Malta has over the last 10 years seen a high influx of foreigners choosing to move to her islands for work and play.  This is not surprising considering all that Malta has to offer, both by way of culture, heritage and climate as well as professional reputation and workforce, sound ethics and lower costs.

 

Ordinary Residence Permit

 

Nationals from the EU and EEA are eligible to apply for ordinary residence in Malta, whilst the eligibility of all other nationals is subject to the discretion of the authorities. An EU/EEA national is also eligible to take up ordinary residence in Malta if he/she takes up employment in Malta whether as an employee or on a self-employed basis. Third country nationals require an employment license to be able to work in Malta and this is granted only subject to certain qualifications.

 

tto qualify for ordinary residence, the applicant must be able to show financial independence and is required to take up a property in Malta whether this is leased or purchased. A person not being domiciled in Malta, having an ordinary residence permit and who qualifies as a resident of Malta for income tax purposes will be taxed on a remittance basis in relation to foreign sourced income, whilst in relation to income and capital gains arising in Malta, the income tax rates applicable for Maltese residents will apply including the requirement to complete and submit a tax return to the authorities each year.

 

A residence permit does not entitle the holder to citizenship.

 

Global Residence Programme

 

The Global Residence Programme, 2013 is a programme designed to attract individuals who are not nationals of the EU, EEA or Switzerland and who are not long-term residents. Individuals benefitting from this programme are not precluded from working in Malta, provided they satisfy the requisite conditions for obtaining a work permit.

 

To be eligible to apply an applicant must appoint an authorised mandatory who qualifies in terms of the said Rules and may not be a beneficiary in terms of any of the below tax programmes:

a. Residents Scheme Regulations;

b. High Net Worth Individuals Rules;

c. Malta Retirement Programme Rules;

d. Qualifying Employment in Innovation and Creativity Rules; or

e. Highly Qualified Persons Rules.

 

However an individual may renounce the right to the benefits provided under any of the above-mentioned Rules prior to submitting an application in terms of Global Residence Programme.

 

The applicant must also own or rent an immovable property in Malta in accordance with the specified criteria laid out in the Programme.

 

High Net Worth Individual Programme

 

It is possible for individuals to take up residency and employment in Malta and apply for a special tax status under the High Net Worth Individuals – EU/EEA/Swiss Nationals Rules and the High Net Worth Individuals – Non-EU/Non-EEA/Non-Swiss Nationals Rules by appointing an authorised mandatory to represent them. A number of criteria however would require to be satisfied to be able to benefit from this programme. The individual:

• would be required to hold a ‘Qualifying Property Holding’ as defined in the Rules which could be either purchased or leased

• does not benefit from the Residence Scheme Regulations or Highly Qualified Persons Rules

• is in receipt of regular and stable resources sufficient to maintain him/herself and dependants

• is in possession of a valid travel document

• is in possession for health insurance cover for him/herself and dependants

• is not domiciled in Malta and does not intend to domicile in Malta within 5 years from the application

• is a fit and proper person

• is fluent in English or Maltese

 

A person who has been granted tax status under this programme would be taxed at the rate of 15% on any income remitted to Malta, provided that a qualification for a minimum amount of tax payable by the beneficiary for any year of assessment and a minimum for any year of assessment for each dependant is satisfied. These amounts depend on whether the individual is an EU/EEA national or not.

 

The special tax status granted in accordance with the High Net Worth Individuals Rules is a tax status and does not confer the beneficiary any further rights. Therefore all other laws need to be adhered to with respect to eligibility to work in Malta. Income arising in Malta from any trade, business, profession or vocation will be subject to a flat rate of tax of 35% on all the income derived therefrom.  

 

Please contact us for more information on the qualifications for eligibility under this programme and costs.  

 

Highly Qualified Persons Programme

 

Since joining the EU in 2004, Malta has been modernising its economy and is becoming recognized as a highly functional, low cost, well regulated jurisdiction with the underlying theme being availability of trained staff through investment in education and training. However, the expansion of the financial services and the gaming services since joining the EU and the aviation services in recent years, is showing a significant need for additional highly qualified workers. Therefore, the need is being felt for the importation of knowledge particularly in those areas of the financial services sector, the gaming sector and the aviation sector where local expertise is lacking.

 

The Highly Qualified Persons Rules provide for a scheme to attract highly qualified persons to occupy an ‘eligible office’ with companies licensed and/or recognized by the Malta Financial Services Authority, companies licensed by the Lotteries and Gaming Authority and undertakings holding an Air Operators’ Certificate or an Aerodrome Licence issued by the Authority for Transport in Malta. This scheme essentially provides for a reduced rate of income tax (15%) to be charged to the employee on employment income subject to specific qualifications and valid for a consecutive period of 5 years for EU/EEA/Swiss nationals and 4 years for third country nationals.

 

Please contact us for further information for eligibility under this programme.

 

Retirement Programme Rules

 

Malta is a popular place for retirees and for this purpose the Retirement Programme Rules were issued granting a specific tax status for retirees from EU/EEA/Swiss nationals who are not in an employment relationship and are in receipt of a pension as their regular source of income. Individuals benefitting from this Programme may hold a non-executive post on the board of a company resident in Malta. This implies that the beneficiary would be prohibited from being employed by the company in any capacity, however, such individuals would be able to partake in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which are also of a public character, that is engaged in philanthropic, educational or research and development work in Malta. A person granted with tax status under the Retirement Programme Rules will benefit from a fixed tax rate of 15% payable on the pension remitted provided that the minimum tax required to be paid shall be of €7,500 for the beneficiary and €500 for each of his/ her dependants where applicable.

 

To be eligible to benefit under the Retirement Programme Rules, certain qualifications are required to be satisfied and the applicant is required to appoint an Authorised Mandatory to handle the application process.

 

For further information on the Retirement Programme Rules in Malta please contact us.