5 Countries with Territorial Taxation: Which One Suits Whom
Territorial taxation means a country taxes only income earned within its territory, while foreign income may not be taxed. The key word is “may”: in 2026, conditions apply almost everywhere.
🇵🇦 Panama
How it works: only Panamanian-source income is taxed. On 9 October, the country was removed from the EU blacklist following a reform of its foreign-source income exemption
Condition: from 2027, companies belonging to multinational groups must have real presence
Who it suits: holding companies and businesses focused on Latin America, international trade, IT companies, crypto projects
🇭🇰 Hong Kong
How it works: only profits arising in Hong Kong are taxed
Condition: the company itself must prove that the income was earned outside Hong Kong
Who it suits: trade with Asia and China, IT companies, logistics, companies with real management outside Hong Kong
🇸🇨 Seychelles
How it works: for an IBC, income genuinely earned abroad is taxed at 0%
Condition: foreign passive income is exempt only where there is adequate economic substance
Who it suits: international service and trading companies with active income
🇬🇪 Georgia
How it works: individuals, both residents and non-residents, pay income tax only on Georgian-source income. Foreign dividends, interest, royalties and capital gains on foreign assets are not taxed. Companies pay 15% tax only on distributed profits
Condition: services provided from Georgia to foreign clients may be treated as Georgian-source income. In other words, what matters is where the work is actually performed
Who it suits: IT and trading businesses that need a fast and low-cost base
🇨🇷 Costa Rica
How it works: foreign income is currently taxed only in exceptional cases
Who it suits: those whose income is mainly active, crypto and iGaming projects
Conclusion: territorial taxation means 0% not by default, but subject to conditions. Plus, the rules of your country of residence always apply.
We will find the right jurisdiction for your business and residency @PfserBot
Territorial taxation means a country taxes only income earned within its territory, while foreign income may not be taxed. The key word is “may”: in 2026, conditions apply almost everywhere.
🇵🇦 Panama
How it works: only Panamanian-source income is taxed. On 9 October, the country was removed from the EU blacklist following a reform of its foreign-source income exemption
Condition: from 2027, companies belonging to multinational groups must have real presence
Who it suits: holding companies and businesses focused on Latin America, international trade, IT companies, crypto projects
🇭🇰 Hong Kong
How it works: only profits arising in Hong Kong are taxed
Condition: the company itself must prove that the income was earned outside Hong Kong
Who it suits: trade with Asia and China, IT companies, logistics, companies with real management outside Hong Kong
🇸🇨 Seychelles
How it works: for an IBC, income genuinely earned abroad is taxed at 0%
Condition: foreign passive income is exempt only where there is adequate economic substance
Who it suits: international service and trading companies with active income
🇬🇪 Georgia
How it works: individuals, both residents and non-residents, pay income tax only on Georgian-source income. Foreign dividends, interest, royalties and capital gains on foreign assets are not taxed. Companies pay 15% tax only on distributed profits
Condition: services provided from Georgia to foreign clients may be treated as Georgian-source income. In other words, what matters is where the work is actually performed
Who it suits: IT and trading businesses that need a fast and low-cost base
🇨🇷 Costa Rica
How it works: foreign income is currently taxed only in exceptional cases
Who it suits: those whose income is mainly active, crypto and iGaming projects
Conclusion: territorial taxation means 0% not by default, but subject to conditions. Plus, the rules of your country of residence always apply.
We will find the right jurisdiction for your business and residency @PfserBot