Switzerland, and Malta are some of the best countries with powerful passports.
Europe has always been encouraging foreign investment and opportunities for the growth of its countries to create more opportunities for the residents. It is also working to provide great returns with greater tax benefits. It is on its way to economic growth and prosperity as it was one of the first economies to adopt modernization. Getting second citizenship by investment, especially in countries with lower tax rates, provides an individual with better investment opportunities, greater profits, and benefits to citizenship and better access to other European countries.
Other taxes and countries
There are many countries with no capital gains tax that make Europe a better place to be in and get citizenship by investment to invest for capital gains. Countries like Switzerland, Cayman Islands, Monaco, and Belgium are among the top countries that do not levy any kind of tax on capital gains, attracting many foreign investors and encouraging them to invest and earn in larger numbers. The countries with the lowest income tax in Europe are Montenegro and Bulgaria with income tax lower than 15 percent in both countries. In this context, find out about the Beckham law in Spain, which has made the country a tax haven for foreign workers and entrepreneurs.
Given the tax-free countries in Europe, as a continent, it is the largest tax haven for foreign investors. Also, investors seeking refuge from taxation policies in their own countries have often benefitted from investing in Europe. Most of the countries with lower or no tax-rates will let a foreigner live peacefully in these culturally rich countries with a moderate climate. It might not be possible for an individual to avoid all the taxes, but given so many opportunities to save tax, Europe will be worth whatever remaining taxes they have to pay.