Asia has some of the most elegant cities and the most exciting places to live in the world. There are a lot of tropical and urban areas that offer you limitless possibilities and opportunities.
Expats that have traveled to the continent have described the experience as being empowering, exhilarating, comfortable, and affordable.
So if you plan on moving to Asia but unsure of the opportunities in the country, be rest assured that this paradise continent has the most affordable living standards on earth, it is a great place to retire, live, and start a business.
The low cost of living, developed cities, stable economy, excellent healthcare system, and stunning scenery are among the reasons why millions of expats have immigrated to Asian nations to start a new life.
When moving to Asia, one of the few things that you should always look out for is taxes.
Although Asia is not a tax haven, you should know there are a lot of countries in the continent that have very low tax rates even for expats.
In this guide, we will show you Asian countries with some of the lowest tax rates.
Low Tax Countries In Asia
If you plan to visit an Asian country for a short vacation or permanent residence, these are by far the most excellent countries in Asia with the lowest tax rates.
Malaysia is one of the most developed countries in Asia and also boasts of having the lowest tax rates in Asia.
Non-resident companies enjoy a flat rate of 24% regardless of their capital or annual income.
Non-residents are taxed at a flat rate of 30% of their total taxable income while residents enjoy rates as low as 8% of their income. A foreign national is considered a taxable resident of Malaysia if he/she stays in the country for more than 182 days in a calendar year.
A foreign company/entity in Malaysia will be taxed if its management and control of its affairs are exercised in Malaysia [the entity may be taxed if the Board of Directors is held a meeting in Malaysia].
The Malaysian tax system is strictly territorial.
Residents and foreigners are taxed only on their Malaysian source of income. Any income generated from foreign sources is not taxed, even if the personality is a foreign entity or an expat.
Aside from having one of the lowest tax rates in Asia, Malaysia also offers a lot of tax incentives and reliefs to foreign investors and businesses. Tax incentives are available for investments in certain sectors like manufacturing, tourism, energy conservation, and environmental protection.
These incentives are usually in the form of tax exemption (up to 10 years) or tax credit of 60% or 100% of the capital investment for 10 years.
Malaysia is a good place to start a business, and these tax reliefs are extra incentives for investors.
If you plan on visiting an Asian country with very low-income taxes, you should try out Vietnam.
Although Vietnam taxes its citizens on their worldwide income, the rates in this country are quite low compared to other Asian nations. You are required to file your taxes regardless of the currency in which you received your income or the source.
Vietnam is a safe and low-tax Asian jurisdiction available for everyone looking to escape the burden of heavy taxes in their home country.
PIT is levied on a progressive tax depending on your income.
You will be considered a taxable resident if you stay in the country for more than 182 days in a calendar year or more than 180 days within 12 consecutive months.
Personal income taxes for Non-residents are levied at a flat rate. It is collected on the income received or revenue generated from working in Vietnam in the tax year.
Thankfully, Vietnam has DTA with almost every country in the world.
In case you traveled from a country/jurisdiction that doesn’t have a Double Tax Agreement with Vietnam but plan to stay in the country for more than 182 days, you are required to present your income report for the 1st of January for review.
With that said, Vietnam is a great place to live; it is more affordable than other Asian nations, has beautiful weather, and a very stable economy.
Thailand is another exciting travel destination in Asia where you can enjoy an excellent quality of life with a very little tax penalty. It offers the safest, tourist-friendly options for tourists in Asia.
The Thai tax year begins on the 1st of January and ends on the 31 of December every year. Every resident is required to submit their income tax return for the prior tax year to the tax office before the 31st of March.
Residents can enjoy rates as low as 5% and companies domiciled in the country can enjoy a flat rate of 20% regardless of their income.
Domestic corporations are subject to taxes on their worldwide income, while foreign corporations are subject to taxes on income generated in Thailand.
A company incorporated or doing business in Thailand is considered a resident. While individuals will be considered as residents for tax purposes if they stay in the country for more than 180 days in a calendar year.
Taxable residents are liable to pay taxes on all income or revenue generated regardless of the location the transaction happened. Non-residents are only taxed on income and revenue generated in Thailand.
If you are considering moving to Thailand, make sure that you file your taxes on time because there are severe penalties for delayed payments and processing.