Thinking of moving to Malta?
Are you thinking of moving to Malta? Numerous residents are attracted to the tiny island state every year. These include freelance professionals who can work remotely as well as retirees from Northern Europe.
All those who move to Malta, the smallest EU state, fall in love with its natural beauty, architectural gems and the Mediterranean life on the island. Many are also attracted by the various successful industries that are flourishing in Malta such as the gaming industry and the financial services.
Other star attractions include the plethora of leisure activities namely diving, cultural events and night life.
Residency Requirements
It is relatively straightforward to obtain the necessary paperwork to be able to move to Malta.
Tourist Schengen Visa
This type of visa is issued to Third country nationals who require a Visa to travel to the Schengen area for tourism purposes. It is issued for not longer than 90 days of stay and may be a Single or Multiple entry visa, depending on the decisions made by the authorities and other relevant factors. However in the case where the applicant requires an extension due to unforeseen circumstances whilst in Malta, he/she may request a Visa extension from the Central Visa Unit.
Moving around in Europe
Malta is in the Schengen area which is a group of countries that have got rid of passport and immigration controls at their common borders.
People travelling to and from Schengen areas will not need to have their passports checked at the borders, however at any time of travel, Immigration Police may request to check documents.
Permanent Residency
If you become a permanent resident in Malta you will need to pay 15 per cent tax on the income you bring into the country. Thanks to double tax treaties with various countries, you will probably not need to pay any tax to your country of origin.
Once you’ve become a permanent resident, of course you don’t need to necessarily live on the island all the time and can come and go as you wish. Do be aware that you are not becoming a Maltese citizen by becoming a resident and will not be able to vote.
Two Types of Residency
Depending on where you are emigrating from, you can apply for one of two types of residency:
- Ordinary Residence
- Permanent Residence.
The difference between the two ultimately boils down to how much you are taxed.
Ordinary Residence
Ordinary Residence applies to people coming to Malta from the EU. The tax you pay is worked out by taking from 0 to 35 per cent of your income, minus a tax-credit, depending on how much you earn and marital status.
Permanent Residence
Permanent Residence is open to everyone, no matter what your country of origin is. If you’re not from the EU then this is what you need to apply for. You can also apply for this scheme if you are from the EU, but we recommend always consulting a lawyer to see which scheme is more suited to you.
You will need to renew you ordinary residence permit every five years, while permanent residence permits are renewable every year.
Malta Residence Programme
The Malta Residence Programme is a programme designed to attract individuals who are nationals of the EU, EEA or Switzerland and who are not permanent residents of Malta. Beneficiaries may also have household staff providing a service in their qualifying property, as long as all the requisite procedures are satisfied.
The Malta Global Residency Programme
In July 2013, the Maltese Government introduced a new residency programme. This offers special tax status to third country nationals (except for EEA and Swiss nationals) in Malta. To apply for this programme you need to satisfy certain criteria such as buying or renting property in Malta or Gozo and paying a minimum annual tax liability on foreign income received in Malta.
The Malta Residency and Visa Programme
This programme falls under the Immigration Act and is available for applicants who are third country nationals, along with their dependants (i.e. Spouse, children, parents and parents-in-law). This excludes EU/EEA AND Swiss nationals.
The applicant must not be under the Residents Scheme Regulations, the High Net Worth Individuals (EU/EEA/Swiss Nationals Rules), the Malta Retirement Programme Rules, the Residence Programme Rules, the Qualifying Employment in Innovation and Creativity Rules or the Highly Qualified Persons Rules.
For an applicant to qualify for the Malta Residence and Visa Programme, prior to receiving the Residency Certificate, he/she has to meet the following qualifications and requirements:
- Be at least 18 years of age
- Has an annual income of not less than €100,000 arising outside of Malta, or has in his possession a capital of not less than €500,000
- Has stable and regular resources which are sufficient to maintain him/herself and any of his/her dependants
- Be in possession of valid travel documents
- Be in possession of health insurance in respect of all risks covered for Maltese Nationals
- Be in possession of a Clean Police Conduct from one’s birth place as well as any country the applicant and his/her dependant/s have resided in for longer than 6 months in the past 10 years.
- Has to Provide a certificate from a reputable health system proving that Main Applicant and all his / her dependants are otherwise in good health and will not be an unreasonable burden on the national health system
- Has to a non-refundable Initial Fee of €5,500 that is to be settled upon submission of application
- An additional €5,000 is to be submitted per dependant (excluding children of main applicant and/or the spouse)
Once the Residency Certificate is approved, the applicant is to meet the following criteria:
- Pay the remaining contribution fee, amounting to €24,500, plus €5,000 per additional adult applicant, if applicable
- Pay card fees amounting to €27.50 per person per year
- Hold a qualifying property for a minimum of 5 years from the date of issuance of the Residency Certificate, either through the:
- Purchase of property of either:
- A minimum of €270,000 for properties situated in Gozo and the South of Malta, or
- A minimum of €320,000 for properties situated in the rest of Malta
- Rent of property of either:
- A minimum of €10,000 per annum for properties situated in Gozo or the South of Malta, or
- A minimum of €12,000 per annum for properties situated in the rest of Malta.
- Holds a qualifying investment of not less than €250,000 for a minimum of 5 years from the date of issuance of the Residency Certificate.
Applications are to be administered by a Registered Accredited Person (RAP) or a Registered Approved Agent (RAA) duly registered with the MRVA.
Once the Residency Certificate is issued, this will provide the Beneficiary and his/her dependants the right to reside, settle or stay in Malta, indefinitely plus the ability to freely move around the countries in the Schengen Area. It also provides them with the opportunity to live in a country with a moderate cost of living with a direct access for the Beneficiary and any approved dependant of age, to apply for a work permit. It also provides the opportunity and the ability to live in a safe country which is both politically and economically stable, along with access to high level educational institutions and access to renowned English Schools.
The Malta Individual Investor Programme (IIP)
The Malta Individual Investor Programme is intended to take Malta to the world, expand our horizons and attract individuals not only looking to invest, but who believe in our country, a small island nation with great potential.
Eligibility for Maltese citizenship under the Individual Investor Programme of the Republic of Malta, main applicants must:
- make a contribution of €650,000 to the Maltese Government, which is deposited in the National Development and Social Fund (NDSF);
- lease a property for a minimum value of €16,000 per annum, or purchase a property for a minimum value of €350,000, both in Malta and cannot be let or sublet; and
- acquire €150,000 worth of stocks, bonds, debentures, special purpose vehicles or other investment vehicles as may be identified from time to time by MIIPA.
Applications may also include any of the following dependants:
- the spouse of the main applicant through a monogamous marriage or civil union, or a de facto partner, or a person with whom a relationship is held through a status which is the same as or similar to marriage;
- a child, including an adopted child, of the main applicant, or of the spouse of the main applicant, who is less than 18 years of age;
- a child of the main applicant, or of the spouse of the main applicant, who is between 18 and 26 years of age, who is not married, and who proves that he/she is wholly maintained or supported by the main applicant;
- a parent or grandparent of the main applicant, or of the spouse of the main applicant, who is over 55 years of age, who proves that he/she is wholly maintained or supported by the main applicant, and forms part of the household of the main applicant;
- a child of the main applicant, or of the spouse of the main applicant, who is at least 18 years of age, is physically or mentally challenged, and who is living with and is fully supported by the main applicant.
All applicants and each and every dependant must have a global health insurance coverage of at least €50,000 and must provide evidence that they can maintain it for an indefinite period.
The Malta Residence Programmes
Malta Retirement Programme
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 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.
Such individuals may also partake in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta.
The Malta Retirement Programme requires that applicants are not settled in Malta and that they do not intend to establish their residency in Malta within five years from date of application.
To qualify for the Malta Retirement Programme, the applicant must also hold a qualifying property for the duration of their Residency Certificate by:
- Purchasing – In the case of purchasing a property, the minimum value must be of at least €220,000 for properties situated in Gozo and the South of Malta, or a minimum of €275,000 for properties situated in the rest of Malta; or
- Renting – If the applicant opts to rent a property this must be of a minimum value of €8,750 per annum for properties situated in Gozo or the South of Malta or a minimum of €9,600 per annum for properties situated in the rest of Malta.
- Applicants must be in receipt of a pension as supported by documentary evidence, all of which is received in Malta and which constitutes at least 75% of the beneficiary’s chargeable income.
- Applicant must reside in Malta for not less than 90 days a year, averaged over a 5-year period. They may not stay in any other jurisdiction for more than 183 days in a calendar year.
- Applicant must not be domiciled in Malta and must not intend to establish his domicile in Malta within 5 years from the date of the application for the special tax status
- Applicant must have a valid travel document and must hold insurance covering both applicant and his dependents, in respect of all risks across the whole of the EU.
Highly Qualified Persons Programme
Since joining the EU in 2004, Malta has been modernising its economy. It is becoming recognized as a highly functional, low cost, well regulated jurisdiction with the underlying theme being availability of trained staff through investment in education and training. However, the expansion of the financial services and the gaming services since joining the EU and the aviation services and assisted reproductive technology in recent years, is showing a significant need for additional highly qualified workers. Therefore, the need is being felt for the importation of knowledge particularly in those areas of the financial services sector, the gaming sector, the aviation sector and the assisted reproduction sector where local expertise is lacking.
The material provided above is solely for your guidance. It sets out the main factors that are taken into account by an individual considering these programmes. Any practices described in this guidance notes are subject to periodic review and may subsequently be altered or withdrawn. If practices were to be changed or revoked this would not normally be done so retrospectively. You are responsible for your own tax affairs in Malta. Always contact THE COMMISSIONER OF INLAND REVENUE for updated information.
One must obtain professional advice from an ‘Authorised Mandatory’ at all times to understand which programme may benefit the individual on a case by case basis. Any application for special tax status under the Residency Programmes must be made through the services of a person that is licensed as an “Authorised Registered Mandatory” with the Malta Inland Revenue Department.
For further information about how we can help you with your citizenship and/or residential enquiries kindly contact us on info@aaronbonnici.com