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 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 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 and non-EU/EEA 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 national or a third country national, can be easily complied with, thus making the attainment of Maltese ordinary residence even more attractive.
Ordinary Residence >> EU and EEA nationals
There are different grounds on which EU/EEA nationals may become ordinarily resident in Malta, including economic self-sufficiency, employment, education and opening a business, the most popular of which are being set out hereunder.
Economic Self-Sufficiency: This criterion requires that such individuals 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 nationals are set at a minimum capital of € 14,000 or a weekly income of € 84.95 for single persons, and at a capital of at least € 23,300 or a weekly income of € 93.10 for married couples.
Employment: A second ground on which EU/EEA 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. Alternatively, an individual may opt to set up a business in Malta and work for his / her own business.
Ordinary Residence >> Third country nationals
The qualifying criteria for Maltese ordinary residence in respect of third country nationals vary from those applicable to EU/EEA nationals. We are setting out below a few of these possibilities.
Employment: An employment licence is required in order for non-EU/EEA nationals to work in Malta. This is granted upon satisfying certain criteria. Candidates qualified in the financial services and information technology fields are sought after and therefore it may be easier for such individuals to get an employment licence.
Self-Employment: In order to qualify to apply for self-employed status and work for one’s business, a third country national must meet one or more of the following criteria:
- An investment of at least € 100,000 without an EU/EEA partner, or an investment equivalent to € 40,000 with a Maltese partner. The investment must consist of fixed assets and/or capital used for business purposes. Rental contracts are not eligible;
- Status of a highly skilled innovator with a sound business plan, committed to recruiting at least three EU/EEA nationals within eighteen months of establishment of business;
- Status of sole representative of an overseas company (with a sound reputation and established for at least three years abroad) wishing to open a branch in Malta; or
- The holding of a directorship in a company forming part of a project that has been formally approved by Malta Enterprise, and which has been formally notified by the latter to the Employment and Training Corporation.
A firm commitment regarding the engagement of EU/EEA nationals as part of the applicant’s staff will assist in the favourable consideration of an application.
Individuals who are ordinarily resident, but not domiciled in Malta, are subject to income tax on income arising in Malta, on income arising outside Malta but received in Malta and on capital gains arising in Malta. No tax is chargeable on capital gains which arise overseas but which are remitted to Malta.
Personal income tax is charged at progressive rates from 0% up to a maximum of 35%
Long term residence
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 long-term 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, is pursuing studies or vocational training, or is engaged in other such activities.
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.
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 underage, 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.