U.S. Citizens Moving to Bonaire: Smart Tax Planning & Structuring – Part 1

Thinking about trading your office view for turquoise waters? 

If ending your workday with your toes in the sand sounds appealing, you’re not alone. Bonaire’s warm climate, relaxed pace of life, and incredible natural beauty make it an increasingly popular choice for those planning to retire, work remotely, or start a business. But before you pack your bags, it’s important to understand how the move affects your taxes as a U.S. citizen. 

The good news? Bonaire can be surprisingly tax-friendly. Here’s what to know before making the move. 

Retiring in Bonaire

For many Americans, Bonaire is an ideal retirement destination. Thanks to the Double Tax Decree between the U.S. and the BES islands (Bonaire, St. Eustatius, and Saba), much of your U.S. retirement income is protected from double taxation. 

• Pensions, IRAs, and 401(k)s: In most cases, these are only taxed by the U.S., not by Bonaire. However, if you’re under 65, certain types of retirement income may still be subject to local tax. 

• Over age 65: Once you reach 65 (as of January 1 of the tax year), distributions from pensions and retirement accounts are tax-free on Bonaire. Healthcare contributions also drop significantly—from about $9,000 annually to roughly $180. 

• Social Security: Mostly exempt. Bonaire only taxes the 15% portion not taxed by the U.S., applying a 30.4% rate. 

Bonaire’s 2025 income tax rates:

• 30.4% on income up to $51,250 

• 35.4% on income above that 

• A tax-free threshold of around $20,000 

Even better: Bonaire does not tax rental income or capital gains. For retirees with investments or property, that’s a major advantage compared to many other jurisdictions. 

Remote Work in Bonaire

Remote work is increasingly common, and many Americans spend several months in Bonaire working online for U.S. employers. 

• Short stays (under six months): Bonaire generally doesn’t tax this income if you’re working online for a U.S.-based company and not offering services locally. On the U.S. side, nothing changes. You’ll file and pay taxes as usual. 

• Longer stays (residency): Once you stay longer than six months, you’ll need to apply for residency. Bonaire taxes income earned for work physically performed on the island. Thanks to the U.S.–Bonaire treaty, this income is not typically taxed twice if you’re paying tax in the U.S. 

• Employment considerations: If you’re a W-2 employee, your employer may need to register locally if they don’t already have a Bonaire affiliate. Payroll tax into the Bonaire Social Security system would be required. Also keep in mind that some U.S. states may continue taxing you, even while abroad. 

Starting a Business in Bonaire

If you’d rather run your own venture in paradise, Bonaire offers accessible business structures. 

• Eenmanszaak (sole proprietorship): Straightforward to set up includes registering with the Chamber of Commerce, filing quarterly ABB (sales tax) at 6%, and submitting year-end financials. Profits are taxable in both Bonaire and the U.S., but you may use foreign tax credits to avoid double taxation. 

• BV (corporation): More complex but often worthwhile if profits exceed $20,000 annually. Setting up a BV requires a notary and comes with quarterly ABB and wage tax filings. The advantage: as director of your own BV, you avoid high healthcare premiums and employer payroll taxes. The drawback: a BV adds complexity to your U.S. tax return, and profits remain taxable in the U.S., whether distributed or not. 

We will cover this in more detail in our follow-up piece. 

Quick Tax Takeaways

• Under 65? Some retirement income may be taxed in Bonaire. 

• Over 65? Pension and retirement distributions are tax-free locally. 

• Social Security: only the 15% untaxed by the U.S. is taxed in Bonaire at 30.4%. 

• Rental income and capital gains: not taxed in Bonaire.  

• Remote work: short-term stays are tax-neutral, but long-term residents must register locally. 

• Business owners: choose between an eenmanszaak or BV depending on income and long-term goals. 

Final Thoughts

Bonaire offers more than just natural beauty and a laid-back lifestyle. The island can also be financially smart for retirees, digital nomads, and entrepreneurs. But the key is careful planning. Understanding how U.S. and Bonaire tax rules interact will help you avoid surprises and make the most of your new life abroad. 

As the only U.S. tax firm on the island, BNC Tax & Accounting B.V. specializes in U.S. tax planning for Americans in Bonaire. Whether you’re considering retirement, remote work, or launching a business here, we’ll help you structure your move in a way that’s compliant and tax-efficient. 

Thinking about making Bonaire home? Schedule a consultation with us today to talk through your plans and build a strategy that works for you personally and financially.