Gifting a game to Someone with no Xbox Live

Yes you can. If it's an online game, they'll need Live to play it. Otherwise, all that matters is that they are in the same region as you.

you should have the option to buy as a gift.

Yep, if you go on the microsoft store on xbox, search for “xbox live gold”. Then select buy as gift, you can buy it for someone else, and they will get an xbox live message with the code.

Basically when someone is buying a gift for someone else through the console or online a box will popup before finishing the transaction that says that this gift will ONLY be able to be used in the region that it is purchased in. For instance say I have
a friend in Australia that wants to gift me (I live in the US) a game he would not be able to do that because we live in two different regions. Hence this is where this error you are getting is coming from there is no way around it the only thing that we can
recommend is to have whoever gifted you this game is to have them contact xbox support by going to support.xbox.com/contact-us and see if they can get a refund.

Hey CovetousCash64 -

Thanks for posting. As eviltedi and MaximumExtreme have pointed out, asking someone for their account information is against the Xbox Live TOS and we do not encourage that action. MaximumExtreme's suggestion of buying Xbox Live Gift Cards in your friend's
local currency is good solution for gifting your friends something on Xbox Live.

There is xbox live game pass gift cards same with xbox live gold gift cards. Currency gift cards can't really play for subscription payments.