We at Döhle Malta can assist clients who wish to take up residency in Malta or even citizenship. Over the years Malta has always attracted foreigners to it. Apart from the populations lifestyle, good weather, warm people and rich history, Malta's taxation system has always played an important role to attract foreigners to our shores.
An individual who is resident but not domiciled in Malta is taxable on a remittance basis. He is therefore taxed on income earned or derived in Malta and in the case of foreign source income this is only taxed in Malta if it is remitted to Malta. In addition capital gains arising outside Malta are not taxable in Malta even if they are remitted to Malta.
Some of the benefits associated with a Maltese residence include:
- Worldwide basis of taxation is not applicable to persons who are resident but not domiciled in Malta
- Foreign source capital gains remitted to Malta are not subject to any tax whatsoever
- Access to Malta's wide treaty network (currently 65) as well as unilateral relief provisions
- No net worth taxes, wealth taxes or exit taxes
Malta has also launched a number of tax driven initiatives in order to attract foreign investment to the island. Amongst these tax driven initiatives we find a number of residence schemes, including:
- Highly Qualified Persons Rules
- Qualifying Employment in Innovation and Creativity (Personal Tax) Rules
- Malta Retirement Programme Rules
- Global Residence Programme
- Residents Programme Rules
- Visa and Residence Programme Rules
The Malta Residence and Visa Programme
In terms of Legal Notice 288 of 2015, the Malta Residence and Visa Programme (MRVP) has been introduced for individuals who are Non- EU/EEA/Swiss nationals wishing to reside, settle or stay indefinitely in Malta, as well as travel within Schengen area without the need for applying for a visa.
The programme shall be administered by the Identity Malta Agency which shall be responsible to issue a certificate entitling the beneficiary and his registered dependents to reside, settle or stay indefinitely in Malta. The certificate shall be monitored annually for the first five years and every five years thereafter.
Applicants must satisfy certain conditions to be eligible to apply for this programme.
Minimum criteria for eligibility:
- Individual must be at least 18 years of age
- Individual must be a third-country national (i.e. non-EU/EEA/Swiss)
- Individual must not be a long-term resident
- Individual is not a person who benefits under other Malta residency programmes
- Individual must be in possession of sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals for himself and his dependents
- Individual must have an annual income of not less than €100,000 arising outside of Malta or in possession of capital of not less than €500,000
- The individual must hold for a minimum period of five years from date of issuance of the certificate, immovable residential property in Malta purchased for a value of not less than €320,000. If the property is situated in the South of Malta or in Gozo the purchase value is set at a minimum of €270,000. Alternatively, an applicant may opt to rent instead of purchasing as long as the rental value is not less than €12,000 per annum. If the property is situated in Gozo or in the South of Malta, the minimum rent must not be less than €10,000 per annum
- The applicant must hold, for a minimum period of five years from the date of the issuance of the certificate, a qualifying investment having an initial value of €250,000
- The applicant must make one-time financial contribution of €30,000 to the Government. A non-refundable application fee payable to the competent authority of €5,500 constitutes a part-payment of the said financial contribution
The legal notice establishes the following list of individuals who are eligible for consideration as dependents:
- the spouse of the main applicant in a monogamous marriage or in another relationship having the same or a similar status to marriage
- a child, including an adopted child, of the main applicant or of his spouse who is less than eighteen years of age
- a child of the main applicant or of his spouse who is between the age of eighteen and twenty-six years and who is not married and who is dependent on the main applicant
- a parent or grandparent of the main applicant or of his spouse who is not economically active and is principally dependent on the main applicant
- a child of the main applicant or of the spouse of the main applicant who is at least eighteen years of age, and who has been certified by a recognized medical professional as having a disability and who is living with, and is fully supported by, the main applicant
Taxation in Malta
The MRVP does not specifically address the scope of taxation in Malta of the main applicant and his dependents. The scope of taxation in Malta largely depends on the individuals residence and domicile.
An individual who is resident but not domiciled in Malta is taxable on a remittance basis. He is therefore taxed on income earned or derived in Malta and in the case of foreign source income this is only taxed in Malta of it is remitted to Malta. In addition capital gains arising outside Malta are not taxable in Malta even if they are remitted to Malta.
The Programme can be viewed as a Residence by Investment route open to Non EU nationals and their dependents who would be granted a Maltese residence permit allowing its beneficiaries a permit which will allow free travel within the Schengen Area, thus free travel within the 26 members of the Schengen Area.
Such residence permit will also grant its beneficiaries the right to reside, settle and stay indefinitely in Malta.
The Malta Individual Investor Programme
Apart from a number of residency programmes we at Döhle Malta can assist our clients to obtain a Maltese passport through The Malta Individual Investor Programme.
Quite a few countries, including a number of EU countries have and promote various forms of investment programmes with the aim to attract foreigners to invest in their country. In return these investors and their families would be naturalised as citizens in that country.
Malta, which is one of few countries within the European Union that withstood the recent financial turmoil that shook European banks and economies to their very core, has continued to solidify its growing reputation as a progressive financial services jurisdiction and has developed and launched its own highly attractive Citizenship by Investment Programme.
The Malta Individual Investor Programme was launched by the government of Malta in 2013 and is the only programme of its kind that is approved by the European Commission. During the past few months significant interest has been registered and a considerable number of applications have been received from individuals keen to participate in this programme which was designed by the government of Malta so as to target and attract persons of repute and of quality to Malta.
The programme is managed by Identity Malta, a government agency which is committed to ensuring that all applicants are persons of repute and quality through the application of a thorough and comprehensive due diligence process. The law provides for a processing time for an application of between 6 and a maximum of 24 months to complete. The Programme is capped to 1,800 successful applicants.
The Malta Individual Investor Programme requires an individual to make a minimum investment of circa. €1.15million which breaks down as follows:-
- a non-refundable monetary contribution of €650,000. An additional contribution may be due in respect of dependents included on the application, such additional contribution would be of €25,000 for each of his spouse and per child under the age of 18. In the case of children between the age of 18 and 25 or dependent parents over the age of 55 years an additional contribution of €50,000 per dependent is required
- Acquire residential immovable property worth not less than €350,000 or rent residential immovable property for not less than €16,000 annually. The immovable property must be kept for a minimum of five years
- Invest €150,000 in government bonds or shares
- Be a resident of Malta for one year before acquiring citizenship
The Programme is considered to be very attractive as it provides investors with the opportunity to participate in a European country which is fast becoming the jurisdiction of choice for multinational companies and entrepreneurs looking for a hub from which to do business both within the EU and beyond. As Maltese citizens such individuals would enjoy the right to freedom of establishment in all 28 European Union countries and Switzerland as well as Visa free travel to more than 160 countries worldwide including the USA.