Malta Residency Program

Malta has always been a naturally popular hub for anyone looking to start a new life abroad. Ever since the 1994 Malta Permanent Residence Scheme, and more recently, the renewed Global Residence Programme and the Malta Residence Regulations 2014, the country has seen sustained interest from EU and Non-EU Nationals alike purchasing real estate in Malta as part of the residency criteria. The benefits of becoming a resident of Malta don’t only include a special Tax status of 15%, but also give Non-EU Citizens freedom of movement within Europe and Schengen countries.

This status is one of the many attractions of Malta that has contributed to the growth of the economy, not to mention the real estate market. The differences between the 1994 regulations and today’s new Legal Notices 167 and 270 are primarily the thresholds, which were far too low, as well as the inclusion of health benefits, where the applicant needs a recognisable International Insurance Health Plan.

Taking up residence in any scheme is relatively straightforward. If you’re an applicant in good standing, then the vetting process shouldn’t be a problem. Of course, an Authorised Mandatory needs to be used to apply for and receive the recommended legal consultation necessary to get the best possible outcome for you.

Even though there are fiscal advantages to becoming a resident of Malta, there are a fair few other reasons why you should consider making the Maltese Islands your home. The property market is always solid investment; tradition and solid banking practices were the saviours of the industry, making Malta the only country in Europe to see growth in their market. An impressive 93% (See Market Report) of Maltese citizens believe in the value of buying property in Malta, with high demand and limited land keeping prices stable. Depending on the investment made, rental yields range between 4 and 7%, and capital appreciation hovers around 2% and 6%.

The cost of living in Malta is competitive compared to major cities across Europe. Healthcare is relatively cheap, the pleasant climate, safe environment, and high standards of educational are second to none. Maltese is the island’s mother tongue, but English is also an official language here. More than 95% of the population speaks English as a second language, and a considerable number of locals can also speak Italian and/or French.

There is a large, vibrant expat community in Malta. Dating back to September 21st 1964, when the country gained independence, the British have always had a soft spot for the Islands. Back then, many British citizens made Malta their second home, buying property and putting down roots here, and this has continued to the present day. Over the years, a broad range of nationalities have joined in, with Swedish, Danish, Norwegian, German, Italian, French and American citizens deciding to make a life in the middle of the Mediterranean. If you’re interested in becoming a resident of Malta, have a look at the available options below.

Ordinary Residence

Many EU and Non-EU Nationals choose Malta as their first residence. If they live here for six or more months, they can get a favourable tax situation compared to that in their home country. These kinds of applicants are taxed at the same rate as locals.

There is no minimum threshold to purchase or rent a property in Malta. The criteria change depending on nationality, particularly if you are from an EU/EEA or a third country national.

EU/EEA/Swiss Nationals

There are some important criteria that make up the vetting process behind becoming a resident of Malta. The most important one is that an applicant must be self-sufficient; that means being able to provide for themselves and any dependents. Single applicants must have a weekly income of at least €92.32, while married couples must have a weekly income of a minimum of €108.63. Weekly income should add up to an annual salary of at least €14,000 or €23,300 capital respectively. €8.15 per week is required for each dependent.

Another major requirement is that the applicant must be employed, either working for an employer, self-employed, or in the process of setting up their own business.

Non-EU/EEA and Swiss Nationals (Third Country National)

A Third Country National must apply for a working permit. There are different industries in which qualified persons are given preference, such as iGaming, Finance and IT Industries.

If the applicant is self-employed, the third country national must invest at least €100,000, have a sound business plan, be highly-skilled, have a status of sole representative of a major company, or be director of a project approved by Malta Enterprise.

Income tax for Ordinary Residence is subject to income derived in Malta, income coming from abroad but received in Malta, and capital gains arising in the country. Any income from abroad, not received in Malta, is not taxed here, with tax rates based on local rates.

Shareholders/Ultimate Beneficial Owners of a Malta Resident Company

Third country nationals interested in becoming a resident in Malta can do so if they’re shareholders of a Maltese company, provided that one of the following conditions apply:

  • The third country national must be the holder of a fully paid up share capital of at least €100,000 which may not be redeemed, reduced or transferred to a third party during the first two years following the issue of the employment licence; or
  • The third country national must invest in a capital expenditure of at least €100,000 to be used by the company in the carrying out of its activities. Capital expenditure has the same meaning as explained above; or
  • The company in question is leading a project that has been formally approved by Malta Enterprise and notified by the latter to the Employment and Training Corporation.

Long-Term Residence for Third Country Nationals

The long-term residence status for third country nationals is almost identical to the one that applies to EU/EEA and Swiss nationals. In fact, for third country nationals to get this status, they need to have legally lived in Malta for five consecutive years. During that time, they'll also need to be in the country for at least sic months each calendar year, and should not be absent from Malta for more than 10 months across these five years.

A third country national given a long-term residency status in Malta enjoys the same treatment as any Maltese national when it comes to employment and education opportunities, for instance. One point worth mentinoing is that a third country national granted this kind of status by a Member State other than Malta can live on the island for more than three months to carry out economic activity, whether that's in an employed or a self-employed position. This is provided that the applicant has an employment licence, is pursuing studies or vocational training, or is engaged in other similar activities.

Malta Global Residence Programme

The Malta Global Residence Programme is designed to attract people who aren’t ordinary residents, and aren’t beneficiaries of other tax programmes offered by the government.

To qualify, applicants must own or rent a property in Malta and occupy it their only, principal place of residence. The property must be valued at between €220,000 and €275,000 if owned, or between €8,750 and €9,600 a year if rented, for at least 12 months. In both instances, the location of the property determines the minimum purchase price that has to be satisfied. Properties in the south of Malta are on the lower end of this scale.

Under the GRP, a flat rate of 15% is applicable on income declared in Malta, and beneficiaries have to pay a minimum annual tax of €15,000. This rate applies on income generated overseas and declared in Malta; any other income is taxed at a flat rate of 35%.

The administrative fee for the application is between €5,500 and €6,000, depending on the location of the qualifying owned property.

Applications for the GRP can only be made via an Authorised Registered Mandatory.

Find out more about the Malta Global Residence Programme here.

Malta Residence Regulations Rules 2014 Summarised

There’s a similar residency programme for EU nationals—the Malta Residence Programme—which allows beneficiaries to pay tax on all foreign source income at a flat rate of 15% as long as it is remitted to Malta.

There is a flat rate of 35% tax on any other income, subject to a minimum annual tax liability of €15,000 per application.

Anyone interested in applying for this programme has to own or rent a property in Malta. The property must be worth between €220,000 and €275,000 if purchased, and between €8,750 and €9,600 a year if rented. The minimum cost of the property depends on its location. An administrative fee of between €5,500 and €6,000 also applies.

Malta Retirement Programme Rules

Low crime rates, a generous tax regime, reasonable cost of living, and warm climate are all reasons this Mediterranean gem is popular with people looking to retire and expats interested in becoming a resident of Malta.

The Maltese government has a residency scheme created for people who want to retire to the island, and it’s open to all EU, EEA, and Swiss nationals.

To be eligible, applicants must purchase a property for no less than €275,000 in Malta, or €250,000 in Gozo. Alternately, they must live in a property with an annual rent of €9,600 or €8,750 in Malta and Gozo respectively.

Applicants must also receive a pension that makes up at least 75% of their chargeable income, and is entirely received in Malta. They must also live here for no fewer than 90 days each year, on average, over a period of five years, and may not be away from the island for more than 183 days per calendar year.

Finally, applicants need to have medical insurance. However, they must not be a beneficiary of any other local tax programme or scheme, and must not be domiciled in Malta.

The application fee for this scheme is €2,500 per application.

Successful applicants get a tax rate of 15% on any income from abroad which is received in Malta. Here, it's possible to claim relief of double taxation, and it applies to the beneficiary and any dependants. A minimum tax amount of €7,500 a year is payable for the beneficiary, and €500 a year for each dependant. Any other income not covered by this scheme is taxed at 35%.

Additional Information

With over 21 years of experience within the real estate market, Damcar Properties Unite is best positioned to help you find your dream home. With our main office located in Msida, we strive to provide our clients with the very latest investment opportunities in-line with their budget and requirements.