The choice of a jurisdiction with favorable tax conditions is crucial for conducting business abroad and investing. To reduce the tax burden, it is important to consider not only the corporate tax rate but also other fees, including dividend payments.

Dividend tax is a tax levied by a jurisdiction on dividends paid by a corporation to its shareholders. Dividends are taxed at different rates in different countries, ranging from 0% to 35%. The tax is withheld at the source of the dividends and affects all investors, regardless of their tax jurisdiction. Some countries apply a zero dividend tax rate, which significantly reduces the tax burden. This is precisely the reason why they are attractive for business and investment. There are several countries where dividends are not taxed or are taxed at a very low rate. Here are some of them:

• Bahamas - no dividend tax for residents and non-residents.
• Bermuda - no dividend tax for residents and non-residents.
• Cayman Islands - no dividend tax for residents and non-residents.
• United Arab Emirates - no dividend tax for residents and non-residents.
• Oman - no dividend tax for residents and non-residents.
• Bahrain - no dividend tax for residents and non-residents.
• Kuwait - no dividend tax for residents and non-residents.
• Qatar - no dividend tax for residents and non-residents.
• Saudi Arabia - no dividend tax for residents, 5% for non-residents.
• Singapore - no dividend tax for residents, but there are some exceptions.

Bahamas

In the Bahamas, dividends are completely exempt from taxation, allowing investors to keep all the profits from their investments. In addition to the absence of dividend tax, the Bahamas offer other tax advantages:

• No personal income tax: There is no personal income tax in the Bahamas, allowing individuals to keep most of their income.
• No corporate tax: Companies registered in the Bahamas do not pay tax on profits, making the island nation an attractive place to register a business.
• No capital gains tax: Investors can sell their assets without paying capital gains tax.

Singapore

In this jurisdiction, no withholding tax is levied on dividend payments. The jurisdiction is attractive for entrepreneurs who want to invest in Singapore and receive dividends there.

Qatar

Qatar is a country that is considered a true tax haven. Qatari companies do not pay corporate taxes. Dividends distributed among shareholders are also not subject to withholding tax at the source of payment.

Cayman Islands

The Cayman Islands are a popular offshore jurisdiction, attracting investors from all over the world due to their favorable tax regime. One of the main advantages is the absence of dividend tax, which allows investors to keep all the profits from their investments.

In addition, the Cayman Islands have no personal income tax, corporate income tax, or capital gains tax. These factors make the jurisdiction extremely attractive to investors and contribute to the inflow of foreign investment.

The absence of dividend tax, combined with other tax advantages, stimulates the economic growth of the Cayman Islands, creating new jobs and promoting business development. Investors seeking to maximize their profits and preserve capital will undoubtedly appreciate the opportunities provided by this tax haven.

Apart from the countries mentioned above, there are others that do not withhold taxes on dividends. For advice on countries with attractive tax systems, please contact IT-OFFSHORE specialists.