Best places for Americans to live in 2026: territorial rax and residency done right

[JohnnyDoe]

There isn’t a single “best” country. That’s influencer bait. The right move depends on a stack of variables, not just taxes. Stop picking a flag like it’s a gelato flavor.

There Is No “Best” Country — Only the Best Fit For You​

Choosing a base is a multi-variable problem. Taxes matter, but they’re not king. You balance many aspects, including:

• Quality of life: city vs coastal, language, culture, community.
• Rule of law: courts that work, contracts that mean something.
• Business friendliness: banking depth, company forms, labor law, capital controls.
• Cost of living: housing, services, insurance, flights.
• Safety and crime: not just national stats, but neighborhood realities.
• Healthcare: availability, standards, private vs public, insurers that actually pay.
• Education: international schools, curricula, admissions timelines.
• Climate and environment: storms, heat, humidity, air quality, water.
• Immigration stability: residency class, renewals, path to permanence.
• Exit risks: how hard it is to unwind if it goes sideways.

Smart approach: define your non-negotiables, model total cost and risk over 5–10 years, prove residency with substance, and only then optimize tax. If you don’t want to donate years to bureaucracy cosplay, get guided by a professional who’s done this on the ground and can keep you out of jurisdictions that look great on Instagram and awful in compliance.

First principles​

• Residency beats flags. Taxes follow residence, not your stamp-collection of passports. A shiny second passport won’t save you if you’re still tax resident where you shouldn’t be.
• Citizenship can backfire. If more countries adopt citizenship-based taxation, your new passport becomes a leash. Get residency right first; acquire passports later for mobility only.
• Substance matters. Lease, home, days in country, family, work center, permanent ties. Nail these or enjoy audits.

U.S. tax reality check​

The U.S. taxes citizens on worldwide income. Tools exist:

• FEIE on earned income only, not capital gains or distributions.
• Foreign Tax Credit to offset double tax.
• Treaties to tidy edge cases.

So your play is: pick a low/territorial tax residency, structure income correctly, and stack FEIE/FTC.

Where to actually go in 2025​

Tier A: Efficient, workable, defensible​

1) Italy (Flat Tax Regime)

• The play: Elect the lump-sum regime (€200k/year) and cap foreign source personal tax at a fixed annual amount. Pair with a northern or central base and real lifestyle.
• Why it works: Predictable bill, first-world everything, excellent healthcare. Banking and deals are civilized.
• Watch-outs: Bureaucracy is a sport. Get a local fixer and do things in the right order.

2) Paraguay

• The play: Easy residency, light touch, territorial logic in practice, low runtime cost.
• Why it works: Friendly state, low overhead, simple living, fast setup for a personal base.
• Watch-outs: Build real ties if you plan to rely on it. Don’t be the ghost who shows up once a year.

3) Dominican Republic

• The play: Straightforward residency routes, pragmatic officials, reasonable costs, and strong logistics to the U.S.
• Why it works: Good private healthcare options, solid schools in specific areas, and a large ecosystem for services. Easy flights. Territorial flavor for personal planning.
• Watch-outs: Pick your neighborhood. Paperwork is doable, but don’t freelance it.

4) United Arab Emirates (Dubai/Abu Dhabi)

• The play: Zero personal income tax, company options, strong banking if you’re actually there and bankable.
• Why it works: Infrastructure, speed, and global connectivity.
• Watch-outs: Not a maildrop. Show substance or get nowhere. Costs creep.

Tier B: Lifestyle heavy, admin heavier​

5) Mexico

• The play: Proximity, decent visas, huge expat footprint, great value if you choose cities wisely.
• Watch-outs: Regional security variance. Bank early, keep it boring.

6) Panama

• The play: Territorial system, friendly-nation pathways, dollarized economy.
• Watch-outs: Rules drift. Use current counsel, not bar-stool lore.

Tier C: Pretty, popular, paperwork​

7) Portugal / Spain / Greece

• The play: Lifestyle, healthcare, EU mobility.
• Reality check: If you intend to do business, the rulebook will sit on your chest. Endless reporting, labor rigidity, and shifting goalposts. Live there for life quality, not to run a nimble cross-border operation.

Nomad zoo, not a base​

Thailand • Bali (Indonesia)

• The play: Affordable, fun, photogenic, visa products for long stays.
• Reality check: Great for a season, not a serious long-term base for structured capital, banking depth, or predictable tax outcomes. Use for R&R, not for your holding company.

Banking and money flows​

• Open accounts after you secure residency and proof of address. FATCA exists; pretend it matters because it does.
• Keep operating balances slim. Park real capital where legal protections, courts, and execution are boring and predictable.

Healthcare​

• Italy, Spain, Portugal: excellent care at rational prices.
• UAE: top-tier private, priced accordingly.
• Paraguay/DR/Mexico: private networks are solid; buy international coverage.

Red lines and green lights​

• Green light: You can document ties, live there most of the year, and your income source matches the jurisdiction’s rules.
• Red line: You’re trying to “optimize” from a beach while your company, home, and family scream residency elsewhere. That’s how you collect audits.

Quick picks by profile​

• Capital-heavy, wants Europe, predictable tax: Italy flat tax.
• Low-overhead base, flexible travel: Paraguay.
• Caribbean hub with daily U.S. links: Dominican Republic.
• Tax-free speed and infrastructure: UAE.
• Proximity + value: Mexico.
• Lifestyle EU without running a business there: Portugal/Spain/Greece.

FAQ, minus the fluff​

Can I lower taxes by moving?
Yes, if you change residency properly, align income streams, and use FEIE/FTC. No, if your life still screams “U.S. resident.”

Is a second passport the answer?
No. Residency is the answer. Second passports help with doors, not with tax.

Is the EU good for entrepreneurs?
For lifestyle, yes. For nimble cross-border business, expect a paperwork marathon.

Should I base in Thailand or Bali?
Great for a sabbatical. Not great for banking depth or stable long-term tax planning.
Still good if you are a scammer and Dubai kicked you out. Or if you love ladyboys.

Best overall 2025 short list?
Italy (flat tax), Paraguay, Dominican Republic, UAE, Mexico.

 

[CEO]

It can be personalized for EU goats 🐐 as well.

 

[Justit]

What about Russia?

 

[JohnnyDoe]

What about Russia?

Probably too hardcore for the average American.

 

[CEO]

Italy Considers Raising the Flat Tax for New Residents to €300,000

 

[JohnnyDoe]

Italy Considers Raising the Flat Tax for New Residents to €300,000

ReArm Europe is expensive. They need to find €800bn by 2030, most of which will be pocketed by the USA.

 

[Fiscal]

Greece: non-dom regime requiring an annual flat tax of €200,000 on all foreign income, regardless of the amount. Could be an interesting option as well. Not sure what it's like in practice. Like you stated, must be a pain in the ass to deal with bureaucracy and authorities in general there. It works, but everything just takes longer I suppose.

 

[JohnnyDoe]

Greece: non-dom regime requiring an annual flat tax of €200,000 on all foreign income, regardless of the amount. Could be an interesting option as well. Not sure what it's like in practice. Like you stated, must be a pain in the ass to deal with bureaucracy and authorities in general there. It works, but everything just takes longer I suppose.

It's the same as in Italy, great option if you don't do any business in the country. The annual tax returns are a 1-pager, no questions asked - in theory. In practice, expect to be placed under strict control.
Greece is a picturesque country, not as developed as Italy and in worse overall conditions. The alphabet can be a barrier for some.
If you have the budget to create your own bubble you can live well in both countries.