7 Best Countries for Freelancers Tax (In-depth)

Taxes can be a real headache for freelancers, especially when you’re trying to figure out which countries have the best tax options for you.

It’s important to research a country’s tax system before you decide to move there or start a business there, and it’s also essential to know which countries are the most attractive for freelancers.

Thankfully, I’m here to tell you about the 7 best countries for freelancers’ taxes. These countries offer low tax rates, generous incentives, and a supportive environment for freelancers.

Whether you’re looking for a place to move to or just want to know where to focus your business, these countries are the perfect starting point.

From Malta to Estonia, these countries are some of the best in the world for freelancers, and you’ll find out why as you read on.

We’ll look in-depth at the tax systems in each country, as well as the advantages and drawbacks of being a freelancer there.

We’ll also look at the cost of living and other factors that make these countries attractive for freelancers.

So, if you’re ready to learn about the 7 best countries for freelancers’ taxes, let’s dive in!

Overview of 10 Best Countries for Freelancers Tax

Country Name	Freelancer Tax	Cost of Living per person
#1 UAE (Dubai)	0%.	Average Dirham 10,230 per month.
#2 Bulgaria	10%.	1,034.0лв (557.5$) per month without rent.
#3 Montenegro	9% to 15%.	Average 523.0€ (551.2$) without rent per month.
#4 Estonia	20%.	760.2€ (803.8$) without rent per month.
#5 Portugal	14.5% to 48%.	Average €1,200 per month.
#6 Cyprus	0% to 35%.	751.1€ (795.0$) per month without rent.
#7 Malta	0% to 35%.	750€ per month.

1. UAE (Dubai) (0%)

Capital:	Abu Dhabi.
Currency:	UAE Dirham (د.إ)
Tax Rate For Freelancers:	0%.
Cost of Living:	Average Dirham 10,230 per month. (For 1 person).

Taxation of UAE (Dubai) for freelancers

1. Don’t need to pay any tax.

2. But If the earning is over Dhs. 375,000, you have to register for VAT. 

When giving tax as a freelancer in UAE (Dubai)

If your income as a freelancer in Dubai is over Dhs. 375,000, you must register for VAT. However, you do not have to pay any tax in Dubai.

What you need to register as a freelancer in UAE (Dubai)

1. Memorandum of association.

2. Trade License.

3. Recent photograph.

4. Passport copies or ID.

5. Bank account details.

6. Sponsorship agreement.

7. Financial reports.

How to register as a freelancer in UAE (Dubai)

Step 1: You have to apply for a freelance permit in the UAE via a website. You can complete this process by “GoFreelance”. Link: https://gofreelance.ae/. 

Step 2: You will get an email if your application is approved. It may take a maximum of 15 days. 

Step 3: Visit the business center in Dubai Media City, Dubai Knowledge Park, or Dubai Internet City. 

Step 4: Sign the documents properly there and pay fees. 

Step 5: Wait for an email with your freelance permit. 

Step 6: Apply for a visa.

Step 7: When the freelance visa is done. Apply for a residency visa.

Pros and Cons of UAE (Dubai) for Freelancers

Pros	Cons
The cost of a freelancing permit is quite low.	The freelance visa permit is available only for one person.
Amazing encouragement and support of GOVT. for freelancers.	Requires a trade license if someone wants to hire another freelancer under him.
Enough flexibility.

2. Bulgaria (10%)

Capital:	Sofia.
Currency:	Bulgarian lev
Tax Rate For Freelancers:	10%.
Cost of Living:	1,034.0лв (557.5$) per month without rent. (A single person)

Taxation of Bulgaria for freelancers

1. Income tax: 10%.

2. The pension and health contribution: 27.8% of the remuneration.

When giving tax as a freelancer in Bulgaria 

If you are a freelancer and you stay in Bulgaria for more than 183 days, then you are required to pay tax. The exact amount and type of tax that must be paid will depend on the services you provide and the income you make. Depending on your income, you may need to register for self-employment tax and pay tax every quarter.

What you need to register as a freelancer in Bulgaria

1. A freelance permit.

2. A visa. Has to type D. 

3. A residence permit. 

4. Academic qualifications.

5. Proof of experience in the freelancing field. (Minimum 2 years).

6. A B1 Bulgarian language certificate.

7. Proof of sufficient finances. 

How to register as a freelancer in Bulgaria 

Step 1: Complete the process of your freelance permit by the “Employment Agency”. The website link of “Employment Agency”: https://www.az.government.bg/en/. 

Step 2: Apply for a type D visa after obtaining a freelance permit. 

Step 3: Now, go for a residence permit from the “Migration Directorate”. 

Pros and Cons of  Bulgaria for Freelancers

Pros	Cons
Great opportunity to work.	Language difficulty.
Cooperatively low freelancer tax.	Corruption.
Fastest internet connection.

3. Montenegro (9% to 15%)

Capital:	Podgorica
Currency:	Euro (€)
Tax Rate For Freelancers:	9% to 15%.
Cost of Living:	Average 523.0€ (551.2$) without rent per month. (For 1 person).

Taxation of Montenegro for freelancers

1. Tax is 0%: When the income is above €8,400 per year.

2. Tax is 9%: When the income is between €8,400 and €12,000.

3. Tax is 15%: When the income is over €12,001. 

When giving tax as a freelancer in Montenegro

If you stay in Montenegro for more than 183 days, you are considered to be a tax resident and must pay income tax on any income you earn in Montenegro. This includes income from freelancing. You must file an annual income tax return and pay taxes at the end of the year.

What you need to register as a freelancer in Montenegro

1. Valid identity documents, such as a passport or ID card.

2. Proof of address (utility bill, rental contract or similar).

3. Bank account details.

4. Tax ID number.

5. Professional qualifications (if applicable).

6. Completed and signed the application form for freelancer registration.

7. Payment of registration fee.

How to register as a freelancer in Montenegro

Step 1: Create an account with the Employment Agency of Montenegro (EAMCG): Visit the EAMCG website and click on the “Create Account” button. Fill out the registration form to create an account with the EAMCG. 

Step 2: Submit a Registration Form: Download the registration form from the EAMCG website. Fill out the form with your personal information, such as your name, address, contact information, and bank account details. 

Step 3: Submit a Declaration of Freelance Activity: Download the Declaration of Freelance Activity from the EAMCG website. Fill out the form with your personal information, such as your name, address, contact information, and bank account details. 

Step 4: Pay the Registration Fee: Pay the registration fee of €50 using a credit or debit card. 

Step 5: Wait for Approval: Once your application is received, the EAMCG will review it. If approved, you will receive a notification of your registration within two weeks. 

Step 6: Receive your Registration Certificate: After your registration has been approved, you will receive a certificate of registration by mail. This document is your proof of registration as a freelancer in Montenegro.

Pros and Cons of Montenegro for Freelancers

Pros	Cons
The freelance tax is low comparatively.	Goods are quite expensive.
Developed security.	English is the second language. So you have to know Serbian or Montenegrin for proper communication.
Awesome weather and climate.	The Philippine Embassy is not available.

4. Estonia (20%)

Capital:	Tallinn.
Currency:	Euro (€).
Tax Rate For Freelancers:	20%.
Cost of Living:	760.2€ (803.8$) without rent (It is the average cost for a single person per month).

Taxation of Estonia for freelancers

1. The Standard Rate: In Estonia, freelancers are usually subject to a flat tax rate of 20%. This means that regardless of how much you make, you’ll be paying 20% of your income to the government in taxes. It’s a pretty standard rate.

2. The Reduced Rate: Estonia has a reduced tax rate of 9% for certain items that are deemed necessities. This tax rate applies to things such as medical equipment for disabled persons, newspapers and periodicals, and more. It’s a great way for the Estonian government to help those in need by reducing the cost of these items.

3. The Zero Rate: The zero rate is 0%. For certain people, the zero tax rate is a great deal. It means that you don’t have to pay any taxes on your income. This can be beneficial if you’re retired, self-employed, or a low-income earner. It’s also available to full-time students, people with disabilities, and those who are receiving certain welfare benefits.

When giving tax as a freelancer in Estonia

If you start making more than 40,000 Euros a year, you’ll need to start paying taxes. It’s not something you can avoid, so make sure you get your tax situation sorted out.

What you need to register as a freelancer in Estonia

1. Passport-size photo.

2. Government ID card. 

3. Credit card.

4. Motivation statement.

How to register as a freelancer in Estonia

Step 1: Gather all the papers mentioned above. 

Step 2: Go for a background check by the Estonian Police and Border Guard Board.

Step 3: Wait for a maximum of eight weeks for the paperwork to be fully processed.

Step 4: You have to give a state fee which will cost 100 to 120 EUR.

Step 5: When your paper will be ready, you will get a chance to choose your preferred location from 45 different locations.

Step 6: Ready for a fingerprint in the physical location. 

Pros and Cons of Estonia e-Residency for Freelancers

Pros	Cons
The freelancer tax is reasonable.	Includes annual tax for residency.
Opportunity to start a freelancing business.	Income tax is available.
Businesses can run from anywhere in the world.

5. Portugal (14.5% to 48%)

Capital:	Lisbon.
Currency:	Euro (€).
Tax Rate For Freelancers:	14.5% to 48%.
Cost of Living:	Average €1,200. (Applicable for one person).

Taxation of Portugal for freelancers

1. Tax is 14.5%: When the income is above €7,112.

2. Tax is 23%: When the income is between €7,113 and €10,732.

3. Tax is 28.5%: When the income is from €10,733 to €20,322.

4. Tax is 35%: When the income is between €20,322 and €25,075.

5. Tax is 37%: When the income is from €25,076 to €39,967.

6. Tax is 45%: When the income is between €39,986 and €80,822.

7. Tax is 48%: When the income is above €80,823.

When giving tax as a freelancer in Portugal

Self-employed individuals and freelancers in Portugal are required to pay taxes on their income when it exceeds €7,112 per year. This means that any income earned over and above €7,112 must be declared and taxed accordingly.

What you need to register as a freelancer in Portugal

1. NIF (Taxpayer Identification Number).

2. Passport.

3. IBAN. 

4. NISS.

5. Identity/ Birth certificate.

6. Proof of residency.

7. Bank account.

How to register as a freelancer in Portugal

Step 1: Apply for NIF number. It is simple. 

Step 2: Complete the process of IBAN, International Bank Account Number.

Step 3: Collect the certificate of residency from the Junta de Freguesia. You will need your NIF and passport to get this. 

Step 4: Get the NISS. You will need an NIF, passport, and certificate of residency to get the NISS. 

Pros and Cons of Portugal for Freelancers

Pros	Cons
Setting up my own business is easy and simple.	Need to learn the Portuguese language for proper communication.
The tax system is easy and simple.	Sometimes it is difficult to find clients.
Awesome work-life balance.
Good security.
The cost of living is quite affordable.
The English language can be used for communication.

6. Cyprus (0% to 35%)

Capital:	Nicosia.
Currency:	Euro (€).
Tax Rate For Freelancers:	0% to 35%.
Cost of Living:	751.1€ (795.0$) per month without rent. (One person).

Taxation of Estonia for freelancers

1. Vat is 0%: When the income is €19,500 or less than €19,500.

2. Vat is 20%: When the income is between €19,501 and €28,000.

3. Vat is 25%: When the income is from  €28,001 to  €36,300.

4. Vat is 30%: When the income is between €36,301 and €60,000.

5. Vat is 35%: When the income is above €60,000.

When giving tax as a freelancer in Cyprus

In Cyprus, freelancers are required to pay taxes when their total income for the year exceeds €19,500. This amount is the taxable income threshold and is subject to change year-on-year. Tax rates for freelancers in Cyprus range from 20% to 35%, depending on the amount of income earned. 

What you need to register as a freelancer in Cyprus

1.  Valid Passport.

2. Valid Residency Permit.

3. Proof of a Registered Address in Cyprus.

4. Proof of Professional Skills (Qualifications/Certificates).

5. Proof of Professional Experience. 

6. Valid Tax Identification Number. 

7. Bank Details (IBAN). 

8. Social Insurance Number.

9. Registration with the Department of Labour and Social Insurance (DOLE).

10.  Completion of the Register of Freelancers with the Cyprus Chamber of Commerce and Industry (KEVE).

How to register as a freelancer in Estonia

Step 1: Collect the registration application of self-employed from the Cyprus Companies of Registrar. 

Step 2: Fill up the application form with all of your legal, valid, and active information. 

Step 3: Open a bank account in Cyprus. 

Step 4: Register for social insurance. 

Step 5: Apply for the necessary visa. 

Step 6: Register for tax. 

Pros and Cons of Cyprus for Freelancers

Pros	Cons
The cost of living is quite low.	The tax rate is comparatively high.
Fastest internet connection.	Limited flight option. Traveling to other countries is quite difficult.
English is the primary language.
Amazing environment and nature.
Low crime.
Lots of work opportunities.

7. Malta (0% to 35%)

Capital:	Valletta
Currency:	Euro (€)
Tax Rate For Freelancers:	0% to 35%.
Cost of Living:	750€ per month. It is the average cost of a single person.

Taxation of Malta for freelancers

1. Vat is 0%: When your income is under €9,100.

2. Vat is 15%: When your income is between €9,101 and €14,500.

3. Vat is 25%: When your income is from €14,501 to €60,000.

4. Vat is 35%: When your income is above €60,000. 

When giving tax as a freelancer in Malta

If you’re earning more than 9,100 Euros a year, it’s time to start thinking about taxes. You’ll need to get your paperwork in order and make sure you’re paying the right amount. Don’t worry though – it’s not as complicated as it sounds!

What you need to register as a freelancer in Malta

1. National ID Card.

2. Passport.

3. Social Security Number and some more information.

How to register as a freelancer in Malta

Step 1: Go through the link: https://jobsplus.gov.mt/. (JobPlus is an agency of Malta). 

Step 2: Find out the “Self-Employed Engagement Form” from the form option.

Step 3: Fill out the form with the valid and active information.

Pros and Cons of Malta for Freelancers

Pros	Cons
Unlimited freedom.	The maximum tax percentage is high.
English is the official language.	Transportation is not much developed.
Fewer costs compared to office work.	A small country.
Excellent weather.	Limited cultural activities.

Wrapping Up

So, that was it! This was the end of the in-depth article about the 7 Best Countries for Freelancers Tax. 

I hope you’ve enjoyed reading it and have learned a lot about the different countries and their tax systems that could help you make the right choice for your freelancing career. 

I’m confident that you’ve seen the potential in the countries mentioned and how they allow freelancers to benefit from their tax systems. 

No matter which country you decide to go with, be sure to do your research and get all the details before you make the move. 

In the end, I believe it’s important to choose the right country for your freelancing career. 

I hope you now have a better understanding of the tax systems available and the advantages they offer. 

Thank you for taking the time to read this article and I wish you luck in your freelancing career.

Frequently Asked Questions (FAQs)

Which country has the lowest tax for freelancers?

The UAE (Dubai) has the lowest tax for freelancers which is 0%. So, if you choose this country for your freelancing business, it will be a great decision I hope.

Which European country has the best tax for freelancers?

Portugal is generally one of the best European countries for freelancers. It is mostly because of its low-income tax rates. and attractive incentives for independent workers. The starting freelance tax rate is 14.5% which is much lower than in many other countries in Europe. It makes it one of the most fascinating options for freelancers.

What Steps Should You Take Before Freelancing Abroad?

Before you freelance abroad, it is important to research the destination, including the local laws and regulations, the cost of living, the local culture, and the availability of resources. It is also essential to make sure that you have the necessary insurance and visas to work in the destination. Additionally, it is important to create a plan for your work abroad and to budget accordingly.

Do I need a visa to do freelance work?

It depends on where you are located. In some countries, you may need a work visa to do freelance work, while in others you may not need a visa. It is best to know it from the country you want to go to.

What are the best countries for freelancers’ taxes?

There are many countries available for freelancer taxes. Among them, some of the best countries are Malta, Estonia, Dubai, and some more mentioned above. They have some of the lowest tax rates in the world, exempting freelancers from paying taxes on their earnings.