The Malta Permanent Residence Programme commenced in the 1960s when a retirement program was operated to allow British retirees to relocate to Malta and receive their British pension in Malta enjoying Malta's favourable personal tax system. This gradually evolved and forked into a number of programmes, some of which are still in existence today, including the Malta Global Residence Programme. The 2021 Permanent Residence Programme evolves from changes that are being discussed after a consultation process regarding the Malta Residence Visa Programme or MRVP that revolves around an investment in Government Bonds and listed equities.
The older 1988 Malta Permanent Residence Scheme was designed to attract affluent individuals and their families to take up permanent resident status in Malta. The scheme is especially attractive to retirees, authors, intellectuals and international consultants, entrepreneurs or simply persons seeking to establish an alternative residence that suits their lifestyle and tax profile.
Malta for Quality overseas living
The 2021 Malta Permanent Residence Scheme is probably the most attractive residence programme available to individuals seeking to acquire permanent residence permit in a European country that is also part of the Schengen Area. overseas to more attractive jurisdictions that are warmer in climate, enjoy a high standard of living, provide a safe environment for younger and older members of the family and a provide a scheme for permanent residence that is selective, affordable and tax friendly. Malta ticks all the boxes for an attractive permanent residence jurisdiction and occupies the highest positions in respected international indexes for quality living and retirement.
Investments Qualifying for Malta Permanent Residence
The Malta government contribution may be increased should the applicant choose to rent rather than buy a qualifying property. Currently the qualifying property in the south of Malta must be purchased for a minimum of €270,000 or rented for €10,000; while properties in the rest of Malta must have a minimum value of €300,000 or €12,000 in the case of rent.
Subject to a legal notice expected in the coming weeks, a contribution of €68,000 is payable for investors who buy a qualifying property; or of €98,000 if the investor leases a property rather than buying a property. Qualifying property in the south of Malta must be purchased for a minimum of €300,000 or rented for €10,000; while properties in the rest of Malta must have a minimum value of €350,000 or €12,000 in the case of rent.
Eligibility for Malta Permanent Residence
By way of financial qualifications, an investor is required to demonstrate a capital of €500,000, of which €150,000 must take the form of financial assets.
Family applications are favoured by the Malta Permanent Residence Programme, allowing the following to be included in a family application for permanent residence::
- unmarried couples in a long term relationship and
- dependent unmarried children with no age limit, as well as
- parents and grand parents on either side.
Malta Permanent Residence: Time Frame
From the Agency’s side, there is a renewed commitment towards increased efficiency, with a targeted processing time of 6-8 months, leaving due diligence of applicants as paramount over speed considerations.
Malta Permanent Residence: Contributions
The fees under the awaited new PR regulations are expected to be as follows:
- Main applicant: €68,000 / €98,000 government contribution (in case of property purchase/rental respectively).
- Parents/grandparents: €7,500
- Spouse: €7,500
- Children: 18+: €5,000
A philanthropic donation to an approved charity or NGO in Malta is also expected as a requirement at a minimum of: €2,000.
Competitiveness of Maltese PR
Malta continues to take note of a competitive market place of European countries competing in their attractiveness for foreign investors. Accordingly, some competitive advantages:
- Permanent residence status is not lost if the resident does not reside in Malta in any given year.
- No need to purchase property if property rent is preferred to start with.
- Persons planning their tax resident status in Malta should seek tax advice on the minimum presence and other criteria required for tax residence.
Tax System for Malta Permanent Residents
Non-tax residents are only subject to tax on local source income. Tax residents of Malta enjoy a remittance basis of taxation, often referred to as res non-dom taxation, whereby they are only subject to Maltese tax on their foreign income only to the extent remitted to Malta, and not on their foreign source capital gains, whether remitted or not.
- A minimum annual tax liability of €5,000 applies to person benefiting of Malta's res non-dom tax status.
- Permanent residents of Malta requiring formal confirmation of their tax residence status in Malta are able to obtain this through a separate procedure - prior legal advice is recommended.
- No world-wide income/wealth tax - tax only paid on income remitted to Malta.
- No Inheritance/Wealth Taxes
Permanent Residents of Malta are entitled to taxation at the flat rate of 15% on remitted income if, instead, they apply under the Malta Global Residence Programme - this attracts a higher minimum tax of €15,000 for the privilege of a flat rate of tax on remitted income only.. Income arising in Malta to a permanent residence permit holder is subject to tax at 35%.