As an American stuck in confinement during winter, I can’t help but wonder how much more bearable life would be if I lived somewhere under the sun, with my toes in the sand. Because of the Covid-19 pandemic, many of us are confined to working from home. Since life is not expected to return to normal until at least the end of 2021, many of us are making significant lifestyle changes. Many have been pushing to make their dream a reality and spend winter in the Caribbean.
There wonderful islands in the Caribbean to choose from, and much to consider before making the leap. One of the most important considerations is tax, you may not be heading south only for the weather. By shifting your base to the Caribbean, you can become free of income tax if you plan it well. For someone earning a high income, this could translate to a lot more money at your disposal that you can use to enjoy life and further grow your wealth.
Below is our list of the best places to relocate to in the Caribbean and information on how to gain residence there. Of course, all of them have beautiful sandy beaches and a hot tropical climate to warm your heart.
Anguilla is a British Overseas Territory in the Caribbean. It’s one of the wealthier islands in the region and is home to a thriving ex-pat community. The official language is English and the territory doesn’t levy income tax, corporate tax, or sales tax.
In 2018, Anguilla launched the Anguilla Select programs, a set of 3 programs catering to global citizens. Both the Real Estate Permanent Residence option and the Tax Residency option are interesting. But the Tax Residency option is why we have placed Anguilla in first place. It requires a property purchase of at least $400,000 and annual fees of $75,000. The benefit is that it allows residents to gain a tax residence certificate in Anguilla if they spend only 45 days a year on the island.
This is an extraordinary feature since tax residence is normally gained after spending most of the year in a country. As long as you don’t spend 180 days in another single country and have broken your tax residence at home, you could be free of income tax. For Canadians and Europeans, this is an exceptional proposition. Americans, of course, remain liable to taxation wherever they reside until they forfeit their American citizenship. For them, the Real Estate Permanent Residence is perhaps the best option. You can qualify for permanent residence by buying a property worth at least $750,000 on the island. After 5 years, you’ll be eligible to become a British Overseas Territory Citizen. The BOTC passport is different from the British passport but offers many of the same perks.
#2 Cayman Islands
The Cayman Islands are also a British Overseas Territory (BOT). The islands have some of the world’s highest per capita incomes. It too has English as its official language.
The Cayman Islands rank #1 on our Taxation Index. The country is the last remaining tax “virgin” in the world. It does not levy taxes on any form of income, sales, or social security.
The Cayman Islands offer an extensive set of Residence by Investment programs under the Independent Means category. They can be complicated to navigate, so we’ll try to make it easy for you.
Most programs offer a 25-year resident permit, but only the Certificate of Permanent Residence (CPR) can provide you with a permanent residence that could lead to BOT citizenship after 5 years. The CPR is also the costliest route, with a minimum real estate investment of $2.4m and a one-time $120,000 permit fee.
If you’re not interested in becoming a BOTC, I would suggest other routes. The Certificate of Direct Investment (CDR), for instance, requires a $1.2m investment in business activity on the island. The Residence Certificate requires the same amount, but it can be split between a business investment and a real estate investment. This is true as long as at least half of it goes into a property. You can also get your Residence Certificate in the less-popular Little Cayman and Cayman Brac for half of the investment (500,000 USD).
If you don’t have that much money but think you have an interesting business project that could create at least 4 jobs on the island, you can apply to the Substantial Business Presence track. There is no minimum investment requirement, but you’ll need to own at least 10% of the venture and your project must meet certain requirements.
Most of these residence programs come with an expensive price tag. Still, you get the best the Caribbean has to offer.
#3 The Bahamas
The Bahamas is an independent country, unlike the ones we’ve just described. It is also English- speaking and one of the region’s wealthier islands. The country also ranks highly in our Taxation Index since it doesn’t levy an income tax. The world-famous Atlantis resort is on the island, so your kids will be thrilled.
The Bahamas Residence by Investment programs includes 2 options. You can invest a minimum of $500,000 in business activity to gain an annual resident permit, but the real estate option is more attractive. It provides permanent residence, which can lead to citizenship down the road. You’ll need to invest at least $500,000; an investment above $1.5m will receive faster consideration. The PR real estate program could interesting if you’re American and want to live tax-free. It will take a bit of planning since it takes 10 years of legal residence to become eligible for naturalization as a Bahamian. But, more importantly, if you decide to forfeit your American citizenship, you will be able to travel to the US as a tourist without a visa. The Bahamas passport allows its holders to travel visa-free to the US. Permanent residents also are able to receive a Bahamas tax certificate. For that, you’ll need to spend at least 90 days in the country. If you’re not interested in the 90-day tax residency or a path to citizenship, you can simply buy a property and get a home-owner card. There is no real minimum investment and the permit is renewed every year. You could also simply get an annual resident permit for a $1000 fee and rent a property. In those cases, you’ll need to clock at 183 days on the island and break your tax residency abroad. The Bahamas offers something for everyone.
#4 Turks & Caicos
The Turks & Caicos Islands are yet another British Oversea Territory on our list. Like the previous ones, they don’t levy a tax on personal or corporate income. They are also one of the wealthier jurisdictions in the Caribbean.
Turks & Caicos launched its Permanent Residence Certificate (PRC) in 2008 and it was amended in 2016. The Residence by Investment program offers 3 options and, as its name implies, it provides applicants with permanent residence. One option requires a minimum investment of $1m in a public project. The other two, perhaps the most interesting ones, start at $1m for a real estate purchase and $1.5m for business investment. What’s so interesting about that, you ask? Well, investments on the islands of Grand Turk, Salt Cay, South Caicos, Middle Caicos, or North Caicos qualify for a lower threshold. For example, you can buy a property for $300,000 on one of those islands and qualify for the program. At that price, you can buy a nice vacation home in one of those luxury resorts.
#5 British Virgin Islands
The British Virgin Islands, or BVI for the locals, is yet again another British Oversea Territory. As you may have noticed, the British Oversea Territories don’t levy much tax. They also are usually the wealthiest islands in the Caribbean.
That said, BVI does not offer a Residence by Investment program but instead offers annual resident permits to those seeking to stay on the island. The “Residence without Work” permit allows you to stay for up to a year, but you cannot work on the island other than managing your assets. The Self-Employed category allows you to have your own business on the island. Both programs don’t require much to get approved, and the process is quick. If you have limited funds and are not looking to gain permanent residence, the BVI is an excellent option.
#6 Caribbean CBI Countries
CBI stands for “Citizenship by Investment” and refers to the process of gaining citizenship by investing in a country. The process takes only a few months. In the Caribbean, 5 countries offer a Citizenship by Investment program. Of those 5, St Kitts & Nevis and Antigua & Barbuda don’t levy a personal income tax. The remaining 3, Dominica, Grenada, and St Lucia, taxation on foreign income is inexistent or limited. They are not as wealthy as the British Overseas Territories listed above, but in the last few years, many luxury resorts have been built there to capitalize on the new inflow of wealth.
The islands are as beautiful as the BOTs, and if you want to gain additional citizenship in no time, they’re your best bet. In most cases, you’ll qualify by donating $100,000 or more to the state, depending on the size of your family. You could also decide to purchase a property worth $200,000 or more. The great benefit of the programs is that children dependents qualify up until they are 30 years old. Parents and siblings can also be included in the citizenship application for additional fees.