Malta Citizenship & Residency Handbook - Acumum Legal & Advisory

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- Malta A Schengen Participant
Visa Free Travel within the EU

Ordinary Residence
Permanent Residence
Flexible Residency Rules - EU & Non - EU
Schengen Member
Malta - A Legitimate Low Tax EU Jurisdiction
Why Malta?
Situated in the Mediterranean and a full member of
the European Union, Malta benefits from a warm
climate, a stable economy and government,
advantageous tax regime, as well as a high standard and
competitive cost of living.
The transfer of residence is available to both EU/EEA and
non-EU/EEA nationals.
Foreign income not brought into
Malta
No Taxes on:

Wealth

Schengen Area (EU) | Schengen Area (Non—EU) | Will
implement later | EU State outside of Schengen
The Schengen area allows for free movement of persons
within its borders and includes the territory of the following 26 European Union countries and associated countries:
Austria, Belgium, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Iceland, Italy,
Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherland, Norway, Poland, Portugal, Slovakia, Slovenia, Spain,
Sweden, Switzerland.

Inheritance
Capital Gains

EU & EEA Nationals
Any EU/EEA (or third country national) who resides in
Malta for more than three months requires a permit from
the immigration authorities, which for EU or EEA nationals
is granted on specific grounds:
Ordinary Residence


Must physically live in Malta for a period of six
months or more



no minimum value property requirement (unless
there is the need for an Acquisition of Immovable
Property (AIP) permit, which applies in specific circumstances)

Economic Self-Sufficiency
Able to provide for themselves and dependants by being
financially stable and not being in need of any financial
support from the Maltese government. The current thresholds for EU/EEA nationals are:
Single Person

Married

Minimum
Capital OR

€14,000

€23,300

Weekly income

€92.32

€108.63
plus €8.15 per dependent

Bulgaria, Cyprus, Ireland, Romania and the United Kingdom do not participate in the Schengen cooperation.
Employment
EU/EEA nationals must either be in employment or self
employment.
Employment
An employment licence is required in order for non-EU/EEA
nationals to work in Malta; subject to the satisfaction of
certain criteria. Candidates qualified in certain sectors,
where there is a shortage of skills such as financial services,
IT and aviation are sought after, and therefore it may be
easier for such individuals to obtain an employment licence.

Self-Employment — Non EU Nationals
Shareholders &
Ultimate Beneficial Owners of a Malta Resident Company
For Malta residency under this ground, one of the following
criteria must be fulfilled:


Fully paid up share capital of €100,000 (minimum) - cannot be withdrawn, reduced or transferred to a
third party during the first two years following the


Malta Residency Handbook
issue of the Employment Licence

 Capital expenditure of €100,000 (minimum) to be used
by the company, i.e fixed assets - immovable property,
plant and machinery. Rental contracts do not qualify

 Company is leading a project, formally approved by
Malta Enterprise and the Employment and Training
Corporation. Applications containing a firm commitment to engage EEA/Swiss/Maltese nationals will assist in the favourable consideration of an application

 Status of a highly skilled innovator, with a sound business plan, committed to recruiting at least three EU/
EEA nationals within eighteen months of establishment
of business

Education
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 a minor, his or her
legal guardian can apply for Malta residence to accompany
him or her. The accompanying individual must confirm that
he or she is in receipt of stable and regular income and has
a suitable place to live.
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. No tax is
chargeable on capital gains which arise overseas but which
are remitted to Malta. Personal income tax is charged at
progressive rates up to a maximum of 35 per cent, as illustrated by the following tables:

Or:

Deduct €

Chargeable
Income €
0 - 11,900

If a director is not a shareholder, the above criteria does
not need to be met, however labour market considerations
will apply - Malta’s situation in respect of surpluses or
shortages in the given occupation and sector, the third
country national's skill level, relevant experience and overall suitability for the position in question.
Long-Term Residence
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.
Residency Granted by Other EU State
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.

0.25

3,905

0.32

5,914

0.35

7,714

0

0

0.15

1,275

14,501 19,500

0.25

2,725

19,501 60,000

0.32

4,090

60,001 and
over

0.35

5,890

0 - 9,300

0

0

9,301 - 15,800

Excellence| Superb Client Service | Cost Efficient

21,201 28,700

8,501 - 14,500

0.15

1,395

15,801 21,200

0.25

2,975

21,201 60,000

0.32

4,459

60,001 and
over

Parent
Rates

1,785

0 - 8,500

Single
Rates

0.15

60,001 and
over

Married
Rates

0

28,701 60,000

(sound reputation and established for at least three
years abroad) wishing to open a branch in Malta.

0

11,901 21,200

 Status of sole representative of an overseas company

Rate

0.35

6,259

Dubai, Luxembourg & Portugal Representative Offices

info@acumum.com | www.acumum.com | Skype ID: acumum
Malta Office: +356 2778 1700
260 Triq San Albert, Gzira, GZR 1150, Malta (EU)
Information for guidance purposes only

© Acumum 2014

All Rights Reserved


High Net Worth Individuals Scheme (HNWI)
Special Tax Status for EU/EEA/Swiss Nationals
Flat Rate 15% Income Tax
(Non - EU Nationals: Please Refer to the Global Residency Programme)
EU/EEA/Swiss nationals who are High Net Worth Individuals (HNWIs) who wish to reside in Malta may benefit from a
special and favourable Malta tax status and incentives:

Eligibility - Malta HNWI Rules
A HNWI seeking to benefit from the favourable Malta tax
treatment described above would be eligible to apply to
the Malta tax authorities for confirmation of his/her special
status as such provided that the following key conditions
are satisfied (on an initial and ongoing basis):
 Acquires immovable residential property in Malta
worth at least €400,000, or leases such property for a
total annual rent of at least €20,000. The property
need not be acquired or leased at application stage

 income arising outside Malta which is received in
Malta is taxed in Malta at the flat rate of 15%
 0% Malta tax chargeable on income arising outside
Malta which is not received in Malta
 0% Malta tax chargeable on capital gains realised outside of Malta even if these are received in Malta
 income and capital gains realised in Malta is taxable in
Malta at the higher rate of 35%
Double Taxation Relief
A HNWI is also be entitled to relief of double taxation
otherwise suffered on income arising outside of Malta
which is received in Malta. Such relief would be available in
the form of unilateral relief (in terms of the Malta Income
Tax Act) or, alternatively, under a treaty in force between
Malta and the country of source of the relevant income.

 The applicant and his/her family must occupy the
residential property in Malta as their principal place of
residence and no person other than the applicant and
his/her family may reside in the property
 Be in receipt of stable and regular resources, sufficient
to maintain him/herself and his/her dependants without recourse to the local social assistance system
 Be in possession of private health insurance which covers him/herself and his/her dependants in respect of
all risks across the EU
 Must not be domiciled in Malta or be a long-term resident
 The applicant must be a fit and proper person

Minimum Tax Payable
However, after taking any double tax relief claimed into
account, an EU/EEA/Swiss national HNWI would be
required to make an annual minimum Malta income tax
payment of at least €20,000 plus an additional €2,500 per
dependant.

Additional Tax Considerations
Malta does not levy any wealth taxes or estate or such
other duties. However, duty is chargeable in Malta upon
any inter vivos or causa mortis transfer of immovable
property or marketable securities when located or arising
in Malta.



Malta Office: +356 2778 1700

© Acumum 2014

All Rights Reserved


Retirement Programme
EU/EEA/Swiss Nationals
15% Flat Rate Income Tax

Mediterranean Climate
Low Crime Rate

For retirees from EU, EEA countries and Switzerland when

High Standard of Living

bringing their pension into Malta, the Maltese Government

Strategic EU Location

has retained its very attractive retirement programme.
Subject to acceptance on the Malta Retirement Programme Rules 2012, a fixed tax rate of only 15% is payable
on any pension remitted to Malta with the minimum tax
payable of €7,500 for the beneficiary of the programme
and €500 for each of his/ her dependants (if any).

 The pension, which is received in Malta, must constitute at least 75% of the beneficiary's chargeable
income. Therefore, the beneficiary may only generate
up to 25% of his/her total chargeable income from any
non-executive posts

The main features of the Malta Retirement Programme
Rules 2012 are:

 Must have health insurance in respect of all risks across
the all the EU (also covering her/ her dependants, if
any)

 The beneficiary must be an EU/ EEA/ Swiss national
who is not in employment;

 Must not be domiciled in Malta and should not have
any intention of so establishing his/her domicile in

 The beneficiary may

Malta within a period of 5 years

- hold a non-executive post on the board of a company
resident in Malta, or
- take part in activities relating to an institution, trust or

 The beneficiary must reside in Malta for a minimum of

foundation of a public character, which is engaged in

90 days in each calendar year (the mentioned 90 days

philanthropic, educational, or research and develop-

are averaged over any 5-year period)

ment work in Malta or Gozo

 The beneficiary must not reside in any other jurisdic-

 The beneficiary must purchase or rent property in

tion for more than 183 days in any calendar year during which the retirement programme is availed of.

Malta or Gozo. The rules establish minimum values of
€275,000 (Malta), or €250,000 (Gozo) for purchased
properties whilst for rented properties these minimum

Acumum can take the hassle and strain and assist you in

values are set at €9,600 per annum (Malta), or €8,750

retiring to Malta, please contact us for more information.

(Gozo)


Malta Office: +356 2778 1700

© Acumum 2014

All Rights Reserved


- Malta A Schengen Participant
Visa Free Travel within the EU

Global Residency Programme
Non - EU Nationals
15% Flat Tax Rate
The Global Residence Program Rules (GRP) for non EU
nationals, were recently brought into law on 30th June
2013 and substantially reduce the financial standards required by the previous residency programme.

Schengen Area (EU) | Schengen Area (Non—EU) | Will
implement later | EU State outside of Schengen

The Benefits
Foreign income not brought into
Malta
No Taxes on:

The Schengen area allows for free movement of persons
within its borders and includes the territory of the following 26 European Union countries and associated countries:

Wealth

Austria, Belgium, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Iceland, Italy,
Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherland, Norway, Poland, Portugal, Slovakia, Slovenia,
Spain, Sweden, Switzerland.

Inheritance
Capital Gains
Persons who qualify for the GRP benefit from:
 For foreign income brought into Malta, a flat tax rate of

Bulgaria, Cyprus, Ireland, Romania and the United Kingdom do not participate in the Schengen cooperation.

15%, subject to a minimum tax liability of €15,000, payto the Malta Government being assured that they are in

able each year

fact dependents
 The minimum tax covers income of that individual as
well as that person’s spouse and dependents. Depend-

 Employees are also permitted to come to Malta under

ents are children up to age 25, dependent brothers,,

the GRP, subject to them having been employed for 2

sisters and direct relatives in an ascending line, subject

years.

Property Requirements

North of Malta

Gozo & South of Malta

Purchase of Immovable Property

€275,000

€220,000

Rental of Property

€9,600

€8,750

Minimum Tax Payable

€15,000

€15,000

Non-Refundable Application Fee

€6,000

€5,500

Minimums



Malta Office: +356 2778 1700

© Acumum 2014

All Rights Reserved

Kirkop - Vittoriosa


Income not brought into Malta is 0% taxed



Any other income brought into (remitted to) Malta is
subject to tax at 35%, including any bank interest in
Malta and income from employment in Malta



Luqa - Xgħajra - Marsascala - Żabbar
Marsaxlokk - Żejtun
Mqabba - Żurrieq, Paola

No provisional tax payable during first year; thereafter
provisional tax payments to be paid three times a year

Inheritance of GRP
The special tax status under GRP may now be inherited;
subject to the beneficiary continuously satisfying the GRP
conditions.
Application Standards

Maltese Citizenship
NB: The law relating to Malta’s Citizenship by Investment
Scheme is still under review
To apply for Maltese citizenship, the applicant must be
over 18 years of age and have:
• resided in Malta throughout the twelve months imme-

To apply to the Global Residence Program Rules, the applicant must:

diately preceding the date of application; and
• you have resided in Malta for periods amounting in the

1. Not be or become a Maltese/ EEA/ Swiss national

aggregate to a minimum of four years, during the six

2. Not benefit from any other special tax status

years preceding the above period of twelve months;
and

3. Hold a qualifying residential property
4. Be in receipt of stable and regular resources which are
sufficient to maintain himself and his dependants with-

• you are of good character; and
 you have an adequate knowledge of the Maltese or the
English language; and

out recourse to the social assistance system in Malta
5. Have a valid travel document

 you would be a suitable citizen of Malta.

6. Maintain an all risk health insurance to cover the EU

At the time of application a letter must be submitted

7. Be fluent in either Maltese or English

explaining why the applicant wishes to become a citizen

8. be a fit and proper person

of Malta. This letter should contain information about the
9. The individual must not stay in any other jurisdiction
for more than 183 days in a calendar year
10. Special reporting obligations (the filing of an annual tax
return) and notifications must be complied with.

applicant, including period/s of stay in Malta, details about
employment in Malta if applicable, participation in social
activities and any other information which might be considered appropriate. Subsequently a two supporting let-

Localities specified as South of Malta:
Birżebbuġia - Qrendi, Cospicua - Safi
Fgura - Santa Luċija, Għaxaq - Senglea

ters of sponsorship must be filled with the application.
Please contact us to find out how you can benefit by residing and having Malta, a low tax EU jurisdiction at your
tax base.

Gudja - Siġġiewi, Kalkara - Tarxien


Malta Office: +356 2778 1700

© Acumum 2014

All Rights Reserved


Acumum - Legal & Advisory
‘Uniquely local - Uniquely International’
Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers & tax accountants - with extensive on-location & off-shore international experience providing appropriate, bespoke solutions.
Taxation

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Divisions
Compliance

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Outsourcing

Dubai, Luxembourg & Portugal
Representative Offices

Malta Office: +356 2778 1700

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Malta Citizenship & Residency Handbook - Acumum Legal & Advisory

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