Malta Individual Investor Programme
The Malta Individual Investor Programme (IIP) offers citizenship in an EU Member State that is stable, neutral and highly respected, tying in a solid investment and a lasting bond with the country. The IIP 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.
Successful candidates will be granted citizenship by a certificate of naturalization, which can also be extended to include their dependents. The Maltese authorities guarantee an efficient application process, and strict due diligence and vetting of applicants, thus ensuring only highly respectable clients will be admitted.
Once a candidate is awarded Malta citizenship, this automatically includes EU citizenship, thus obtaining 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 US.
The application will be processed by Identity Malta (a government institution) and is to be submitted through a local Approved Agent. Applications may only be filed through a local Authorised Registered Mandatory.
Applications for the Individual Investor Programme must be submitted to the Maltese Authorities accompanied by the following documents:
- A certificate from a reputable health system that the main applicant and his dependants are not suffering from any contagious disease and that they are in good health;
- Police conduct certificates (need not be submitted at application stage but can be submitted at a later date, prior to approval of application);
- Evidence that the main applicant and his dependants are fit and proper persons;
- An undertaking to remit the required contribution when called to do so by Identity Malta;
- An undertaking to purchase or lease immovable residential property in Malta;
- An undertaking to make other investments as required by the regulations;
- An affidavit of support for each dependant who is over 18 years old.
At application stage, the individual is required to hold a property under title of ownership or lease in Malta or Gozo, satisfying the following minimum values. At this stage all required documents related to the applicants and their source of wealth are required, besides the completion of the relevant application forms. The following fees apply at this stage:
- Passport Fee – €500
- Bank Charges – €200
- Due Diligence Fees:
- Main applicant – €7,500
- Spouse – €5,000
- Children under 18 – €3,000
- Unmarried children between 18 and 26 – €5,000
- Dependent parents and grandparents over 55 – €5,000
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.
All individuals and families applying to the Malta Individual Investor Programme must make a significant contribution for 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 minor child and spouse. 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.
The applicant must commit to retain a property 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.
An investment of €150,000 in Government approved financial instruments is required, which must be maintained for a minimum period of 5 years.
Applicants must reside in Malta for at least 12 months, during which they must establish links with the country but need not spend all their time here. 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.
The main applicant and his dependants need to be covered by a global health insurance policy of at least €50,000 per person per annum and are capable of maintaining such cover indefinitely.
The acquisition of Maltese citizenship under the IIP does not have any tax consequences. 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 in Malta are required to pay income tax on their worldwide income. Personal income is taxed at progressive rates. However, individuals that are residing in Malta but not settled in Malta will only be subject to tax on income and capital gains arising in Malta and foreign income (excluding capital gains) if it is received in Malta. Foreign capital gains received in Malta are not subject to Malta tax.
PROPERTY TRANSFER TAX
A seller who has resided in his orher property (the address of which is listed on their Identity Card), for over three years, does not pay any form of tax (capital gains, local council or municipal tax) when he or she sells their home.
However, on selling an immovable property (NOT one’s primary residence), a seller has to pay a transfer tax, today referred to as a Final Withholding Tax on the value of the transfer. In fact, as from the1st of January 2015, the option of taxing a transfer of property at the rate of 12% on Capital Gains has been done away with. It has now been replaced with a lower rate of final withholding tax of 8%, which is simply calculated on the sale value of the property. Exceptions to this rule would be the following scenarios:
- If a property was acquired before January 2004, a seller is subject to a Final Withholding Tax of 10% on the value of the property.
- If one transfers an immovable property (not one’s primary residence) within 5 years from the date of acquisition, one may benefit from the low rate of a Final Withholding Tax of 5%. Furthermore, a 2% Withholding Tax applies upon a transfer of a property, that was immediately before the transfer, owned by an individual or co-owned by an individual, provided that the transfer is not made later than 3 years. A 5% Final Withholding Tax is also applicable when a transfer pertains to a property located in Valletta- subject to the property having been acquired before the 31st December 2018 and it must have been restored or rehabilitated.
This Final Withholding Tax (FWT) is the full and final payment of income tax due from the recipient of the income.