Expatriates typically look for destinations that can provide both financial advantages and a high quality of life. Areas with low tax rates yet high living standards illustrate that one can indeed have the best of both worlds.
Expat Relocation: Demographics & Drivers
InterNation’s Expat Insider 2023 Survey represents a breakdown of expat demographic statistics, presenting data on gender, relationship status, family status, age groups, and education levels. The gender split shows a nearly even division, with 50% male and 49% female respondents, and a small 0.6% who self-describe their gender differently. Regarding relationship status, 57% of expats are in a relationship while 43% are single. When it comes to family status, 20% have dependent children abroad and a significant majority of 80% do not.
The average age of the expats surveyed is 46.2 years, with the most significant age groups being those aged 46–50 and 61 and above. Moreover, the level of education among these expats is notably high, with 82% holding a university degree; this is detailed further to show that 34% have a bachelor’s degree, 41% have a postgraduate degree, and 7% hold a PhD or similar level of education. There is a smaller percentage (8%) with commercial, technical, or vocational training, and a very small number (2%) with no degree at all.
Another infographic from the same source demonstrates the primary motivations for people moving abroad and their planned lengths of stay. For job and career reasons, 15% relocated after finding a job independently, 10% were recruited internationally, 9% were sent by their employers, and 2% moved to start their own businesses. Lifestyle choices influenced 8% to seek a better quality of life, 5% looked for adventure or a personal challenge, 4% desired to retire abroad, 3% wanted to live in a specific place for its own sake, and another 3% moved for financial reasons. Educational pursuits accounted for 9% who went to attend school or university and 1% aimed to improve language skills. Love and family were motivators for 10% moving to live in their partner's home country or for love, 6% for their partner's job, and 5% for other family reasons. Other motivations included political, religious, or safety concerns (3%), and volunteering or missionary work (1%).
When it comes to the duration of their stay abroad, a small percentage (2%) planned to stay for less than 6 months, while 4% anticipated staying between 6 months and 1 year. A more significant number, 11% each, expected their stay to last 1-3 years or 3-5 years. A substantial 21% planned to stay longer than 5 years, and the highest proportion, 35%, considered the possibility of staying forever. Nonetheless, 16% remained undecided about the length of their stay abroad.
Expat Life Abroad
Expats mostly experience increased happiness abroad due to enhanced career opportunities, improved living standards, and rich cultural exposure. The combination of professional growth, better healthcare, education, and lower cost of living contribute to greater life satisfaction. Additionally, new social connections and the excitement of a new environment often boost personal fulfillment, making the expatriate life rewarding. You can read about the friendliest countries in the world here.
The 2021 Expat Explorer survey conducted by HSBC Holdings plc (NYSE:HSBC) reported that 67% of the expats had perceived an improvement in their quality of life since relocating from their home country. Additionally, 61% had noted minimal disruptions to their work life as a result of the Covid-19 pandemic. The survey also highlighted positive trends in community support and adaptability among expats: nearly half reported increased support from local communities during the pandemic. Furthermore, more expats found it easier to settle in during 2021 compared to 2020, with 23% finding it easier, up from 19% the previous year.
HSBC Holdings plc (NYSE:HSBC) offers a range of services designed to assist expatriates with taxes and related concerns. For example, through its partnership with EY, a professional services firm, HSBC UK offers tax and relocation assistance. This collaboration enables customers to consult tax specialists online, through a mobile app, or via phone or email. Additionally, HSBC Holdings plc (NYSE:HSBC) customers benefit from discounted rates on tax filings and returns. HSBC Expat further supports its clients with banking, foreign exchange (FX), and investment services, providing dedicated support for HSBC Expat Premier customers.
Regarding tax consultation for expatriates, firms like H&R Block Inc. (NYSE:HRB) and Intuit Inc. (NASDAQ:INTU) offer services that tackle tax-related complexities faced abroad. These services include handling foreign earned income exclusions and understanding tax treaties. These firms guide expatriates through their tax obligations effectively, ensuring compliance and maximizing deductions and credits.
On January 29, H&R Block (NYSE: HRB) introduced Direct Import, a tool that simplifies tax preparation by enabling users to easily switch from TurboTax to DIY services by H&R Block (NYSE: HRB). With approximately 65 million Americans opting to file their taxes independently, this new feature enhances the efficiency of tax preparation. It reduces the need to manually search for and enter prior year's tax details by automating the process. Direct Import enables users to automatically transfer their previous year's tax data from TurboTax into H&R Block's DIY online platforms. To facilitate the transfer, users only need to provide the phone number linked to their TurboTax account. This feature supports the automatic import of up to 150 data fields, significantly cutting down the time and effort required for tax filers to complete their returns.
On February 21, Intuit Inc. (NASDAQ:INTU) launched QuickBooks Solopreneur, designed specifically for single-person businesses. This comprehensive tool offers features that simplify financial management, goal setting, and tax preparation, all aimed at enhancing financial security for solopreneurs. According to Intuit's QuickBooks Entrepreneurship in 2024 Report, the trend of solopreneurship is growing, with nearly 25% of U.S. consumers planning to start their own businesses in 2024, seeing it as a more lucrative investment compared to buying a house.
Given this backdrop, we’ll now move onto our list of top countries with low taxes and high quality life for expats.
25 Best Countries for Expats With Low Taxes and High Quality of Life
A bustling airport terminal with travelers heading to their dream destination.
Methodology
To identify the top 25 countries for expatriates seeking low taxes and high quality of life, we incorporated two key data sources. Firstly, we analyzed the Human Development Index (HDI) from Human Development Insights, which evaluates a country’s well-being across health, education, and income. Secondly, we gathered personal income tax rates from Trading Economics and PwC. Our ranking process involved setting the tax threshold at a maximum of 25% and HDI value at a minimum of 0.8. Countries that fell under this tax rate were then ranked based on their HDI values, ensuring that the selected countries offer both a manageable tax burden and a superior standard of living for expatriates.
25 Best Countries for Expats With Low Taxes & High Quality of Life
25. Slovenia
Income Tax Rate: 25%
HDI Value: 0.855
In Slovenia, expats can appreciate a moderate quality of life (HDI 0.855) alongside a balanced income tax rate of 25%.
24. Singapore
Income Tax Rate: 24%
HDI Value: 0.949
Singapore offers an excellent quality of life (HDI 0.949) with a competitive tax system, featuring a top rate of 24%.
23. Czech Republic
Income Tax Rate: 23%
HDI Value: 0.895
The Czech Republic is known for its scenic nature, good food, and deep history. The country demonstrates HDI value of 0.895, coupled with a reasonable tax rate of 23%.
22. Liechtenstein
Income Tax Rate: 22.4%
HDI Value: 0.942
Liechtenstein presents a very high quality of life (HDI 0.942) and lower taxes at a 22.4% rate, making it attractive for expats.
21. Sweden
Income Tax Rate: 20%
HDI Value: 0.952
Sweden is renowned for its exceptional quality of life (HDI 0.952) and surprisingly low income tax rate of 20% for its benefits.
20. Estonia
Income Tax Rate: 20%
HDI Value: 0.899
Estonia offers both a high quality of life (HDI 0.899) and a low income tax rate of 20%, providing notable benefits.
19. Georgia
Income Tax Rate: 20%
HDI Value: 0.814
Georgia provides a peaceful living environment and a good HDI score of 0.814, with a relatively low income tax rate of 20%.
18. Serbia
Income Tax Rate: 20%
HDI Value: 0.805
Serbia presents a modest quality of life (HDI 0.805) with an appealing income tax rate of 20% for those seeking affordability.
17. Hong Kong
Income Tax Rate: 15%
HDI Value: 0.956
Hong Kong ranks highly with an HDI of 0.956 and a low tax rate of 15%, making it a prime destination for expats.
16. Hungary
Income Tax Rate: 15%
HDI Value: 0.851
Hungary is favored for its affordability and lower tax rate of 15%, set against a moderate HDI of 0.851.
15. Montenegro
Income Tax Rate: 15%
HDI Value: 0.844
Montenegro offers stunning landscapes and a reasonable quality of life (HDI 0.844) with a tax rate of 15%.
14. Seychelles
Income Tax Rate: 15%
HDI Value: 0.802
Seychelles, known for its beautiful beaches, offers a decent living standard (HDI 0.802) and a tax rate of 15%.
13. Belarus
Income Tax Rate: 13%
HDI Value: 0.801
Belarus provides a lower cost of living with a tax rate of 13%, although the quality of life is reflected by an HDI of 0.801.
12. Russia
Income Tax Rate: 13%
HDI Value: 0.821
Russia offers a good living standard and stability to its residents with a lower tax rate of 13% and an HDI of 0.821.
11. Switzerland
Income Tax Rate: 11.5%
HDI Value: 0.967
Switzerland is top-rated for quality of life with the highest HDI of 0.967 and a low tax rate of 11.5%, appealing to those seeking premium living conditions.
10. Kazakhstan
Income Tax Rate: 10%
HDI Value: 0.802
Kazakhstan is emerging as an expat destination in terms of a country with a low tax rate of 10% and an HDI of 0.802.
9. Romania
Income Tax Rate: 10%
HDI Value: 0.827
Romania is a country with European cultural backdrop, exhibiting a low tax rate of 10% and an improving HDI of 0.827.
8. Oman
Income Tax Rate: 0%
HDI Value: 0.819
Oman attracts with no income tax and a good quality of life (HDI 0.819), ideal for expats looking for tax efficiency.
7. Bahamas
Income Tax Rate: 0%
HDI Value: 0.82
The Bahamas offers a tax-free environment along with a comfortable living standard (HDI 0.82), perfect for those seeking a relaxed lifestyle.
6. Brunei Darussalam
Income Tax Rate: 0%
HDI Value: 0.823
Brunei Darussalam provides expatriates with a tax-free living and a high standard of life, indicated by its HDI score of 0.823.
