Malta is a pretty small island in the heart of the Mediterranean, with a rich culture and a significant number of historical sites. Malta is a member of the European Union, the Eurozone, and part of the Schengen area; thus, people coming from countries who are also members do not need any entry Visa.
Malta is an ideal place to take up residence and offers unique programs like the Malta Individual Investor Program and the Malta Residence and Visa Program, which can help you acquire Maltese citizenship and Maltese residency, respectively.
The country offers a range of benefits to individuals seeking to take up residence on the island, given its advantageous tax regime and competitive cost of living. Malta offers an extensive number of tax incentives aimed at attracting foreign expatriates.
In this article, we will be discussing how and why it can benefit you to take up residence in Malta.
Acquiring Citizenship by Naturalisation
Malta Individual Investor Program (Malta Citizenship by Investment)
Under the Individual Investor Program (IIP), certain investors who bring their expertise, create new opportunities and make a positive contribution to the country, maybe allowed to become Maltese citizens. The MIIP was launched by the Government in 2014 and is capped at 1,800 applications.
Applicants under the MIIP must apply using the prescribed forms and go through a very thorough application procedure including detailed due diligence, background verification checks and undertakings. They must also pay the necessary fees and bank charges as well as fulfil the relative criteria as specified in the regulations. If successful, applicants and their families are granted a certificate of naturalisation (citizenship).
The team is led by Karl Cini, partner at Nexia BT, and is an Accredited Person/Agent under the Regulations for the Individual Investor Programme (IIP) with Agent number IIP-003. Karl and his team can assist in the completion of the requested documents needed and for the submission of the application when liaising with Malta Individual Investor Programme Agency (MIIPA).
Different Malta Residency Programs
The Global Residence Program (GRP) and the Residence Program (RPR)
Malta’s Global Residence Program (GRP) rules are designed to attract 'third-country nationals’ (nationals from outside the EU/EEA and Switzerland who wish to buy or rent high value, qualifying property in Malta, and who wish to benefit from a residence permit in Malta. The Program is mainly targeted at those individuals who are what we refer to as ‘tax nomads’, meaning they are not resident in one particular country long enough to make them taxable in that particular country.
Meanwhile, the Residence Program Rules (RPR) is a tax residency program designed to attract EU, EEA and Swiss Nationals.
Individuals who qualify under the GRP Rules and RPR are taxable at the rate of 15% on foreign source income remitted to Malta subject to a minimum annual tax liability of €15,000, with the possibility to claim double taxation relief. The minimum annual tax payable must be paid fully and yearly in advance, by not later than the 30th April of the year immediately preceding the relevant year of assessment. Any other income that is not chargeable to tax at the beneficial tax rate in terms of the GRP and RPR is charged as separate income at the rate of 35%.
Tax status holders cannot become permanent or long-term residents of Malta and must not stay in any other jurisdiction for a stretch of time longer than 183 days in a calendar year.
Following the acquisition of a special tax status under these programmes, the beneficiary may proceed to apply for a residence permit as economic self-sufficient under a separate process on the basis of said acquired special tax status.
Highly Qualified Persons Rules
The Highly Qualified Persons Rules were introduced in 2011 with the aim of attracting overseas skilled professionals to take up employment in certain eligible roles with companies licensed by the Malta Financial Services Authority, the Malta Gaming Authority or companies holding an Air Operators’ Certificate issued by the Authority for Transport in Malta or an aerodrome licence issued under the Air Navigation Order. Certain roles and offices within the assisted reproduction sector may also qualify as eligible roles on the basis of which one may be eligible to apply for a special tax status under these rules.
These individuals are eligible for a reduced rate of tax of 15% on all income (not less than €86,385 per annum for base year 2020) derived from their qualifying contract of employment in Malta. Certain conditions listed in the rules must be satisfied in order to become a beneficiary under this regime.
For further information, read our factsheet Malta – Income tax incentives for Highly Qualified Persons.
Malta Retirement Program Rules
Under these rules, EU, EEA or Swiss nationals in receipt of a pension (which must constitute at least 75% of the beneficiary’s chargeable income) may, subject to qualifying for the special tax status, benefit from a flat 15% Maltese tax rate on foreign source income received in Malta subject to an annual minimum tax payment of €7,500 in respect of the main applicant, with the possibility to claim double tax relief. Certain conditions listed in the rules must be satisfied in order to become a beneficiary under this regime.
There is no general inheritance tax system in Malta, however, upon the transfer or transmission (upon death) of:
Immovable property in Malta or shares in a company mainly owning immovable property situated in Malta, there is a 5% duty;
Marketable securities (mainly shares in Maltese companies), there is a 2% duty – although exemptions may apply.
Read more about the Amendments to the Malta Retirement Programme Rules here.
The Malta Residence and Visa Program (MRVP)
The Malta Residence and Visa Programme gives the opportunity to non-EU/EEA/Swiss Nationals and their dependents to reside, settle or stay indefinitely in Malta.
Given that Malta is a member of the European Union and also part of the Schengen area, such non-EU/EEA/Swiss Nationals will, through the acquisition of a certificate under the MRVP, enjoy unrestricted entry into Malta as well as benefit from free movement within the Schengen Area, provided that the conditions of the Programme are satisfied.
Visit the link for further information on Malta Residency by Investment Programme.