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PERMANENT RESIDENCE PERMITS [rules reflecting position after 1st May 2004 in the light of the Residents Scheme Regulations, 2004]
There are a number of the reasons why an increasing number of foreigners are purchasing a home and taking up permanent residence in the Maltese Islands:
A flat rate of 15% is chargeable on all income (less personal allowances) received in, or remitted to, Malta from either local or foreign sources. This is subject to a minimum payment of Lm1,800 per annum. Overseas capital funds invested locally are of course only taxed on any interest or dividends generated thereon, again at a 15% flat rate. Permanent residents also benefit from double taxation agreements existing between Malta, most European countries, Canada, Australia and the USA, ensuring that tax is never paid twice upon the same income. -
See
Taxation of Permanent Residents 2. Exemption from Customs Duty/VAT Your used household and personal effects, furniture and other domestic articles (excluding firearms and weapons of all kinds) may be imported free of import duty if imported within six months of your arrival in Malta to take up residence. In such cases import licences are not required.
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importation of motor vehicles. 3. Complete Freedom of Movement There are no annual minimum stay requirements. A permanent residence may travel to and from Malta freely without the need of applying for a visa or extensions of stay. Permanent Residents are allowed to register their imported vehicle at preferential rates. Click here for more info.
Proceeds from the sale of property, encashment of investments, local income and excess income brought into Malta may be freely repatriated by permanent residents, provided that any tax due has been settled. Owners of properties with swimming pools or properties enjoying the use of swimming pools are allowed to rent them out, provided that such properties are licensed as holiday accommodation by the Hotels and Catering Establishments Board. All income thereon, is of course, subject to the 15% tax rate mentioned in (1) above and may be repatriated as in (5) above.
1. If a property is purchased in one name, the heirs of the deceased have to pay 7% provisional tax on the value of the property declared. This value will in turn be verified by an appointed architect. 2. If a property is bought jointly and one of the parties passes away, provisional tax of 7% is only paid on half the estate, i.e. half the value as stated in (1). Though no death duties are payable in Malta, Transfer duty (according to the Duty of Documents and Transfers Act, 1993) is charged on:
Any foreigner, of whatever nationality, may submit an application for a permanent residence permit provided the capital or annual income conditions are satisfied. This permit is issued on an indefinite basis. Capital or Income Qualifications Applicants must produce evidence of EITHER: 1. an annual income of €24,000 (US$30,000) or over, OR 2. a capital equivalent to €360,000 (US$450,000) or over, in the form of bank account holdings, real estate, investments and other assets situated in any country outside Malta. In either case, the whole amount is not required to be brought into the country, and the value of the property purchased locally is also taken into account as part of the capital requirement, if you proceed to acquire real estate prior to the issue of a permit in your favour. A. Acquisition or Rental of Property Within a year from the issue of their residence permit, permanent residents must purchase their own residence in Malta at a value that is not less than €120,000 (US$150,000) in the case of a house or €72,000 (US$90,000) in the case of an apartment. Alternatively, the applicant may opt to lease or rent a property of which the minimum rental is €4,400 (US$5,400) per annum. While you may invest capital in Malta, investments in real estate outside Special Designated Areas are limited to one owner-occupied house or apartment. B. Annual Income Remitted to Malta The minimum annual income to be brought into the country is Lm6,000 per applicant, with an additional Lm 1,000 for each dependent (spouse, children under 21 years of age and parents/grandparents wholly dependent on applicant). In other words, a married couple would, for example, have to bring in at least Lm7,000 per annum. There is no restriction as to how one must use money remitted under this rule as long as it is not retransferred out to a foreign bank account. C. Employment/Engagement in Business No employment or engagement in business may be undertaken by applicants for permanent residency unless authorised by the competent authorities. Interestingly, however, official Government policy welcomes the introduction of overseas expertise and ideas in the tourism, manufacturing and catering sectors and a number of interesting options are outlined elsewhere. Permanent residents are not allowed to participate in political activities; however, should you be interested in local council activities you may contact the Local Councils Department for more information. Should you have any further enquiries on permanent residence permit applications and on the costs and charges involved, please contact us. [Rules reflecting position after 1st May 2004 in the light of the Residents Scheme Regulations, 2004] |
A pleasant climate and
a hospitable English-speaking people.