The Benefits of Living in Malta

When it comes to Malta, Frank Salt Real Estate should be your first port of call.

Malta is an extremely popular place for expats to live in Malta and many thousands of workers, retirees and business people relocate to the islands each year because it is an idyllic destination with excellent weather and a dynamic business hub, offering an easy-going lifestyle. Whether you have been to Malta on holiday and fell in love with the islands or are simply investigating your options, Frank Salt Real Estate is your gateway to settling in the country. We can answer all your questions, provide you with homes and commercial premises to buy or rent and even assist you in understanding all of the residency programmes offered by the government. We can make your transition to settling in Malta a hassle-free and easy one. We are local, we have been in operation for more than 50 years and as the largest real estate company in the country, we offer far more than just properties for sale and rent.

Let’s look at some of the most frequently asked questions relocating to Malta:

What kind of person relocates to Malta?

For most families, the number one reason to relocate is safety and security. Others may do it to benefit from Malta’s advantageous tax benefits and then there are those who are considering where to spend their golden years… and end up being persuaded by a good health care system and a warm, sunny climate all year. But Malta is not only for the wealthy or for retirees: whether you are a baby boomer, a millennial, GenX-er or GenZ, Malta is also a prime location for many well-paying jobs and Malta even has its own Digital Nomad Visa available.

Can you tell me about the kind of jobs that are available in Malta, the workforce and quality of life?

Malta is cheaper than most other EU countries when it comes to labour, although it has a low cost of living it has a high standard of living. Malta’s workforce is highly educated, English-speaking and thus the perfect place to recruit staff to be employed by an international company. Living in Malta comes with many benefits which are available to companies setting up business and for those operating from Malta by the Maltese government. The country is well-known for its IT and i-Gaming sectors: the latest figures show that the islands are already home to more than 250 registered i-Gaming companies! In addition, Malta is respected and known for banking and financial services, pharmaceuticals, shipping, chandler services, automotive, aviation and more. Malta has also recently introduced the Digital Nomad Visa for those who are able to work remotely, opening its doors to some of the world’s most dynamic minds.

Lastly, Malta is economically extremely stable, offers very competitive labour costs and encourages a pro-business culture and environment, making it tremendously appealing to international investors.

OK, so tell me more about doing business in Malta?

Malta offers immeasurable opportunities to international companies setting up businesses on its shores, such as borderless access to the rest of the EU, open trade and a unified currency, the Euro. Companies setting up business in Malta will benefit from little or no regulations when trading with other EU countries due to the fact that a company vetted and established in Malta is already accepted as having gone through stringent measures to make sure they comply with all the necessary EU regulations regarding trade. This also makes Malta very popular as a manufacturing destination for many companies in the fields of pharmaceuticals, aviation, shipping, manufacturing and i-Gaming.

What about the tax system in Malta?

The whole Maltese tax system is geared to attract global investment and the brightest of innovators, investors and entrepreneurs. Generally corporate tax comes in at 35% with numerous refund schemes which are very beneficial to shareholders in companies. In some cases this can bring the realistic tax rate down to as little as 5%!

Malta has more than 70 double taxation treaties with other countries, which means you will not pay tax twice on the same income. This is extremely beneficial for companies located and registered in Malta, as it provides lower withholding taxes on dividends for starters. This also applies to income and royalties pertaining to foreign companies that are non-resident but who have business activities in Malta.

What can you tell me about the banking system in Malta?

Malta has one of the world’s best-rated banking systems with strict anti-money laundering measures in place. Doing your banking from Malta carries with it a certain amount of credence and due to this, once you have opened a business bank account in Malta, you can be assured that you have been qualified above and beyond all measures as a safe partner in the world of international trade and business.

What happens if I decide to buy a property in Malta? What are the steps involved?

Purchasing real estate in Malta is a simple, uncomplicated process and it is very safe. After seeing the property options available with your local agent, the next step is obviously deciding on which one to buy.

With your heart set on your new property of choice, you will then have to engage in signing a Promise of Sale or preliminary agreement as the first official step towards owning it. This will bind both parties contractually to the purchase and sale as agreed upon.   

The Promise of Sale is in most cases valid for three months or as agreed upon by both the parties involved and at this time a 10% deposit is usually paid to the agent or a notary. It will then be the responsibility of the notary to do the necessary due diligence checks to right up to the time of signing the final Deed of Sale, confirming that everything is in order regarding the property.

The notary will also apply for all permits such as AIP (Acquisition of Immovable Property) if needed and if anything from the purchaser’s side causes cancellation of the sale, the 10% deposit will be favoured to the vendor. All contracts are done in English although there are a lot of Latin terminology and phrases. If you do not understand the meaning of these, make sure to ask your notary to explain this to you as you will have to sign at some stage that you have understood everything as stated in the particular contract.

When your permits have all been approved and the title of the property is unquestionable, you will be asked to sign the Contract of Sale or Deed of Sale. At this stage you will have to pay the balance of the purchase price, plus stamp duty and all other sundries. When this is all done and the property is registered in your name, you become the rightful owner.

General costs involved

• Stamp duty of 5%
• A 1-3% notarial fee (estimate)
• €600 for searches and registration fees
• €233 for an AIP Permit upon issue (where needed)

Should you make use of the services of an estate agency to find and buy your property, the commission fees are paid by the vendor.

The AIP Permit Explained

Every person who has not been living in Malta for 5 years continuously or more needs to buy a property, if outside a Designated Area, by means of obtaining an AIP Permit. With an AIP Permit you are only allowed to buy one property which you are also not allowed to rent out. If a property is located within one of the Designated Areas, you can purchase more than one and it can also be rented out without the need to apply for an AIP permit. 

Although the purchasing of property by Maltese Citizens is not curbed, non-residents, as said, need to obtain an AIP permit. No permit is needed by buying in a Special Designated Area or by:

• An EU Citizen that has been resident for more than 5 years
• A non-EU resident who have lived in Malta for more than 5 years
• An EU Citizen who purchases a property as their primary residence
• An EU Citizen who purchases a property for investment purposes
• In the case where one of the spouses is an EU Citizen and the other not, both people can benefit from the examples mentioned above as long as the property is intended to be their main residence
• If a property is to be used for business activity or to be rented out, this needs to be reflected in the Contract of Purchase

More conditions of the AIP Permit

There is a minimum value for the purchase of properties under AIP which is periodically updated, but this currently stands at €143,410 for apartments and maisonettes and €247,701 for villas, townhouses and other property.  These estimates may vary in the south of Malta and on Gozo. Ask your notary for the latest figures that apply. Also note that the purchasing of a shell apartment under that amount will be allowed as long as after finishing it, it can be valued by an architect for an amount exceeding the minimum as required.

Note that should you already own a property and want to buy another property outside one of the Special Designated Areas, it will be required that you sell the property you currently own first, given that you may not qualify under one of the conditions as stated earlier.