Malta Global Residence Program
The Malta Global Residence Program builds on the success of Malta’s reputation in attracting expatriates seeking an alternative residence base in a warm Mediterranean Island in the European Union. Malta’s membership and full implementation of the Schengen Area Treaty offers further attraction on the basis of the ease of travel within the Schengen Area enjoyed by holders of the Malta Global Residence Program permit.
Basis for Malta Global Residence Program
The aim of the Malta Global Residence Program is to formally recognize as tax resident for Maltese tax purposes those foreign nationals satisfying the eligibility criteria of the Malta Global Residence Program. The Maltese Residence Program requires that an economically self-sufficient residence candidate maintains a permanent address in Malta in the form of residential property purchased or rented in Malta or Gozo.
Taxation of Maltese Global Residents
Maltese residents are not subject to tax in Malta on foreign sourced income not remitted to Malta. Nor are they subject to tax on any foreign-sourced capital gains whether remitted to Malta or not. Permanent Residents of Malta are entitled to taxation at the flat rate of 15% on remitted income.
Malta enjoys over 60 double tax treaties, persons who take up residence in Malta can receive their pensions in Malta free of tax at source and subject to a mere 15%. Global residents also benefit from Malta’s double taxation agreements existing with most European countries, Canada, Australia and the USA, ensuring that tax is never paid twice upon the same income. Overseas capital funds invested locally are of course only taxed on any interest or dividends generated thereon, again at a 15% flat rate.
For EU and EEA nationals, in the absence of significant remittances of income, it may be more feasible to opt for the Ordinary Residence Scheme which imposes no minimum tax liability.
The following is a summary of the tax system applicable to residents under the Malta Global Residence Program:
|Summary of Malta Global Residence Tax Rules|
|Basis of Taxation|
|Tax Rate for Foreign Source Income remitted to Malta||15%|
|Tax Rate for Local Personal, Business, Investment Income 35%||35%|
|Tax on Capital Gains outside Malta||Nil|
|Minimum tax (per family)||€15,000|
|Taxation per dependent||Nil|
|Double Tax Treaty Relief||applicable|
|Tax Residence Certificate||Process available|
Eligibility for the Malta Global Residence Program
Applications under the Malta Global Residence Program are open to non-EU, non-EEA and non-Swiss nationals. One application can include the main applicant as his spouse, financially dependent ascendants and other non-family members and dependent relatives that are shown to be bona fide members of the household. Children under the age of 25 are automatically eligible for inclusion. Applicants must demonstrate their financial self-sufficiency and must be in possession of valid sickness insurance cover.
Within 12 months of taking up residence under the Malta Global Residence Program, the residence permit holder needs to comply with the requirement of acquiring or renting property in Malta. Residence candidates are required to demonstrate that an address is available to them in Malta by buying or renting property in Malta. Candidates for the residence program need to meet minimum property value requirements at €275,000 for property in Malta and €220,000 for property in Gozo and the Southern Region of Malta. Candidates have the option to rent property in Malta at €9,600 or property in Gozo and the Southern Region of Malta at €8,750 in annual rent.
The following is a summary of the program rules on eligibility of applicants.
|Summary of Malta Global Residence Program|
|Eligible for inclusion in application:|
|Main Applicant’s spouse||Yes|
|Dependants||< 25 years|
|Taxation per dependent||Nil|
|Minimum Property Purchase Price / Annual Rent|
|Malta||€275,000 / €9,600|
|Southern Region of Malta, Gozo||€220,000 / €8,750|
|Sickness Insurance Coverage||Required|
Malta Global Residence Program: The Rules
Permit holders are required to reside not more than 183
days in any foreign jurisdiction in any year. The program does not impose any formalities for evidencing any minimum residence requirement. Residents also need to demonstrate a valid sickness insurance coverage for all EU risks including Malta. Malta Global Residence Program Permits are issued subject to the following conditions:
|Residence Permit Conditions|
|Maltese domicile||Not allowed|
|Maximum Residence in OTHER countries||< 183 days|
|Employment, Business, Office in Malta||allowed|
The materials contained in this document are provided for general information purposes only and are not intended to provide legal or other professional advice. We accept no responsibility for any direct, indirect or consequential loss or damage which may arise from reliance on information contained in this document. Readers are advised to seek confirmation of statements made herein before acting upon them; specialist advice should also be sought on your particular cases. Please feel free to contact us at your convenience.