Malta remains one of the smallest and safest countries in the world. The mediterranean country with its strategic location is well known for shipping, tourism and yachting is a magnet for investment. Malta has a rich culture, history attracts diversity to its shores. Maltese islands are known to exist from 5600 BC.
Malta has two golden visa program and one citizenship by investment program in total has 3 immigration programs aimed at attracting HNW clients. While many of you have heard about a citizenship and golden visa program in Malta, the second golden visa scheme (GRP) is not known to many, as it is not widely promoted.
The three citizenship and residence programs for investors in Malta are:
- Direct Investment Exceptional Naturalization program
- Malta Residence Visa Program (MRVP)
- Global Residence Program (GRP)
The key difference between the GRP and MRVP golden visa schemes is the GRP scheme does not offer permanent residence rights and no citizenship, while offering special tax status. This is why MRVP remains the most popular golden visa program.
Why Malta?
- Politically and economically stable climate;
- Safest country in the world
- English is official language, warm wealth with lots of sunshine
- Forward thinking nation welcoming multicultural diversity
- Economic growth higher than most EU countries, low public debt
- One of the 3 Commonwealth member states among Europe.
- Member of the EU since 2004, Schengen Area since 2007 and Eurozone
1. Direct Exceptional Naturalization Program
Malta’s Direct Investment exceptional naturalization program which replaces Individual Investor Programme (IIP) provides for granting of citizenship by a certificate of naturalisation to foreign individuals who make a financial investment in Malta. The New regulations published in L.N. 437 of 2020 under the Granting of Citizenship for Exceptional Services Regulations, 2020 which was published in the Government Gazette Of Malta No. 20,524– 20.11.2020
This new citizenship program is limited 1500 applications is launched. A further annual cap of 400 investors granted citizenship for investments.
The minimum cost incurred for an IIP application by a main applicant purchasing property in Malta and having no dependants would amount to (EUR 750,000 (contribution). Applicants must also pay the agent’s fees as per agreement between the agent and applicant. Renting a place and health insurance coverage are mandatory under the current rules. No separate investment is required from dependants and the contribution required on their behalf
The Community Malta Agency is responsible for administering this new citizenship program with strict vetting standards. The background screening of applicants for citizenship is very strict only those with good background and financial profile are admitted into the program. The refusal rates are 25-30%. There is a 4 month minimum processing time of applications.
Once approved, applicants must apply for e-residence permit for 12 months and after this time take an oath to become a Maltese citizen and then later for maltese passport.
The Maltese passport is highly respected and strongest EU passports in the world offering free movement to United States, Canada, Australia, United Kingdom over 180+ countries.
2. Malta Residence Visa Program
The Malta Residence and Visa Programme (MRVP) provides for the acquisition of Maltese residency by investment. The MRVP was established in 2015 by the Malta Residence and Visa Programme Regulations (LN 288/2015)3 – subsidiary legislation issued under the Immigration Act
The competent authority for the MRVP is the Malta Residence and Visa Agency (MRVA) established in 2017 In practice, the MRVA is responsible for all MRVP matters except for the issuance of the residence permit that falls within Identity Malta’s competences.
MRVP remains the cheapest golden visa scheme in Europe, exactly similar to the hungarian golden visa program which was closed few years ago. MRVP offers immediate permanent resident status with indefinite rights to live and settle in Malta and later path to become a maltese citizen after 5 years through ordinary naturalization.
Conditions
- Finance Government bonds or stocks for €135,000 (all inclusive price incl Govt fee and Agent fee) or invest €250,000 in buying interest free Govt stocks or bonds plus Govt fee and Agent fee.
- Prove net assets of €500,000 or have annual income of €100,000
- Pay Government processing fee €130,000
- Rent a property for atleast €10,000 per year or buy real estate for atleast €270,000
- Health insurance coverage
Taxes
An individual is typically resident but not domiciled in Malta where the individual lives in Malta for more than 183 days in a calendar year but does not intend to live in Malta permanently.
In such cases, the individual is subject to tax in Malta on any Malta source income and any foreign income remitted to Malta.
Capital gains arising outside Malta will remain not taxable in Malta even if received in Malta.
A person who is neither ordinarily resident nor domiciled in Malta is taxable only on income arising in Malta, i.e. income having a Malta source.
3. Malta Global Residence Program
The Global Residence Programme (‘GRP’) Rules were introduced by virtue of Legal Notice 167 of 2013 and came into force with effect from 1st July 2013.
This program is aimed at attracting real estate investment in Malta granting special tax status to investors. This program does not offer indefinite stay rights (no PR) to applicants like MRVP, requires applicants live permanently in Malta and does not offer path to maltese citizenship.
Conditions
- One-time registration fee of €6,000 (€5,500 in the case of applications involving a qualifying property holding in the south of Malta or Gozo) must be paid upon application.
- Buy Immovable property in Malta for a value of not less than €275,000, or if the property is located in the south of Malta or Gozo, the value shall not be less than €220,000; or Rent immovable property in Malta for not less than €9,600 annually, or if the property is located in the south of Malta or Gozo, the value shall not be less than €8,750 annually.
- Must not stay in any other jurisdiction for more than 183 days in a calendar year.
- The GRP Rules also set up special reporting obligations, being the filing of an annual tax return and other notifications that must be complied with.
4. Malta Retirement Residence
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 benefit from a reduced rate of tax of 15% on foreign income remitted to Malta, and 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.
Taxes
Individuals who qualify under the GRP Rules are taxable at the beneficial tax rate of 15% on foreign source income remitted to Malta, subject to a minimum annual tax payment of €15,000 with the possibility to claim double taxation relief.
Please contact us for more information.
