First, I want to commend one of the best media outlets and their investigative journalists based in the US. 
I love it even though their reporters are based all over the world, with headquarters in Washington. We can say what we want about our neighbors. When is the CRTC going to get a clean-up? It’s long overdue.
Special CRTC December 16
Cocaine Company
Delaware is everywhere’: how a little-known tax haven made the rules for corporate America
In his new book “What’s the Matter with Delaware?” former Financial Times reporter Hal Weitzman explores the tiny state’s massive role in global financial secrecy.
By Nicole Sadek
The words “tax haven” typically invoke visions of far-off tropical hideaways like Panama, Bermuda and the Caymans. But one of the world’s biggest tax havens actually sits within the bounds of mainland USA: the tiny, tax-free state of Delaware.
Hal Weitzman, an author, business school professor at the University of Chicago Booth School and former Financial Times reporter, explores a little-known side of Delaware in his new book, “What’s the Matter with Delaware?” which sheds light on the lax corporate tax laws that have allowed the more than one million companies registered in Delaware to cloak themselves in secrecy and, in some cases, engage in illicit or dodgy financial activity.
ICIJ spoke with Weitzman about how Delaware has become one of the best-kept secrets in offshore finance, and the role the state plays in our daily lives. His book was published in the U.S. in May, and is available in the U.K. on July 19.
You spent 12 years as a reporter for the Financial Times. Was Delaware always on your mind?
No, it wasn’t. It wasn’t something that I ever covered for the Financial Times. The only thing I was aware of was that for some reason that I did not understand, everything seemed to happen in Delaware: all the court proceedings, mergers and acquisitions, bankruptcies. There was a lot going on in Delaware. Obviously, I looked at my credit card, and saw that it came from Delaware. So I knew of it hazily, but I didn’t really understand it, which is what got me intrigued when I had some time to dig into it.
Why has Delaware, as a tax haven, flown under the radar?
Delaware was sort of like someone in the Witness Protection Program. It was like a perfect cover story. Typically, when you think about these issues, you think about somewhere exotic, or exotic to us anyway, like the Cayman Islands or the British Virgin Islands or Panama or Bermuda or Cyprus, Luxembourg or Switzerland. It’s the sort of places like a James Bond film; it’s always something that happens over there. We never think of it as being something that happens over here and in the very non-exotic location of Delaware, right? So the sheer sort of ordinariness of it was in itself kind of remarkable.
What makes Delaware a tax haven?
Companies and wealthy individuals can use Delaware to avoid paying some taxes in other states. So there’s a thing called the Delaware Loophole, which essentially enables companies to avoid paying state corporate income tax where they earn the revenue. Home Depot and Toys R Us and a lot of retailers have used that loophole. And then Delaware is one of five states that don’t have a sales tax. So it’s very common for people to cross state lines to shop in those states; duty free shopping is a big thing. So people cross over and they buy stuff, duty free. It’s not strictly legal, but it’s small stuff. It’s not a huge misdemeanor, as things stand. But if you’re a wealthy individual buying, for example, a piece of art in New York at auction, you can put that in a truck and ship it straight to a warehouse in Delaware, and you don’t pay any tax to the state of New York. So in both these cases, it’s helping people — in the case of art, helping them avoid taxes in their home state; in the case of the Delaware Loophole, it’s helping corporations avoid paying corporate income tax.
After Russia’s invasion of Ukraine, you wrote an op-ed in March entitled “America’s indulgence of corporate secrecy (like Delaware LLCs) makes it harder to squeeze Putin” for MarketWatch. Why has the state received renewed attention since the war began?
Well, because some of the big financial centers, particularly London, had been under a lot of scrutiny because they’ve been trying to strangle the wealth of these Russian oligarchs, and they found it challenging to do so, which just shows you how entrenched that money is in our system. But the fact is that in America, there’s even less transparency than there is in the U.K.
Here in America, we have no idea because we don’t ask the question, who owns the company? The policy that Delaware has championed and defended, the system against attempts to reform it, is ‘don’t ask, don’t tell.’ I spoke to the secretary of state in Delaware last year, to their office, and I just wanted to be 100% clear before I said it publicly: “Do you know where the owners of corporations registered in Delaware are located?” And they said they don’t. And there’s no way of knowing because they just don’t even ask the information.
Have efforts to reform Delaware’s secrecy-friendly policies, like the federal Corporate Transparency Act, been sufficient?
That law won’t change that registration system. You will still be able to register in Delaware anonymously with no documentation, not an ID required, nothing. Then you can still put someone else’s name, the agent’s name, instead of your own. And that will be completely legal. So that system, the system of anonymity at the point of registration, that continues. That’s now institutionalized and reinforced by this new law. So I do think in America, it’s even further behind than the U.K.
More Tax Heaven
16 Countries with No Income Taxes
At Nomad Capitalist, our motto is simple: Go Where You’re Treated Best.
But finding that place can be complicated, so a major part of going where you’re treated best is choosing the places that suit your personal preferences.
You may enjoy the hustle and bustle of big-city living, long for sunshine and sand, and wish to banish the spectre of winter forever. Maybe you’re seeking cultural experiences, culinary delights and travel opportunities, or perhaps you just want a ‘Plan B’ second residency as a backup strategy.
Whatever you want, as a high-net-worth individual, you need to weave asset protection and investment opportunities together in a plan that allows you to keep more of your wealth for you and your family to enjoy.
That’s why, in our experience, some factors – like paying low or zero taxes – are crucial.
Simply put, if you’re losing a good chunk of your income to taxes, then you’re not where you’re treated best.
But what does that mean in the context of all the global destinations you could choose for planting flags and what does it mean when talking about paying no income tax?
16 Countries With No Income Taxes
The Most Popular Bahamas
Ready to Bank in the Bahamas
The Bahamas is one of the most liveable countries with no income tax. Establishing a second residence there is not too difficult, either – as long as you have the money to invest.
Getting a temporary residence permit is as simple as paying US$1,000 at the immigration office and it’s renewable every year.
Recently, however, the Bahamas has started cracking down on foreign residents who use the temporary permit without making investments. If you want to stay there long-term, you’ll need to purchase a property for at least US$750,000 to qualify for permanent residence. As a general rule, the more money that you invest in the Bahamas, the more likely you’ll be treated favourably by the immigration office.
But while getting permanent residence is mostly a matter of investment, securing citizenship is another story. The country has flirted with a pricey citizenship-by-investment program, but nothing has come of it yet.
Apart from value added tax (VAT) and stamp duties, you won’t pay much in taxes to the Bahamas, but you’ll need to spend a substantial amount of money to live there. In the long run, though, it could be worth it to pay no income taxes while lounging on the beach.
Bahrain
Bahrain was one of the first states in the Persian Gulf to discover oil within its borders and that stroke of fortune has allowed this small Gulf state to become one of the wealthiest nations in the world – and one of the handful of countries with no income tax.
It’s fairly easy to live there, and places like Manama, a well-developed city, have sizeable expat communities. However, the problem with Bahrain, in common with many other Middle Eastern states, is that getting permanent residence can be difficult.
To establish permanent residence in Bahrain, you need to be retired, invest US$530,000 in property or earn a basic monthly salary of no less than US$5,300.
But at least getting permanent residence in Bahrain is possible. Securing citizenship is much harder; among the major hurdles you’ll need to leap through, you’ll have to live in here for 25 consecutive years and be fluent in Arabic, before they’ll consider your application.
Bahrain, then, could be an option if you’re looking for a tax-free permanent residence in the Gulf. Just don’t set your heart on getting a second passport there.
Bermuda
A British territory in the North Atlantic Ocean known for its pink-sand beaches and zero income tax, Bermuda has a population of just 64,000 residents.
It doesn’t have any permanent residence or citizenship-by-investment programs but, if you want to visit the island, you can stay for up to six months with a short-term permit visa. You can also live there on a work permit that’s usually issued for one to five years, and sometimes longer.
Do note that Bermuda does have a payroll tax. The main difference is that payroll tax is required by employers only, who may deduct 9.5% from employees’ salary that goes to said tax. And if you’re self-employed, you are required to pay the payroll taxes yourself.
Brunei
Brunei does not need to impose income taxes thanks to its great wealth
This tiny Sultanate on the Malaysian island of Borneo also has enough oil wealth to forego collecting income tax.
However, unlike Bahrain or the Bahamas, Brunei is extremely difficult to live in. It has a reputation of not very friendly to foreigners and the government is, frankly, heavy-handed and dictatorial. You might even find fellow expats who are scared to speak to you thanks to local laws and policing practices.
Permanent residence and citizenship are also out of the question – unless you somehow gain the approval of the Sultan. Brunei exemplifies how countries with no income tax are not necessarily hubs of economic freedom.
Cayman Islands
Like the Bahamas, the Cayman Islands’ scenic beaches draw in enough tourists to keep its government afloat without the need for income tax.
There are three ways to obtain residency in the Cayman Islands:
Working for a Cayman Islands-based company
Making a significant investment
Establishing a business there.
You’ll need to earn US$147,000 per year and invest at least US$1.2 million in real estate or local companies if you want to live on Grand Cayman and, from there, you’ll need to wait another eight years for permanent residence.
And, as in most Caribbean countries, the more money that you invest, the more easily you can obtain permanent residence. However, you can get away with investing a bit less if you choose to move to one of the less popular islands, like Cayman Brac.
Overall, the Cayman Islands is an interesting zero-tax option if you have the substantial funds to invest.
Kuwait
Like many of the Gulf countries on this list, Kuwait doesn’t need to levy an income tax thanks to its large oil industry. It’s also one of the most expat-friendly countries in the world with foreign citizens making up two-thirds of the population. From our own experience, Kuwait City is highly Westernised and easy to navigate.
However, it doesn’t have much need for foreign investment, so citizenship by investment is out of the question. Obtaining permanent residency there generally requires you to have Kuwaiti relatives or formal employment within the country.
Living permanently in this particular tax-free haven, then, is near-impossible, so it’s advisable not to base your tax strategy on Kuwait.
Maldives
Imagine living in an overwater bungalow without paying a dime in income tax.
Well, you can technically do that in the Maldives, a small island country in the Indian Ocean and thanks to its plentiful – and expensive – resorts, the Maldives doesn’t see much need for an income tax.
However, while spending your days living tax-free in the Maldives sounds idyllic at first, staying there long-term is close to impossible. You need to be a Sunni Muslim to even apply for citizenship or permanent residence and, even then, the country doesn’t have a program for foreigners to become permanent residents, let alone citizens.
There is one upside to this: while you’re lounging at the St Regis, at least you won’t have to worry about complicated triggering tax requirements.
Monaco
Monaco’s status as one of the world’s best countries with no income tax has made it into a playground for the European elite.
This gorgeous country on the French Riviera is safe and luxurious, yet it charges its residents and citizens a total of zero income tax. Moreover, since the country tends to attract high-income, tax-averse types, it will likely remain tax-free for the foreseeable future.
Notably, it’s also one of the easier tax-free countries in which to become a citizen.
Although you’ll need to spend several million dollars to prove your wealth in order to become a resident, the residency process itself is fairly straightforward since it’s a popular destination for wealthy expats.
For those who prefer European glamour to island life, then living tax-free in Monaco may be the best choice. If you’re thinking of moving there, check out our ultimate guide to getting residency and citizenship in Monaco.
Nauru
Nauru is a small island country in the southwest Pacific Ocean that was first named ‘Pleasant Island’ by European sailors.
Unfortunately, however, the island doesn’t seem to quite live up to its original name.
Most people only know of Nauru for its recent media coverage as the location of a controversial Australian-run detention camp for asylum-seekers. And while Nauru certainly has many of the charming features that draw visitors to other Pacific islands, the island’s phosphate mining industry has decimated its economy.
If all that wasn’t bad enough, Nauru is also under threat of sinking into the Pacific Ocean, thanks to rising sea levels.
In fact, Nauru only makes the list of countries with no taxes because of its government’s last-ditch efforts to keep its economy afloat. If you’re looking for a peaceful tax haven in the South Pacific, Nauru may not be your best bet.
Oman
Like most Middle Eastern countries on this list, Oman has no need for an income tax thanks to its oil and gas industry.
Additionally, despite its massive oil and gas reserves, Oman has made a distinct effort to diversify its economy and open it up to new opportunities. This makes it a great alternative to the United Arab Emirates (UAE) for investors looking for opportunities in the Gulf.
As with most wealthy Middle Eastern states, Oman isn’t exactly dying for foreign capital, so expats looking to move there usually need strong connections in the country to do so easily.
Living there can also be a major adjustment since Omani culture is quite conservative. In fact, you need to obtain a personal liquor licence from a local police station to buy even a single bottle of wine.
The Omani Government offers an Investor Residence Visa on its website. However, specifics like minimum investments aren’t readily available and none of the lawyers we spoke to in Oman specialise in this area.
Oman is an interesting option but living there long-term isn’t generally an option for Nomad Capitalists.
Qatar
It’s a small, wealthy country that made its fortune through the oil industry with a culture that’s highly conservative, but a mindset that’s rapidly modernising thanks to foreign investment and external business influences.
It may be small, but Qatar has one of the highest per capita income rates in the world and is regarded as the most developed country in the Middle East. It also plays a unique role in global and regional politics and, in its own right, is a fascinating country due to its particularly high level of development and growing role in world politics.
Overall, Qatar is a relatively peaceful and pleasant place to live and, unlike its Gulf neighbours, offers permanent residence for expats.
That said, like most countries with no income tax, it’s difficult for foreigners to attain permanent residence here since requirements are strict and few lawyers specialise in the area. To even be eligible, you must have lived in the country for over 20 years and have a good command of Arabic.
Saint Kitts and Nevis
Saint Kitts and Nevis is a gorgeous island nation and one of the easiest tax free countries to get citizenship
If you’re looking for a place to establish tax-free citizenship easily, look no further than Saint Kitts and Nevis.
The price tag of its citizenship by investment is also far lower than other citizenship-by-investment programs.
There are two citizenship-by-investment options: a donation of US$250,000 to the Sustainable Growth Fund or an investment in a government-approved real estate project for at least US$400,000 or US$800,00 in an approved private dwelling.
While you can read more about the citizenship-by-investment program in Saint Kitts and Nevis here, it’s a relatively straightforward process that can take less than a year to complete. Reach out to our team to find out how.
Somalia
Somalia is – without question – one of those countries.
Insurgent groups like al-Shabab control large swaths of Somalian territory at the same time as the country is facing a devastating humanitarian crisis. Millions of people face acute food insecurity and the NGOs that can operate here are struggling to provide aid to vast areas, like those controlled by al-Shabaab, due to the fear of attacks.
Clan uprisings have been accompanied by a worsening drought, as al-Shabaab increases taxes and local clans rebel. In 2024, it’s estimated that around 6.9 million Somalis are in need of humanitarian assistance.
The ongoing conflicts mean that Somalia is far from a viable option and, even if the country goes manage to emerge from decades of conflict, such a development could well mean the end of its zero-tax status as it faces the prospect of repaying its foreign debts.
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