More than a dozen countries impose no capital gains tax on individuals. The United Arab Emirates, Monaco, the Bahamas, the Cayman Islands, and Bermuda sit at the top of the list, with several smaller jurisdictions offering the same treatment and a second group of countries granting a conditional exemption that works for most private investors. None of that helps if you hold a US passport or green card. The IRS taxes American citizens on worldwide income regardless of where they live, so a move to a zero-tax country does not end your US capital gains obligation, and the penalties for failing to report foreign assets are steep.
The Zero-Rate Countries
These jurisdictions charge no capital gains tax on individual residents across virtually all asset types. Each sits inside a broader low-tax or no-income-tax system, though other taxes typically fill in the gap.
United Arab Emirates
The UAE charges no personal income tax and no capital gains tax on individuals, citizen or foreign resident. Gains on stocks, real estate, crypto, and other assets are entirely tax-free at the individual level. A 9% corporate tax on business profits above AED 375,000 (roughly $102,000) took effect in 2023, but it applies to businesses, not personal investment portfolios.
Monaco
Monaco has no personal income tax, no capital gains tax, and no wealth tax for residents. Investment profits, stock trades, and real estate gains are untaxed. One exception matters: French nationals living in Monaco remain subject to French income tax under a 1963 bilateral agreement.
The Bahamas
The Bahamas imposes no income tax, no capital gains tax, no wealth tax, and no inheritance or estate tax on individuals. Revenue comes from customs duties, VAT, and business licensing fees.
Cayman Islands
The Cayman Islands has no direct taxation of any kind on individuals: no income tax, no capital gains tax, no inheritance tax, no gift tax. 1GOV.KY. Finance and Economy Import duties, work permit fees, and financial services licensing fund the government.
Bermuda
Bermuda has no income tax and no capital gains tax on individuals. It does impose a payroll tax on employment income, with progressive rates reaching 12.5% on earnings above $500,000 and a $1 million cap on taxable remuneration per person. 2Government of Bermuda. Calculating Payroll Tax for the Period April 1, 2025 – March 31, 2026 Investment income and capital gains fall outside that payroll tax entirely.
Other Zero-CGT Jurisdictions
Vanuatu, the British Virgin Islands, and the Turks and Caicos Islands also have no direct taxation of any kind. Belize has no domestic capital gains tax but taxes overseas passive income, including foreign capital gains, at 5%.
Countries With Conditional Exemptions
A second group technically has no standalone capital gains tax but draws a line between passive investors and active traders. If your activity looks like a business, the exemption disappears.
Singapore
Singapore does not tax capital gains from the sale of property, shares, or financial instruments when those gains are capital in nature. 3Inland Revenue Authority of Singapore. Gains from Sale of Property, Shares and Financial Instruments The line between a capital gain and a trading profit is fact-specific. Buy and sell property with a clear profit-seeking motive, or run what looks like a securities trading business, and the tax authority can reclassify the gains as taxable business income.
Hong Kong
Hong Kong imposes no capital gains tax. Only business profits, employment income, and property rental income are taxed; investment gains, dividends, and interest are not. 4Financial Services and the Treasury Bureau. Prevailing Tax Policy Two situations trip people up. Trade often enough that the tax authority treats you as carrying on a business, and gains become taxable as business profits. Shares received as employment compensation are taxed as salary when the option is exercised or the award vests, though the later sale of those shares is generally not taxable. 5GovHK. How Share Awards and Share Options are Taxed
Switzerland
Private individuals pay no federal capital gains tax on movable assets like stocks and bonds, so long as they aren’t classified as professional securities dealers. That classification turns on trade frequency, leverage use, short holding periods, and whether investment gains make up a significant share of total income. Real estate is different. Cantons levy their own capital gains tax on property sales, with rates that vary by location and holding period, and short-term flips often face surcharges.
New Zealand
New Zealand has no general capital gains tax, unusual among OECD countries, but not all property gains are tax-free. The bright-line test taxes gains on residential property sold within two years of purchase (as of July 2024). Outside that window, gains can still be taxed if the property was bought with the intention of reselling it, was part of a development or subdivision, or was connected to a land-dealing business. Share gains are untaxed for ordinary investors but taxable for anyone running a trading business.
Belgium
Belgium does not tax capital gains on shares held as part of the normal management of private wealth. A diversified portfolio traded at a reasonable pace owes nothing. Speculative or professional-level activity can push gains into taxable territory. Belgium also imposes a 30% withholding tax on dividends and interest, so the overall picture for investors is not as clean as the zero-CGT headline suggests.
Luxembourg
Luxembourg exempts gains on shares held longer than six months, but only when you own less than 10% of the company’s share capital. Sell within six months and gains face ordinary income tax rates up to roughly 43.6%. If you hold a significant stake (more than 10% at any point in the prior five years), gains are taxed even after the six-month mark, at half the normal rate with a maximum around 21.8%. 6Guichet.lu. Identifying and Reporting Income from the Purchase or Sale of Shares or Other Securities A 1.4% long-term care insurance contribution also applies. The exemption mainly benefits small, patient shareholders.
Malaysia
Malaysia introduced a capital gains tax in 2024 on the disposal of unlisted shares, but the tax applies only to companies, limited liability partnerships, trusts, and co-operative societies. Individual taxpayers are not subject to this CGT. 7Inland Revenue Board of Malaysia. Guidelines on Capital Gains Tax for Unlisted Shares Real estate is handled separately under the Real Property Gains Tax, with rates that decrease with the length of ownership and reach 0% after a certain holding period.
Why a US Passport or Green Card Changes the Answer
This is where most plans fall apart. The United States taxes its citizens and permanent residents on worldwide income, regardless of where they live. 8Internal Revenue Service. US Citizens and Resident Aliens Abroad Sell stocks for a profit while living in the UAE, and you owe US capital gains tax on that profit exactly as if you had never left.
The IRS offers two tools to reduce double taxation, but neither eliminates capital gains tax when you’re living in a zero-tax country.
- The Foreign Earned Income Exclusion (FEIE) lets qualifying expats exclude up to $132,900 of foreign earned income in 2026. The key word is “earned.” Capital gains, dividends, interest, rental income, and pensions are all excluded from the FEIE. It covers wages and self-employment income only.9Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- The Foreign Tax Credit (FTC) gives a dollar-for-dollar credit against your US tax bill for income taxes paid to a foreign government. Live in a country with no capital gains tax, and you paid no foreign tax on those gains, so there’s nothing to credit.10Internal Revenue Service. Foreign Tax Credit
The result: a US citizen living in a zero-CGT country pays the full US capital gains rate on investment profits. High earners also face the 3.8% Net Investment Income Tax on capital gains when modified adjusted gross income exceeds $200,000 for single filers or $250,000 for joint filers. 11Internal Revenue Service. Net Investment Income Tax
What You Still Have to Report
US citizens and residents who move investments abroad face two separate reporting obligations, both with steep penalties for noncompliance. These apply even when no additional tax is owed.
FBAR (FinCEN Form 114)
If the combined value of your foreign financial accounts exceeds $10,000 at any point during the year, you must file a Report of Foreign Bank and Financial Accounts. 12FinCEN. Report Foreign Bank and Financial Accounts Bank accounts, brokerage accounts, mutual funds, and certain insurance policies held outside the US all count. A non-willful failure to file can draw a penalty up to $10,000 per violation (adjusted for inflation). Willful violations carry penalties up to 50% of the account balance or $100,000, whichever is greater. 13Taxpayer Advocate Service. Modify the Definition of Willful for Purposes of Finding FBAR Penalties
FATCA (Form 8938)
Under the Foreign Account Tax Compliance Act, you also report specified foreign financial assets on Form 8938 when they exceed certain thresholds. Taxpayers living in the US file at $50,000 in total foreign assets at year-end (or $75,000 at any point) for single filers, and $100,000 at year-end ($150,000 at any point) for joint filers. Expats living abroad get higher thresholds: $200,000 at year-end or $300,000 at any point for single filers, and $400,000 at year-end or $600,000 at any point for joint filers. 14Internal Revenue Service. Instructions for Form 8938 Form 8938 and the FBAR are separate filings with different thresholds, and you may need to file both.
Passive Foreign Investment Companies
US taxpayers who invest through foreign mutual funds, foreign ETFs, or similar pooled vehicles often trigger the Passive Foreign Investment Company (PFIC) rules. A foreign fund qualifies as a PFIC if 75% or more of its income is passive or 50% or more of its assets produce passive income. Owning even one share requires filing Form 8621 every year, and the default tax treatment is deliberately punitive: gains are spread across the holding period and taxed at the highest ordinary income rate plus an interest charge. This is one of the most common traps for Americans who move abroad and invest through local funds instead of US-domiciled ones.
Renouncing Citizenship and the Exit Tax
Some people conclude that the only real escape from US worldwide taxation is to renounce citizenship or surrender a green card. The IRS anticipated this. Under IRC Section 877A, anyone who qualifies as a “covered expatriate” faces a mark-to-market exit tax that treats all worldwide assets as if sold at fair market value on the day before expatriation. 15Office of the Law Revision Counsel. 26 USC 877A – Tax Responsibilities of Expatriation
You’re a covered expatriate if you meet any one of three tests: net worth of $2 million or more, average annual net US income tax liability over the prior five years above roughly $211,000 (for 2026), or an inability to certify five years of federal tax compliance. The first $910,000 of gain (for 2026) is excluded from the deemed sale, but unrealized gains above that threshold are taxed immediately, even though nothing has actually been sold.
The State Department also charges a $450 administrative fee to process the renunciation, reduced from $2,350 in early 2026. Expatriation triggers additional reporting obligations and can affect your ability to spend time in the US afterward. This is not a decision to make without specialized legal counsel.
What Else You’ll Pay in a Zero-CGT Country
A country with no capital gains tax is not necessarily a low-tax country overall. Governments need revenue, and jurisdictions that skip income and capital gains taxes raise it in other ways. VAT or goods and services taxes are common, often between 5% and 15%. Import duties can be substantial, particularly in island nations like the Bahamas and Bermuda where most goods are imported. Property transfer taxes, stamp duties, and business licensing fees add further costs.
The UAE introduced a 9% corporate tax in 2023 and charges 5% VAT on most goods and services. Bermuda’s payroll tax on employment income can exceed 10% for higher earners. 2Government of Bermuda. Calculating Payroll Tax for the Period April 1, 2025 – March 31, 2026 Cost of living in many zero-tax jurisdictions runs high, partly because the absence of broad-based taxes gets capitalized into real estate prices and import costs. A full comparison means looking at your total tax and cost burden, not just the capital gains line.
Making the Move Count: Tax Residency
Moving to a zero-CGT country only helps if you actually become a tax resident there. Residency determines which country can tax your income and assets, and it usually turns on physical presence, the location of your permanent home, and where your economic ties are strongest.
Many countries use a 183-day rule as a baseline: spend more than half the year in their territory and you’re a resident for tax purposes. Specifics vary. Some countries count partial days as full days. Others use a weighted average across multiple years. The US applies a “substantial presence test” that counts all days in the current year, one-third of days in the prior year, and one-sixth of days two years back, with a threshold of 183 equivalent days. 16Internal Revenue Service. Substantial Presence Test
When both countries claim you as a tax resident, tax treaties provide tie-breaker rules. The standard hierarchy looks at where your permanent home is, where your personal and economic interests are strongest, where you spend the most time, and finally your citizenship. Not every country pair has a treaty, and the specific rules differ by agreement. If you’re planning a move to a zero-CGT jurisdiction, confirming your tax residency in both the country you’re leaving and the one you’re entering is the single most important step. Get it wrong and you can end up paying capital gains tax in both places, or in a country you thought you had already left.