Malta is an ideal place to take up residence. Besides its pleasant climate, safe environment and hospitable English-speaking population, it offers a range of benefits to individuals seeking to acquire residence on the island, given its advantageous tax regime and competitive cost of living.
Any EU/EEA or third country national who resides in Malta for more than three months requires a permit from the immigration authorities, which is granted on specific grounds, some of which are listed below.
Ordinary residence in Malta requires individuals to physically live on the island for a period of six months or more. The transfer of one’s residence from a high-tax jurisdiction to a lower tax overseas country is available to both EU/EEA and non-EU/EEA nationals. There is no minimum value property requirement for non-residents seeking to obtain ordinary residence in Malta, unless there is the need for an Acquisition of Immovable Property (AIP) permit, which applies in specific circumstances.
The qualifying criteria, which vary according to whether the individual seeking to obtain ordinary residence in Malta is an EU/EEA national or a third country national, can be easily complied with, thus making the attainment of Maltese ordinary residence even more attractive.
There are different grounds on which EU/EEA nationals may become ordinarily resident in Malta, including economic self-sufficiency, employment, education and opening a business.
Third Country Nationals
The qualifying criteria for Maltese ordinary residence in respect of third country nationals vary from those applicable to EU/EEA nationals. We are setting out below a few of these possibilities. An employment licence is required in order for non-EU/EEA nationals to work in Malta. This is granted upon satisfying certain criteria. Candidates qualified in the financial services, and information technology fields are sought after, and therefore it may be easier for such individuals to get an employment licence.
In order to qualify to apply for self-employed status and work for one’s business, a third country national must meet one or more of the following criteria:
- An investment of at least € 100,000. In relation to such investment, expenditure ought to comprise solely capital expenditure, which must consist of fixed assets (such as immovable property, plant and machinery) used for business purposes and this must be reflected in the business plan submitted with the application. Rental contracts do not qualify. Likewise, expenses such as salaries and legal fees cannot be paid from the €100,000 invested by way of minimum investment;
- Status of a highly skilled innovator with a sound business plan, committed to recruiting at least three EU/EEA nationals within eighteen months of establishment of business;
- Status of sole representative of an overseas company (with a sound reputation and established for at least three years abroad) wishing to open a branch in Malta; or
- The holding of a directorship in a company forming part of a project that has been formally approved by Malta Enterprise, and which has been formally notified by the latter to the Employment and Training Corporation.
Malta Retirement Programme Rules 2012
In October 2012, the Maltese Government has issued a special tax status for retirees from EU, EEA countries and Switzerland when remitting their pension into Malta. A fixed tax rate of 15% will be due on the pension remitted, and the minimum tax payable shall be of €7,500 for the beneficiary and €500 for every dependant (if any).
The Malta Retirement Programme Rules 2012, have been included as Subsidiary Legislation 123.134 to the Maltese Income Tax Act. The salient conditions and features of the rules can be summarised as follows:
The beneficiary must be an EU/ EEA/ Swiss national who is not in employment;
- The beneficiary may hold a non-executive post on the board of a company resident in Malta or partake in activities related to any institution, trust or foundation of a public character and of any other similar organisation or body of persons, also of a public character, which is engaged in philanthropic, educational, or research and development work in Malta;
- The beneficiary must purchase or rent property in Malta or Gozo. The established minimum values are of €275,000 (Malta), or €250,000 (Gozo) for purchased properties whilst for rented properties these minimum values are set at €9,600 per annum (Malta), or €8,750 (Gozo);
- The pension which is received in Malta, must constitute at least 75% of the beneficiary’s chargeable income. Conversely, the beneficiary may only generate up to 25% of his/her total chargeable income from any non-executive posts as referred to above;
- The beneficiary must have health insurance in respect of all risks across the all the EU (also covering dependants, if any);
- The beneficiary must not be domiciled in Malta and should not have any intention of so establishing his/her domicile in Malta within a period of 5 years ;
- The beneficiary must reside in Malta for a minimum of 90 days in each calendar year, averaged over any 5-year period; and the beneficiary must not reside in any other jurisdiction for more than 183 days in any calendar year during which the retirement programme is availed of.
Malta Global Residence Programme
The 2013 Malta Global Residence Programme was designed to attract affluent individuals seeking to take up global residence in Malta.
Now, from all parts of the world, individuals and their families who are entrepreneurs, retirees, authors, intellectuals and international consultants are now able to establish an alternative residence that suits their lifestyle and tax profile at a reasonable cost.
Malta Residence Programme - For EU/EEA Nationals
From September 2014, wealthy EU/EEA nationals can take advantage of the new Malta Residence Programme. The tax benefit will consist mainly of the right to pay tax at a flat rate of 15% on all foreign source income which is remitted to Malta. Any other income (such as local source income) is subject to a flat rate of 35% tax. This is subject to a reduced minimum annual tax liability of €15,000 covering the main applicant and dependents included on the same application. As with Malta's other programmes, applicants are required to own or rent property in Malta with minimum values set according to the location.
Global Residence Permit for Non-EU Nationals
The Malta Global Residence Programme follows in the footsteps of the Malta Permanent Residence Scheme. The PRS was probably the most attractive residence scheme available to non-EU, non-EEA and non-Swiss nationals seeking to migrate their fiscal residence overseas to a more attractive country, with mild winters, a high standard of living, and a safe environment for all the family.
Like the PRS, the Global Residence Programme provides a programme for permanent residence that is qualitative yet financially feasible and with the tax efficiency of Malta's remittance based taxation system. Malta ticks all the boxes as a foremost global residence jurisdiction and tops the respected international indexes for quality living and retirement.
Requirements of Malta's Global Residence Programme
The financial qualifications are easy to satisfy and permanent residents are entitled to the following benefits:
- No minimum stay requirements
- A low personal tax rate at 15% on remitted income.
- A low annual tax liability of a total of EUR15,000 per family.
- No world-wide income/wealth tax - tax only paid on income remitted to and kept in Malta
- No need to purchase property - only a minimum annual rent of €9,600 / 8,750 for Malta / South of Malta & Gozo, respectively.
- No minimum investment requirements
- No Inheritance/Wealth Taxes
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