We get asked constantly about the most TAX-FRIENDLY state to transfer residency when you are trying to leave the U.S. (either permanently or temporarily), or in the case of RV explorers and part-time snowbirds, the best state for retirees who only want to spend a few months out of the year in one place and the rest of the year in a warmer tropical climate.
Note: This advice is coming directly from our accountant, who also took the plunge and became a digital nomad several years ago and now works remotely year-round. This is not intended to be legal or tax advice, just general advice that anyone can verify themselves.
Top 5 Tax-Friendly States for Digital Nomads
1. Nevada: Best privacy, no personal income tax, no corporate income tax. Allows anonymous LLCs. Shareholders in a NV corporation can also remain anonymous.
2. Florida: No personal income tax. Does impose a 5.5% corporate income tax.
3. Texas: No personal or corporate income tax, but does levy a gross receipts tax.
4. Alaska: No personal income tax. There is a corporate income tax.
5. Wyoming: No corporate or personal income tax.
Our Accountant, Chris: If you plan to live the life of a snowbird or be a digital nomad, the best state to establish residency is Nevada. Nevada has no corporate or personal income tax as well as the best privacy laws. Nevada collects most of its revenue through sales taxes, as well as taxes on the casino and hotel industries. Nevada is the only state that does not share information with any other state or the IRS, and Nevada is one of the few states that allows anonymous LLCs. Shareholders in a Nevada corporation can also remain completely anonymous.
This can prevent unwanted individuals from having access to your private information, and it also cuts down on spam, unwanted mailings, and solicitations from businesses and individuals trying to sell you things when you open a new business (one of my pet peeves!).
All the major cities in Nevada (Las Vegas, Reno, Carson City) host several popular incorporation and mail forwarding services targeted towards expats and snowbirds that make transferring residency and setting up a corporation or other entity in Nevada very easy to do. Corporations and LLCs do have to file an annual list every year, which costs several hundred dollars, but can be filed online. If you don't have a corporation or an LLC, then it is much cheaper. In Las Vegas, for example, a home-based sole proprietorship or general partnership costs nothing to set up, the business license is free. And there are no state-level tax return filings in Nevada.
Nevada also has the benefit of several big cities and a wide range of climate and terrain. In Tahoe, you can enjoy beautiful mountains, skiing, fresh air, and the beautiful Lake Tahoe for fishing or water activities. If you like nightlife, or if you like live events, concerts, parties and gambling, there's Las Vegas. And everything in between.
Florida and Texas are close seconds, and preferable to Nevada in terms of climate if you want to live in the states at least part-time. Florida and Texas impose no personal state income tax, but they do have some types of franchise/corporate tax on a businesses' gross income.
Florida imposes a 5.5% corporate income tax. In Texas, businesses with $1.18 million to $10 million in annual receipts pay a franchise tax of 0.375% on their gross receipts.
Alaska isn't a bad choice, either. There's no personal income tax, but there is a corporate tax. Alaska imposes a corporate tax ranging from 0% to 9.4%, spread across ten tax brackets.
It's also less accessible than any of the lower 48 states. Actually getting to Alaska if you need to do anything related to your residency requires a long drive and a border crossing, or an airline flight over Canada. And the harsh Alaskan winters are not for the faint of heart. But to be fair, there are many people who love Alaska's unspoiled wilderness. Plus, the summers in Alaska are rumored to be absolutely spectacular.
Wyoming is also another good choice, from a tax perspective. This state also imposes no personal income tax, but the landscape is isolated and rather bleak, (I've driven through the whole state and there isn't much to see in Wyoming). So if you're not planning to actually live there at least part of the year, Nevada is a better choice in terms of privacy as well as tax benefits.
Ecuador has launched a digital Nomad Visa (called the “Rentista” Visa) with one of the lowest barriers to entry in the world. This Visa is a two-year temporary residence visa for digital Nomads that have income from outside the country. It is available to Nationals of 182 countries and territories as determined by the Ecuadorian Ministry of Tourism.
See the list of the 182 nations that qualify for the new Ecuadorian Digital Nomad Visa.
The Ecuadorian government is hoping that by inviting digital Nomads and remote workers, it will encourage more travel and foreign dollars to flow into the country. Remote-worker visa holders cannot perform local work in Ecuador.
This Visa is designed for people who want to operate remotely and live and work in Ecuador. It has one of the lowest income requirements and barriers to entry of any digital Nomad Visa program. you only have to earn $1,275 a month from outside sources in order to qualify. That's only $15,300 USD per year (this requirement used to be lower! But was recently increased in 2022).
Most remote workers who work for U.S. or Canadian employers will qualify, as well as many self-employed workers. You must also have a clean police record and then documents that confirm you are the owner of a company or a remote worker for a foreign firm.
If you are currently self-employed but do not have proof, a home-based business license, LLC, or even a corporation can be to obtained. For example, in a state like Nevada, which has no state income tax and is a great place to transfer residency if you plan to leave the United States for an extended period. If you want advice on how to transfer residency to another state, consult your financial advisor.
Ecuador in general has a lenient Visa policy, and one of the world's quickest citizenship programs. You don’t have to apply right away–most foreigners can enter Ecuador and stay for up to 90 days. So you can go, visit the country, enjoy the beautiful coastal areas end cool mountain cities, and then easily apply for residency if you like it well enough to stay.
General requirements and links for the Ecuadorian digital Nomad Visa:
According to official government sources it takes about a week the process the paperwork. family members can also apply after the principal applicant of teams their digital Nomad Visa the principal Visa holder must demonstrate an additional monthly income of at least $250 USD per dependent. so for example, a married couple with two kids would have to demonstrate income of $1,275 + ($250 + $250 +$250) = $2,025.
You can check more requirements on the official Ecuadorian Visa government website.
More resources and a well-known Visa facilitator for Ecuador: Joseph Guznay-Expats Ecuador
Everyone has been talking about digital nomad visas! These are also commonly called "remote worker visas" and more and more countries are starting to offer them. These are visas that are designed to encourage remote workers to bring their laptops (and their money!) to a new, exciting country. Digital nomads understand that there are plenty of opportunities to grow professionally while experiencing a different way of life in a foreign nation.
#1: Costa Rica Digital Nomad Visa
Announced in October of 2021, the Costa Rica Digital Nomad Visa invites international residents to work remotely. A visa with huge tax benefits, as Digital Nomads will not be considered "residents" for tax purposes, and the income they receive from abroad will not be considered taxable in Costa Rica. You can use your country of origin driver's license in Costa Rica, and you can open a bank account, as well, two huge benefits.
Costa Rica also has a high degree of internet access, allowing digital nomads to keep in touch with their companies anywhere in the world. Costa Rica has long been a favorite for international expats to live. With its great weather and relaxed lifestyle, it is a perfect choice for nomads to settle and work remotely. Anyone that works as a freelancer doing remote work in Costa Rica could potentially apply for this visa, as long as you have proof of income.
The financial requirements are a little steep compared to other similar programs in Columbia and Brazil. To qualify for the Costa Rican digital nomad visa, you must earn at least $3,000 USD a month if you are single, or $4,000 USD a month for a family. And you cannot work within Costa Rica, although the income could come from multiple outside sources.
The Costa Rica Digital Nomad Visa allows digital nomads to stay in Costa Rica for up to 1 year, and the visa can be extended for an additional year (so, 2 years total). Before applying for the additional year, you must prove that you have stayed in Costa Rica for at least 80 days.
#2 Ecuador Digital Nomad Visa
Ecuador is one of the easiest countries to obtain a long-term visa. The Ecuador Digital Nomad Visa is relatively new, but immediately popular. With the Ecuador digital nomad visa, remote workers can live in the country for up to 2 years. This 2-year temporary residence visa allows foreigners to work remotely. Applicants must have the following documents:
It takes about three months to process Ecuador’s digital nomad visa. Digital nomads are not taxed on their foreign income sources.
# 3 Panama Digital Nomad Visa
Panama is one of the most developed and financially stable nations in Central America. Residents have a relatively high standard of living. The climate is warm and you can choose to live in a cooler mountain region, or a balmy beach.
Also known as the Short Term Remote Worker visa, this visa was introduced by the Panamanian government in 2021. This visa allows digital nomads to live in Panama for 9 months. It has an option to extend the visa for an additional 9 months (so a total of 18 months). To be eligible for this digital nomad visa, you must earn an income remotely and cannot work for a Panamanian company.
Panama has literally dozens of visa options. Navigating these generally takes the help of an attorney, and the short term worker visa is no exception. You must have assistance from an immigration lawyer to file your application. The fees for application are affordable (compared to, for example, the Cayman Islands digital nomad visa). There is a $250 application fee and a $50 visa card issuance fee.
#4 Colombia Digital Nomad Visa
In 2022, Colombia joined Argentina and Brazil in offering a short term temporary visa for digital nomads. This is a brand new digital nomad visa for Colombia and only took effect on October 22, 2022, so there is little information yet. The digital nomad visa will be issued for a period of up to 2 years.
But we know that Colombia's new digital nomad visa has one of the lowest income requirements of any nomad visa currently available. Eligible applicants only have to earn approximately $700 USD in income monthly. No other South American visa's requirements even come close to being this affordable and easy to fulfil.
Colombia has a low cost of living compared to other destinations in South America, and up to 80% less cost of living than the United States. Columbia has a large expat population in coastal areas as well as Medellín. These expats know that in Columbia, their foreign dollars will go much farther.
Since this visa is so new, everyone is waiting on the government for guidance on how to apply. But this one is one to watch!
#5 Brazil Digital Nomad Visa
Brazil's digital nomad visa is another new visa program, just implemented by the Brazilian government in January 2022. The Brazilian digital nomad visa is for remote employees as well as self employed digital nomads. Applicants cannot work for a company inside of Brazil. The visa allows one year of residence, with the option to renew for another year.
In order to qualify, applicants must earn more than 1,500 USD per month or prove they have at least 18,000 USD in savings, which can be proved with a bank statement.
You must have the following to apply:
#6 Belize Digital Nomad Visa
Belize is a small but lovely Central American Nation that boasts English as its national language, making your transition easy as pie if you are a native English speaker. The Belize digital nomad visa was launched as part of Work Where You Vacation Program, which aims to attract more visitors into the country, which suffered a great deal during the pandemic when tourism screeched to a halt.
Unlike some other visa programs, if you have children, this program also lets them learn in Belize. All kids under 18 are eligible to enroll in Belize’s outstanding school system. The cost to apply is $500 BZD per adult and $200 BZD per child under 18 years of age (this translates into abut $250 USD for adults and $100 per child).
To be eligible for this visa, you must:
#7 Mexico Temporary Residence Visa
While technically not a "digital nomad" visa, Mexico's Temporary Resident Visa is an easy choice for digital nomads who love the beauty of Mexico but aren't sure if they want to apply for permanent residency. This visa is designed for foreign visitors who intend to remain in Mexico as temporary residents for a period greater than 180 days and less than 4 years.
You need proof of economic solvency, showing an average monthly balance of $55,655 Canadian dollars during the past twelve months; or employment or a pension with a monthly tax-free income of over $3,339.00 Canadian dollars during the past six months.
The Temporary Resident visa is a renewable, long-term visa. After four years, you may apply for a Permanent Residence Visa if you wish to stay in Mexico. Applicants should generally consult an attorney if they wish to apply, as navigating the application process can be rather difficult. We used EDUARDO CHAVEZ FREGOSO as our attorney for this process and were very pleased with how easy it went.
#8 Dominican Republic Temporary Residence Visa
While technically in the Caribbean, the Dominican Republic is only a a short 2.5 hour flight from Miami.
Like Mexico, there is technically no digital nomad visa in the Dominican Republic, however, the country does offer a Temporary Residence Visa which allows you to stay for up to one year. You can renew and this for up to five years and then you can apply for permanent residency. Applications for renewal must be made within thirty days before the expiration date.
The Dominican Republic is one of the best countries in the Caribbean for digital nomads The country is friendly, Spanish speaking, and has good infrastructure and affordable prices for rent, food, and utilities.
#9 Antigua and Barbuda Nomad Digital Residence Program
The Antigua and Barbuda Digital nomad visa (officially called the "Nomad Digital Residence Visa") is for any digital nomad that wants to move to the country for up to 2 years. The application process is very easy as long as you meet the income requirements.
How to Apply
Before starting your application, please ensure that you have the following:
#10 Argentina Digital Nomad Visa
The Argentinian government launched a visa for digital nomads in May 2022. This visa allows foreigners who are employed outside of Argentina to work remotely. This visa will supposedly be available for a one-year term, but there are few details yet, and the government has not yet started accepting applications. But stay tuned!
No website or company has paid a fee to be mentioned in this blog. Any suggestions you see are based solely on our own experiences and personal preferences.
Just a middle-class dad and mom with three young kids, looking to escape the rat race. This is our journey!
If you have a question for us, please contact us directly using our email here.