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Malta Citizenship by Investment Programme

Introduced in the first quarter of 2014, the Malta Individual Investor Programme (IIP) offers citizenship in a EU Member State that is stable, neutral and highly respected, tying in a solid investment and a lasting bond with the country. The program allows for the grant of citizenship to duly qualified, reputable foreign individuals and families (EU and non-EU nationals) who make a significant contribution to the economic development of Malta.

The new Malta Individual Investor Programme (also referred to as the Malta Citizenship Programme) will be a good opportunity for investors to contribute to the local Maltese economy whilst at the same time benefiting from a citizenship in Malta. Successful candidates will be granted citizenship by a certificate of naturalization, which can also be extended to include their families and dependent.

The Maltese authorities guarantee an efficient application process, and the world’s strictest due diligence standards and vetting of applicants, thus ensuring only highly respectable clients will be admitted.

Benefits

Successful candidates will be awarded Malta citizenship, which automatically includes EU citizenship, thus giving the right of establishment in all 28 EU countries and Switzerland. Other benefits include the ability to work and/or set up business in Malta and visa-free travel to more than 160 countries in the world, including the USA.

Eligibility criteria for the Malta Individual Investor Programme

The main applicant must be at least 18 years of age and may also add to a citizenship application for his/her spouse, as well as children and parents or grandparents, given that certain conditions are met.

Financial contribution

All individuals and families applying to the Malta Individual Investor Program must make a significant contribution to the National Development and Social Fund established by the Government. This consists of a financial contribution of €650,000 for the main applicant and an additional €25,000 per direct dependents, including the spouse and minor children. In the case of dependent children that are 18 to 26 years of age, or dependent parents over 55 years, a €50,000 contribution is applicable.

Property

The applicant must also commit to retain a residence in Malta for a period of at least 5 years, either through the purchase of a property for which the minimum value must exceed €350,000, or by renting out a property for which the minimum annual rent must exceed €16,000

Bonds Investment

An investment of €150,000 in Government approved financial instrument is required, which must be maintained for a minimum period of 5 years.

Residency status

On buying/renting their property in Malta, citizenship candidates are issued an identity card. Citizenship is granted after 12 months from date of property purchase or rental. Candidates need not spend 365 days in Malta before citizenship is granted. Residence is defined under Maltese law as an intention to reside in Malta for any fiscal year, usually evidenced by a stay of a minimum of 183 days or by the purchase / rental of property together with a visit to Malta.

Fit and proper test

Applicants must show they are in good standing and repute and will undergo a ‘fit and proper’ test. They must also show they do not suffer from any contagious disease.

Clean Criminal Record

The applicant must have no criminal record. Applicants must provide a police certificate which may be submitted subsequently to the submission of the application but before approval. A person who has been denied a visa to a country with which Malta has visa-free travel arrangement shall not be entitled to apply under the program. A person who is deemed a potential national security or reputational risk, or is subject to criminal investigation will also be denied citizenship.

Application and Due Diligence fees

Standard due diligence fees are applicable as follows: For main applicant: EUR 7,500; for spouses, adult children and parents: EUR 5,000; for children between 13 and 18 years of age: EUR 3,000 each.

The programme is limited to the first 1,800 approved applications.

The application will be processed by Identity Malta (a government institution) and is to be submitted through a local Approved Agent.

Through its hands-on participation in promoting Malta on an international level, and in association with a number of local approved agents Frank Salt Real Estate can assist international clients in obtaining Malta residence and citizenship under the respective programs, including the Malta Individual Investors Programme.

Taxation Merits tied to the Malta Citizenship by Investment Programme

The acquisition of Maltese citizenship under the IIP does not have any tax consequences, and even if one’s residence is moved to Malta, one would still retain the status of a non-domiciled person and thus have a limited, advantageous tax exposure.

Candidates that become residents and domiciled in Malta are required to pay income tax on their worldwide income. Personal income is taxed at progressive rates of up to 35%. However, individuals that are resident in Malta but not domiciled in Malta will only be required to pay tax on income arising in Malta and income (excluding capital gains) that arises outside Malta that is received in Malta.

Capital Gains Tax: Malta does not impose estate or donations tax but it does levy a capital gains tax on various assets (mainly immovable property and shares). Capital Gains Tax is not levied on transfer of immovable property if the person transferring the property has owned it and occupied it as his main residence for a period of three years and has not vacated it for more than one year. Otherwise tax shall be levied at the 0 to 35% tax regime on the gain if the property is sold within the first 12 years of ownership or 12% of the sales consideration if the transfer is effected after 12 years of ownership. However the 12% final tax does not apply if the individual property owner is not resident in Malta.

Malta has concluded double taxation treaties with around 60 countries with a number of other agreements signed but not yet in force.

The standard VAT rate in Malta is of 18%. The corporate tax rate is 35%, however special tax concessions apply for non-resident/non-domiciled owners.

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