A small group of countries and territories still charge no corporate income tax to most companies. The best known are the Cayman Islands, the British Virgin Islands, the Bahamas, Bermuda and Bahrain. Jersey, Guernsey and the Isle of Man charge 0% to most businesses, and Estonia, Latvia and Georgia charge nothing on profits a company keeps and reinvests.
Since 2024, the rules around these jurisdictions have changed. The OECD's 15% global minimum tax, known as Pillar Two, has pushed several zero-tax places to introduce top-up taxes for very large multinational groups. Bermuda now has a 15% corporate income tax for those groups. Bahrain, the UAE, Kuwait and Qatar have domestic top-up taxes. For a small online business, the bigger questions are usually substance, where the company is managed, and where its owner lives.
This guide lists the countries with no corporate tax as of October 2026, explains the alternatives, and shows how the global minimum tax fits in.
Key takeaways
- The Cayman Islands, the British Virgin Islands, the Bahamas and Bahrain do not levy a general corporate income tax. Bermuda taxes only companies in very large groups.
- Jersey, Guernsey and the Isle of Man charge 0% to most companies, with 10% or 20% for banks, utilities, property and certain other sectors.
- Estonia, Latvia and Georgia tax profits only when they are distributed.
- The 15% global minimum tax applies only to groups with revenue of at least EUR 750 million, so most small companies are outside it.
- A company's tax position depends on where it is managed and on the owner's home-country rules, not only on where it is registered.
Jurisdictions with no corporate income tax
| Jurisdiction | Corporate income tax | Exceptions or changes |
|---|---|---|
| Cayman Islands | None | No capital gains, payroll or other direct taxes on companies |
| British Virgin Islands | None | Economic substance reporting applies |
| Bahamas | None | Domestic minimum top-up tax for large groups; VAT applies |
| Bermuda | None for most companies | 15% from 2025 for groups with revenue of EUR 750 million or more |
| Bahrain | None in general | 46% on oil and gas; 15% top-up tax for large groups from 2025 |
| Jersey | 0% standard rate | 10% for financial services; 20% for utilities, local property and large retailers; 15% for in-scope groups from 2025 |
| Guernsey | 0% standard rate | 10% and 20% for listed sectors; top-up taxes from 2025 |
| Isle of Man | 0% standard rate | 10% for banking and large local retail; 20% for local property income |
The Cayman Islands do not impose corporate income, capital gains, payroll or other direct taxes on corporations. The government is funded mostly through fees and duties. The British Virgin Islands and the Bahamas also have no corporate income tax, though both apply economic substance or reporting rules. The Bahamas enacted a Domestic Minimum Top-up Tax Act in November 2024, effective from 1 January 2024, for groups in scope of Pillar Two, according to PwC's Bahamas summary. The British Virgin Islands does not appear on HMRC's May 2026 list of qualifying domestic top-up taxes.
Bermuda was the best-known zero-tax jurisdiction until its Corporate Income Tax Act 2023. From 2025, Bermuda businesses that belong to multinational groups with annual revenue of at least EUR 750 million pay 15%, according to PwC's Bermuda summary. Companies outside that scope still pay no income tax.
Bahrain has no general corporate income tax on income, sales, capital gains or estates. Oil and gas businesses pay 46%, and since 2025 a domestic minimum top-up tax raises the effective rate of in-scope multinational groups to 15%, according to PwC's Bahrain summary.
The Channel Islands and the Isle of Man: the zero-ten model
The three British Crown Dependencies use a similar system. Most companies pay 0%. Regulated financial businesses, such as banks and trust companies, pay 10%, and income from local property, utilities and some local retail pays 20%. PwC's Jersey summary notes that Jersey added a 15% multinational corporate income tax for in-scope groups from 2025, while most local businesses stay under the existing regime. Guernsey brought in its own top-up taxes from the same date.
The UAE: 0% up to a threshold
The UAE is often described as tax-free, but since 2023 it has a federal corporate tax. Taxable income up to AED 375,000 is taxed at 0% and income above that at 9%. Companies that qualify as Qualifying Free Zone Persons can pay 0% on qualifying income, subject to substance requirements and limits on other income. Large groups pay a 15% domestic minimum top-up tax from 2025. Our guide to tax-free countries in the Middle East covers the rest of the Gulf.
Zero tax on retained profits: Estonia, Latvia and Georgia
A different model taxes profits only when they leave the company. Retained and reinvested profits are not taxed, whatever their size.
| Country | Tax on retained profits | Tax on distributed profits |
|---|---|---|
| Estonia | 0% | 22% (calculated as 22/78 of the net dividend) |
| Latvia | 0% | 20% on the grossed-up amount, which equals 25% of the net dividend |
| Georgia | 0% | 15% on the grossed-up distribution (20% for banks and lenders) |
In Estonia, a company with 100 euros of profit can pay a 78-euro dividend and 22 euros of tax. Deemed distributions, such as gifts and non-business expenses, are taxed the same way. Latvia added an alternative in 2026 for companies owned only by individuals, which splits the charge into a 15% corporate tax and a 6% personal tax withheld on the dividend. Georgia adopted the Estonian model in 2017.
The model can suit businesses that reinvest. It does not remove tax on the owner, who may still be taxed on dividends in their country of residence. Estonia's e-residency program lets non-residents form and run an Estonian company online, but e-residency is a digital identity, not tax residence or a right to live in Estonia.
Low headline rates in the EU
For companies that need to be inside the EU, a few member states have low rates:
- Hungary: 9% flat, plus a local business tax of up to 2% set by municipalities.
- Bulgaria: 10% flat.
- Ireland: 12.5% on trading income and 25% on passive income such as interest and rents.
- Cyprus: 15% from January 1, 2026, up from 12.5%.
As EU member states, all four are bound by the EU's minimum tax directive, so in-scope large groups pay at least 15%.
How the 15% global minimum tax works
Pillar Two is a set of OECD model rules that most major economies have adopted. Its aim is that very large multinational groups pay an effective tax rate of at least 15% in every jurisdiction where they operate.
- Who it applies to: groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years.
- How it is collected: through an income inclusion rule in the parent's country, an undertaxed profits rule as a backstop, and qualified domestic minimum top-up taxes in the low-tax country itself.
- Why zero-tax places changed: if a low-tax jurisdiction does not collect the top-up, another country can. Many have therefore introduced their own top-up taxes to keep that revenue at home.
The rules have also been adjusted for the United States. The OECD/G20 Inclusive Framework has agreed a "side-by-side" package under which the US is treated as a qualifying jurisdiction. US-headquartered groups do not pay top-up tax under the income inclusion and undertaxed profits rules, although domestic minimum top-up taxes in other countries still apply. PwC's Ireland summary notes that Ireland expects to legislate for the package in Finance Act 2026.
For a freelancer's company or a small online business, none of this is likely to apply directly. The threshold is far above their revenue.
What matters more for small online businesses
For most entrepreneurs, the registered address of a company is not what decides its tax. Several other rules usually matter more:
- Management and control. Many countries treat a company as resident where its key decisions are made. A zero-tax company run day to day by an owner living in a high-tax country may be taxed there.
- Permanent establishment. Working from a country can create a taxable presence there, even for a foreign company. Our guide to permanent establishment risk covers this.
- Controlled foreign company rules. Many countries tax residents on the undistributed profits of low-taxed companies they control.
- The owner's personal tax. Dividends and salaries are taxed where the owner is resident. Our list of countries with no personal income tax covers the personal side.
- Substance and reporting. Zero-tax jurisdictions now require economic substance reports, and banks expect to see real activity. All structures need to be reported fully under rules such as CRS.
Our guides on where to base an online business and holding company jurisdictions look at these factors in more detail. Special economic zones are another category, with their own legal frameworks; see our overview of special economic zones for entrepreneurs.
Frequently asked questions
Which countries have 0% corporate tax?
As of October 2026, the Cayman Islands, the British Virgin Islands, the Bahamas and Bahrain have no general corporate income tax. Bermuda taxes only companies in groups with revenue of at least EUR 750 million. Jersey, Guernsey and the Isle of Man have a 0% standard rate with higher rates for some sectors.
Does the 15% global minimum tax apply to my small company?
Almost certainly not. Pillar Two applies to multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years. Smaller companies are outside its scope, although national corporate tax rules still apply.
Is the UAE corporate tax-free?
No. Since 2023, UAE companies pay 9% on taxable income above AED 375,000. Qualifying free zone companies can pay 0% on qualifying income if they meet the conditions, and large groups pay a 15% top-up tax from 2025.
What is the Estonian corporate tax model?
Estonia does not tax profits a company keeps. Tax of 22% (22/78 of the net amount) is due only when profits are distributed as dividends or treated as distributed. Latvia and Georgia use similar systems.
If I register a company in a zero-tax country, do I pay no tax?
Not necessarily. A company can be taxed where it is managed or where it has a permanent establishment, and its owner is usually taxed on dividends or salary where they live. Controlled foreign company rules can also tax undistributed profits.
Important: This article is general information, not tax, legal or financial advice. Rules change often and depend on your personal circumstances. Speak with a qualified professional in each relevant country before you act.