More than a dozen jurisdictions impose no capital gains tax on individuals, and a second group exempts most private investors under conditions. The countries with no capital gains tax at all include the United Arab Emirates, Monaco, the Bahamas, the Cayman Islands, Bermuda, Vanuatu, the British Virgin Islands, and the Turks and Caicos Islands. Several more, including Singapore, Hong Kong, Switzerland, New Zealand, Belgium, Luxembourg, and Malaysia, exempt ordinary investors but tax anyone whose activity looks like a trading business. If you hold a US passport or green card, none of this frees you from US capital gains tax. The IRS taxes American citizens on worldwide income regardless of where they live.
Jurisdictions That Impose No Capital Gains Tax
The countries below charge zero capital gains tax on individual residents across essentially every asset class. Each sits inside a broader low-tax or no-income-tax framework, though other taxes typically fill the gap.
United Arab Emirates
The UAE charges no personal income tax and no capital gains tax on individuals, whether you are a citizen or a foreign resident. Gains on stocks, real estate, crypto, and other assets are 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 and does not reach 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 notable exception: French nationals living in Monaco remain subject to French income tax under a 1963 bilateral agreement. Everyone else pays nothing on investment gains.
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 rather than direct taxation of individuals.
Cayman Islands
The Cayman Islands has no direct taxation of individuals at all. No income tax, no capital gains tax, no inheritance tax, no gift tax. 1GOV.KY. Finance and Economy The government funds itself through import duties, work permit fees, and financial services licensing.
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 tax.
Other Zero-Tax Jurisdictions
Vanuatu, the British Virgin Islands, and the Turks and Caicos Islands have no direct taxation of any kind. Belize imposes no domestic capital gains tax, but it does tax 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 gains look like ordinary business activity, they lose their tax-free status.
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. Frequent buying and selling with a clear profit motive, or activity that resembles a securities business, can be reclassified as taxable business income.
Hong Kong
Hong Kong imposes no capital gains tax. It taxes only business profits, employment income, and property rental income, with no tax on investment gains, dividends, or interest. 4Financial Services and the Treasury Bureau. Prevailing Tax Policy Two situations trip people up. Trading frequently enough to be treated as carrying on a business makes gains taxable as business profits. Shares received as employment compensation are taxed as salary when the option is exercised or the award vests, not when the shares are later sold. 5GovHK. How Share Awards and Share Options are Taxed Gain from the subsequent sale of those shares is generally not taxable.
Switzerland
Private individuals in Switzerland pay no federal capital gains tax on the sale of movable assets like stocks and bonds, provided they are not classified as professional securities dealers. Factors that push you into that classification include trade frequency, use of leverage, short holding periods, and whether investment gains make up a significant share of your 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. Short-term flips often face surcharges, while longer holdings bring reduced rates.
New Zealand
New Zealand has no general capital gains tax, which makes it unusual among OECD countries. That does not mean all property gains are tax-free. A 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 an intent to resell, was part of a development or subdivision, or was connected to a land-dealing business. Gains from selling shares and other financial assets are untaxed for ordinary investors, but anyone running a trading business pays income tax on those profits.
Belgium
Belgium does not tax capital gains on shares held as part of the normal management of private wealth. A diversified portfolio sold at a reasonable pace triggers no tax. Speculative trading or professional-level activity can push gains into taxable territory. Belgium also imposes a 30% withholding tax on dividends and interest, so the investor’s overall picture is less clean than the zero-CGT headline suggests.
Luxembourg
Luxembourg exempts gains on shares held for more 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, though 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 to capital gains income. The exemption mainly benefits small, patient shareholders.
Malaysia
Malaysia introduced a capital gains tax in 2024 on the disposal of unlisted shares, but it 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, which taxes gains on Malaysian property at rates that decrease with the length of ownership, reaching 0% after a certain holding period.
Why Americans Cannot Escape Capital Gains Tax by Moving
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 as if you had never left.
The IRS offers two tools to reduce double taxation when you pay tax to both the US and a foreign country. Neither one helps in a zero-tax country.
- The Foreign Earned Income Exclusion lets qualifying expats exclude up to $132,900 of foreign earned income in 2026. The operative word is “earned.” Capital gains, dividends, interest, rental income, and pensions do not qualify. Only wages and self-employment income do.9Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- The Foreign Tax Credit gives a dollar-for-dollar credit against your US tax bill for income tax paid to a foreign government. In a country with no capital gains tax, you paid nothing abroad, so there is nothing to credit.10Internal Revenue Service. Foreign Tax Credit
A US citizen living in a zero-CGT country owes the full US capital gains rate on investment profits. High earners also owe 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 married couples filing jointly. 11Internal Revenue Service. Net Investment Income Tax
Reporting Traps for Americans Investing Abroad
Moving investments overseas creates reporting obligations that apply even when you owe no additional tax. The penalties are steep.
FBAR
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 (FinCEN Form 114). 12FinCEN. Report Foreign Bank and Financial Accounts The rule covers bank accounts, brokerage accounts, mutual funds, and certain insurance policies held outside the US. A non-willful failure to file can bring 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
You may also need to report specified foreign financial assets on Form 8938. For taxpayers living in the US, the trigger is $50,000 in total foreign assets at year-end (or $75,000 at any point during the year) for single filers, and $100,000 at year-end ($150,000 at any time) for joint filers. Expats living abroad get higher thresholds: $200,000 at year-end or $300,000 at any time for single filers, and $400,000 at year-end or $600,000 at any time for joint filers. 14Internal Revenue Service. Instructions for Form 8938 Form 8938 and the FBAR are separate filings with different thresholds; you may need to file both.
PFIC Rules
Investing through foreign mutual funds, foreign ETFs, or similar pooled vehicles often triggers the Passive Foreign Investment Company rules. A foreign fund qualifies as a PFIC if 75% or more of its income is passive, or if 50% or more of its assets produce passive income. Owning even a single share requires filing Form 8621 annually, 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.
The Exit Tax on Renouncing Citizenship
Some people conclude that the only way out 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 are a covered expatriate if any one of three tests applies: your net worth is $2 million or more, your average annual net US income tax liability over the prior five years exceeds roughly $211,000 (for 2026), or you cannot certify five years of full federal tax compliance. The first $910,000 of gain (for 2026) is excluded from the deemed-sale calculation, but unrealized gains above that threshold are taxed immediately, even though you have not actually sold anything. The State Department also charges a $450 administrative fee to process the renunciation, reduced from $2,350 in early 2026. This is not a decision to make without specialized legal counsel.
Other Taxes in Zero-CGT Countries
A country with no capital gains tax is not necessarily a low-tax country overall. Governments that skip income and capital gains taxes collect revenue 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 its 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 The 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. Any real comparison should look at your total tax and cost burden, not just the capital gains line.
How Tax Residency Actually Works
Moving to a zero-CGT country only helps if you actually become a tax resident there. Tax 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 strongest economic ties sit.
Many countries use a 183-day rule as the baseline: spend more than half the year in their territory and you are a tax resident. 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 from two years back, with a threshold of 183 equivalent days. 16Internal Revenue Service. Substantial Presence Test
When two countries both claim you, tax treaties provide tie-breaker rules that look at permanent home, personal and economic interests, time spent in each country, and citizenship. Not every country pair has a treaty, and the specific rules differ by agreement. Confirming your tax residency status in both the country you are leaving and the one you are entering is the single most important step before a move. Getting it wrong can mean paying capital gains tax in two places, or in one you thought you had already left.