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Ordinary Residence

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ORDINARY RESIDENCE IN MALTA

The Ordinary Residence program in Malta allows individuals who intend to reside in the country for more than three months to establish long-term residency. Available to both EU nationals and third-country nationals (TCNs), this program provides a secure way to settle in Malta. To qualify, applicants must meet specific criteria, including demonstrating financial self-sufficiency, securing suitable accommodation, and having health insurance.

Once approved, ordinary residents can apply for a Uniform Residence Permit, which grants visa-free travel within the Schengen Zone for up to three months and allows the holder to work or conduct business in Malta. While this offers great flexibility, applicants must still meet the necessary criteria to be eligible for the program, ensuring a smooth and lawful transition to permanent residence in Malta.

ELIGIBILITY FOR ORDINARY RESIDENCE IN MALTA FOR EU/EEA NATIONALS

EU/EEA nationals enjoy a relatively straightforward requirements to gain ordinary residence in Malta:

  • Financial Self-Sufficiency: Applicants need to demonstrate economic independence without relying on Maltese social assistance. Proof of financial self-sufficiency is required.
  • Proof of Residence: Applicants must provide evidence of a physical address, either through property ownership or rental, with no minimum property value unless an Acquisition of Immovable Property (AIP) permit is necessary, which applies only in certain cases.
  • Residence Duration: EU nationals must have lived in Malta for at least three months to apply for an e-Residence card from the Department for Citizenship and Expatriate Affairs.

ELIGIBILITY FOR ORDINARY RESIDENCE IN MALTA FOR THIRD COUNTRY NATIONALS (TCNs)

    • Financial Independence & Residence: TCNs must demonstrate financial independence, similar to the requirements for EU nationals, and provide proof of a physical address in Malta (either by renting or purchasing property).
    • Employment or Business Ownership:
    • Employment: A work permit is required for non-EU/EEA nationals to be employed in Malta.
    • Self-Employment or Business Ownership: TCNs can also qualify for ordinary residence through self-employment or ownership of a business in Malta. In such cases, they must meet one of the following conditions:
      • Investment Requirement: The applicant must invest at least €500,000 in fixed assets (e.g., immovable property, machinery) for business use, within six months of receiving the JobsPlus license. Rental contracts do not qualify.
      • Highly Skilled Innovators: TCNs with a solid business plan and the ability to recruit at least three EEA, Swiss, or Maltese nationals within 18 months of establishment.
      • Approved Projects: The applicant must lead a project formally approved by Malta Enterprise and notified to JobsPlus.
    • Shareholding in a Malta-Registered Company: TCNs who are shareholders or ultimate beneficial owners of a Malta-registered company can qualify for ordinary residence if they meet one of the following conditions:
      • A fully paid-up share capital of at least €500,000, which cannot be redeemed or transferred for the first two years.
      • A minimum investment of €500,000 in capital expenditure for fixed assets as outlined in the business plan.
      • Leading a project that has been approved by Malta Enterprise and notified to JobsPlus.

TAXATION

  • Ordinary residents in Malta are taxed on income earned in Malta and foreign income remitted to Malta. Residents but non-domiciles enjoy further tax advantages:

    • Residency Status: An individual is considered a tax resident in Malta if their stay in the country exceeds 183 days in a calendar year.
    • Tax on Foreign Income: Foreigners who are resident but not domiciled in Malta are not taxed on their worldwide income but only on Maltese-source income and on foreign-source income received or remitted to Malta.
    • Minimum Tax Requirement: Ordinary residents receiving foreign-source income of more than €35,000 (which is not remitted to Malta) are subject to a minimum tax liability of €5,000 annually.

    Progressive Tax Rates: Malta applies progressive tax rates ranging from 0% to a maximum of 35%, with a minimum annual tax of €5,000 if foreign-source income exceeds €35,000.

     

Single Rates:

Income (€)                          Rate                       Subtract (€)

0 – 9,100                             0%                          0

9,101 – 14,500                 15%                       1,365

14,501 – 19,500              25%                       2,815

19,501 – 60,000              25%                       2,725

60,001+                               35%                       8,725

 

Married Rates:

Income (€)                          Rate                       Subtract (€)

0 – 12,700                          0%                          0

12,701 – 21,200             15%                       1,905

21,201 – 28,700             25%                       4,025

28,701 – 60,000            25%                       3,905

60,001+                             35%                       9,905

 

Parent Rates:

Income (€)                          Rate                       Subtract (€)

0 – 10,500                          0%                          0

10,501 – 15,800             15%                       1,575

15,801 – 21,200             25%                       3,155

21,201 – 60,000             25%                       3,050

60,001+                             35%                       9,050

 

Parent Rate: Parents who are responsible for children under the age of 23 (if unmarried) can benefit from these rates. Parental rates can apply to married couples or individuals with dependent children, resulting in more favorable tax treatment than non-parents.

Note on Tax Credits: Tax relief may also apply in specific cases, including parents with dependents and deductions for children. These credits can lower the effective tax rate in some situations.

For further details, you can consult the official page from the Commissioner for Revenue

INHERITANCE TAX

No death tax is payable in Malta. However, duty on documents and transfers is payable by the heirs of the deceased or the purchaser in the case of real estate situated in Malta, as well as upon the purchase of shares in Maltese companies.

No duty is payable on share transfers made by companies that have more than ninety percent of their business interests outside Malta. Additionally, an exemption from duty on share transfers exists for a Maltese company if more than half of the ordinary share capital, voting rights, and rights to profits are held by individuals who are not residents of Malta.

Subject to certain exceptions, duty is charged at a rate of 5% for real estate and 2% for shares.

DOUBLE TAXATION RELIEF

Malta residents are protected by double taxation agreements, which ensure that tax is not paid twice on the same income in different countries. Malta has an extensive network of double taxation treaties, and where no treaty exists, other forms of relief under domestic law are available to eliminate double taxation.

YOUR TRUSTED PARTNER IN MALTA

With over 55 years of experience since 1969, Frank Salt Real Estate has built a trusted reputation for guiding clients through Malta’s residence and citizenship programs to find the perfect fit for their needs. We offer Malta’s largest selection of properties for sale and rent, and our team is highly experienced in assisting foreign clients looking to relocate or invest. From tailored residency guidance to exceptional real estate options, Frank Salt Real Estate is your reliable partner for a seamless transition to life in Malta.

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