Top 10 tax-friendly countries for entrepreneurs

The United Arab Emirates maintained its position as one of the most tax-friendly countries for entrepreneurs in 2025. The country does not impose any personal income tax on individuals. Businesses pay zero corporate tax on taxable income up to 375,000 dirhams. This equals approximately 102,000 US dollars. Only income above this threshold faces a 9 per cent corporate tax rate. According to government regulations, this rate came into effect in 2024. The UAE features more than 40 free zones where foreign investors can retain full ownership of companies. These zones provide complete exemptions on corporate and income taxes if businesses meet specific requirements. Starting from January 2025, large multinational enterprises with consolidated revenues over 750 million euros face a 15 per cent Domestic Minimum Top-Up Tax. This aligns with OECD standards.

The country also offers no capital gains tax, no dividend tax, and no withholding taxes on most payments.

Estonia operates one of the most innovative tax systems in Europe through its e-residency programme. As per the official government data, the country does not impose taxes on reinvested company income. Entrepreneurs only pay tax when they distribute profits as dividends. The corporate income tax rate increased to 24 per cent in 2025 from 22 per cent. This only applies to distributed earnings. According to Invest in Estonia, the e-residency programme generated 68 million euros in direct income for the state in just the first six months of 2025. This was twice as much as initially expected. This included 26.2 million euros from labour taxes and 39.7 million euros from dividend taxes.

The programme received 7,994 new applications from January to June 2025. This represented a 23 per cent increase compared with the same period last year.

Estonia also allows entrepreneurs to establish and run companies entirely online from any location in the world.

Hong Kong applies a two-tiered profits tax system that benefits small and medium enterprises. According to the Inland Revenue Department, corporations pay just 8.25 per cent tax on the first 2 million Hong Kong dollars of assessable profits. This equals approximately 256,000 US dollars. Profits above this amount face a 16.5 per cent tax rate. The city operates under a territorial tax principle. This means it only taxes income arising from or derived from Hong Kong itself. According to tax authorities, profits from activities outside Hong Kong remain untaxed even when received by a Hong Kong company. The jurisdiction does not impose capital gains tax, dividend tax, or withholding tax on interest income. Hong Kong implemented the OECD's global minimum tax for fiscal years starting from 1 January 2025. This affects only multinational groups with annual consolidated revenue of at least 750 million euros. The 2025-26 budget proposed enhanced tax deductions for intellectual property acquisition costs.

Singapore offers one of the most attractive startup ecosystems in Asia with substantial tax incentives. According to the Inland Revenue Authority of Singapore, qualifying new companies enjoy a 75 per cent tax exemption on the first 100,000 Singapore dollars of normal chargeable income.

They also receive a 50 per cent exemption on the next 100,000 Singapore dollars. These exemptions apply for the first three years of assessment. The standard corporate tax rate stands at 17 per cent. The exemptions significantly reduce the effective rate for startups. According to government data, investment holding and property development companies are excluded from the scheme. The Enterprise Innovation Scheme introduced in Budget 2023 provides 400 per cent tax deductions on the first 400,000 Singapore dollars of qualifying expenses for research and development activities. Singapore does not tax capital gains or dividends.

Ireland continued to apply its 12.5 per cent corporation tax rate in 2025 for businesses with revenues less than 750 million euros per year. As per the the Department of Finance, over 99 per cent of companies operating in Ireland remain outside the scope of the global minimum effective tax rate of 15 per cent. This higher rate applies to larger multinational entities. The standard rate applies to trading income. This includes income from commercial activities such as manufacturing and selling goods or services. Non-trading income including rental and investment income faces a higher rate of 25 per cent. The Irish government increased the research and development tax credit from 25 per cent to 30 per cent in Budget 2024. This aims to incentivise businesses of all sizes to invest in future productive capacity. Ireland also offers a 6.25 per cent knowledge development box tax rate for intellectual property income.

Hungary boasts the lowest corporate tax rate in the European Union at just 9 per cent on all corporate profits, according to official regulations. The flat tax applies to all types of business activity without complexity. Companies can be set up online in a few days with no local shareholder or director required. Hungary does not impose withholding tax on corporate dividends paid to shareholders including non-residents. Capital gains on qualifying shareholdings are taxed at 0 per cent for Hungarian companies. A Local Business Tax of up to 2 per cent may apply depending on the municipality where the company operates. Bulgaria follows closely with a 10 per cent corporate income tax rate. According to European tax data for 2025, Bulgaria has signed more than 70 double taxation agreements, including with Asian and CIS countries. Both countries offer tax incentives for startups and reduced rates on intellectual property.

The Cayman Islands do not impose any personal income tax, corporate tax, capital gains tax, value-added tax or withholding taxes. As per the official data, this zero-tax policy applies to both residents and foreign entities operating in the islands. The country earns revenue via fees related to tourism, work permits, financial transactions, and import duties levied at 22 per cent on most goods. The Bahamas similarly imposes no personal income tax or corporate tax for individuals or entities. From 2024-25, the Bahamas will apply a 15 per cent Domestic Minimum Top-Up Tax only to multinational enterprises. This aligns with OECD standards. The Office of the Prime Minister projected this would generate 140 million US dollars in extra revenue. Both jurisdictions offer 25-year tax guarantees and proximity to the United States. The Bahamas is located just 50 miles from Florida.