The Perfect 0% Tax Structure For Digital Nomads | Pay No Taxes While Traveling
Table of Contents
Introduction
About a year ago, one of our founders – Kevin McKenzie had the chance to visit Thailand. Kevin mentions it as an experience of a lifetime. From the beautiful beaches to the vibrant culture and delicious street food, Thailand had everything to offer. But what made Kevin’s trip truly memorable wasn’t just the picturesque views or the fun activities; it was the people he met along the way.
While hopping from one café to another, Kevin met a group of digital nomads who were living the dream—traveling the world while working remotely. As someone who loves exploring new ways of doing business and optimizing tax strategies, Kevin couldn’t resist chatting with them about how they managed their businesses, and more importantly, how they handled their taxes while living this globe-trotting lifestyle.
The Tax Myth: “Just Leave Your Home Country and You Don’t Have to Pay Taxes”
During Kevin’s conversations, he noticed a recurring theme among the nomads. Many of them believed that if they simply left their home country and traveled around the world, they would no longer have to pay taxes in their home country. To be honest, nothing to be surprised, because this is a common misconception. But the reality couldn’t be further from the truth.
Most of these nomads were unknowingly falling into a legal gray area, with many of them illegally avoiding taxes without even realizing it. They thought that as long as they weren’t physically present in their home country, they were off the hook when it came to taxes. Spoiler alert: that’s not how it works!
In today’s article, We’re going to break down a completely legal way to pay 0% taxes while traveling around the world. It’s a structure that our clients use, and it’s all based on setting up in a tax-friendly location like Dubai. If you’re someone who’s trying to figure out how to travel, run your business, and legally avoid taxes, stick with us.
Who is Kevin McKenzie and What Is GenZone?
Before we dive in, let us introduce you to Kevin.
Kevin McKenzie is one of the co-founders of GenZone. Over the years, he has helped hundreds of people set up their businesses and lives in Dubai, taking advantage of the city’s 0% tax policy. Whether you’re a freelancer, an entrepreneur, or running a large company, Dubai has options that can drastically reduce or even eliminate your tax burden.
If you’re wondering how this works, buckle up—we’re about to share the exact steps that our clients use to pay 0% tax while living a jet-set lifestyle.
Step 1: Spend Enough Time in Dubai
The first thing you need to know if you want to take advantage of Dubai’s tax-free lifestyle is that you have to spend time in Dubai. Specifically, you need to spend a minimum of 90 days per calendar year in the UAE to qualify as a tax resident.
Now, a lot of people ask us: “Do I have to spend those 90 days consecutively?” The short answer is no, you don’t. But let us clarify—while you don’t need to spend three straight months in Dubai, it’s important that your time in the city makes it look like you’re genuinely living there.
Think about it: if you’re constantly flying in and out of Dubai, staying for a couple of days in a hotel, then leaving again, does that really look like you’re a resident? Not really. The goal is to optimize for success, and that means setting up your life in a way that reflects real residency, even if you’re traveling the world the rest of the time.
But if you’re a digital nomad, spending 90 days in Dubai is usually enough to qualify for residency. And guess what? That’s just the start of the journey.
Step 2: Minimize Time in Your Home Country
The second step is just as important as spending time in Dubai—you need to minimize the time you spend in your home country. Why? Because if you spend too much time there, you could be classified as a tax resident in your home country, which would subject you to taxes there.
Every country has different rules about how much time you can spend there before you become a tax resident. In countries like Canada, the rule of thumb is that you shouldn’t spend more than six months in the country per year. For the UK, it’s often less than 90 days.
There are even self-assessment tests you can take to figure out your tax residency status, but the general rule is to spend less than six months in your home country. This way, you can avoid becoming a tax resident and having to pay taxes there.
Step 3: Set Up a Company in Dubai
This is where things get really interesting. You can’t just show up in Dubai, spend 90 days, and call it a day. To truly take advantage of Dubai’s tax-free status, you need to set up a company in the UAE.
Why? Because simply being a tourist in Dubai doesn’t give you the same tax benefits as being a resident with a company. If you set up a company in Dubai, you can live there as a resident, run your business, and, most importantly, pay 0% taxes on your income.
Once your company is set up, you’ll open bank accounts in Dubai and funnel all your income through those accounts. This step is critical because it shows that you’re genuinely running your business from Dubai, and not just using the country as a tax shelter.
What Happens After You’ve Spent Your 90 Days in Dubai?
So, let’s say you’ve followed the first two steps. You’ve spent 90 days in Dubai, set up your company, and minimized your time in your home country.
What now?
The good news is that after you’ve spent your 90 days in Dubai, you’re free to travel the world. Whether it’s Thailand, Bali, Europe, or anywhere else, you can explore as much as you want—as long as you don’t spend too much time in any one country to become a tax resident there.
One Last Rule: Maintain Your Residency in Dubai
Recap: How to Legally Pay 0% Taxes
Let’s break it down one more time:
- Spend at least 90 days in Dubai per calendar year. It doesn’t have to be consecutive, but it should look like you’re living there.
- Minimize your time in your home country to avoid becoming a tax resident there. Generally, this means less than six months.
- Set up a company in Dubai. This gives you the right to live there as a resident and pay 0% tax on your income.
- Travel the world after spending your 90 days in Dubai, but make sure you don’t stay too long in any country to become a tax resident.
- Return to Dubai at least once every six months to maintain your residency.
Want Help Setting This Up?
If you’re serious about setting up a 0% tax structure and traveling the world while keeping your finances in check, GenZone can help. We don’t just give advice; we handle the entire process for you, from setting up your company to securing your residency. If you’re ready to make the leap, book a call with us, and let’s get started.
Final Thoughts
Traveling the world while running a successful business and paying 0% taxes isn’t a dream—it’s a reality for many people, including our clients. By following the simple steps we’ve outlined, you can legally minimize your tax burden while enjoying the freedom that comes with being a digital nomad.
So, if you’re ready to take control of your finances and live a tax-free lifestyle, Dubai might just be the perfect place to set up shop.
