All the European countries I'm familiar with have tax-advantaged pension schemes to guarantee income for retirees, but there's a severe age limitation (like with 401(k)), which is incompatible with my life plan.

I would like to know which is the friendliest country for an individual investor, and which advantages offers. Given the heterogeneity of Europe I'm hopeful there will be a country that stands out. Please, do mention other countries as well; my focus is on Europe, but I won't rule out any country in the world at this point.

e.g. Until last year, in Spain, the first €1500 received from dividends, in a given year, were tax free.

If the example is not clarification enough: I'm not looking for the country that offers the best perks once I hit 60 years of age, but the one that allows to maximise investing performance of an individual investor in his mid twenties.


The UK has ISAs (Individual Savings Accounts), which let you invest up to £15,240 per year (for the current 2015/16 tax year). You don't get tax relief on your original investment, but all income and capital gains on the investments held in the ISA wrapper are tax-free. You have to be 16 year of age to open a cash ISA and 18 years of age for a Stocks and Shares ISA.

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    Actually there are age limits to having an ISA but there is also a Junior ISA for non adults. – Pepone May 3 '15 at 17:42
  • @Pepone I was referring to restrictions regarding withdrawals before old age. – Calculus Knight May 3 '15 at 20:38
  • @Tachibanaian err yes I got that – Pepone May 3 '15 at 20:53
  • @Pepone What you didn't seem to get was my other comment, on Chris' answer. – Calculus Knight May 3 '15 at 22:20

Canada introduced the Tax Free Savings Account (TFSA) in 2009.

Any Canadian resident age 18+ and having a valid Social Insurance Number (SIN) can establish a TFSA and contribute to it. After-tax contributions of up to $10,000/year are permitted. (The limit was $5,500/year, until just recently.) Unused contribution room carries forward, and withdrawals from the TFSA increase the contribution room by an equivalent amount the next calendar year; i.e. you get your contribution room back.

The TFSA's principal advantage is that account assets (which may include cash, marketable securities, etc.) can generate income free from any Canadian taxes, no matter whether the income arises from capital gains, dividends, interest, etc. Note that this "tax free" moniker isn't merely describing tax deferral — withdrawals remain non-taxable, too.

The TFSA is similar to the U.S. Roth IRA account type, but without tying the account to the concept of retirement. For a TFSA there is no minimum age for withdrawing funds, and so no early withdrawal penalties. All withdrawals from a TFSA are tax free. This makes a TFSA ideal not just for saving for retirement, but for emergency savings and other purposes.

Individuals also have access to the Registered Retirement Savings Plan (RRSP), similar to the U.S. Traditional IRA, where the contributor gets a tax deduction for contributions made during the year, and withdrawals are taxed as ordinary income. However, similar the TFSA, there is no minimum age for withdrawing funds, and no early withdrawal penalties. However, contribution room is not restored after a withdrawal, and contributions are no longer permitted after age 71 — the RRSP must then be converted to provide taxable income instead.

Canada also has a dividend tax credit (DTC) whereby an individual with income solely from eligible Canadian corporation dividends can earn a considerable amount per year without paying any income taxes at all. (The exact amount varies by province.)

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    I know Candas in Eurovison but its not a European Country :-) – Pepone May 3 '15 at 17:50
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    @Pepone >"Please, do mention other countries as well". If only you had read the question before downvoting a perfectly good answer... – Calculus Knight May 3 '15 at 19:26
  • @Tachibanaian you implied ONLY other EU country's – Pepone May 4 '15 at 15:30
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    @Pepone He implied nothing. It was made explicit: "Please, do mention other countries as well; my focus is on Europe, but I won't rule out any country in the world at this point." Perhaps if you (still) did not read the actual entire question, you might assume it was implied by the title. Please read the question body. – Chris W. Rea May 4 '15 at 15:41

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