Leveraging Low-Cost, Low-Tax Countries as a Remote Dev in 2024
Why it might be better than working in Big Tech in Zurich/London
Working for FAANG in HCOL is losing its appeal.
While a few years ago a FAANG job would be a dream for most devs, nowadays things have changed.
I see this everywhere: among my peers, on Blind, YouTube, here on LinkedIn... Everyone is kind of tired of it.
They're not anymore the cushy, high-paying and fun jobs they used to be.
In most big tech companies nowadays you would breathe a "suboptimal vibe".
They have laid off hundreds of thousands of employees, collectively.
They have forced people back to the office even when it made very little sense, and even if, especially for some people, it would have meant a lot to be able to work from home.
They have been reducing perks.
They're lowering their compensation packages.
They keep increasing the difficulty of the interviews just because there are so many candidates.
They want you to want to get promoted such that you'll get a lot more responsibility and a little more pay, wanting you to have the same career dream people had in the 60s.
In the meantime?
You need to get taxed as an employee while employment income taxes aren't low and aren't getting any lower, and oftentimes you need to live in very expensive cities with increasing costs and unaffordable real estate.
So what's the new wave?
Working as a contractor for high-paying, fully-remote startups and scaleups is a good one.
Working as a contractor for a Fortune500 that allows for remote work is also another good one if you don't care too much about building cool tech.
And other paths people are figuring out as we go.
Look, a FAANG job is still a great job. Don't get me wrong.
But it's definitely way less appealing than it was a few years ago.
List of low-tax countries for freelance devs (most of them are also low-cost)
I always mention this "below 15% income tax" working as a freelancer dev in Europe.
Today, I'll tell you which countries allow you to get these low tax rates.
Most of them also have low cost of living. Meaning that you'd be able to save money on 2 fronts: taxes and living expenses.
If you're a dev making between 50k and 300k per year, the difference in purchasing power and savings that these 2 optimisations will allow you can be quite life-changing.
Here's the list:
Georgia: 1% tax for incomes below $200k, no mandatory social security or healthcare.
Poland: 12% tax plus 1-4% for social security.
Italy: About 20% total tax if making less than €85k per year.
Cyprus: Effective tax rate around 15%.
UAE: 0% income tax, no mandatory social security or health insurance.
Switzerland: About 24% for an income of CHF 100k, all-inclusive.
Bulgaria: 9% total tax.
Montenegro: 15% flat income tax, no social security if not employed by a local employer.
Thailand: LTR visa for skilled workers, 17% tax if working in-country, 0% if work is for foreign clients.
Spain: 24% up to €600k on a digital nomad visa.
Turkey: 5% for contractors working with foreign clients, about €150/month for social security.
Lithuania: 22.79% total tax rate for contractors earning €100k.
Serbia: 10% up to €51k, social security based on a fixed taxable base.
Albania: 0% up to €80k, then 5% on the difference.
Ukraine: 5% plus a flat fee, free healthcare.
Hungary: 15% flat income tax, 9% corporate tax.
Romania: 15%.
Moldova: 7%.
On some of them, I have done somewhat extensive research, and I am fairly confident about the numbers. These are: Georgia, Italy, Poland, Cyprus, UAE, Switzerland, Bulgaria, Ukraine.
For the other ones, I have had them recommended by others, done some research to validate the numbers, but didn't dive too deep. So they might be less accurate (but I don't think they're far from the truth).
Please, if you have more detailed insights about these countries and taxation systems, let me know either here in the comments or in DM.
To get extensive data on salaries and saving rates for developers in Europe, checkout the links in comments.
Note: this of course is not tax advice. I'm just a coder
Story of a German dev who relocated to Poland as a remote freelance dev to increase their lifestyle and save an additional 50k per year moving to Poland
I met a dev on Reddit who moved from Germany 🇩🇪 to Poland 🇵🇱.
Now, they earn over €200k with a 15% tax rate, with a very low cost of living. 🚀
Here’s how they did it.
They started by helping a Polish colleague calculate the savings rate for a job offer in Munich.
Surprisingly, the colleague’s saving rate in Poland was higher than what he would have had in Germany with the new job (that paid much more)!
This sparked an idea. 💡
Already freelancing and finding German taxes taking a significant chunk of income, the Reddit user started seeing a move to Poland as interesting.
After thorough research, including consultations with Polish tax advisors, the financial benefits were clear.
Financial Highlights:
1. Saving around €4,000 per month on taxes.
2. Lower cost of living while maintaining a high income.
3. Total yearly savings significantly higher than in Germany.
The move involved:
1. Visiting potential cities in Poland.
2. Choosing one of them (not disclosing it for privacy reason) for its beauty and proximity to Germany.
3. Spending around €5,000 on the move, including consulting and double rent.
Why this move makes sense:
1. Potential to save and grow wealth faster.
2. Opportunities for remote work in a lower tax and cost environment.
This person’s story is an example of leveraging geographic and economic differences to maximize financial benefits as a dev in Europe.
If you’ve considered a similar move or have experience working in Poland or elsewhere in Europe as a remove freelance dev, share your thoughts in the comments or DM me.
Networking and building direct client relationships were crucial in making this transition smooth and profitable.
If you want to learn more about optimizing your career and finances in Europe as a tech worker, follow me here and subscribe to my newsletter.
What would I do if I was just starting out?
If you're a Junior Tech Professional based in Europe, you’ll find this useful.
This is the blueprint I would use today if I were just starting out in my career:
1. If you can, get a job in a high-paying location right after uni, or soon thereafter.
Juniors in high-paying locations still get good money, and, if they manage their finances correctly, they should be able to save a few 10k every year, while having a good lifestyle.
For example, you could try to get a 80k-100k junior job in Zurich, be relatively frugal during the week and live with flatmates, travel every month, and save 20k-30k a year.
2. As you get more experienced, start diving deep on remote work.
This is a transition phase: while in the first few years you can just focus on improving your skills, having some fun, and saving some money, now you can start educating yourself on the world of remote freelance/contract jobs.
This will take time, and you can do it while you are a mid-level engineer in your career.
3. Once you're senior and are educated on remote work, exploit your skill-set and knowledge capital to 10x your lifestyle.
Hopefully, by now you should have: a) saved more than 100k (hopefully, invested well), and b) learnt where you'd like to spend your time in and get taxed in as someone with job flexibility.
Then, you can aim for high-paying (100k+) remote jobs, live in an affordable location you like, and get taxed at low rates (under 15%).
This way, you would be able to have an unparalleled lifestyle, a great saving rate and incredible purchasing power, and be in a position of extreme leverage of your skill-sets.
Checkout Euro Tech Money: a salary and saving rates transparency document I'm building with the rest of the community of devs in Europe. You’ll see it contains a lot of senior devs in Eastern Europe saving more money than some devs in Switzerland. Especially if they have a family.
If you haven’t contributed to it yet, please do so. Here’s the link.
To just view the Excel, this is the link.
Check Euro Top Tech Jobs: a list of over 4k jobs in Europe open right now, including salary and saving rates data.
Considering the current situation, putting Ukraine on the list is an interesting take
In Spain, in addition to the 24%, as autonomo you still have to pay social security taxes, which start at ~ 300 eur/month the second year. In the first year, there is a reduced rate of only €80 per month.