Malta Residence

Legal, Tax, Advisory, Corporate

Malta is an ideal place to take up residence. Besides its pleasant climate, safe environment and hospitable English-speaking population, it offers a range of benefits to individuals seeking to acquire residence on the island, given its advantageous tax regime and competitive cost of living.

Any EU/EEA/Swiss or third country national who resides in Malta for more than three months requires a permit from the immigration authorities, which is granted on specific grounds, some of which are listed below.

Ordinary Residence

Ordinary residence in Malta requires individuals to physically live on the island for a period of six months or more. The transfer of one’s residence from a high-tax jurisdiction to a lower tax overseas country is available to both EU/EEA/Swiss and third country nationals. There is no minimum value property requirement for non-residents seeking to obtain ordinary residence in Malta, unless there is the need for an Acquisition of Immovable Property (AIP) permit, which applies in specific circumstances.

The qualifying criteria, which vary according to whether the individual seeking to obtain ordinary residence in Malta is an EU/EEA/Swiss national or a third country national, can be easily complied with, thus making the attainment of Maltese ordinary residence even more attractive.

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EU/EEA/Swiss Nationals

There are different grounds on which EU/EEA/Swiss nationals may become ordinarily resident in Malta, including economic selfsufficiency, employment, education and opening a business, the most popular of which are being set out hereunder.

(1) Economic Self-Sufficiency

This criterion requires applicants to show that they are able to provide for themselves and for their accompanying dependants by being financially stable and not being in need of any financial support from the Maltese government. The current thresholds for EU/EEA/Swiss nationals are set at a minimum capital of 14,000 for single persons, and at a capital of at least 23,300 for married couples. Moreover, an extra 3,500 is required per any added dependent.

(2) Employment

A second ground on which EU/EEA/Swiss nationals may obtain ordinary residence in Malta is employment. Hence, an individual must accept offers of employment or seek employment in Malta, work in Malta as an employee or be self-employed and work for his/her own business.

(3) Education

Temporary residence is granted for the entire period of education to students in any Private School, College, or at the University of Malta. If the student is under-age, his or her legal guardian can apply for Malta residence to accompany him or her. Such person has to confirm that he or she is in receipt of stable and regular income and has a suitable place to live.

(4) Family Members

Both EU/EEA/Swiss and third country nationals are granted the right to accompany their family member being an EU/EEA/Swiss national. However, such relatives or partner, are not given the automatic right to live in Malta for they must prove that they are related to the main applicant.

Furthermore, in the case of partner, it must be proven that the relationship has been stable and durable for the last two years.

(5) Permanent Residence for EU/EEA/Swiss nationals

Permanent residency may be applied for by EU/EEA/Swiss nationals and their family members, upon completing a continuous five year period of legally living in Malta. Such a ‘continuous’ period entails that applicants must not have absented themselves from Malta for more than six months a year. Throughout the said five year period, such individuals must be employed or self-employed, studying or economically self-sufficient.

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Third Country Nationals

The qualifying criteria for Malta ordinary residence in respect of third country nationals vary from those applicable to EU/EEA/Swiss nationals. We are setting out below a few of these possibilities.

(1) Employment

An employment licence is required in order for non-EU/EEA/Swiss nationals to work in Malta. This is granted upon satisfying certain criteria. Candidates qualified in certain sectors such as financial services, healthcare and information technology are sought after, and therefore, it may be easier for such individuals to obtain an employment licence.

The Key Employee Initiative

The Key Employee Initiative is a fast-tracked employment and residence process for highly-specialised third country nationals who would like to work and live in Malta.

Eligible applicants:
The Key Employee Initiative is aimed at managerial or highly-technical posts requiring particular qualifications or adequate experience. Innovators involved in start-up projects endorsed by Malta Enterprise may also apply for the Key Employee Initiative. Amongst others, the following conditions are to be fulfilled:

  • An annual gross salary of at least 30,000;
  • Certified copies of the relevant qualifications, warrants or the necessary work experience;
  • A declaration by the employer stating that the applicant has the necessary credentials to perform the duties being assigned.

Submission of applications

Applications under the Key Employee Initiative may be submitted while the applicant is in Malta or even while he/she is still abroad.

Time-frame

Work/residence permits under this initiative will be issued to successful applicants within around five working days from the date of submission of the application.

Validity

The work/residence permit issued under the Key Employee Initiative will be valid for a year and may be renewed, provided the requirements in place are complied with.

(2) Self-Employment

In order to qualify to apply for self-employed status, a third country national must meet at least one of the following criteria:

  • nvest in Malta capital expenditure of at least 500,000 within 6 months from the date on which the employment licence is issued. Capital expenditure shall solely consist of fixed assets (such as immovable property, plant and machinery) used for business purposes as reflected in the business plan submitted with the application;
  • Be a highly-skilled innovator with a sound business plan (to be submitted with application), who commits to recruiting at least three EEA/Swiss/Maltese nationals within eighteen months of establishment;
  • Be a person leading a project that has been formally approved by Malta Enterprise and formally notified by the latter to Jobsplus.

Applications containing a firm commitment to engage EEA/Swiss/ Maltese nationals as part of the applicant’s staff complement will assist in the favourable consideration of the application.

(3) Shareholders / Ultimate Beneficial Owners of a Malta Resident Company

In order to apply for Malta residence under this ground, one of the following criteria must be fulfilled by the third country national:

  • A fully paid up share capital of at least 500,000 which may not be redeemed, reduced or transferred to a third party during the first two years following the issue of the Employment Licence;
  • A capital expenditure of at least 500,000 that is to be used by the company. Capital expenditure shall consist solely of fixed assets (such as immovable property, plant and machinery) used for the business purposes as reflected in the business plan submitted with the application;
  • The company is leading a project that has been formally approved by Malta Enterprise and formally notified by the latter to Jobsplus.

Applications containing a firm commitment to engage EEA/Swiss/ Maltese nationals as part of the applicant’s staff complement will assist in the favourable consideration of the application.

In cases where a director is not a shareholder, the application does not need to meet the above criteria, however, it will be processed on the basis of labour market considerations. Many aspects are involved in such labour market considerations, including the national situation in respect of surpluses or shortages in the given occupation and sector, and the third country national’s skill level, relevant experience and overall suitability for the position in question.

(4) Long-Term Residence for Third Country Nationals

Long-term residence status may be granted to individuals who have been legally residing in Malta for five continuous years. The term “continuous” means that such individuals must not have absented themselves from Malta for more than six consecutive months in any given year of the said five-year period and further must not have been absent from Malta for more than a total of ten months throughout this five-year period.

Furthermore, a third country national who has been granted longterm residence status by another Member State other than Malta may reside in Malta, for a period exceeding three months, for the exercise of an economic activity in an employed or self-employed capacity, provided that such person is in possession of an employment licence, or to pursue studies or vocational training.

A third country national who has been granted long-term residence status in Malta shall enjoy equal treatment as any other Maltese national in terms of access to employment or self employment, conditions of employment, and education, amongst others.

(5) Education

Temporary residence is granted for the entire period of education to students following an approved course of studies in any Private College or at the University of Malta. If the student is under-age, his or her legal guardian can apply for Malta residence to accompany him or her. Such person has to confirm that he or she is in receipt of stable and regular income and has a suitable place to live.

(6) Partners

Foreign partners of Maltese citizens are given the opportunity to apply for residency in Malta, if it is demonstrated that they are in receipt of a regular and stable income, and that the relationship has subsisted for at least two years. In the event that the partnership has subsisted for at least five years, a residence permit for three years would be issued.

(7) Family Members

A third country national who resides legally in Malta is given the right to apply for the reunification of his family members, namely spouses being 21 years of age or over, and minor unmarried children under the age of 18. Such a right is given to the third country national if he/ she has reasonable prospects of permanent residence in Malta, has satisfactory accommodation for the family, and has stable and regular resources being tantamount to the average wage in Malta and an addition of 20 per cent of the average wage for each family member. Furthermore, the third country national who sponsors his family, must have resided in Malta for at least two years. The reunited family will be able to work and study just like the applicant. Once the family would have resided in Malta for five years, family members will be entitled to an autonomous residence permit.

Third country nationals who do not satisfy the abovementioned conditions and are legally residing in Malta may nonetheless submit a residence permit application for their family members, as cases are considered on their own merits with regards to the sponsor’s income, length of stay and nature of employment.

(8) Temporary Residence

The Maltese authorities may grant third country nationals a permit to reside in Malta for a period exceeding three months on a case by case basis, depending on the purpose for which a request is being made.

Individuals staying in Malta for some temporary purpose with no intention of establishing their residence here and who have not resided in Malta for a period longer than six months in a calendar year shall not be taxed in Malta on their foreign income and gains, whether these are remitted to Malta or otherwise. They are liable to tax in Malta solely on Maltese sourced income and capital gains.

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Income Tax

Individuals who are ordinarily resident, but not domiciled in Malta, are subject to income tax on income and capital gains arising in Malta, and on income arising outside Malta which is received in Malta. No tax is chargeable on foreign capital gains even if such gains are remitted to Malta. Personal income tax is charged at progressive rates of tax up to a maximum of 35 per cent, as illustrated by the following tables:

Single Rates
Taxable Income Rate % Deduct
0-9,100 0 0
9,101-14,500 15 1,365
14,501-19,500 25 2,815
19,501-60,000 25 2,725
60,001 & over 35 8,725
Married Rates
Taxable Income Rate % Deduct
0-12,700 0 0
12,701-21,200 15 1,905
21,201-28,700 25 4,025
28,701-60,000 25 3,905
60,001 & over 35 9,905
Parent Rates
Taxable Income Rate % Deduct
0-10,500 0 0
10,501-15,800 15 1,575
15,801-21,200 25 3,155
15,801-60,000 25 3,050
60,001 & over 35 9,050

In order to qualify for the parental rate computation, a parent must satisfy the following conditions:

  1. he / she maintained under his/her custody a child or paid maintenance (established or authorised by courts) in respect of his or her child;
  2. such child was not over 18 years of age, or not over 21 years if receiving full-time instruction at a tertiary education establishment;
  3. such child did not earn income in excess of 2,400 from gainful occupation.

THE RESIDENCE PROGRAMME RULES, 2014 FOR EU/EEA/SWISS NATIONALS

The Residence Programme Rules 2014 created a residence programme conferring special tax status to EU/EEA/Swiss nationals. Applicants must satisfy certain conditions including acquiring or renting qualifying immovable property situated in Malta or Gozo and paying a minimum annual tax liability.

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Property

Applicants are required to own a Qualifying Property Holding, being property in Malta purchased for a value of not less than 275,000. If the property is situated in Gozo or in the South of Malta the purchase value should not be less than 220,000. This must serve as the applicant’s habitual residence, and that of any accompanying family members and household staff. Alternatively, an applicant may opt to rent property in Malta for not less than 9,600 per annum. If the property is situated in Gozo or in the South of Malta the minimum rent must not be less than 8,750 per annum.

Such Qualifying Property Holding may not be let or sub-let.

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Financial Resources and Insurance

The applicant must also be in receipt of stable and regular resources, which are sufficient to support himself/herself, as well as any accompanying dependants. Applicants must therefore be economically self-sufficient and both the applicant and any dependants must hold adequate health insurance covering the EU territory. The individual must satisfy a “fit and proper test” in order to be granted a permit under this Programme.

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Income Tax

A 15 per cent rate of tax is charged in respect of foreign income remitted to Malta, with the possibility of claiming double tax relief. The minimum annual tax stands at 15,000 after claiming any applicable double tax relief. Income arising in Malta will be taxed at 35 per cent.

The above minimum amounts of tax payable are not refundable.

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Entry and Stay in Malta

It is important to note that the special tax status granted by the Residence Programme Rules 2014 does not grant the beneficiary a right to enter, stay and reside in Malta, at any time throughout the duration of such status. Although, on the basis of such status, one would be able to apply for the appropriate immigration documentation to be able to reside in Malta.

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Minimum Stay Requirements

Applicants may not spend more than 183 days in any other jurisdiction.

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Registration Fee

A one-time registration fee of 6,000 is levied by the Malta Government. In the case of a qualified owned property situated in the south of Malta, the administrative fee amounts to 5,500. Permit holders are also allowed to carry on an economic activity in Malta.

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Annual Return

An individual who benefits from this special tax status must submit an Annual Tax Return which should include any material changes that affect the beneficiary’s special tax status.

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Submission of Applications

An application for special tax status under the Residence Programme Rules, 2014 may only be submitted through the services of a person that qualifies as an Authorised Registered Mandatory. EMD, as an Authorised Registered Mandatory, may assist you with your application for residency under this Programme as well as with any tax and legal requirements.

THE GLOBAL RESIDENCE PROGRAMME 2013 FOR NON EU/EEA/SWISS NATIONALS

The Global Residence Programme, introduced in July 2013, confers a special tax status to Third Country Nationals (excluding EEA and Swiss nationals). Applicants must satisfy certain conditions including acquiring or renting qualifying immovable property situated in Malta or Gozo and pay a minimum annual tax liability.

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Income Tax

A flat rate of tax of 15% is charged on foreign source income received in Malta, subject to a minimum annual tax liability of ¤15,000 after allowing for any double taxation relief. Any income arising in Malta would, in turn, be taxable at 35%.

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Property

Applicants are required to purchase or rent immovable property in Malta or in Gozo, which property must be solely occupied by the applicant, his/her family members and household staff. Its purchase value must not be less than 220,000 if situated in the South of Malta or in Gozo, or not less than 275,000 if situated in any other location in Malta.

Should the applicant choose to rent property, the annual thresholds are set at a minimum of 8,750 for a property situated in the South of Malta or in Gozo and 9,600 for property situated in any other location in Malta.

The property so purchased or rented must be the applicant’s primary residence and principal place of abode worldwide and cannot be let or sublet.

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Other conditions

Applicants must be in receipt of stable and regular financial resources. The main applicant and his/her dependants must be covered by a health insurance policy, providing coverage for all risks across the EU normally covered for Maltese nationals.

Although there is no requirement for a beneficiary to spend a minimum number of days in Malta, it is to be noted that beneficiaries under this programme may not spend more than 183 days in a calendar year in any other jurisdiction.

Finally, applicants must satisfy a fit and proper test as set out by the Maltese Authorities and must hold a valid travel document.

Should the permit holder pass away, the tax status will be transferred to a dependant of the deceased beneficiary who has either inherited the qualifying immovable property or has rented the immovable property immediately after the beneficiary’s death. Such status will be transferred once it is proven that the said dependant has satisfied all the conditions to hold GRP status.

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Submission of Applications

Applicants for GRP status are required to submit the relevant application through an Authorised Registered Mandatory. EMD is licenced as an Authorised Registered Mandatory and may assist throughout the entire application process.

The application is to be submitted together with a non-refundable administrative fee of 6,000 payable to the Maltese authorities (a fee of 5,500 is paid where the beneficiary acquires immovable property situated in the South of Malta).

The Malta Residence and Visa Programme Rules, 2015

The Malta Residence and Visa Programme Rules 2015, promulgated by virtue of Legal Notice 288 of 2015, introduced a residence programme for Non-EU/EEA/Swiss nationals. Beneficiaries under the Global Residence Programme may also apply. A certificate issued under this Programme entitles the beneficiary and his/her dependants to reside, settle or stay indefinitely in Malta. Applicants must satisfy certain conditions including acquiring or renting qualifying immovable property situated in Malta or Gozo and investing in the Maltese economy.

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Property

Applicants are required to own a Qualifying Owned Property, being property in Malta purchased for a value of not less than 320,000. If the property is situated in Gozo or in the South of Malta the purchase value should not be less than 270,000. Alternatively, an applicant may opt to rent property in Malta for not less than 12,000 per annum. If the property is situated in Gozo or in the South of Malta, the minimum rent must not be less than 10,000 per annum. The property is to be held by the applicant for a minimum of 5 years from the date of issue of the certificate.

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Financial Resources and Insurance

The applicant must be in receipt of stable and regular resources which are sufficient to maintain himself/herself and his/her dependants and he/she must provide an affidavit declaring that from the date of the application onwards, he/she has either an annual income of not less than 100,000 arising outside of Malta or capital of not less than 500,000. Both the applicant and any dependants must hold adequate health insurance covering the EU territory. The main applicant must satisfy a “fit and proper test” in order to be granted a permit under this Programme. Background checks shall be carried out in relation to the main applicant and his/her dependants who are over 12 years of age.

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Investment

The main applicant must hold a qualifying investment for at least 5 years from the date of issue of the certificate. This investment needs to have an initial value of 250,000. The investment can take various forms as permitted by the Malta government.

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Dependants

Dependants include the following

  • the spouse of the main applicant in a monogamous marriage or in another relationship having the same or a similar status to marriage;
  • a child, including an adopted child, of the main applicant or of his/ her spouse, who at the time of the application is less than eighteen years of age;
  • a child, including an adopted child, of the main applicant or of his/ her spouse, who at the time of application is not yet born or not yet adopted by the main applicant or by his/her spouse, and is born or becomes so adopted after the appointed day;
  • a child, including an adopted child, of the main applicant or of his/ her spouse, who at the time of application is over eighteen years of age, not married, and who proves, to the satisfaction of the Minister that at the time of application he/she is not economically active and is principally dependant on the main applicant;
  • a parent or grandparent of the main applicant or of his/her spouse who proves that he/she is not economically active and is principally dependant on the said person; or
  • an adult child of the main applicant or of his/her spouse, and who has been certified by a recognised medical professional/Authority as having a disability in terms of the Equal Opportunities (Persons with Disability) Act and who is living with, and is fully supported by, the main applicant;
  • the spouse of a previously approved dependant child of the main applicant/spouse may be included on the Main Beneficiary’s certificate against a non-refundable supplementary administration fee of 5,000 per person and subject to a successful due diligence check;
  • the child, born or adopted after the approval date, of a previously approved dependant child of the main applicant/spouse, or of the previously approved dependant child’s spouse may be included on the Main Beneficiary’s certificate against a non-refundable supplementary administration fee of 5,000 per person and subject to a successful due diligence check.

Approved children of the main applicant and/or the spouse will retain residency rights provided they are not economically active and/or married at application stage.

The main applicant and his/her dependants will become eligible to apply for Long Term Residence subject to the respective requirements being satisfied.

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Entry and Stay in Malta

The beneficiary and his/her dependants being awarded a certificate under this Programme are entitled to reside, settle or stay indefinitely in Malta. It is important to note that such a certificate shall be monitored on an annual basis for the first five years from when it is issued and then every five years thereafter.

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Contribution and Registration Fee

There is a 30,000 contribution fee payable to the government of Malta. This covers the main applicant, spouse and children. A onetime non-refundable registration fee of 5,500 is levied by the Malta Government. This is deducted from the 30,000 contribution. An additional non-refundable 5,000 contribution per parent or grandparent of the main applicant or of the spouse is also applicable

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Submission of Applications

An application under the Malta Residence and Visa Programme Rules, 2015 may only be submitted through the services of a person that qualifies as an Authorised Registered Mandatory. EMD, as an Authorised Registered Mandatory, may assist you with your application for residency under this Programme as well as with any tax and legal requirements.

THE MALTA RETIREMENT PROGRAMME RULES 2012

The Malta Retirement Programme Rules, 2012 applicable to pensioners, introduced a tax Programme conferring a Malta special tax status to EU/EEA/Swiss nationals, with the exclusion of Maltese nationals.

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Income Tax

Beneficiaries have the right to pay tax at a flat rate of 15 per cent on foreign source income received in Malta, by them or their dependants, subject to a minimum annual tax payment of 7,500, with an additional 500 per dependant and special carer, if any. The Programme also confers the right to claim double taxation relief. Any income arising in Malta would, in turn, be taxable at a rate of 35 per cent.

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Property

The said Programme requires its applicants, namely pensioners, to purchase or rent immovable property in Malta, or in Gozo, which property must be solely occupied by the applicant, his/her family members and any household staff accompanying them. The property in question must have been purchased after 1st January 2011 up to 30th June 2013 for a value of not less than 275,000 if situated in Malta, or 250,000 if situated in Gozo. Any property purchased on or after 1st July 2013 must have been purchased for a value of not less than 275,000 if situated in Malta or 220,000 if the property is situated in Gozo or in the South of Malta. The rental thresholds are set at a minimum of 9,600 per annum for a property situated in Malta, or 8,750 per annum for a property situated in Gozo or in the South of Malta. Such property must serve as the applicant’s habitual place of abode worldwide.

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Remittances to Malta

Furthermore, in order to become eligible to apply for this Programme, the whole amount of the pension must be received in Malta, which pension must constitute at least 75 per cent of the beneficiary’s chargeable income in Malta. Applicants and their accompanying dependants must also be covered by a health insurance policy, providing coverage for all risks across the EU normally covered for Maltese nationals.

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Other Conditions

The beneficiaries of such Programme must be domiciled overseas, and should not have the intention to establish their domicile in Malta within 5 years from the date of application for such Programme. Moreover, applicants must not be in employment, or benefit under any other Malta Programme conferring a special tax status, and must hold a valid travel document.

Beneficiaries under this Programme are, however, entitled to 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, or any similar organisation or body of persons, also having a public nature, or be engaged in philanthropic, educational or research and development work carried out in Malta.

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Minimum Stay Requirements

An important point to note is that beneficiaries of this Programme 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 a calendar year in any other foreign jurisdiction. Finally, applicants must satisfy a fit and proper test set by the pertinent Maltese authorities. The above-mentioned qualifying criteria must be complied with on a yearly basis.

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Submission of Applications

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. EMD, as an Authorised Registered Mandatory, may assist you throughout the entire application process, as well as with the compliance obligations required by the Programme.

HIGHLY QUALIFIED PERSONS RULES

By means of Legal Notice 106 of 2011, titled the ‘Highly Qualified Persons Rules, 2011’, rules have been issued by virtue of which individuals in receipt of employment income from an ‘eligible office’ will be subject to a flat rate of tax of 15 per cent on their employment income instead of the progressive rates of tax which are capped at 35 per cent. The rationale behind the implementation of such rules is 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.

Employment income from an eligible office will benefit from a reduced tax rate of 15 per cent, if it amounts to at least 75,000 per annum as adjusted annually in line with the Retail Price Index. In the event that the income exceeds 5 million, the excess is exempt from tax. An eligible office is defined, as eligible employment with a company authorised and/or recognised by the Malta Financial Services Authority (MFSA), licensed by the Malta Gaming Authority (MGA) or eligible offices within companies which fall within the remit of the Authority for Transport in Malta (TM), namely undertakings holding an air operator’s certificate (AOC) issued by TM or an aerodrome licence issued in terms of Article 71 of the Air Navigation Order. The following are the eligible offices:

MFSA1 MGA2 TM3
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 Search Engine Optimisation and Systems Architecture); Aviation Continuing Airworthiness Inspector, Aviation Flight Operations Inspector, Aviation Training Manager and Aviation Ground Operations 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

1. With effect as from the 1st January, 2011
2. With effect as from the 1st January, 2010
3. With effect as from the 1st January 2012

The conditions which need to be satisfied in order for the professional to benefit from the 15 per cent reduced rate of tax are the following:

  • The individual derives employment income which is subject to tax in Malta in respect of work carried out in Malta and/or in respect of any period spent outside Malta in connection with such work;
  • The individual is in possession of professional qualifications and has at least five years experience;
  • The individual has not benefitted from any other deductions available to investment services expatriates;
  • The contract of employment is subject to Maltese law for the purposes of carrying out genuine and effective work;
  • The individual fully declares in his Maltese personal income tax return all income derived from his contract of employment;
  • The individual is not domiciled in Malta.

Any rights are withdrawn with retrospective effect if the individual is a third country national and he either physically stays in Malta, in the aggregate, for more than four years, or directly or indirectly acquires any immovable property, including any rights thereon, situated in Malta.

The reduced rate of tax applies for a consecutive period of five years with the possibility of an extension for another five years for EEA and Swiss nationals and for a consecutive period of four years for other nationals. Persons who were employed under a contract of employment requiring the performance of their duties in Malta for a period exceeding two years preceding 1st January 2010 cannot benefit from the flat rate of 15 per cent.

HIGHLY QUALIFIED INDIVIDUALS RETURNING TO MALTA TO WORK

Any individual established in a field of excellence returning to Malta as an ordinary resident for work purposes may benefit from a reduced rate of tax of 15 per cent on income from employment exercised in Malta. This is subject to the individual having been previously ordinarily resident in Malta for at least twenty years. Moreover, the said individual must not have been ordinarily resident in Malta for the ten consecutive years prior to his/her return.

DOUBLE TAXATION RELIEF

Malta residents are afforded protection by double taxation agreements, which ensure that tax is never paid twice on the same income in different countries. Malta has an extensive network of double taxation treaties. Most treaties are based on the OECD Model Convention. Where there is no double taxation treaty, another form of relief from double taxation available under domestic law, namely unilateral relief, largely achieves the same outcome.

DUTY ON DOCUMENTS ON INHERITANCE

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.

Subject to certain exceptions, duty is due at the rate of five per cent in the case of real estate and shares in property companies (as defined) and two per cent in the case of shares in other companies.

However, no such duty is payable on share transfers effected by shareholders in or by trading companies which have business interests to the extent of more than ninety per cent outside Malta and/or where more than half of the ordinary share capital, voting rights and rights to profits are held by persons who are not resident in Malta.

PURCHASE OF REAL ESTATE

Foreigners may freely purchase one residential property in Malta, subject to obtaining an AIP (Acquisition of Immovable Property) permit. This restriction does not apply to properties in Special Designated Areas and, in the case of EU citizens who have not been resident in Malta for at least five continuous years, to property which is to serve as their primary residence. On the other hand, EU citizens who have been resident in Malta for at least five continuous years may purchase any number of properties they wish.

Where one of the spouses is an EU citizen and the other spouse is a third country national, both can likewise benefit from the exemption outlined above and acquire property without the necessity of obtaining an AIP permit, provided the acquisition is being made to establish therein their primary residence.

Also excepted is the acquisition of immovable property by an EU national for the conduct of one’s business activity or for the supply of services by such person. In such a case, a declaration reflecting the purchaser’s intention for the acquisition should be inserted in the relative contract of purchase.

Where the purchaser requires an AIP permit, the property must satisfy a certain minimum value which changes periodically.

IMPORTATION OF HOUSEHOLD GOODS AND FURNITURE

Individuals taking up residence in Malta may import their household goods and furniture into Malta free of VAT and import duties. If the imported goods originate from a country outside of the EU, residents are required by the customs authorities to make a deposit or provide a bank guarantee for the amount of VAT/duty in question. Upon evidence of stay in Malta for a cumulative period of 200 days in a period of 365 days, the deposit will be refunded.

Persons moving to Malta who owned a vehicle for at least 2 years before moving to Malta can import the vehicle free of registration tax, upon showing evidence of ownership for such period.

Information current as at 16th January 2018.

For further information kindly contact EMD, Vaults 13 - 16, Valletta Waterfront, FRN 1914, Malta
Tel: (+356) 2203 0000 Fax: (+356) 2123 7277 Email: info@emd.com.mt www.emd.com.mt

The above information is intended to be of a general nature and is not intended to address the circumstances of any individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. EMD Advisory Services Ltd, its officers, staff, associates and related/associated companies/firms shall not be responsible or liable for any action taken on the basis of the above information, or for any errors or omissions contained herein. Professional advice should be sought before any decision based on any matter referred to above is taken.

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