Timor-Leste
TL
USD$
Portuguese
| Pros |
|---|
| Low corporate tax rates and simplified fiscal regime for small businesses |
| Untapped market potential in tourism and natural resources with minimal regulatory hurdles |
| High degree of personal freedom and a relaxed lifestyle in a developing coastal nation |
| Cons |
|---|
| Pervasive corruption and weak judicial systems for contract enforcement and property rights protection |
| Inadequate infrastructure with unreliable power grids and limited high-speed internet connectivity |
| Heavy economic reliance on state-managed oil funds and volatile government spending |
Personal income
0 → 10%
progressive
Corporate
10%
flat
Capital gains
0 → 10%
progressive
VAT (standard)
0%
standard rate
i
8.1
VERY LOW TAX
i
7.3
PRIVACY GRADE
i
2.2
HOLDING
i
2
CRYPTO HAVEN
i
2
EASY CITIZENSHIP
i
1.7
DIVIDEND PIPELINE
─ On this page
01
Will Timor-Leste tax what you earn?
02
Will Timor-Leste tax what you own?
03
Is it easy to run a company in Timor-Leste?
04
Is Timor-Leste good for your holding company?
05
What does it cost to come and go from Timor-Leste?
06
Will Timor-Leste protect your privacy?
07
Is Timor-Leste itself a liability?
08
Will you feel free in Timor-Leste?
01/08
Will Timor-Leste tax what you earn?
●income tax
●tax residency
●territorial system
YES, BUT LIGHTLY. Timor-Leste taxes personal income lightly (top rate 10%), and the residency test stays out of your way. Lisible pressure, no ambush.
Personal income taxi
0 → 10%
progressive · 2 brackets
Income simulatori
Income
Tax due
Effective rate
all-in
Marginal rate
Tax residence testi
183days
●
183-day rule
○
Economic interest
○
Family centre
○
Habitual abode
○
Extended-stay test
●
Just one rule above is enough to make you tax-resident here.
02/08
Will Timor-Leste tax what you own?
●capital gains
●wealth tax
●inheritance
●dividends
●interest
YES, BUT LIGHTLY. Timor-Leste taxes capital gains lightly (10% at the top), with no annual wealth charge and no inheritance regime. A held portfolio compounds with minimal friction; the state only shows up at disposal.
Capital gainsi
10%
progressive
Dividend taxi
0%
flat
Interest incomei
10%
progressive
Wealth taxi
NONE
no annual wealth tax · no real-estate wealth tax · no net-worth assessment
Crypto · tax regimei
Regime
UNREGULATED
Fallback rate
10%
Timor-Leste has no specific cryptocurrency legislation. Under the Taxes and Duties Act 2008, residents are taxed on worldwide income, which is broadly defined as any increase in economic capacity. Individual residents are subject to a 10% tax rate on annual income exceeding $6,000 USD. The Banco Central de Timor-Leste (BCTL) has issued public warnings stating that virtual currencies are not legal tender and are unregulated, but they are not explicitly banned for personal holding.
Crypto-to-cryptoi
TAXABLE
each swap counts as a disposal — gains realised at every trade
FATF travel rulei
NOT SIGNED
no information-sharing obligation on VASP transfers
Inheritance systemi
NONE
no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply.
03/08
Is it easy to run a company in Timor-Leste?
●corporate tax
●criminal liability
●public registry
●VAT
●IP box
YES. Corporate tax in Timor-Leste sits at a low 10%, with VAT around it. Setting up and running a company is cheap; the rate won't be what kills a venture here.
Corporate taxi
10%
flat
IP Box · Patent Boxi
NONE
no IP regime · IP income taxed under standard corporate rules
Misuse of corporate assetsi
NO CRIMINAL LIABILITY
N/A - Civil Matter / Breach of Fiduciary Duty
Timor-Leste's legal system, based on the Commercial Code (Decree-Law 4/2004) and the Penal Code (Decree-Law 19/2009), does not include a specific criminal offense for the 'Misuse of Corporate Assets' (Abuso de Bens Sociais). While the company is a separate legal entity, general property crimes such as 'Infidelity' (Art. 252 of the Penal Code) require the intent to cause 'important property damage' to the interests of another. In a scenario involving a sole shareholder and a solvent company, the lack of a specific statute means the act is treated as a civil breach of fiduciary duty (Articles 164-167 of the Commercial Code) or a tax irregularity rather than a criminal matter.
Shareholders privacyi
PUBLIC PAYWALL
Serviço de Registo e Verificação Empresarial (SERVE)
Directors privacyi
PUBLIC PAYWALL
Serviço de Registo e Verificação Empresarial (SERVE)
Incorporation costi
Limited Liability Company
Sociedade por Quotas (Lda)
SERVE Government Registration Fee
USD 0
Professional Incorporation & Legal Service Fees
USD 2,000
Notarization and Translation of Corporate Documents
USD 200
Total
USD 2,200
VAT standard ratei
0%
2 distinct tiers in force
0%
5%
Food & drink
0%
food
0%
non-alcoholic
0%
alcohol
Print media
0%
books
0%
ebooks
0%
newspapers
Culture
0%
cultural events
0%
cinema
0%
theatre
0%
museums
0%
sports
Transport
0%
public transit
0%
rail
0%
air
Hospitality
5%
hotels
5%
restaurants
5%
takeaway
Health
0%
pharma
0%
medical dev.
Energy
0%
electricity
0%
natural gas
0%
district heat.
0%
domestic fuel
Utilities
0%
water
0%
waste
Clothing
0%
kids clothing
Digital & telecom
0%
digital
5%
telecom
0%
broadcast
Construction
0%
construction
0%
social housing
Agriculture
0%
farm inputs
0%
animal feed
Personal services
0%
funeral
0%
hairdressing
04/08
Is Timor-Leste good for your holding company?
●treaty network
●participation exemption
●withholding
NOT REALLY. Timor-Leste is structurally weak as a holding base: only 1 treaties signed and no participation exemption to soften the domestic layer. Cross-border dividend flows will leak value at every step.
Territorial systemi
Individuals
WORLDWIDE
Corporates
WORLDWIDE
Individuals: worldwide income taxation regardless of source.
Corporates: worldwide.
Participation exemptioni
NONE
no dividend participation exemption regime
CFC rulesi
NONE
no controlled foreign corporation regime · foreign-source corporate income out of scope
WHT · dividendsi
10%
non-resident outbound
WHT · interest
10%
non-resident outbound
WHT · royalties
10%
non-resident outbound
Tax-haven WHT
—
no punitive rate on record
Treaties signedi
1
active
Treaties pending
—
in negotiation
Tax treaty networki
origin · TL
0%
> 0%
no treaty
⌖
Inspect a country
Hover any country on the map to read its withholding-tax treaty with TL.
| Country | Status | Dividends | Interest | Royalties |
|---|---|---|---|---|
|
|
|
|
|
|
| ∅ // no treaties match | ||||
05/08
What does it cost to come and go from Timor-Leste?
●exit tax
●territorial system
●dual citizenship
SOME. Timor-Leste taxes worldwide income while you're resident, but there's no exit tax on the way out. The cost of leaving is mostly paperwork: unrealised gains follow you to the next jurisdiction untouched.
Exit taxi
NONE
no triggers active · residence change tax-free · no deemed-disposal mechanism
Dual citizenship
FORBIDDEN
naturalisation requires renouncing existing citizenship
Citizenship paths
●
Residence
●
Marriage
●
Birth
○
Descent
○
Investment
06/08
Will Timor-Leste protect your privacy?
●info exchange
●corporate registries
YES. Timor-Leste has signed few exchange frameworks, so foreign tax authorities won't routinely see what you do here. But corporate registries are public: ownership and directorships are queryable by anyone with a browser. Privacy from abroad, transparency at home.
Multilateral reporting frameworks
0/10 active
CRS
—
CARF
—
FATCA
—
MLI
—
BEPS
—
MAAC
—
GLOBAL FORUM
—
EOIR
—
CRYPTO-CARF
—
CRYPTO TRAVEL RULE
—
07/08
Is Timor-Leste itself a liability?
●blacklists
●FATF standing
NO. Timor-Leste carries no entries on any major blacklist, though it sits outside FATF membership. Counterparties may apply light extra due diligence, but no formal stigma attaches to dealing with it.
Blacklist exposure
Clear everywhere
FATF
grey / black list
EU
non-cooperative list
FRANCE
ETNC list
SPAIN
tax-haven list
PORTUGAL
favourable regimes
BRAZIL
low-tax list
08/08
Will you feel free in Timor-Leste?
●press freedom
●crypto
●CBDC
●EU
PARTLY. Timor-Leste scores in the middle band of the RSF press-freedom index (rank #39): civil society operates but the boundaries are real. Crypto sits in the standard regulated tier.
Press freedom · RSF indexi
39/180
score 71 · ↓ 19 ranks year-on-year
Central bank digital currencyi
| Program | Status | Cross-border | Sources |
|---|---|---|---|
|
eCentavos
Enhance transparency and traceability of transactions, offer tools to reach underserved populations, and support evolution of the country’s digital economy.
Banco Central de Timor-Leste
|
RESEARCH | — | announce → |
SEE ALSO
Other jurisdictions worth comparing
Picked by similarity of strategic profile to Timor-Leste. No editorial ranking — neighbours in the same scoring space.
PROFILE-ADJACENT
Same shape, comparable overall friction.
NOTABLY MORE FAVORABLE
Same family of strategies, higher total score.
NOTABLY LESS FAVORABLE
Same family of strategies, lower total score.