Whether you are considering to relocate for work or for a better lifestyle, Malta might be the location for you and your family to enjoy the most comfortable and relaxed environment to live and work in. Relocating your business or family to Malta can be beneficial for a number of reasons, including the advantages the island offers and its excellent tax regimes. This section will mention the incentives and other advantages offered by the country.
A new tax regime, namely ‘The Highly Qualified Persons Regulations’ aims to attract highly-qualified professionals, predominantly within the financial services, aviation, and Gaming sectors, who would be working with licensed companies in Malta. The qualification is valid for up to five years, enabling the holder to qualify for an income tax rate of 15% compared with the usual progressive rate up to 35%, on Malta source qualifying income.
This Programme is available to third-country nationals as well as to nationals of the European Union, European Economic Area and Switzerland (EU/EEA and Swiss nationals), with the latter (EU/EEA and Swiss nationals) benefiting from the reduced rate of income tax for a maximum consecutive period of five years.
By virtue of this amendment EU/EEA and Swiss nationals are now eligible, upon application, for a one-time extension of five years to their period of benefit, subject to the continued adherence to the provisions of the Rules. Such extension shall not be made available to any person who has been residing in Malta prior to the 1st of January 2008. Furthermore, the maximum qualifying period for EU/EEA/Swiss nationals undertaking the Highly Qualified Persons Programme, shall not exceed ten years of assessment.
The Global Residence Programme Rules, 2013 (‘GRP Rules’) introduced from 1st July 2013, offers favourable tax status to those individuals wishing to relocate or retire in Malta.
Individuals who qualify under the GRP Rules are taxable at the rate of 15% on foreign source income remitted to Malta with the possibility to claim double taxation relief. Any other income of the aforementioned persons that are not covered by these Rules shall be charged at the rate of 35%. This is subject to a minimum tax payment of €15,000 per annum payable by not later than the 30th April of the year in which the income is received in Malta and such payment must be accompanied by a return made to the Commissioner that provides proof that all the requirements continue to be satisfied.
So, the Global Residence Programme (GRP) Grants:
Special tax status in Malta;
A Maltese residence permit to holders (via a separate application);
Possibility to pass on the Special Tax Status to one’s heirs under certain terms; and
The above benefits without the obligation for long-term residency in Malta.
Tax Treatment in Malta under GRP:
Beneficiaries taxable at the rate of 15% on foreign source income remitted to Malta;
Foreign source capital gains not taxable even if remitted to Malta;
Possibility to claim double taxation relief;
Malta source income charged as separate income at the rate of 35%; and
A minimum tax of € 15,000 is payable by the holder of the tax status in respect of any year of assessment.
Our team can assist individuals, families, company executives and high net worth individuals taking up residence in Malta, by adopting a holistic approach to cover all aspects of moving and abiding by statutory requirements.
Malta’s positive attributes compared to other EU or Mediterranean locations:
The country’s stability and fiscal policy agreements;
European Union membership;
English speaking hospitable people;
Highly rated health service by the World Health Organization;
High standard of security and stability; and
Low cost of living.
Double taxation agreements with over 70 countries may also mean that retirees taking on permanent residence in Malta may have their pensions remitted to them in Malta free of income tax and then taxed at 15% in Malta.
The Malta Retirement Programme (MRP) is a programme designed to attract nationals of the EU, EEA and Switzerland who are not in an employment relationship and are in receipt of a pension as their regular source of income. Individuals benefitting from this programme benefit from a reduced rate of tax of 15% on foreign income remitted to Malta and may hold a non-executive post on the board of a company resident in Malta. This implies that the beneficiary would be prohibited from being employed by the company in any capacity.
Located in the Mediterranean Sea, the Maltese archipelago consists of three main islands: Malta, Gozo and Comino, with a total landmass of just 316km2.
The distance between Malta and the nearest point in Sicily is 93km, while the distance from the nearest point on the North African mainland (Tunisia) is 288km. Gibraltar is 1,826km to the west and Alexandria is 1,510km to the east.
Malta’s climate is typically Mediterranean, with mild rainy winters, and hot dry summers. Malta enjoys an average 300 days of sunshine per year, with a daily average of 6 hours’ sunshine in mid-Winter, to more than 12 hours in summer.
Maltese and English are both official national languages and given equal status and use in governmental authorities or agencies. English is typically the language of business. Maltese, the national language, is of Semitic origin expressed in an ad hoc Latin script alphabet, which, over the centuries, has incorporated vocabulary derived from English, Italian and French.
The vast majority of Maltese people are bilingual and the majority many are also conversant in Italian. Some may also have at least a working knowledge of French or German. Foreign language fluency as a percentage of the population is as follows: English 88%, Italian 66%, French 17% and German 6%.
Maltese private law is based on a codified civil code deriving from the Napoleonic code but Malta’s Commercial Laws (including maritime/admiralty, company, tax, financial services laws) and Criminal Law are heavily based on English statute and principles. Maltese Public Law makes extensive reference to English common law, which was never adopted despite Malta having been a British colony until 1964. Maltese courts are not bound by precedence.
The direct application, transposition and implementation of European Union legislation continue to invigorate Malta’s legal system.
Malta’s booming real estate market can be attributed to healthy inward investment. With an ever-increasing number of igaming companies, international call centres, manufacturing companies etc, the number of expatriates living and working in Malta has risen sharply – fuelling demand for higher-end residential and commercial property. This rise in demand for high-end commercial and residential property is set to continue, providing developers and investors with the opportunity to contribute to and benefit from the market.
Purchasing property in Malta for residential purposes is possible if the person is an EU citizen, consequent to the right to EU wide freedom of movement. However, a third-country national wishing to purchase property in Malta must first obtain clearance from the Minister responsible. While obtaining ministerial clearance is generally a straightforward process, there is the option of purchasing a property within Special Designated Areas (SDA). Properties within SDAs may not be purchased without having obtained the said permit. The purchase procedure is the same as when local wishes to purchase a property.
Nexia BT is a leading firm providing a wide range of services in the financial sector to corporate and private clients.
We pride ourselves in having worked closely with large international companies and high-net-worth individuals. This experience allows us to help our clients achieve their maximum financial results in business.