Foreign government bonds are safe, namely Malta

Malta residence and citizenship

At Kresse International, we take care of your requirements regarding any type of residence in Malta and advise you on your options for naturalization.

Rules for Residency in Malta

Regarding the provisions of the Malta residency requirements, there are two categories of applicants, namely nationals:

  • The European Union, the European Economic Area (EEA), including Iceland, Norway, Lichtenstein and Switzerland and
  • from third countries

A distinction can be made between the following 6 possibilities:

1. Residence permits for EU / EEA nationals

Every EU and EEA citizen as well as a citizen of a third country who has been resident in Malta for more than three months requires a permit from the authorities in Malta.

Anyone can have their habitual residence in Malta. To do this, this person must have lived and worked in Malta for at least six months or be financially able to support themselves and their family.

Temporary residence is guaranteed for people who are studying in Malta.

EU or EEA nationals and their family members can apply for permanent residence once they have lived continuously in Malta for five years and have not been outside Malta for more than six months per year. Furthermore, it is necessary that the resident has been employed, self-employed or a student or has financially taken care of himself during these 5 years.

2. Highly qualified program

In 2011, a new regulation was introduced for people who work in selected key positions. They receive a tax break in the form of a flat tax of 15% of their earned income.

The purpose of this regulation is to encourage the settlement of qualified foreign specialists in Malta. An income is considered to be derived from a qualifying employment contract if it is at least seventy-five thousand euros (€ 75,000) and the remuneration is paid for one of the selected professional positions. This includes work in the following positions:

  • Chairman of the board or management board, board member or executive board member in the areas of risk, finance, operations, technology
  • Portfolio Manager, Investment Director, Senior Trader / Trader, Senior Analyst (including Structuring Professional), Actuarial Specialist, Chief Underwriting Officer, Chief Insurance Technical Officer
  • Head of Marketing, Head of Investor Relations

In order for a person to be subject to the 15% flat tax, the following requirements must be met:

  • The employee must be employed in one of the above-mentioned selected areas
  • Wages are paid for this work performed in Malta
  • The person has a corresponding specialization, professional training and at least 5 years of work experience
  • The employment contract is subject to Maltese law
  • The person must disclose their tax data and state the remuneration from the employment relationship
  • The individual is not subject to any other of the Maltese tax programs for expatriates in the Investments Services area
  • The person is not yet a resident of Malta / is a Maltese citizen

The tax breaks are valid for citizens of the EEA and Switzerland for five years, for all other nationalities for four years.

3. Program for high net worth individuals (HWNI)

This program, which was introduced in September 2011, only applies to citizens of the EU, the EEA and Switzerland. The Global Residence Program introduced in 2013 applies to all other nationalities.

Malta's HWNI program is designed for individuals who wish to move to Malta for tax purposes.

Then a flat tax of 15% applies to the remittance base, i.e. only foreign income that is transferred / remitted to Malta is subject to Maltese taxation.

Summary of the HWNI program

Requirements:

  • EU / EEA / Swiss citizenship
  • Stable and regular income
  • Buying a property worth at least € 400,000 or
  • Rent at a rental price of at least € 20,000 per year
  • At least 183 days per year in Malta
  • Health insurance

Taxation:

  • 15% on foreign income transferred to Malta
  • 35% on Maltese income
  • Annual minimum tax for the main applicant: € 20,000;
  • for each additional family member: € 2,500

4. Global Residence Program

The Global Residence program complements the HWNI program for nationals from third countries.

To participate in this program, the following requirements must be met:

  • Property ownership in Malta worth at least € 270,000 (a reduced amount of € 220,000 applies to the south of Malta and Gozo) or
  • Rent at a rental price of at least € 9,6000 per year (in the south of Malta and Gozo: € 8,750)
  • Stable financial security for the applicant and thus every dependent family member
  • Presence of health insurance that covers all health costs across the EU
  • Fluent knowledge of English
  • Reliable and suitable person (good repute)

If these conditions are met and the national of a third country takes up residence in Malta, a tax rate of 15% applies to income that is earned outside of Malta and transferred to Malta. Income generated in Malta is taxable at a maximum tax rate of 35%.

5. The Malta Retirement Program 2012 (MRP)

This retirement program is intended for citizens of the EU, the EEA or Switzerland who are not employed and who receive their main income from a pension.

Anyone participating in this program may hold a position on the board of directors of a Malta-based company, but may not be employed by that company in any form. Furthermore, non-profit offices such as in the field of education, research and development work in public institutions, foundations or associations can be performed.

If a citizen of the EU, the EEA or Switzerland registers his place of residence in Malta as part of this program, a tax rate of 15% applies to foreign income, whereby a minimum tax of € 7,500 plus € 500 must be paid for each family member and each caregiver are.

The entire pension is taxable in Malta and must represent at least 75% of the person's total taxable income in Malta.

In order to benefit from the MRP program, the retiree may not stay in any other country outside of Malta for more than 183 days per year and must be in Malta for at least 90 days per year on average for the 5-year period from the date of approval.

In order to qualify for this program, you must purchase or rent a property in Malta or Gozo for at least twelve months.

  • A minimum purchase price of € 275,000 is required for a property purchase, in the south of Malta and on Gozo € 220,000.
  • When renting, the annual rent to be paid must be at least € 9,600. In the south of Malta and Gozo, € 8,750 is sufficient.

EU citizens can bring their household effects and a car that has been in their possession for at least 24 months to Malta, VAT and duty-free. The car must be brought to Malta within 12 months of taking up residence. Applications for the use of this program can be made through Authorized Consultants. We at Kresse International work together with various such consultants and can do this for you.

6. Malta citizenship through investment 2014

Since its introduction in early 2014, the Malta Individual Investor Program (IIP) has offered wealthy individuals and their families from around the world citizenship in Malta, an internationally respected EU member.

People who meet the requirements are guaranteed citizenship in Malta through naturalization. With the Maltese citizenship, which includes the EU citizenship, the establishment of a residence in all 28 EU countries and Switzerland is possible. It also enables business establishments in Malta and visa-free travel to over 160 countries worldwide including the USA.

Requirements for the Individual Investor Program Malta

6.1 Good repute

The Maltese Citizenship by Investment program has one of the strictest screening processes to ensure that only innocent individuals receive Maltese citizenship. There is a four-tier review process for this, in which applicants are examined directly by the government. Applicants must not have committed any crime, which is matched directly with INTERPOL, the International Court of Justice and various other sources and authorities. In addition, they must present a police clearance certificate as part of the inspection.

6.2 Comprehensive health insurance coverage

Furthermore, applicants are not allowed to have any contagious diseases. In addition, they must have an internationally valid health insurance policy with coverage of at least EUR 50,000.

6.3 Financial contribution

Any applicant and their family members moving to Malta must pay a non-refundable levy to the National Development and Social Fund. The fund, which is on a par with the central bank, finances projects in the fields of health care, education, job creation, welfare and research.

In principle, the following taxes must be paid four months after receiving the approval for naturalization:

  • For the main applicant - € 650,000
  • For the spouse - € 25,000
  • For each minor child - € 25,000
  • For each unmarried child between the ages of 18 and 26 - € 50,000
  • For parents & grandparents of the applicant - € 50,000 each

Buying or renting real estate

Applicants must commit to holding property in Malta for a period of at least 5 years. This can be done by buying a property worth at least € 350,000 or by renting it with an annual rent of at least € 16,000. Proof of purchase or rental must be provided within four months of receiving approval for naturalization.

Investment in government bonds

Furthermore, the applicant must invest at least € 150,000 in government-specified securities (government bonds, stocks, bonds that benefit the country) and commit to holding them for at least five years.

6.4 Residence Requirements

When buying or renting a property in Malta, applicants receive a so-called eResidence Card as identification. This signals the beginning of their settlement in Malta and shows their already close connection with the country. 12 months after an applicant has taken up his main residence on Malt, he is entitled to be naturalized. This does not mean that every single day of the year has to be spent in Malta. Maltese law defines residence as “the intention to be resident in Malta for each tax year, with a stay of at least 183 days per year or through purchase or renting a property together with a stay in Malta is suspected ”. Ultimately, this means that by purchasing or renting a property on the Mediterranean island, which is already mandatory, and receiving the Malta eResidence Card, all requirements are met and the applicants do not have to meet any further residence requirements in Europe.

Applicants who have already lived in Malta for one year before applying for naturalization, i.e. who have already established a residence on the Mediterranean island, can be naturalized much faster.

6.5 Steps to Naturalization

Applicants who are not already resident in Malta are advised to move to Malta immediately in order to begin the twelve month residency period as soon as possible.

If the main residence is established, an amount of € 5,000 for the main applicant and € 1,000 for each additional person must be paid to the National Development and Social Fund.

6.6 Application for naturalization

Applications for Maltese citizenship through investment must be submitted to the "Identity Malta" authority. Applicants must be represented by a consultant approved for this purpose in Malta. At Kresse International we work with various Authorized Mandatories.

6.7 Taxation after naturalization

The Maltese tax system is based on residence - not citizenship. Acquiring Maltese citizenship does not automatically mean that you are tax resident in Malta.

However, tax residency in Malta is presumed if a person resides in Malta for at least 183 days per year. Tax residents in Malta who do not have their main residence in the Maltese Islands are taxed on a remittance base. Someone who is not resident in Malta is also not taxable in Malta on foreign income. Only Maltese income and capital gains can be recognized under Maltese tax law for a person who is not a resident of Malta.

We will be happy to provide you with detailed information about the individual steps in personal contact as well as the exact procedure at Identy Malta. As a Maltese partner, we cooperate with one of the leading "accredited agents", so that you can be sure that the combination of our know-how and local praix will optimally look after your application and have the best chance of success.