Residence Permit in Malta

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Malta Residence permits for EU/EEA nationals

Any EU and EEA or third country national residing in Malta for a period of more than three (3) months is required to obtain a permit from the competent authorities in Malta. An individual may qualify for Ordinary Residence, which requires that such individual has been physically living in Malta for a period of six months or more and is currently working in Malta or is able to financially support himself and his family, without having to resort to public funds. Temporary residence is also granted to a person who is following an education here in Malta. Permanent residence can be applied for by an EU/EEA national and his family members once they have been living in Malta for a continuous period of five years and provided that such applicants have not absented themselves from Malta for more than six months a year. The applicants should be employed, self-employed, studying or economically self-sufficient throughout the five year period.

Malta highly specialized individuals scheme for residents

Legal Notice 106 of 2011 introduced new rules by virtue of which individuals who receive an employment income from an ‘eligible’ office will be subject to a tax benefit consisting of a flat tax rate of fifteen percent (15%) on their employment income rather than the ordinary progressive rates of tax, capped at thirty five percent (35%). The purpose of these rules was to encourage expatriates working within specialised sectors to relocate to Malta and increase Malta’s attractiveness as a reputable financial services centre. Income is considered to derive from a qualifying contract of employment when it relates to employment income of a minimum of seventy five thousand Euros (€75,000) consisting of emoluments from an ‘eligible office’. The latter relates to an employment in any one of the following positions:

Head of Marketing, Head of Investor Relations.

Chief Executive Officer, Chief Risk Officer, Chief Financial Officer, Chief Operations Officer, Chief Technology Officer;

Portfolio Manager, Chief Investment Officer, Senior Trader/Trader, Senior Analyst (including Structuring Professional), Actuarial Professional, Chief Underwriting Officer, Chief Insurance Technical officer;

An individual under this scheme shall benefit from the 15% tax rate if the following conditions are satisfied:

The individual is not domiciled in Malta

The employment contract is subject to the laws of Malta for the purposes of carrying out genuine and effective work;

The individual is able to demonstrate that employment income received is related to employment activities carried out in Malta;

The individual is able to demonstrate that the employment activities carried out are in relation to the functions of an eligible office;

The individual has not benefitted from any other deductions available to investment services expatriates;

The individual fully discloses for tax purposes and declares emoluments received in respect of income from a qualifying contract of employment;

The individual is able to demonstrate that he has adequate and specific competence and is in possession of professional qualifications and has at least 5 years’ experience;

The reduced rate of tax applies for a consecutive period of five years for EEA and Swiss nationals and for a consecutive period of four years for other nationals.

High Net Worth Individuals Rules for Malta residence permits

On the 15th of September 2011, Malta’s Finance Minister announced the much awaited High Net Worth Individuals Rules (‘HNWI Rules’)regulating the issue of Malta residence permits to EU and non-EU nationals (although a new scheme called the Global Residence Programme Rules 2013 replaced the High Net Worth Individuals Rules with respect to non-EU nationals) Persons eligible under these new rules will be subject to Malta tax at a flat rate of 15% on a remittance basis, that is, only on foreign source income if remitted to Malta.

These Rules replace the former Malta Residents Scheme Regulations. Malta's HNWI Rules apply to those individuals who wish to have their tax residence in Malta and they now address only two categories of applicants, namely nationals of:

The European Union (EU), the European Economic Area (EEA) and Switzerland, and

Summary of the HNWI Rules

The following is a summary of the applicable requirements for the Malta High Net Worth Residence Schemes:

Requirements	EU/EEA/Swiss Nationals
Financial Background	Stable & regular income
Property Purchase; or	Minimum of EUR 400,000
Property Rental	Minimum of EUR 20,000
Property Subletting / Sharing	Not allowed
Tax Rate	15% Foreign source income remitted to Malta; 35% Malta source income
Annual Minimum Tax Payment	Main Applicant : EUR 20,000; Dependent : EUR 2,500
Health Insurance	Required
Maximum Residence in any other country	< 183 days
Malta domicile allowed	No
Local Business / Employment	Allowed

The Global Residence Programme Rules 2013

The new Global Residence Programme, Legal Notice 167 of 2013 (hereinafter the ‘Rules’ have recently been published in Malta and replace the High Net Worth Individual Rules above with respect to third country nationals. In order for a person to qualify under these Rules, such person would be required to hold a qualifying property holding, which in terms of the Rules may refer to either a purchase of an immovable property at a consideration of not less than Euro 270,000 for a property situated in Malta; albeit if the property is situated in the south of Malta or in Gozo, the amount is reduced to Euro 220,000. Alternatively, a qualifying property may refer to a property taken on a lease which is not less than Euro 9,600 per annum for a property situated in Malta or Euro 8,750 per annum for a property situated in the south of Malta or in Gozo. In order to further qualify under these rules, such person would also be required to be in receipt of stable and regular resources, which are sufficient to maintain himself and any person dependent on him; he would require a health insurance that covers all risks in the EU, be fluent in English and be a fit and proper person. A qualified person under these Rules would be subject to pay income tax at a rate of 15% on income arising outside of Malta and remitted to Malta. Any other income arising in Malta which is not chargeable to tax under the Rules shall be charged as separate income at the rate of 35%.