1. INVESTING IN
MEDITERRANEAN
REAL ESTATE
MALTA

2. Distance from Moscow - 2808 km
Where is Malta?

3. Where is Malta?
Malta is situated in the centre of the
Mediterranean
 80 km (50 mi) south of Sicily (Italy)
 284 km (176 mi) east of Tunisia (North Africa)
 333 km (207 mi) north of Libya (North Africa)
 1510 km (937 mi) west of Greece

4. Political milestones
Independent from the UK since 1964
Republic since 1974
Member of the European Union since 2004

5. Facts and figures
Area - 316 km2 (122 sq mi), making it one of the world's
smallest states
Coastline: 140km long
Malta is 27km (16 mi) long and measures 14km (8 mi) at
its widest point
Population: 452,515 (2011)
Capital city – Valletta (European capital of culture in 2018)
Time zone – CET
Official languages are Maltese and English – other
languages such as Italian, French and German are widely
spoken

6. Facts and figures
 Very Reasonable Cost of Living
 Modern communications infrastructure
 Excellent connectivity with daily flights to major European airports
 Politically stable – elections are held once every 5 years
 Highest concentration of UNESCO World Heritage Sites per m2
 Safe
 Easy and relaxed lifestyle
 National healthcare system voted as 5th best worldwide in 2012 by WHO
 Voted 3rd Overall for Quality of Life by International Living 2011
AND
 The Maltese are constantly voted as one of the Happiest People In
Europe!!!

7. Climate
Warm Mediterranean climate with mild
winters and hot summers with a cool sea
breeze
Daily temperatures range from 15° C (59F) in
winter to 32 ° C (90F) in summer
Approximately 330 days of sunshine every
year

8. Maltese Landmarks

9. Economy
 Currency – Euro since 2008
 GDP in 2012 – 8.6 billion Euros
 Economic growth in 2012 – 1.2 % - EU forecasts that
Malta will register the second highest growth among
the 17 members of the Eurozone
 Unemployment in April 2013 – 5.5%
 Rating: “A+” (Fitch - April, 2013)
 Lowest effective tax rate in the European Union

10. Economy
Main contributors to GDP:
 Tourism (35%) - over 1.3 million visitors annually
 Industry (27%)
 Financial services (15%) - over 7,000 employed.
In the next few years, this is expected to increase
to 25% of GDP

11. Economy
Malta’s financial stability.
The European Commission has stated that:
 The large financial sector poses limited risks as the majority of
financial institutions present on the island were internationally
oriented and did not do any business in Malta
 Malta’s financial system is generally safe and sound
 Domestic banks are rather conservative and rely mainly on resident
deposits for their funding ; they have low loan to deposit ratios
 This, and the stable deposit base thanks to Maltese households’
high propensity to save, helped core domestic banks cope with the
financial crisis and the volatility on international wholesale markets
 The Government has not experienced any problems with debt
financing thanks to high domestic demand for issued securities

12. Economy
 LONDON (Standard & Poor's) April 24, 2013:
Standard & Poor's Ratings Services believes that “the
combination of factors behind Cyprus' difficulties is
not currently replicated in other small, financially-
focused eurozone economies”.
Taken from Report titled "Small Countries, Big Banking Systems: How
Malta And Luxembourg Differ From Cyprus," published on April 23,
2013 on RatingsDirect.

13. The Maltese Property Market
Due to the limited space available for construction,
purchase of real estate in Malta has always been
considered to be one of the best investments
Since 2000,
the property price
indexincreasedby
70.1%
Period Total
2000 100.0
2001 105.1
2002 114.2
2003 129.3
2004 155.6
2005 170.9
2006 177.0
2007 178.9
2008 174.1
2009 165.3
2010 167.1
2011 169.3
2012 170.1

14. Why do properties retain their value in Malta?
 High demand for property by local and foreign
buyers
 Very good rental market meeting the needs of an
ever growing expat community working and living
in Malta
 Maltese buyers constitute the bulk of the market
 Very cautious and stable banking system
The Maltese Property Market

15. The Maltese Property Market
The Rental Market
 90% of the properties rented in Malta are rented by non-
Maltese
 Annual gross rental return has averaged 5% during recent
years
 There has been a recent boom in the commercial market
which in turn has further stimulated the residential market
 Foreigners rent due to work, residence/tax purposes, or as a
holiday home
 The rental market has adapted itself to the needs of foreign
tenants

16. Apartments

17. Houses of Character

18. Palazzos

19. Villas

20. Why do foreigners buy property in Malta?
Residence – for tax and other purposes
Holiday homes
Retirement
Investment appreciation
To develop residential or commercial real
estate for a return

21. Property purchase by foreigners
 No permit required for EU citizens wishing to reside
permanently in Malta; if, however, the property will
be used as a holiday home, a permit is required
 Non-EU citizens must acquire a permit prior to
purchase, irrespective of whether it is a residence or
holiday home
 Application fee for permit is EUR235
 Only one property can be purchased, unless situated
in a Designated Area
 More properties can be purchased by EU citizens
after 5 years of living permanently in Malta
 EU citizens doing business in Malta can purchase any
number of properties related to their business

22. Procedure
 Once a property is chosen and conditions are agreed
to, a Promise of Sale Agreement is entered into
 This agreement safeguards and binds both parties
during the period in which the vendor’s good title to
the property can be ascertained. It also allows time
for other verifications to be made, including financial
considerations for the Buyers
 The purchaser normally pays the vendor a deposit
equivalent to 10% of the final price, as well as duty
equivalent to 1% of the purchase price

23. Procedure
 The Promise of Sale Agreement is normally valid for
three months during which either party can
withdraw from the sale, should one or more of the
conditions listed therein does not verify itself
 If the purchaser terminates the agreement for no
good reason at law, or refuses to buy the property,
the 10% deposit which he would have paid would be
forfeited
 If the vendor terminates the agreement for no good
reason at law, or refuses to sell the property, he
would have to return the deposit plus an amount
equivalent to the 10% deposit

24. Procedure
 Once all the title searches have been
completed, necessary permits obtained, and
full financing for the purchase arranged, the
final contract of sale would be drawn up by a
Notary Public, who will then publish the
contract and register it in the Public Registry
 At this stage the remaining duty of 4% of
purchase price is payable

25. The future of the Maltese property market
Indications of the real estate market in Malta show :
Growth in the commercial sector driven by:
EU nationals relocating and opening businesses in Malta
Increase in Malta based financial services providers and i-gaming
companies.
Growth in the residential sector driven by:
Increased interest in up-market properties by locals and foreigners
Increased interest by non-EU citizens wishing to benefit from
various residence schemes available
 Continued investment in real estate by the Maltese
Increase in buy-to-let properties due to a surge in the rental
market

26. Residing in Malta

27. Residing in Malta
■ It is possible to reside in Malta as:
■ an Ordinary resident
■ a holder of a permit under the
Global Residence Programme
■ a Highly Qualified Person
■ a Retiree

28. Ordinary Residence
■ No minimum amount of time to be spent in Malta:
however, to be considered to be tax resident in Malta,
one must spend in excess of six months per calendar year
in Malta
■ No minimum value property requirement: unless an AIP
Permit is required
■ 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

29. Ordinary Residence
■ Citizens of the EU/EEA may apply for Maltese residence on
various grounds, including:
 economic self-sufficiency - minimum capital of € 14,000 or
a weekly income of € 92.32 for single persons, and at a
capital of at least € 23,300 or a weekly income of € 108.63
for married couples; in case of dependants, €8.15 weekly is
to be added to these amounts for every dependent
 employment
 self-employment

30. ■ Personal income tax is charged at progressive rates up to a
maximum of 35 per cent, as illustrated by the following tables:
* Will be reduced to 29% in 2014 and to 25% in 2015
SINGLE MARRIED
Rate % Chargeable income Chargeable income
0 0 – 8,500 0 – 11,900
15 8,501 – 14,500 11,901 – 21,200
25 14,501 – 19,500 21,201 – 28,700
32* 19,501 – 60,000 28,701 – 60,000
35 60,001 and over 60,001 and over
Ordinary Residence

31. Ordinary Residence
 In the case of ordinary residence, Malta tax at
the above-mentioned rates is charged on:
 Income and capital gains arising in Malta
 Foreign income remitted to Malta
 Capital gains arising outside Malta and
remitted to Malta are NOT taxed in Malta

32. Global Residence
Programme (GRP)

33. Global Residence Programme
 This programme replaces the High Net Worth
Individual scheme
 Officially launched on 1 June 2013
 Rules and regulations will be issued by 30 June 2013
 However the salient features have been announced

34. Global Residence Programme
Property requirement
 Own property in Malta costing not less than
€275,000 (or €220,000 if situated in the South of
Malta or in Gozo)
or
 Rent property in Malta at not less than €9,600 per
annum (or €8,750 if situated in the South of Malta
or in Gozo)

35. Financial resources and insurance requirements
 Applicant must be in receipt of stable and regular
financial resources sufficient to support
himself/herself as well as any accompanying
dependants
 Applicant and dependants must have adequate
health insurance covering the EU territory
 Applicant must satisfy a “fit and proper test”
Global Residence Programme

36. Taxation
 Flat rate of 15% on foreign source income remitted to Malta
with a minimum annual tax of €15,000
 Foreign capital gains can be received in Malta tax free
Application procedure
■ A one-time registration fee of €6,000 payable to the Malta
Government
■ Application must be filed by an Authorised Registered
Mandatary (EMD is so authorised)
■ A permit holder must submit a tax return annually which
should include any material changes that affect the
beneficiary’s tax status.
Global Residence Programme

37. Highly Qualified Persons

38. Highly Qualified Persons
 Applicants must hold an ‘eligible office’, that is, employment with a
company which is licensed and/or recognized by:
 the Malta Financial Services Authority (MFSA)
 the Lotteries and Gaming Authority (LGA)
 Transport Malta (TM) as an undertaking holding an air
operator’s certificate (AOC)
 Employment income from such ‘eligible office’ will be subject to a
flat rate of tax of 15 per cent if the income amounts to at least
€75,000 per annum. In the event that the income exceeds €5
million, the excess is exempt from tax
 Why? To attract expatriates who work within particular specialised
sectors to relocate to Malta, thereby continuing to increase Malta’s
attractiveness as a reputable services centre of excellence

39. Highly Qualified Persons
Beneficiaries of this incentive must:
 Derive employment income which is subject to tax in Malta in respect of
work carried out in Malta or in respect of any period spent outside Malta in
connection with such work
 Be professionally qualified and have at least five years experience.
 Not have benefitted from any other deductions available to expatriates
working in the field of investment services
 Have a contract of employment which is subject to Maltese law for the
purposes of carrying out genuine and effective work
 Fully declare all income derived from the contract of employment in the
Maltese personal income tax return, and
 Not be domiciled in Malta
 Non-EU/EEA/Swiss applicants cannot purchase immovable property in Malta

40. Highly Qualified Persons
Malta Financial Services
Authority
Lotteries and Gaming
Authority
Transport Malta
Chief Executive Officer, Chief Risk
Officer, Chief Financial Officer, Chief
Operations Officer and Chief
Technology Officer;
Chief Executive Officer, Chief Risk
Officer (including Fraud and
Investigations Officer), Chief
Financial Officer, Chief Operations
Officer, Chief Technology Officer and
Chief Commercial Officer;
Chief Executive Officer, Chief Risk
Officer, Chief Financial Officer, Chief
Operations Officer, (Including
Aviation Accountable Manager) and
Chief Technology Officer;
Portfolio Manager, Chief Investment
Officer, Senior Trader, Senior Analyst
(including Structuring Professional),
Actuarial Professional, Chief
Underwriting Officer, Chief Insurance
Technical Officer;
Odds Compiler Specialist, Head of
Research and Development
(including SEO and Systems
Architecture);
Aviation Continuing Airworthiness
Inspector, Aviation Flight Operations
Inspector, and Aviation Training
Manager;
Head of Marketing and Head of
Investor Relations
Head of Marketing (including Head
of Distribution Channels) and Head
of Investor Relations
Head of Marketing

41. Highly Qualified Persons
■ The reduced tax rate applies for a period of 5
consecutive years for EU, EEA and Swiss nationals, and
for a consecutive period of 4 years for other nationals
■ Any rights will be withdrawn with retrospective effect if
the beneficiary is a non-EU/EEA/Swiss national who
either physically stays in Malta, in the aggregate, for
more than 4 years, or directly or indirectly acquires any
immovable property, including any rights thereon,
situated in Malta

42. Malta Retirement
Programme

43. Malta Retirement Programme
■ The Malta Retirement Programme Rules 2012 introduce
a new tax status for pensioners who are EU/EEA/Swiss
Nationals
■ Beneficiaries have the right to pay tax at a flat rate of
15% on foreign source income received in Malta by them
or their dependants, subject to a minimum tax payment
of €7,500, with an additional €500 per dependant and
special carer, if any
■ The Scheme also confers the right to claim double
taxation relief
■ Any income arising in Malta would be taxed at 35%

44. Qualifying Criteria – Purchase or rent property
 Applicants must purchase or rent immovable property in
Malta and such property must be solely occupied by the
applicant, his/her family members and any special carers
accompanying them
 Such property must serve as the applicant’s habitual place of
abode worldwide
 If property is purchased its value must be of not less than
€275,000 (€250,000 if in Gozo)
 If property is rented, the minimum payable must be not less
than €9,600 per annum (€8,750 if in Gozo)
Malta Retirement Programme

45. Qualifying Criteria – Receipt of pension and insurance
 The applicant must receive the full amount of the pension in
Malta and this pension must constitute at least 75 per cent
of the beneficiary’s chargeable income in Malta.
 Applicants and accompanying dependants must also be
covered by a health insurance policy, providing coverage for
all risks across the EU.
Malta Retirement Programme

46. Other Qualifying Criteria
 Applicants must be domiciled overseas, and should not have
the intention to establish their domicile in Malta within 5
years from the date of submission of their application.
 Applicants must not be in employment, or benefit under any
other Malta scheme conferring a special tax status, and must
hold a valid travel document.
 However, they may be non-executive directors of companies
resident in Malta, or participate in activities related to any
institution, trust or foundation of a public character, or any
similar organization or body of persons, also having a public
nature, engaged in philanthropic, educational or research and
development work carried out in Malta.
Malta Retirement Programme

47. Malta Retirement Programme
Other Qualifying Criteria cont.
 Applicants must spend in excess of 90 days per
calendar year in Malta, averaged over a period of 5
years, and may not spend more than 183 days in any
other foreign jurisdiction.
 Applicants must satisfy a fit and proper test.

48. Malta Retirement Programme
Qualifying Criteria
■ The qualifying criteria must be complied with on a yearly
basis. Therefore, beneficiaries must retain their property
or lease as per the above requirements annually, renew
their pertinent health insurance policies on a yearly
basis, and comply with the minimum stay requirements
during each year of their holding such status.
■ An application fee of €2,500 is payable to the Maltese
authorities, and applications may only be filed through
the services of an Authorised Registered Mandatory
(ARM).

49. Inheritance and wealth tax
■No death tax 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 inheritance or purchase
of shares in Malta companies, unless exempt.
■ Duty on documents is 2% but if the majority of the
assets of the company are immovable property, this
would be 5%.
■ No wealth tax is levied in Malta

50. And this is
why I love
Malta. I want
to live in a
place that's
beautiful.
Ilene Springer –
Diary of An American in Malta
Author of “The Diary of an
American Expatriate” ISBN-13:
9781782341253

51. Thank you
For further information kindly contact:
EMD - Malta
info@emd.com.mt
+356 2203 0000

52. Disclaimer
This presentation has been prepared for general guidance for matter of
interest only and does not constitute professional advice. You should not act
upon the information contained in this presentation without obtaining
specific professional advice. No representation or warranty (express or
implied) is given as to the accuracy and completeness of the information
contained in this presentation, and the firm does not accept any liability and
disclaims all responsibility for the consequences of you or anyone else acting,
or refraining to act, in reliance on the information contained in this
presentation or for any decision based on it.