Apart from tax advantages offered at company level, Malta also offers a number of advantages at a personal level targeting high net worth individuals who would like to shift their residence to Malta. Altima Malta Limited can assist you with respect to personal tax issues, residency issues and also provide assistance in cases where treaty application is required to solve dual residency issues.
Various programmes exist which are summarised below:
Ordinary residence – Need to reside in Malta for at least six months in a year to be considered resident for tax purposes for that calendar year. There is no minimum value property requirement although one would be required to either buy or rent property in Malta. There are no tax benefits arising from this type of residency, apart from the fact that foreign capital gains (irrispective of whether they are remitted to Malta or not) as well as foreign income not remitted to Malta are not subject to tax. Otherwise, normal resident rates of tax apply.
This type of residency is available to both EU and non-EU citizens, however, different requirements apply:
EU Nationals may enter and reside freely in Malta, however, if the stay in Malta exceeds three months, they shall inform immigration authorities accordingly. EU nationals may decide to reside in Malta due to taking up employment in Malta or else carry on a business in Malta as a self-employed. Persons who are not in receipt of active income, may still take up residence on a self-sufficiency basis, in which case it is required to confirm that the individual has a minimum capital of EUR14,000 or weekly income of EUR92.32 if a single person, or capital of at least EUR23,300 or weekly income of EUR108.63 for married couples. An extra EUR8.15 is required for every dependant.
Non-EU Nationals cannot reside freely in Malta. They must either be in possession of an employment licence to work in Malta or else start a trading activity or incorporate a company and become employed with such company, only if a certain level of investment is undertaken. A non-EU national must invest in Malta at least EUR100,000 in the first six months in fixed assets (such as immovable property, plant and machinery) used for the business purposes as reflected in the business plan submitted with the application, as well as commit in recruiting at least 3 employees within 18 months. Non-EU nationals that are self-sufficient may be able to reside in Malta on a temporary basis only.
Global Residence Programme and Residence Programme Rules – These are two programmes that apply to non-EU and EU/EEA nationals respectively and provide for a 15% flat rate of tax on foreign remitted income with the possibility of double tax relief, subject to a minimum of EUR15,000 annual tax payable. Income arising in Malta will be taxed at 35%.
Applicants are required to own a Qualifying Property Holding, being property in Malta acquired for at least EUR275,000 (or EUR220,000 if purchased in the South of Malta or Gozo). This must serve as the applicant’s habitual residence, and that of any accompanying family members. Alternatively, an applicant may opt to rent property in Malta for not less than EUR9,600 (or EUR8,750 if purchased in the south of Malta or Gozo) per annum.
The applicant must also be in receipt of stable and regular resources, which are sufficient to support himself/herself, as well as any accompanying dependants. Applicants must therefore be economically self-sufficient and both the applicant and any dependants must hold adequate health insurance covering the EU territory.
Both programmes provide a special tax status to the beneficiary, but do not grant the beneficiary a right to enter, stay and reside in Malta, at any time throughout the duration of such status. One would be able to apply for the appropriate immigration documentation on the basis of this special tax status.
Applicants may not spend more than 183 days in any one other jurisdiction but is not required to spend 183 days in Malta to retain such special tax status.
A one-time registration fee of EUR6,000 payable to the tax authorities applies (EUR5,500 if property will be in the South of Malta or Gozo). An individual who benefits from this special tax status must submit an Annual Tax Return which should include any material changes that affect the beneficiary’s special tax status.
Altima Malta Limited can assist in the application process under both Rules, which may only be submitted through an Authorised Registered Mandatory. Altima Malta’s tax partner is registered as an ARM for this purpose.
Retirement Programme Rules – This programme applies to pensioners that are EU/EEA/Swiss nationals, with the exclusion of Maltese nationals. Beneficiaries have the right to pay tax at a flat rate of 15% on foreign source income received in Malta with the possibility to claim double taxation relief, subject to a minimum tax payment of EUR7,500.
The said Programme requires its applicants, namely pensioners, to purchase or rent immovable property in Malta which property must be solely occupied by the applicant and family members. The property in question must have a value of at least EUR275,000 (or EUR250,000 if situated in Gozo). Alternatively, one may rent a property for at least EUR9,600 per annum (or EUR8,750 for a Gozo property). Such property must serve as the applicant’s habitual place of abode worldwide.
In order to become eligible to apply for this Programme, the whole amount of the pension must be received in Malta, which pension must constitute at least 75% of the beneficiary’s income. Applicants and their accompanying dependants must also be covered by a health insurance policy, providing coverage for all risks across the EU normally covered for Maltese nationals.
An applicant will need to spend an average of 90 days per year in Malta over a five year period, and must not spend more than 183 days in a calendar year in another one jurisdiction.
An application fee of EUR2,500 is payable to the Maltese authorities, and applications may only be filed through the services of an Authorised Registered Mandatory (ARM). Altima Malta’s tax partner is registered as an ARM for this purpose.
Factsheets:
EU & Swiss High Net Worth Individuals Residence Programmes