Which Countries Have Non-Domicile Regimes?

When it comes to tax planning in the world of business, one term that often pops up is “non-domicile”, most commonly referred to as “non-dom”, status.

For some, it sounds like something complicated and reserved for high-net-worth individuals with teams of accountants – essentially, an idea totally inaccessible to most normal people.

While that’s partly true, the concept is fairly straightforward once you break it down. That is, a non-domicile regime is a set of rules that allow people who live in a country but are not legally considered “domiciled” there to be taxed in a more favourable way, often on foreign income.

But first, what does domiciled mean? Being domiciled means that a person is legally recognised as having their permanent home in a particular country, regardless of where they are currently living.

Now, non-these regimes exist in several countries around the world and are designed to attract wealthy individuals, entrepreneurs and investors. By offering an alternative tax treatment, they encourage people to base themselves in that country while keeping their global wealth relatively sheltered.

However, the idea of a non-domicile regime (and its attractiveness) is one thing, but in reality, there are only a few countries in the world that actually operate in this way.

 

What Is a Non-Domicile Regime? More Detail 

 

We’ve got the basics, but there’s a lot more to the idea of a non-dom regime than just the basics that we’ve outlined.

So, first and foremost, a person’s domicile is their legal home. Importantly, it’s not the same as residency, which is simply where you live for a certain number of days in a year. Your domicile, on the other hand, is usually the country you consider your permanent home or where you intend to return to indefinitely.

In a non-domicile regime, people who are resident in a country but have their permanent home elsewhere may be allowed to pay tax only on income earned within that country. In some cases, they can choose to pay tax on foreign income only if it is brought into the country. This is often referred to as the “remittance basis” of taxation.

It’s not just about paying less tax, although that is the obvious attraction, especially for business owners and other high earners. Rather, it’s more about flexibility. These regimes are particularly appealing for individuals with complex international finances, investments or business interests that are spread across several countries.

 

The UK’s Famous Non-Dom Regime

 

One of the most well-known examples of a non-dom regime is the United Kingdom. The UK non-dom regime has been around for over a century and has attracted thousands of wealthy individuals over the years. Non-doms in the UK can choose to be taxed on the remittance basis – this means that they only pay UK tax on income and gains that arise in the UK or are brought into the UK.

This benefit doesn’t come free though. After being a resident for a certain number of years, individuals must pay an annual charge to continue claiming the status. Furthermore, the UK government has tightened the rules in recent years, but even so, it remains a significant draw for international entrepreneurs and investors.

 

 

Other Countries with Non-Domicile Regimes

 

While the UK may have popularised the idea, it’s definitely not the only country with these kinds of rules. Here are some other jurisdictions with non-domicile or similar preferential tax systems, with Ireland, Malta and Cyprus as the three best known:

 

Ireland

 

Ireland offers a non-dom regime very similar to the UK’s, using the remittance basis for foreign income and capital gains. This makes it attractive for those who want access to the EU market while keeping their global tax liabilities under control.

 

Malta

 

Malta’s non-domicile regime allows foreign residents to be taxed only when remitted to the country. It’s particularly popular because Malta also offers a range of residency and citizenship schemes. Essentially, the country’s tax treaties can also reduce the risk of double taxation.

 

Cyprus

 

Cyprus has positioned itself as a tax-friendly location for international residents. Non-doms are exempt from tax on dividends and interest, even if sourced from abroad, for a set number of years. Cyprus is especially appealing to those with investment-heavy income streams.

 

Gibraltar

 

This small British Overseas Territory offers a favourable system for non-doms. Individuals are taxed on income accrued in Gibraltar, with foreign income often untouched. Combined with low overall tax rates, Gibraltar tends to attract both businesses and individuals.

 

Italy

 

Italy’s non-dom regime is a newer entrant to this list. Residents can opt to pay a flat tax on foreign income, rather than the standard progressive rates. This is particularly appealing to wealthy retirees and high-earning professionals moving to Italy for lifestyle reasons, of which, these days, there are many.

 

Greece

 

Greece has also jumped onboard with a regime offering flat annual tax rates for certain categories of foreign income. It’s been marketed heavily to retirees and entrepreneurs seeking Mediterranean living with tax advantages.

 

Portugal

 

Portugal’s Non-Habitual Resident (NHR) programme works slightly differently but has similar aims. New residents can enjoy reduced or even zero tax on certain foreign income for a fixed period, making it a big draw for remote workers and retirees. It’s not technically non-dom, but it’s pretty similar.

 

Jersey, Guernsey and the Isle of Man

 

These Crown Dependencies offer low personal tax rates and in some cases remittance-style systems. They also provide residency routes for high-net-worth individuals, so they’re very similar to non-dom regimes.

 

Monaco

 

Monaco doesn’t have personal income tax (except for French citizens), which means residents effectively enjoy the same benefit as non-dom status, with no tax on foreign or local income.

 

Switzerland

 

Switzerland offers lump-sum taxation to wealthy foreigners. Instead of taxing worldwide income, the tax is calculated based on living expenses, creating a predictable and often much lower tax bill.

 

Thailand

 

Thailand introduced a new Long-Term Resident (LTR) visa and tax incentives for high-net-worth individuals, skilled professionals and wealthy pensioners too. Some categories allow exemptions or reductions on foreign income tax if certain conditions are met.

 

Singapore

 

Singapore does not tax most foreign-sourced income unless it is received in Singapore, and its territorial tax system works in a way similar to non-dom status. This has made it a popular hub for expatriates with international earnings.

 

Hong Kong

 

Like Singapore, Hong Kong operates a territorial tax system, meaning only income arising in or derived from Hong Kong is taxable. Foreign-sourced income remains untaxed even if remitted to Hong Kong.

 

Bahamas, Bermuda, Cayman Islands and Other Caribbean Nations

 

Many Caribbean jurisdictions have no personal income tax at all, which means residents, by default, are not taxed on foreign income. These territories often combine this with investor visa programmes.

 

United Arab Emirates

 

The UAE doesn’t levy personal income tax. Combined with its investor-friendly residency schemes, it operates effectively as a permanent non-dom jurisdiction for expatriates, making it one of the most popular places in the world to start a business.

 

What Do These Regimes Exist?

 

The idea is simple. Countries want to attract wealthy individuals who will spend money locally, invest in property, employ people and contribute to the economy. Offering tax incentives is one way to make that happen, and that’s why it’s becoming an effective way to stimulate economies.

Of course, it’s not without criticism. Some argue these regimes give the rich an unfair advantage, while others see them as essential tools for competing in the global talent and investment market. But, from a purely practical perspective, they work. Countries that offer these incentives tend to see an influx of high-net-worth residents who boost the local economy in a variety of ways.

 

Things To Consider Before Moving for Non-Dom Benefits

 

So, if you’re thinking about relocating to take advantage of a non-domicile regime, remember that tax law is complex and most importantly, it changes regularly. What’s attractive today might look very different in five years, and it often does. There are also other considerations beyond tax, including cost of living, quality of life, visa requirements and long-term plans.

It’s also important to understand how your home country taxes its citizens or former residents. In some cases, you could still be liable for tax there even if you are a non-dom elsewhere, so at the end of the day, professional advice is essential before making a move based purely on tax incentives – it’s not worth finding out crucial information at a later stage.

Non-domicile regimes can offer huge financial advantages for the right person in the right circumstances. They’re designed to draw in wealth and talent, and they do exactly that. From the UK to Cyprus, Malta to Italy, these schemes have become an important part of how countries compete for residents on the global stage.

So, ultimately, if you’re considering it, do your homework. Moving countries is a big decision, and tax benefits are just one piece of the puzzle, no matter how attractive they may be. But for many, non-dom status is a powerful incentive that tips the balance in favour of packing their bags and starting a new chapter abroad.