Expat Friendly Countries Without Capital Gains Taxes part 1 – that will be the topic of today’s article.
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The best time to consider your financial situation is when you are moving to a new country.
Have you had enough of the rat race and are considering a life as an expat? Or maybe you want to make a move but don’t know where to start or which countries will make your expatriation experience easier? Then this article is for you! And we’re here to walk you through the process on this platform.
Though not technically moving to another country, Americans are allowed to spend around 182 days in any foreign nation without reporting anything about their time spent there. If an American spends more than half the year in a foreign country, the person is required by US law to pay capital gains taxes on her property which may or may not be relevant.
There are currently 193 countries globally, so any given location is bound to have something going for it. That being said, some of our top picks for places an expat might like to live and not pay taxes on her income have been listed in this article.
If you’re an expat planning on moving to a new country, it’s essential to do your research first and find out if that country has any taxes on capital gains. This is because; capital gains taxes can be a major burden for expats, so it’s best to avoid countries that have them. Would you love to know more?
Of course, if that sounds like a yes, we’ve got you covered. Today, our focus is on expat-friendly countries without capital gain taxes. Not only is that, but we will walk you through the benefits of moving to countries without capital gain taxes. Well, you need to read further to get the details of it.
Benefits of Moving to Countries without Capital Gains
What are capital gains? Is it the same as an income tax? And why does it matter to you? Umm. Good questions! First, let’s break down what exactly capital gains are. Capital gains come from the value of your assets increase over time. Some examples include financial instruments like stocks and bonds or even cryptocurrencies like Bitcoin. Basically, anything that you own that appreciates over time.
So, if every time you saw an increase in your assets, would this mean that you would be paying more taxes on it? Yes! Taxes are assessed on the difference between the asset’s purchase price and its sale price (the capital gains). Basically, you’re paying taxes on your profits.
In fact, capital gains taxes are different in other countries. In the United States, for example, capital gains tax rates can be as high as 23.8%. Whereas in Singapore, it’s a mere 0%! So, what are some reasons you might want to move to a country without capital gains tax? Here are seven benefits.
1. You’ll Keep More of Your Profits
As we mentioned earlier, the capital gains tax rates can be as high as 23.8% in the United States. This means that for every $100 you make in profit from the sale of your assets, you will be paying $23.80 in taxes. Ouch! But, in a country without capital gains tax, you will be able to keep that entire $100. This can really add up over time and can be a great way to save for retirement or other financial goals.
2. You’ll Have More Money to Invest
When you don’t have to worry about paying taxes on your profits, you can put that money back into your investments and see even more growth. This can be a great way to build your wealth over time. For example, you can invest that extra 100 dollars into your investment portfolio.
If you could see a 5% return on your invested money every year – which is relatively low – then in 10 years, you will have nearly doubled your initial investment! And after 20 years? Well, let’s just say that it can really add up!
3. You’ll Be Able to Keep More of Your Money
Remember that $23.80 we talked about earlier? Well, that’s just from one sale! Imagine if you had multiple deals in a year. It can really start to add up. But, if you’re living in a country without capital gains tax, you won’t have to worry about it at all. And this means you can keep more of your money, and do what you want with it.
4. Make Better Use of Your Time and Resources
Capital gains tax is one of those taxes that can take a lot of time and effort to manage. We’re not saying that it’s impossible, but it can be a lot of work. And, if you’re trying to focus on growing your business or saving for retirement, the last thing you want to worry about is preparing your taxes!
But, if you’re living in a country without capital gains tax, then you won’t have to worry about it! This will free up your time and resources so that you can focus on what’s important to you.
4. Opportunity to Keep your Money in the Country
When you have to pay taxes on your capital gains, it often means that you have to send that money outside of the country. This can be a pain, especially if you’re trying to keep your money in the country. If you can’t even get rid of that extra cash, then what’s the point?
But thankfully, if you are living in a country without capital gains tax, you won’t have to worry about sending your money outside of the country! This can be a big win for small business owners and other entrepreneurs looking to keep their money close by.
5. You’ll Be Able to Retire Sooner
When you don’t have to worry about paying taxes on your capital gains, you can afford to retire sooner! This is because you will have more money available to you without worrying about paying taxes on it. So, if you’re planning on retiring in, say, 15 years – and you were making a 5% return on your investments every year – then you would need a total of $77,816 to retire.
But if you were able to keep an extra 3% from your capital gains tax-free money every year, instead of spending it, you would only need $68,521 to retire. That’s a difference of nearly $10,000.
6. Take Advantage of Tax-Free Investments
When you’re living in a country without capital gains tax, you’ll be able to take advantage of the many tax-free investment opportunities out there. There are so many different types of tax-free investments; it can be hard to keep track of. But they’re all great opportunities to take advantage of and build up your wealth over time. And the best part is that since these investment accounts are exempt from taxes – or nearly tariff-free – that means more money in your pocket.
Furthermore, if you’re looking for a great way to grow your wealth without having to worry about capital gains tax, then moving to a country without capital gains tax is the way to go. You’ll be able to take advantage of all the great investment opportunities out there and retire sooner than you thought possible.