Two very different structures get lumped together as 'tax-friendly'. A zero-tax jurisdiction levies no personal income tax at all. A territorial jurisdiction levies tax only on income sourced inside its borders — foreign income falls outside the net. For a remote worker paid by foreign clients, the second is often as good as the first, with far more livable destinations available.
Comparison
| Destination | Tax type | Local tax on foreign income | Residency requirement | Notable feature |
|---|---|---|---|---|
| Paraguay | Territorial | None in general | 120 days / PR status | Low-cost permanent residency |
| Uruguay | Territorial | Holiday period, then reduced rate | 183 days or vital interests | Multi-year tax holiday election |
| Panama | Territorial | None on foreign-source income | Residency permit | Dollarised economy |
| Chile | Hybrid | Exempt for first 3 years | 183 days | Treaty network including the US |
| Colombia | Worldwide | Taxed once resident | 183 days rolling | Digital nomad visa does not create residency by itself |
The US citizen caveat
US citizens and green-card holders are taxed on worldwide income regardless of where they live. Moving to a territorial jurisdiction does not end that obligation. The Foreign Earned Income Exclusion can shelter a band of earned income, the Foreign Tax Credit can offset foreign tax paid, and FBAR and FATCA reporting apply to foreign accounts above threshold. Structure the move with a cross-border accountant before you rely on any of it.
Check the residency trigger, not the rate
Every ENRIS country profile lists the day-count trigger and system type in its Tax Snapshot section.
Browse country profiles →Estimates for planning purposes — confirm with an official source before you act.