How the Nomad Tax Index is calculated

Who the Index scores: the reference profile

Every country is scored for the same person: a non-US citizen who is self-employed, sells services to clients outside the country, works remotely while living there, and has no local clients and no employees. We price that person at 3 revenue levels, $50,000, $100,000 and $250,000, with business costs of 15% of revenue.

For each country we score the most favorable structure the law makes available to a new resident who makes no investment, and we name that structure next to the result. A US citizen stays taxable in the US wherever they live, so the Index shows a separate US view with the federal layer added on top.

Rules that change the answer

• Local-source work. In several territorial countries, work you do while physically there is local income even when every client is abroad. Those countries score on the local treatment, not on "territorial, so 0%".
• Turnover taxes. A tax charged on revenue rather than profit is converted to its effective rate on profit, so it compares fairly with an income tax.
• Work income and passive income. Newcomer exemptions usually cover foreign dividends and gains, not work done in the country, so the two are scored separately.
• The permit can decide the tax. A few digital nomad permits exempt foreign income or tax it at a flat rate, while most have no tax effect, so the permit is an input, not just the country.
• Fixed sums and caps. Lump-sum regimes only pay off at high incomes. A setup whose fixed sum costs more than the income is still priced and ranked on its total, so it comes last at these incomes.
• Residency is not only a day count. Some countries make you resident after 60 days under conditions, and others through a home alone. The presence points use the legal test.

Live score: points for each country

The live score adds 5 parts to a maximum of 100. Tax at $100,000 revenue carries half the weight, because it is the figure most readers move for; access, presence, stability and the treatment of foreign passive income make up the rest. The table lists every threshold the scorer applies.

Lists behind the stability points

Stability starts at full points and loses points for a listing on the EU list of non-cooperative jurisdictions or the FATF grey list, and for an adverse change in the last 24 months to the regime a new resident relies on. We use each list as last adopted and read it again after every update.

Incorporate score: points for each company jurisdiction

The incorporate score rates the company, not the country you live in, and also runs to 100. Its tax part uses $100,000 profit of a one-person service company paid out in full to an owner who lives elsewhere, because that is how most solo founders take the money.

Where the owner lives still decides the tax

A low-tax company run from a high-tax home is usually taxed at home, under CFC rules or because the company is managed there. That is why the priced live and company setups always pair a residence with a company: the incorporate score compares companies, and the setups show what a real person pays.

When official sources conflict

Where official sources conflict, or the law can be read 2 ways, the Index scores the cautious reading, the one with the higher tax, so a score never overstates a saving. The note on the figure sets out both readings and says which one the Index uses. A figure past its freshness limit or overtaken by a newer rule is marked outdated: it never appears on the site or counts toward a score, and it is read again at its source before the next update.

Verification states for every figure

Every number on the site is stored with the address of its source, the date we read it and 1 of 5 states. The state decides whether the number can appear on the live site and whether a score can use it. An unverified figure, one we have read but not yet confirmed at an official source or a professional summary, appears and counts like a verified one, stays labeled unverified in our data and is re-checked every quarter.

Sources we accept

We read thresholds in the statute or at the agency that applies them, and fees in the agency's own schedule. Primary sources are tax and immigration authorities, official gazettes and legislation, companies registries, free zone authorities, the OECD, the EU list of non-cooperative jurisdictions and the FATF. When no primary source can be read, a Big 4 or law firm summary can stand in; the figure is then marked verified-secondary and the source is named.

Formation agents, relocation consultants, visa agencies, blogs, forums and Wikipedia are never a source. Search results and summaries are leads that point us to the law, and each figure is read at its source in the session that writes the page. Corrections follow the same editorial policy and sourcing rules as every other page.

How often we re-check the data

• Every figure carries the date we last read it. After 180 days it is flagged for a re-check, and after 365 days it can no longer appear on the live site.
• Regimes that changed in the last 24 months are re-checked every quarter.
• Each January, in budget season, we re-verify the whole Index and publish a new edition year.
• When the EU list or the FATF lists are updated, we read them again and adjust the stability points.

Each change in the law we record goes into the dated change log with its source, and so does every new version of these rules.

Methodology version history

When a scoring rule changes, the version number changes and the earlier rule stays listed here, so an archived edition can be read against the rules it used.