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  • Writer's pictureCreimerman Product Team

Unlocking Tax Advantages: Establishing Tax Residency in Antigua and Barbuda

The allure of exploring tax-favorable destinations draws attention to the tropical haven of Antigua and Barbuda. In this article, we dive into the nuances of achieving tax residency in this picturesque locale, shedding light on the pathways to establishing residency and capitalizing on the nation's tax-friendly framework.

Antigua and Barbuda: A Snapshot

Nestled within the Lesser Antilles in the Caribbean Sea, Antigua and Barbuda form a pair of captivating islands known for their unspoiled beauty. The country's constitutional monarchy and parliamentary government have shaped its trajectory, gaining independence from Britain in 1981. A modest population of around 101,000 residents contributes to the islands' unique blend of history and modernity.

Climate and Economic Landscape

Antigua's flat topography and sun-drenched beaches make it a perpetual destination for year-round getaways. Notably drier, Barbuda lies to the north, characterized by its coral makeup. While agriculture once reigned supreme, tourism has taken center stage in the nation's economy. The Eastern Caribbean dollar (XCD) serves as the local currency, maintaining parity with the US dollar.

Antigua and Barbuda are charting a sustainable path, with an impressive 8.3% economic growth in 2022, indicative of their transition towards eco-friendly practices. Furthermore, the country has carved a niche as a financial hub within the region

Embracing Tax Residency Advantages

Antigua and Barbuda beckon individuals seeking tax optimization, boasting a landscape devoid of capital gains, inheritance, and wealth taxes. A standout feature is the absence of personal income tax, a boon for those striving to curtail their tax liabilities.

A unique facet is the lack of Controlled Foreign Corporation regulations, ensuring that offshore company ownership by a resident exerts no influence on the entity's tax status. Exceptions arise if the company's management and control originate from within Antigua and Barbuda.

Attaining Tax Residency

Prospective tax residents can follow two paths to unlock the benefits of Antigua and Barbuda. The first adheres to the 183-day rule, bestowing tax residency upon individuals who spend more than 183 days on the islands. The second option caters to perpetual travelers, enabling them to acquire permanent residency by spending just 30 days annually within the country. A flat annual tax of $20,000 USD accompanies this route, and applicants must provide a dossier of documents, including identification, financial references, and health assessments.

Navigating Tax Responsibilities and Regulations

Upon gaining tax residency, individuals must register with the Inland Revenue Department, receiving a six-digit Tax Identification Number (TIN). Timely tax filing and payment are pivotal, as delayed payments trigger debt accumulation after 30 days.

Antigua and Barbuda International Business Corporations

Entrepreneurs and investors find an attractive haven in Antigua and Barbuda's International Business Corporations (IBCs). These tax-exempt entities require a single shareholder and director, allowing foreigners complete ownership of corporate shares. The enticing fifty-year tax exemption encompasses a diverse spectrum of income and financial activities.However, IBCs must steer clear of specific activities, including local trading, real estate ownership, and certain financial services. Stringent regulations govern their operations.

Sales Tax and Withholding Tax

Antigua and Barbuda's sales tax, resembling a value-added tax (VAT), is levied on goods and services. The standard rate stands at 15%, with specialized rates for tourism and exemptions for select goods and services. Meanwhile, non-resident companies accruing income in Antigua and Barbuda are subject to a 25% withholding tax.

Residency's Culmination

Antigua and Barbuda's tax residency opens doors to an array of enticing advantages, including exemption from income, capital gains, inheritance, and wealth taxes. The flat $20,000 USD tax for permanent residency holders elevates the appeal of this paradise. While corporate taxes persist, they harmonize with the jurisdiction's hospitable environment. Embarking on the journey of tax residency in Antigua and Barbuda promises not just financial savings but also a lifestyle nestled amidst the stunning Caribbean panorama.

So, if you are interested in finding out more about Tax Residency and its opportunities to develop business, contact us today! Below this article, you will find a link to set up a free fifteen-minute consultation with us to discuss your options further.

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