The 20 Best Places for Freelancers to Pay Low Tax (and Actually Be Tax Resident)
If you’re a freelancer in IT consulting or software, making around €120,000 a year, chances are you’ve thought about moving abroad to lower your tax bill. The internet is full of promises: set up an LLC somewhere, travel the world, and never pay tax again.
But here’s the truth:
Most clients, banks, and tax authorities will want to see a certificate of tax residence.
Without it, they can withhold tax, refuse payments, or even report you back to your home country.
For German nationals, the danger is sharper: under §2 AStG, if you leave Germany and have “stateless” or floating income (like from a US LLC), Germany can tax you for 10 years after departure.
So the real question is not just “where is tax low?” but: “where can I realistically become a tax resident, and how much time must I spend there?”
Why tax residency is key
Many freelancers think they can be “residents of nowhere.” They live from hotel to hotel, invoice through an offshore LLC, and assume no tax applies. In reality:
Clients may demand a tax residency certificate to pay you gross.
Banks require it under CRS/FATCA.
Home countries may keep taxing you until you prove residency elsewhere.
Germany, in particular, applies the 10-year extended limited tax liability (§2 AStG) if you leave without clear tax residency.
That’s why this list focuses not only on tax percentages but also on how you actually secure tax residency.
Why residency flexibility matters
It’s not enough to ask “How many days must I stay?”. In practice, the most flexible solutions are those where:
You rent or buy a real home (not just a mailbox),
You run your business and file taxes locally, and
You don’t have stronger ties elsewhere.
In those cases, even if you spend relatively little time physically in-country, the local tax authority will usually issue you a certificate of tax residence.
⚠️ But you must avoid triggering tax residency somewhere else. Many countries apply a simple 183-day rule, but others (Germany, France, UK) can claim you if your center of vital interests is there.
👉 Not all days are equal. If your travel abroad is business-related, many tax authorities do not count those days against you at all — or treat them more leniently. For example, in Cyprus or Bulgaria, time spent on work trips abroad doesn’t usually break your residency, as long as your home and business remain there. This means you may travel extensively without losing residency, provided you keep your base secure.
That’s why this list doesn’t just show the tax burden, but also how residency is triggered — and how much real flexibility you have to travel without endangering your certificate of tax residence.
Pro Tip: Using a US LLC the Right Way
Many freelancers still ask: “Can I just use a US LLC instead?”
The short answer: Yes — but only if you do it right.
A US LLC has many advantages:
It looks more professional and international than a sole trader invoice.
It offers limited liability.
In states like Delaware, New Mexico, or Wyoming, it can provide a high degree of privacy.
In our experience, this is totally fine — as long as you make sure that all the income ultimately flows into your country of residence and is declared there.
The clean setup looks like this:
You form a local company in your new country of residence.
You also own a US LLC.
Your LLC invoices your international clients.
Your local company then invoices your LLC, pulling the profit onshore where you are tax resident.
Example: Austrian freelancer in Cyprus
Imagine an Austrian software developer who relocates to Cyprus:
He registers as a tax resident Non-Dom in Cyprus and sets up a Cyprus Ltd.
He also forms a New Mexico LLC.
Clients in Germany, Switzerland, and the US prefer paying the LLC, because it looks international and professional.
Each month, the Cyprus Ltd invoices the LLC for the full consulting profit.
The Cyprus Ltd pays 12.5% corporate tax on its profit. Dividends can then be distributed to the Austrian expat completely tax-free in Cyprus (thanks to the Non-Dom status), except for the GeSY health levy of 2.65%.
This way:
Clients are happy with the LLC,
The freelancer enjoys liability protection + international branding,
And he remains fully compliant, because the income is taxed and declared in Cyprus.
⚠️ What you must avoid: letting the LLC sit “offshore” and retain earnings. That creates “stateless income” — and countries like Germany punish this under §2 AStG with up to 10 years of extended tax liability.
The 20 Best Jurisdictions for Freelancers (€120k profit scenario)
(Each entry shows: Net income, Total burden, Residency trigger, Flexibility, Disadvantages.)
Get a summary table of the list below as Google Sheet
1. United Arab Emirates (Dubai)
Net: ~€118.5k (AED ~472k–476k).
Total burden: ~1–1.5%.
Residency Trigger: Residence visa + 90 days/year presence with housing & company.
Flexibility: High — certificate secure, travel most of year.
Disadvantages: High living costs.
2. Georgia
Net: ~€118.5k.
Total burden: ~1.25%.
Residency Trigger: 183 days, or HNW residency (assets/taxes).
Flexibility: Very high with HNW option.
Disadvantages: SBS excludes “consulting.”
3. Armenia
Net: ~€118.5k.
Total burden: ~1.25%.
Residency Trigger: 183 days or center of interests.
Flexibility: Home + business usually enough.
Disadvantages: New regime.
4. Mexico
Net: ~€115–116k.
Total burden: 3–4%.
Residency Trigger: 183 days or center of interests.
Flexibility: Certificate with home + business, travel tolerated.
Disadvantages: VAT, Spanish filings.
5. Andorra
Net: ~€101–106k.
Total burden: 12–16%.
Residency Trigger: 183 days or economic interests.
Flexibility: Low — real presence expected.
Disadvantages: Housing scarce.
6. Slovenia
Net: ~€102–103k.
Total burden: 14–15%.
Residency Trigger: 183 days or permanent home.
Flexibility: Moderate.
Disadvantages: Benefit shrinks above €100k.
7. Romania (2025)
Net: ~€100–103k.
Total burden: 14–17%.
Residency Trigger: 183 days or permanent home.
Flexibility: Certificate possible with residence + business.
Disadvantages: 2026 threshold drop.
8. Bulgaria
Net: ~€101k.
Total burden: 15–16%.
Residency Trigger: Center of economic interests, not just days.
Flexibility: Very high — home + company enough.
Disadvantages: Needs substance.
9. Cyprus
Net: ~€101.8k.
Total burden: 15.15%.
Residency Trigger: 183-day OR 60-day rule.
Flexibility: Very high.
Disadvantages: Accounting & substance needed.
10. Montenegro
Net: ~€96–102k.
Total burden: 15–20%.
Residency Trigger: 183 days or center of interests.
Flexibility: Moderate.
Disadvantages: Small market.
11. North Macedonia
Net: ~€96–100k.
Total burden: 17–20%.
Residency Trigger: 183 days or home.
Flexibility: Moderate.
Disadvantages: SSC high relative to tax.
12. Poland
Net: ~€96–99k.
Total burden: 17–20%.
Residency Trigger: 183 days or center of interests.
Flexibility: Moderate.
Disadvantages: ZUS heavy.
13. Greece
Net: €96–104k.
Total burden: 13–20%.
Residency Trigger: 183 days or center of interests.
Flexibility: Moderate.
Disadvantages: Bureaucracy.
14. Italy
Net: €92–98k.
Total burden: 18–23%.
Residency Trigger: Anagrafe + 183 days/center of interests.
Flexibility: Low.
Disadvantages: High INPS.
15. Hong Kong
Net: €104–107k.
Total burden: 11–13%.
Residency Trigger: Territorial — taxed only on HK-source.
Flexibility: Very high.
Disadvantages: Proof for offshore claims.
16. Lithuania
Net: €90–100k.
Total burden: 17–25%.
Residency Trigger: 183 days or home.
Flexibility: Low.
Disadvantages: SSC complex.
17. Czechia
Net: €90–97k.
Total burden: 19–25%.
Residency Trigger: 183 days or home.
Flexibility: Low.
Disadvantages: Flat-tax cap too low.
18. Hungary
Net: €92–98k.
Total burden: 18–23%.
Residency Trigger: 183 days or center of interests.
Flexibility: Moderate.
Disadvantages: Multiple taxes.
19. Estonia
Net: €93.6k.
Total burden: 22%.
Residency Trigger: 183 days or center of interests.
Flexibility: Low.
Disadvantages: Heavy if you need cash yearly.
20. Serbia
Net: €82–95k.
Total burden: 21–32%.
Residency Trigger: 183 days or center of interests.
Flexibility: Low.
Disadvantages: Dividend WHT heavy.
Final Thoughts
This list isn’t about chasing “0% tax” — it’s about where you can really be resident, get a certificate, and still keep most of your €120k.
Most flexible + lowest tax: Dubai, Georgia (software), Armenia, Mexico.
Best EU-compatible options: Bulgaria, Cyprus, Slovenia.
Lifestyle half-tax regimes: Greece, Italy.
Banking hubs: Hong Kong, Cyprus.
The winners are the countries where you can anchor yourself with a real home and a business, but still travel freely without losing residency.
Consultation
Every freelancer’s case is unique — your passport, your family, your travel pattern, and your history with your home tax authority matter.
📩 Book a consultation with us. We’ll help you pick the right jurisdiction, structure your business (with or without an LLC), and ensure you always have a valid certificate of tax residence to show banks, clients, and authorities.
