Malta Residency by Investment

Dr. Jean-Philippe Chetcuti | 19 Oct 2015

Ccmalta Default

The Malta Residency by Investment Programme is a Malta residency route open to Non EU nationals and their registered dependents who would be granted a Maltese residence permit allowing its beneficiaries a permit which will allow free travel within the Schengen Area. Such residence permit will also grant its beneficiaries the right to reside, settle and stay indefinitely in Malta. The Republic of Malta enjoys a stable political climate and a bi-partisan political scene that is largely convergent on issues of national and economic importance. Malta has weathered the financial crises well and shared the limelight with Germany as the only two states maintaining economic growth in the Euro Zone. Malta's banks have been ranked amongst the top 5 soundest banks in the world.

Legal Basis for Malta Residency by Investment 

Malta Residency by Investment may be granted under an amendment passed in August 2015 to the Maltese Immigration Act, Chapter 217 of the Laws of Malta.  These amendments provided the framework for the enactment of L.N. 288 of 2015. The 'Malta Residence and Visa Programme Regulations' provide for affluent persons of impeccable standing and repute to receive Maltese residency on the basis of a contribution to and investment in Malta.    

Benefits of Malta Residency by Investment 

  • Maltese residence card allows its holder free travel within the 26 members of the Schengen area.
  • Malta has been a member of the European Union since 2004 and part of Schengen since 2007.
  • Family eligibility includes the spouse or partner in a long and durable relationship of the main applicant, a child of the main applicant or his spouse/partner under the age of 18, economically dependent and unmaried children of the spouse/partner between the age of 18 and 26, and economically dependent parents or grandparents of the main applicant and his spouse/partner.
  • Malta is a neutral, safe and stable country with a friendly people living a European lifestyle but with a Mediterranean quality of life.

Eligibility for Malta Residency by Investment 

The salient conditions of the Malta Residency by Investment Programme under the Malta Residence & Visa Regulations are outlined below.

The main applicant:

  • must be at least 18 years of age;
  • must be a Third Country National, ie. a non-EU national.
  • meets the application requirements laid down by Malta Residence and Visa Programme;
  • commits to provide proof of title to qualifying property (which must be held for a minimum 5 year period from the date of issue of the residence certificate) with a minimum value of:
    • if the property is situated in Malta: €320,000, or rent here at an annual minimum rent of €12,000;
    • if the property is situated in the Southern Region of Malta or in Gozo: €270,000, or rent here at an annual minimum rent of €10,000;
  • commits to invest in qualifying investment (Government bonds or other approved investments announced from time to time) having an initial value of €250,000 to be held for a minimum period of 5 year period from the date of issue of the residence certificate;
  • commits to pay in full the contribution of €30,000 (non-refundable);
  • is in receipt of stable and regular resources which are sufficient to maintain himself and his dependants without recourse to the social assistance system of Malta, proved by an affidavit proving that his/her annual income stands at €100,000 or holds a minimum capital of €500,000.
  • is in possession of valid travel document as are his dependents
  • is in possession of a sickness insurance in respect of all risks across the whole of the European Union normally covered for Maltese nationals;
  • has either an annual income of not less than €100,000 arising outside Malta OR has in his possession a capital of not less than €500,000.

Grounds for Refusal of Malta Residency by Investment 

An application for Malta Residency by Investment shall be refused if the applicant:

  • Makes false statements or omits information requested.
  • Is not in possession of a clean police conduct
  • Has appeared or been indicted before a criminal court
  • Is listed as wanted person with INTERPOL
  • May be considered as a potential threat to national security, public policy or public health

Grounds for Revocation of Malta Residency by Investment 

A beneficiary under the Malta Residency by Investment Programme shall cease to benefit from the certificate issued under the Regulations if:

  • The individual becomes a Maltese, EEA or Swiss National
  • The individual becomes a long-term resident
  • The individual ceases to satisfy the investment and property requirements
  • The individual's stay is not in the public interest

Taxation of New Residents

The basis for taxation under the Maltese tax system are based on domicile and residence. Residence for Malta tax purposes is established by demonstrating an intention to reside in Malta indefinitely.  It may also be definitely established on the basis of a physical presence in Malta of at least 183 days.

Maltese tax residents who are not domiciled in Malta are taxable on a remittance basis. Non-domiciled residents of Malta are taxable on a remittance basis only on foreign-source income (not foreign-source capital) remitted to Malta and only to the extent remitted.  Income and capital gains arising in Malta are always subject to tax in Malta at the applicable personal income tax rates.

Capital gains arising outside Malta fall outside the scope of Maltese tax whether remitted to Malta or otherwise. Capital and savings remitted to Malta also fall outside the scope of Malta tax.

Other tax benefits include:

  • No inheritance tax
  • No estate duty
  • No wealth tax
  • No municipal taxes
  • No rates
  • Stamp duty is payable by the acquirer on the transfer of immovable property situated in Malta and transfers of shares in Maltese companies (including transfers on death).
  • Exemptions from stamp duty may be available on the transfer of shares in certain Maltese companies, e.g. if the company is listed on the Malta Stock Exchange or if the vast majority (at least 90%) of its business interests are outside Malta

References


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