Residency in Malta offers a pleasant climate, safe environment and hospitable English-speaking population, as well as a range of benefits to individuals seeking to acquire residence on the island, given its advantageous tax regime and competitive cost of living. Any EU/EEA or third country national who resides in Malta for more than three months requires a permit from the immigration authorities which is granted on specific grounds, some of which are listed below.
Until recently, the Malta Retirement Programme was only available to applicants from EU, EEA, or Switzerland. It is now available to EU and non-EU nationals and is designed to attract individuals who are not in employment but instead are in receipt of a pension as their regular source of income.
Ordinary residence in Malta requires individuals to physically live on the island for a period of six months or more. The transfer of one’s residence from a high-tax jurisdiction to a lower tax overseas country is available to both EU/EEA and non-EU/EEA nationals. There is no minimum value property requirement for non-residents seeking to obtain ordinary residence in Malta, unless there is the need for an Acquisition of Immovable Property (AIP) permit, which applies in specific circumstances.
The qualifying criteria, which vary according to whether the individual seeking to obtain ordinary residence in Malta is an EU/EEA national or a third country national, can be easily complied with, thus making the attainment of Maltese ordinary residence even more attractive. There are different grounds on which EU/EEA nationals may become ordinarily resident in Malta, including economic self-sufficiency, employment, education and opening a business, the most popular of which are being set out hereunder.
Long-term residence status may be granted to individuals who have been legally residing in Malta for five continuous years. The term “continuous” means that such individuals must not have absented themselves from Malta for more than six consecutive months in any given year of the said five-year period and further must not have been absent from Malta for more than a total of ten months throughout this five year period.
Furthermore, a third country national who has been granted long-term residence status by another Member State other than Malta may reside in Malta, for a period exceeding three months, for the exercise of an economic activity in an employed or self-employed capacity, provided that such person is in possession of an employment licence, is pursuing studies or vocational training, or is engaged in other such activities.
Individuals staying in Malta for some temporary purpose with no intention of establishing their residence here and who have not resided in Malta for a period longer than six months in a calendar year shall not be taxed in Malta on their foreign income and gains, whether these are remitted to Malta or otherwise. They are liable to tax in Malta solely on Maltese sourced income and capital gains.
Temporary residence is granted for the entire period of education to students in any Private School, College, or at the University of Malta. If the student is underage, his or her legal guardian can apply for Malta residence to accompany him or her. Such person has to confirm that he or she is in receipt of stable and regular income and has a suitable place to live.
In November 2020 Malta officially launched its latest rules for foreign nationals interested in acquiring Maltese and EU Citizenship – the Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment.
More commonly referred to as the Maltese Exceptional Investor Naturalisation (MEIN) procedures, or the Malta Citizenship by Direct Investment regulations, the new rules allow individuals, along with their family dependants to obtain citizenship by making a direct investment in the country. This will also grant applicants a Maltese and EU Passport.
The rules aim to ensure that reputable applicants not only acquire an EU passport, but also create a lasting bond with Malta – an EU Member State that is stable, neutral and highly respected – and also significantly contribute to the economic development of the island.
The Malta Permanent Residence Programme is a residency-by-investment program which shall entitle a beneficiary to the right to settle, stay and reside in Malta permanently. It is by far one of the most attractive residence programmes available to individuals looking at obtaining permanent residence in an EU country that also forms part of the Schengen Zone.
By taking up the Malta Retirement Programme (MRP), beneficiaries will be able to benefit from a tax rate of 15% on any income arising outside Malta which is received in Malta by the beneficiary or dependent, with the possibility to claim relief of double taxation. It is ideal for retirees, or persons reaching retirement age, who are looking at taking up residence in a country that offers them the best in terms of climate, lifestyle, health services and peace of mind, whilst also providing very favourable tax benefits.
The scheme is available to both EU and non EU nationals.
Introduced in June 2013, the Malta Global Residence Programme allows people who buy or rent a property in Malta and direct their income to Malta to qualify from a residence permit.
In order to qualify for residency, under the new Global Residence Programme, one needs to buy a property of €220,000 or over (if the property is in the South of Malta or in Gozo) or of a minimum value of €275,000 for properties in Central and Northern Malta. Foreign nationals who are interested in renting a property, can also do so and they are eligible for Residency given that the annual rental value is of €9,600 (or €800 monthly) in Malta and €8,750 (or €730 monthly) in Gozo or the South of Malta.
No bonds or guarantees are required and no minimum stay is applicable. This residency programme is particularly attractive to non-EU nationals.
Malta has just announced the launch of its latest Residence Programme, aimed at attracting high net worth EU nationals who wish to enjoy permanent residence status in Malta, thus benefitting from several benefits, including a very favorable tax rate of on income remitted to Malta.
Malta residents are afforded protection by double taxation agreements, which ensure that tax is never paid twice on the same income in different countries. Malta has an extensive network of double taxation treaties and where there is no double taxation treaty, another form of relief from double taxation available under domestic law, namely unilateral relief, largely achieves the same outcome.
No death tax or duty is payable in Malta. However, duty on documents and transfers is payable by the heirs of the deceased or the purchaser on real estate situated in Malta, and upon the purchase of shares in Malta companies. However, no such duty is payable on share transfers effected by shareholders in or by trading companies which have business interests to the extent of more than ninety per cent outside Malta. Likewise, an exemption from duty on share transfers in holding companies exists where more than half of the ordinary share capital, voting rights and rights to profits are held by persons who are not resident in Malta. Subject to certain exceptions, duty is due at the rate of 5% in the case of real estate, and 2% in the case of shares.
Malta became part of the Schengen Zone in 2007. Non-EU citizens may obtain the Uniform Residence Permit, issued on the basis of one being a permanent resident. In this case, it grants its holder the possibility to travel throughout the Schengen Zone without the requirement of a visa for at least three months. In order to apply for the Uniform Residency Permit, the applicant must have a place of residence in Malta.
For tax purposes an individual is normally regarded as being resident in Malta for a particular year if, in that year, his stay in Malta exceeds 183 days. As already noted, however, foreigners residing in Malta are not taxed on their worldwide income, but only on Maltese source income and capital gains and on foreign source income remitted to Malta. Foreign source capital gains are not taxed even if remitted to Malta. The applicable income tax rates are, however, the normal rates of income tax applicable to residents. More information about taxation in Malta can be found here.