Ordinary Residence

An EU citizen has the right to enter and reside in Malta without the necessity of obtaining a visa, however if he/she intends to reside in Malta for a period longer than three months be it for employment, study or otherwise, he/she would need to obtain an e-Residence card which once issued would be valid for a period of five years. Once the EU citizen has lived in Malta for a continuous period of five years he/she would be entitled for permanent residence. An individual applying for ordinary residence status must purchase or rent a property in Malta.  Moreover the said individual would be subject to the normal income tax rules which are applicable to any Maltese resident.

The Malta Residence Programme

The Residence Programme (TRP) is designed to attract individuals who are nationals of the EU, EEA or Switzerland and who are not permanent residents of Malta. Beneficiaries may also have household staff providing a service in their qualifying property, as long as all the requisite procedures are satisfied.

An individual who has been granted special tax status in accordance with the TRP, will be subject to tax at a rate of fifteen cents (0.15) on every euro thereof on any income that is received in Malta from foreign sources by the beneficiary and his/her dependants. This rate of tax will apply from the year of confirmation of the special tax status up to year of cessation of status, both years included.

The Malta Global Residence Programme

An individual who has been granted special tax status in accordance with the GRP, will be subject to tax at a rate of fifteen cents (0.15) on every euro thereof on any income that is received in Malta from foreign sources by the beneficiary and his/her dependants

The Global Residence Programme (GRP) is 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. Beneficiaries may also have special carers providing a service in their qualifying property, as long as all the requisite procedures are satisfied.

An individual who has been granted special tax status in accordance with the GRP, will be subject to tax at a rate of fifteen cents (0.15) on every euro thereof on any income that is received in Malta from foreign sources by the beneficiary and his/her dependants. This rate of tax will apply from the year of confirmation of the special tax status up to year of cessation of status, both years included.

The Malta Retirement Programme

The Malta Retirement Programme (MRP) is a programme designed to attract nationals of the EU, EEA and Switzerland 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.

Such individuals may also 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.

An individual who has been granted special tax status in accordance with the MRP, hereinafter referred to as “beneficiary”, the beneficiary will be subject to a rate of fifteen cents (0.15) on every euro thereof on any income that is received in Malta from foreign sources by the beneficiary or his dependents (see below). This rate of tax will apply from the date of confirmation of the special tax status which is referred to as the “appointed day” up to “day of cessation of status. Progressive tax rates are to apply in the days prior to the appointed day or subsequent to the day of cessation of status.

The United Nations Pensions Programme

The United Nations Pensions Programme Rules, 2015 (UNPP) contemplate the granting of “special tax status” to individuals who meet a number of conditions. An individual may benefit under this system if he/she is neither a permanent resident nor a long-term resident of Malta and if he/she is in receipt of a UN pension or a Widow’s/Widower’s Benefit of which at least 40% is received in Malta. Such individual may hold a non-executive post on the board of a company resident in Malta or partake in activities related to any institution, trust or foundation of a public character and any other similar organisation or body of persons, which is also of a public character, that is engaged in philanthropic, educational or research and development work in Malta. Beneficiaries may also have household staff providing a service in their qualifying property, as long as all the requisite procedures are satisfied.

An individual who has been granted special tax status in accordance with the UNPP shall be:

• Exempt from income tax on UN pension income or Widow’s/Widower’s benefit received in Malta;
• Subject to tax at a rate of fifteen cents (0.15) on every euro thereof on any income excluding the UN pension income or Widow’s/Widower’s benefit arising outside Malta that is received in Malta by the beneficiary, the beneficiary’s spouse, minor children including adopted minor children and children who are in the care and custody of the beneficiary/ spouse/ person with whom the beneficiary is in a stable and durable relationship, and children who are not minors but who because of circumstances of illness or disability of a serious gravity, are unable to maintain themselves. This rate of tax will apply from the year of confirmation of the special tax status up to year of cessation of status, both years included;
• Subject to tax at the rate of thirty-five cents (0.35) on every euro on any other income of a beneficiary, the beneficiary’s spouse, minor children including adopted minor children and children who are in the care and custody of the beneficiary/spouse/person with whom the beneficiary is in a stable and durable relationship, and children who are not minors but who because of circumstances of illness or disability of a serious gravity, are unable to maintain themselves that is not chargeable to tax under these rules. This may include bank interest received from a Maltese bank, rental income received from immovable property situated in Malta or dividends received from a company registered in Malta.

Beneficiaries of special tax status granted in terms of the UNPP will need to pay a minimum tax in respect of the income arising outside Malta which is received in Malta excluding UN pension income or Widow/er’s Benefit of ten thousand euro (€10,000) in respect of the beneficiary and an additional five thousand euro (€5,000) in the event that both spouses are in receipt of a UN pension. The minimum tax shall be payable by not later than the 30th April of the year immediately preceding the relevant year of assessment. In the case of the year in which the special tax status is granted, where it is evident that the special tax status will not be granted before the 30th April, the minimum tax is to be paid before the special tax status is granted.

Malta Citizenship by Investment Programme

The Malta IIP is the first investment citizenship program of its kind to be recognized by the European Commission

The Malta Individual Investor Programme (IIP) was introduced at the beginning of 2014 and offers high net worth individuals and families worldwide citizenship in Malta. The Malta IIP is the first investment citizenship program of its kind to be recognized by the European Commission, and the executive body of the European Union has formally acknowledged the legality of the program paving the way for its success. Successful candidates will be granted citizenship in Malta by a Certificate of Naturalization, which can also be extended to include their families. Once a candidate is awarded Malta citizenship, which includes EU citizenship, they have the right of establishment in all 28 EU countries and Switzerland. They also have the ability to set up business in Malta, and can get a Malta passport enabling them to enjoy visa-free travel to more than 160 countries across the World including the United States. The IIP is capped at 1,800 participants and as of May 2015, over 585 Malta passport applications on behalf of investors have been received from more than 40 different countries.

Once a candidate is awarded Malta citizenship, which includes EU citizenship, they have the right of establishment in all 28 EU countries and Switzerland. They also have the ability to set up business in Malta, and can get a Malta passport enabling them to enjoy visa-free travel to more than 160 countries across the World including the United States

Malta Residence by Investment

The Malta Residence by Investment Programme was introduced by virtue of the Malta Residence and Visa Programme Rules 2015 and is designed to attract Non-EU/EEA/Swiss nationals and once all conditions are satisfied the beneficiary and his/her dependants would be entitled to reside in Malta indefinitely. Once a Residence Certificate is issued, the applicant may reside in Malta indefinitely. The said certificate however is monitored annually for five years from the date of issue and every five years thereafter. For persons who are only resident but not domiciled in Malta tax would become due on a source and remittance basis, that is, on income and capital gains arising in Malta and on income arising outside Malta which is received in Malta. Any capital gains arising outside of Malta would not be taxed even if remitted to Malta. Individuals granted a Residence Certificate as per these Regulations may also be eligible to tax incentives granted under a separate programme entitled Global Residence Programme, granting the beneficiary a 15% beneficial tax rate on income received in Malta from foreign sources with the possibility to claim double taxation relief. On the other hand, individuals who have been granted residence under the Global Residence Programme are also eligible to apply for the issuance of a Certificate in terms of the new Regulations, provided they satisfy all the additional eligibility requirements.