Tax-Free Countries for Freelancers: Dubai, Andorra & Beyond

The Freelancer Tax Problem

As a freelancer, you probably pay more in taxes than most employees — and get fewer benefits in return. No employer matching pension contributions, no employer-paid health insurance, and you're responsible for both sides of social security in many countries.

In France, a freelancer earning EUR 100,000 might keep only EUR 45,000–50,000 after income tax, social charges, and VAT obligations. In Germany, it's similar. In the UK, slightly better but still significant.

Relocating to a low-tax jurisdiction can dramatically change this equation. But the decision isn't as simple as moving to the cheapest country on paper — you need to consider setup costs, physical presence requirements, banking access, and your home country's rules about leaving.

Dubai: 0% Income Tax for Freelancers

Dubai offers zero personal income tax — period. Whether you earn $50,000 or $5,000,000, you pay nothing in personal income tax as a UAE resident.

For freelancers specifically, Dubai offers two paths: a full free zone company (from $10,000 Year 1) or a freelancer permit (from $5,000 Year 1). Both provide a residence visa and allow you to invoice clients under a UAE entity.

The catch: you need to genuinely live in Dubai. Visa maintenance requires visiting every 180 days, but for tax residency, you should spend 183+ days per year. Cost of living runs $3,000–5,000/month for a comfortable lifestyle.

Best for: high-earning freelancers ($100K+/year) who want to maximize take-home pay and enjoy city life. The break-even point compared to European taxes is usually around $60,000–80,000 in annual income — below that, the setup and living costs may outweigh the tax savings.

Andorra: 0–10% with European Quality of Life

Andorra offers a maximum 10% personal income tax (first EUR 24,000 tax-free). Social security for self-employed is approximately EUR 500/month.

A freelancer earning EUR 100,000 would pay approximately EUR 8,200 in income tax plus EUR 6,000 in social security — total tax burden of about 14%. Compare to 45%+ in France or Germany.

Setup costs are higher than Dubai (EUR 50,000 refundable deposit required), but the cost of living is lower. You need to spend 183+ days per year in Andorra and run your business from there.

Best for: freelancers who want low European taxes, enjoy mountain lifestyle, and are close to Spain and France. Particularly attractive for Spanish and French freelancers who want to stay nearby but reduce their tax burden.

Other Options Worth Considering

While we operate in Dubai and Andorra for personal relocation, here are other popular options for freelancers.

The Delaware LLC Complement

Many freelancers combine a personal tax residence in a low-tax country with a Delaware LLC for US client payments. The LLC serves as your invoicing entity for US clients, provides access to US payment processing (Stripe), and creates a professional US presence.

If you live in Dubai and have a Delaware LLC, you pay 0% personal tax in Dubai and 0% US federal tax on the LLC (assuming no US-source income). The LLC costs approximately $1,700 to set up and $650/year to maintain.

This Dubai + Delaware LLC combination is one of the most tax-efficient structures available for international freelancers.

Making the Decision: A Practical Framework

Before choosing a jurisdiction, answer these questions: What's your annual income? Below $60K, the tax savings may not justify relocation costs. Are you single or do you have a family? Family logistics significantly affect jurisdiction choice. Where are your clients? If they're in Europe, staying close (Andorra, Portugal) may matter. What's your home country? Exit tax rules vary dramatically and can change the math entirely. What lifestyle do you want? Tax optimization is meaningless if you're unhappy.

Our Relocation Readiness Audit helps freelancers and founders answer these questions systematically. It's $1,500 (credited toward setup if you proceed) and delivers a written plan tailored to your situation.