Ordinary Residence in Malta

Ordinary residence is available for 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. The qualifying criteria vary according to whether the individual seeking to obtain ordinary residence in Malta is an EU/EEA national or a third country national.

Ordinary Residence for EU/EEA nationals

There are a number of different grounds on which EU/EEA nationals may become ordinary residents in Malta including:

1.       Economic self-sufficiency– Individuals applying on this basis need to show that they are able to provide for themselves and their accompanying dependants by being financially stable and not being in need of any financial support from the Maltese government;

2.       Employment– The individual must accept offers of employment or seek employment in Malta, work in Malta as an employee or be self employed. Alternatively, an individual may opt to set up a business in Malta and work for his/her business;

3.       Education– Residency is granted for the entire period of education to the student;

4.       Family members– Relatives and partners of an EU/EEA national must prove that they are dependent on the applicant for them to be granted the right to accompany the applicant.

Ordinary Residence for third country nationals

The grounds on which third country nationals can apply for Ordinary Residence include:

1.       Employment– An employment licence, which is required in order for non-EU/EEA nationals to work in Malta, is only granted upon satisfying certain criteria;

2.       Self-employment– For a third country national to apply for self employed status or work for one’s business he must meet at least one of a series of investment criteria;

3.       Partners– Foreign partners of EU citizens are given the opportunity to apply for residency in Malta, if it is demonstrated that there is a regular and stable income and that the relationship has subsisted for at least two years;

4.       Family members– A third country national who resides legally in Malta has the right to apply for the reunification of his family members if he/she has reasonable prospects of permanent residence in Malta, has satisfactory accommodation for the family, has stable and regular means of resources and has resided in Malta for at least two years.

Malta Retirement Residency Programme

By taking up this programme, beneficiaries will be able to benefit from a tax rate of 15% on any income arising outside Malta but received in Malta (subject to a minimum tax of €7,500 + €2,500 per dependant and carer), with the possibility to claim relief of double taxation. This programme requires the purchase or lease of property in Malta for certain minimum values. 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 favourable tax benefits. Beneficiaries must spend more than 90 days per calendar year in Malta, averaged over 5 years.

Malta Global Residency Programme

Holders of a permit under the Global Residence Programme (GRP) will pay tax at a flat rate of 15% on foreign source income received in Malta.  This is subject to a minimum annual tax liability of €15,000 after allowing for any double taxation relief. No additional tax will be paid by the beneficiary’s dependants. Any income arising in Malta would, in turn, be taxable at 35%.

To qualify as a GRP permit holder, the applicant must purchase or rent immovable property in Malta or in Gozo. In case the property is purchased, its purchase value must be not less than €220,000 if situated in the South of Malta or in Gozo, or not less than €275,000 if situated in any other location in Malta. Should the applicant choose to rent the property, the annual rental thresholds are set at a minimum of €8,750 for a property situated in the South of Malta or in Gozo and €9,600 for a property situated in any other location in Malta.

Although there is no requirement for a beneficiary to spend a minimum number of days in Malta, it is to be noted that beneficiaries under this programme may not spend more than 183 days in a calendar year in any other jurisdiction.

The High Net Worth Residency Programme

This Programme grants special tax status to high net worth individuals who either come from EU/EEA countries or are of Swiss nationality. It gives its holders the right to pay tax at a beneficial rate of 15% on foreign income, received in Malta, with the possibility to claim double taxation relief, subject to a minimum payment of €20,000 + €2,500 per dependant. One must also purchase and rent property for certain minimum values.

Highly Qualified Professionals

By means of the Highly Qualified Persons rules, qualified and experienced individuals occupying high managerial or executive posts in the gaming, financial services or aviation industries who are in receipt of employment income from an eligible office will be subject to a flat rate of tax of 15% on their employment income.

About Malta

Malta and its two other sister islands, Gozo and Comino, make up the Maltese archipelago, which is situated in the centre of the Mediterranean, covering just over 316km. The current population is that of 421,230. The capital city of Malta is Valletta which is situated in the centre of the island.

The climate is typically Mediterranean, with a daily average of 12 hours of sun during the summer season decreasing to 5 or 6 hours in the winter season.

The islands are a globally renowned touristic attraction as they boast three UNESCO World Heritage sites. One is Valletta, the capital city itself, built by the Order of St. John of Jerusalem under Jean de Valette after the Great Siege of 1565; it houses hundreds of monuments, rendering it one of the most concentrated historic cities in the world. The other two are the seven megalithic temples and the Ħal Saflieni Hypogeum. Both were built between 3600-2500 B.C. and are considered to be essential global prehistoric monuments. The island also boasts a large number of beaches garnering its status as a holiday resort especially in the summer season.

Maltese is the national language, which is Semitic by origin and has a Latin Script. However, English is also an official language, due to Malta’s long historical links with Britain, and Italian is widely spoken by the majority of its inhabitants. The country possesses a civil legal system although it is heavily influenced by the common law system.

The vast majority of the country’s inhabitants profess the Roman Catholic faith although all other religious denominations have places of worship in Malta and there is general acceptance and tolerance towards them.

Many civilisations have left their trace on the island. Settlers have inhabited the country since the Neolithic Period while other foreign occupiers include the Phoenicians, Carthaginians, Romans, Byzantines, Normans, the Sovereign Military Order of St. John, the French and the British. The expulsion of the British culminated in the country’s Independence followed by the formation of a Republic and subsequently, in more recent history, followed by the country’s accession into the European Union in 2004.

Malta is classified as an advanced economy along with 32 other countries according to the International Monetary Fund. Malta’s prime location in the centre of the Mediterranean has historically made it a convenient hub for maritime activity, especially after the opening of the Suez Canal. This industry is continuously expanding, and Malta nowadays is the largest ship register in Europe. Tourism also forms a large part of the country’s Gross Domestic Product (GDP).

The Maltese currency is the Euro after the country’s entry into the Euro zone in 2008.

With its pleasant climate, safe environment and hospitable English-speaking population, Malta is an ideal place to take up residence. In addition, it offers 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.

Other Useful Information

Double Taxation relief

Malta residents are afforded protection by a number of mechanisms for relief from double taxation, which ensure that tax is never paid twice on the same income in different countries.

Inheritance Tax

No death tax is payable in Malta. Duty on documents and transfers is payable by the heirs of the deceased, but only on real estate and shares in certain companies.

Taxation

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.

Income tax

Individuals who are ordinarily resident but not domiciled in Malta are subject to income tax on income arising in Malta, on income arising outside Malta but received in Malta and on capital gains arising in Malta.  Foreign sourced capital gains are not taxed in Malta even if received in Malta.

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