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The difference between residency and citizenship

Malta’s warm climate, cosmopolitan lifestyle, safe environment and food culture make it a popular destination for expats to make a new life and resettle with their families.

Apart from marriage and naturalisation, Malta offers two very attractive options for relocation – residency and citizenship.

Both have their benefits and the choice of which option to go for largely depends on a prospective applicant’s particular circumstances.

Citizenship of Malta

The Maltese passport, which of course is also a European Union passport, is one of the most coveted in the world. If you want to become a citizen of Malta, then you should apply under the Malta Individual Investor Programme (MIIP), recognised as one of leading citizenship-by-investment programmes in the world.

The MIIP allows applicants to acquire Maltese citizenship after a strict due diligence process and proof of residency in Malta for twelve months.

The process to participate in the MIIP costs in the region of €1.2 million.

This can be broken down into a €650,000 contribution fee to the State of Malta, €150,000 investment in government bonds, property worth at least €350,000 purchased or rent of at least €16,000 a year. These conditions must be held for at least five years. An indefinite private health insurance covering all applicants of the MIIP is required.

The passport is hereditary, so once obtained, the right to that passport passes to future generations.

A key benefit of citizenship is that apart from the freedom to travel within Schengen, a Maltese passport holder has the right to work and study in all 28 countries that make up the zone. The Maltese passport also allows for easy travel to Africa and visa free travel to over 160 countries.

Maltese citizenship also offers a free healthcare system, excellent primary, secondary and tertiary education.

Malta also does not have any inheritance or succession taxes. The main applicant and eligible dependents are covered under the MIIP.

Residency in Malta

There are several residence programmes in Malta, according to nationality and the basis upon which one is applying. The Ordinary Residence Programme applies to European Union, European Economic Area nationals, as well as nations from Switzerland, Liechtenstein, Norway and Iceland. It is a programme which lasts 4 – 6 weeks. Third country nationals wishing to work in Malta should apply for a single permit or work permit, which would normally take 2 – 3 months to be issued.

The Malta Residence and Visa Programme applies to nationals from third countries. The Global Residence Programme and the Residence Programme are tax programmes which set a minimum tax to be paid per annum to the State of Malta. The former applies to non-EU nationals while the latter applies to EU nationals.

If you become a successful applicant for Malta residency, but choose not to domicile there, you are taxable on a remittance basis. This means that a residents would not be taxable on foreign income which is not remitted to Malta. Residents are taxed on income made in Malta and/or income remitted to Malta. Residents are also not liable to capital gains outside of Malta, whether remitted into the country or not.

Because Malta is within the Schengen Area, residency allows freedom of movement within the said area. Under the residency programmes, eligible dependents may also be covered depending on the residency programme undertaken.

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