Jurisdiction: Malta

Background

Malta, without doubt, is one of the countries with the greatest number of residency routes; there is a programme for everyone.

Located in the Mediterranean, just south of Sicily, Malta offers all of the advantages of being a full member of the EU and Schengen Member States, has English as one of its two official languages, and a climate many chase all year round. Malta is also very well connected with several international airlines, including: British Airways, Lufthansa, Emirates, Qatar, Turkish Airlines, Ryanair, EasyJet, WizzAir and Swiss, which fly into and out of Malta almost daily.

Its location in the centre of the Mediterranean has historically given it great strategic importance as a naval base, with a succession of powers having contested and ruled the islands. Most of the foreign influences have left some sort of mark on the country’s ancient history.

Malta’s economy has enjoyed large growth since joining the EU and the forward thinking Government actively encourages new business sectors and technologies.

Malta Residence Programmes

Malta is unique in that it offers nine residence programmes to meet different individual circumstances.

Some are appropriate for non-EU individuals, whilst others provide an incentive for EU residents to move to Malta.

These programmes include those offering individuals a fast and efficient way to obtain a European permanent residence permit and visa-free travel within the Schengen Area, as well as another programme designed for third country nationals to legally reside in Malta but maintain their current job remotely. An additional regime is targeted towards professionals earning over a certain amount each year and offering a flat tax of 15%, and finally, there is a programme for those who have retired.

• It should be noted that none of the Malta residence programmes have  language test requirements.

The Nine Malta Residence Programmes

Here is a quick breakdown:

• Malta Permanent Residence Programme – open to all third country, non-EEA, and non-Swiss nationals with a stable income and sufficient financial resources.
• Malta Start-Up Programme – this new visa allows non-European nationals to relocate and live in Malta, by establishing an innovative start-up. founders and/or co-founders of the start-up can apply for a 3-year residency permit, together with their immediate family, and the company to apply for 4 additional permits for Key Employees.  
• Malta Residence Programme – available to EU, EEA, and Swiss nationals and offers a special Malta tax status, through a minimum investment in property in Malta and an annual minimum tax of €15,000.
• Malta Global Residence Programme – available to non-EU nationals and offers a special Malta tax status, through a minimum investment in property in Malta and an annual minimum tax of €15,000.
• Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment – a residence programme for foreign individuals and their families who contribute to the economic development of Malta, which can lead to citizenship.
• Malta Key Employee Initiative – a fast-track work permit application programme, applicable to managerial and/or highly-technical professionals with relevant qualifications or adequate experience relating to a specific job.
• The Malta Highly Qualified Persons Programme – available to EU nationals for 5 years (may be renewed up to 2 times, 15 years in total), and non-EU nationals for 4 years (may be renewed up to 2 times, 12 years in total). This programme is targeted at professional individuals earning more than €81,457 per annum and seeking to work in Malta in certain industries.
• Qualifying Employment in Innovation & Creativity Scheme – targeted towards professional individuals earning over €52,000 per annum and employed in Malta on a contractual basis at a qualifying employer.
• Digital Nomad Residence Permit – targeted at individuals who wish to maintain their current job in another country, but legally reside in Malta and work remotely.
• Malta Retirement Programme – available to individuals whose main source of income is their pensions, paying an annual minimum tax of €7,500.

The Remittance Basis of Taxation

To make life even more enjoyable, Malta offers tax benefits to expatriates and the attractive Remittance Basis of Taxation.

A resident non-domiciled individual is only taxed on Malta source income and certain gains arising in Malta. They are not taxed on non-Malta source income not remitted to Malta and are not taxed on capital gains, even if this income is remitted to Malta.

Additional Information and Assistance

Dixcart can assist in providing advice as to which programme would be most appropriate for each individual or family.

We can also; organise visits to Malta, make the application for the relevant Maltese residence programme, assist with property searches and purchases, and provide a comprehensive range of individual and professional commercial services once relocation has taken place.

For further information about moving to Malta please contact Henno Kotze:

advice.malta@dixcart.com.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

What is the Key Employee Initiative?

The Key Employee Initiative (KEI) provides a fast-track work permit for highly specialised Third-Country Nationals (TCNs), who are employed in Malta.

The scheme enables work permits to be issued to key prospective employees, no longer than 5 working days from the date of application, under normal circumstances.

Third-Country Nationals

Third-Country Nationals require a single work permit to be able to obtain residence and be employed in Malta. This is because TCNs are not members of the EU or EFTA, and are therefore not able to move across borders, in the EU, without the proper documentation. 

However, TCNs who are high-skilled workers, are provided with a fast-track work permit service by the Key Employee Initiative. Under normal circumstances, the scheme will issue work permits in not more than 5 days, as detailed above. In contrast non highly specialised TCNs must wait for at least a couple of months.

Who is Defined as a Highly Skilled Worker?

Highly-skilled workers include individuals who possess advanced technical, academic and interpersonal skills. They usually flourish in the areas of; problem-solving, leadership, system improvement and creativity. Examples of highly-skilled workers include; university professors, engineers, biotech scientists, business directors, and IT experts. 

Criteria

Malta’s Key Employee Initiative (KEI), is available to highly technical or managerial professionals with the relevant qualifications and experience for the job they are applying for.

Eligible highly-skilled workers are required to meet the following requirements: 

• Have valid travel documents 
• Receive an annual gross salary of at least €30,000 
• Be in possession of certified copies of qualifications and necessary work experience 
• The employer must declare that the individual has the necessary credentials for the assigned role

Benefits:

The following benefits are available through Malta’s Key Employee Initiative:

• The KEI is a fast-track version of the standard single work permit application, with applications being approved in just 5 days.
• Applications can be submitted online, without the applicant needing to be present in Malta.
• Approved applicants are issued with a residence permit valid for 1 year. This  can be renewed, subject to the presentation of a valid definite or indefinite contract, and an original ‘annual tax declaration form’, stamped by the Maltese Inland Revenue Department.
• Visa-free travel within the 26 Schengen Area Countries, by virtue of the Maltese residence card. This is limited to a maximum of 90 days every 180 days.

Family Members of Work Permit Holders

Non-EU nationals who have been legally residing in Malta for over a year (in specific circumstances this may be reduced), are eligible to apply for the ‘reunification’ of family members. This includes spouses over the age of 21 and children under the age of 18.

Long-term Residents

Long-term residence status may be granted to persons legally residing in Malta for a continuous 5 year period.

A successful application requires; proof of continuous residence prior to the application date, and the ability to show stable and regular income of a stipulated amount. Dixcart can provide details of the other requirements, which include the need to have health insurance and attendance of a language and culture course.

Tax Treatment

• Tax is charged at progressive rates (capped at a maximum of 35%), on Malta sourced income and capital gains, and on foreign source income (excluding foreign source capital gains), that is remitted to Malta.

• No tax is chargeable on foreign sourced income that is not remitted to Malta.
• Capital gains are tax-exempt in Malta, even if they are remitted to Malta.
• Bank interest earned in Malta can be liable to withholding tax at 15%.

• Long term residence permit holders are not entitled to benefit from the remittance basis of taxation and will be taxed on their worldwide income in Malta.

Case Study

Dixcart Malta provided advice to a UK citizen who was still living in the UK. An important benefit of the Key Employee Initiative is that it is possible to start the  process before the relevant individual has even arrived in Malta.

This highly-skilled professional, in the ICT industry, secured his position at a Maltese employer and decided to relocate to the island once he received the ‘Approval in Principal Letter’, confirming that his application met all of the requirements and had been successful.

After being provided with all of the essential documents, Dixcart Malta made the application, on behalf of the Employee and Employer and submitted all of the forms and evidence of experience, qualifications, and health insurance, to the Authorities. In addition, we even helped to find an apartment for the newcomer.

After receiving a final decision, the KEI had 90 days to relocate to Malta.

Another Set of Circumstances

Dixcart Malta can also provide support services, relating to the Key Employee Initiative, for TCN Employees and local Employers. There may be situations where positions cannot be filled by the local labour market and where suitable TCNs can fulfil the job in the EU with a fast-track Malta work permit, rather than the company remain with vacant positions.

Additional Information

For further information on the Key Employee Initiative, please do not hesitate to contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

Background

In 2020 the Maltese government updated the citizenship legislation relating to citizenship by; birth, registration, naturalisation, dual and multiple citizenships, and exceptional services by direct investment.

A new residency route which can lead to Citizenship in Malta, was the outcome.

What are the Details of this New Residency Route?

• ‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment,’ provides foreign individuals and their families, who contribute to the economic development of Malta, a route to become citizens of Malta.

Malta is a member of the European Union as well as a Schengen Member State, and its citizens can travel, live, work, study and set up business in any of the member countries, with visa-free travel rights to more than 180 countries.

Community Malta Agency (‘Agency’), is the authorised Maltese Government Agency responsible for administering the processing of all applications leading to Maltese Citizenship.

What are the Criteria?

To apply for Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, an applicant needs; to invest in the Maltese economy directly, make a donation and hold residential property.

Direct Investment

Applicants, who can prove residency status in Malta for 36 months, prior to the naturalisation, are required to make a direct investment of €600,000. Whilst applicants who can prove residency status in Malta for at least 12 months, prior to naturalisation, are required to make a direct investment of €750,000.

If the applicant is accompanied by qualifying dependants, a further investment of €50,000 per dependant needs to be made. 

An applicant cannot apply for a certificate of citizenship by naturalisation for exceptional services, before he/she has proved that he/she has become a resident of Malta for the minimum period required.

Philanthropic Nature of Direct Investment

Prior to the issue of a certificate of Maltese citizenship, the applicant must donate a minimum €10,000 to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society, or as otherwise approved by the Agency.

In addition, the main direct investment made by each applicant will be used by the Government to finance projects coordinated by The National Development and Social Fund, across Malta.

Projects that Benefit from The National Development and Social Fund

The National Development and Social Fund agency (‘Fund’) was established to manage and administer 70% of the contributions received from the Individual Investor Programme of the Republic of Malta, set up under the Malta Citizenship Act Cap.188.

The Fund’s mission is to; contribute towards, promote and support significant projects and initiatives of national importance and of public interest, which are intended to develop and improve the economy, public services, and the general well-being of present and future generations.

Between July 2018 and June 2019, the total contributions, including property purchases, rents, and investments, collected through the Programme amounted to more than €271 million. This equates to approximately 2.11% of Malta’s GDP in the same period. The total amount collected, since the changes implemented in the 2020 citizenship legislation, exceed €930 million. Of these funds, approximately €515 million have been allocated to the National Development and Social Fund.

More Details about the Projects

The fund has invested in the following projects:

• €10 million to upgrade eight health centres and 54 clinics. Previously, the Fund awarded a grant of €950,000 to Mater Dei Hospital’s Cardiology Department to upgrade its two catheterisation suites, and €5 million to Puttinu Cares to purchase apartments for cancer patients and their families in London.
• In Feb 2019, a memorandum was signed to commit €50 million towards a social housing project. Five hundred new social housing units to be built, across 22 different sites. These sites are spread over 12 localities; Paola, Kirkop, Rabat, Żabbar, Mellieħa, Luqa, Żurrieq, Żebbuġ, Qormi, Siġġiewi, Qrendi and Marsascala.
• In Ħamrun, a planned roof garden of around 500m2, with more than 2,500 trees, shrubs and plants including mature carob, olive and oak trees, will be featured in the square. This garden will absorb around 900 kilograms of carbon dioxide from the atmosphere, whilst producing 660 kilograms of oxygen.
• Other investments allocated by the Fund include;  €1.5 million for Caritas, a €1.5 million investment in artistic heritage, and €3.5 million in Urban Green projects.

In 2020, the Fund received €27.8 million from Community Malta Agency, with the total proceeds received from inception being €599.8 million.

Investment in Education

An agreement was signed at the Wardija Resource Centre, part of the Maria Regina College, offering special education beyond the compulsory school age. With an investment of around €40,000, teaching will take place in a multisensory room, where skills related to students’ senses will be developed.

In addition, in collaboration with the University of Malta, a new garden will be planted to create a habitat for endemic butterflies and to enhance their reproduction chances. Another section is to have an apiary where students can learn and enjoy their free time.

At St Paul’s Bay’s Primary School, a room dedicated to creativity and innovation will be launched with an investment of €35,000. Teaching will be undertaken in interdisciplinary ways, mixing; science, technology, engineering, and the arts to increase students’ scientific, literacy and critical thinking.

Finally, at Naxxar’s Senior School, an investment of around €30,000 will be used for new curtains and a mechanised projector for the school’s stage. This is to encourage students to participate in visual and artistic activities, as this will help them learn to think creatively and develop critical thinking, which can be applied in all areas of learning.

Quota for the New Residency Route

It is important to be aware that a maximum quota of 400 applicants per year has been set, with a total maximum number of applicants set at 1,500, for the entire scheme.

Additional Information

If you would like further information regarding Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, please contact the Dixcart office in Malta: advice.malta@dixcart.com or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

Digital Nomads – the Background

Digital nomads are remote workers who travel to different locations regularly. They use modern technology to work from coffee shops, hotels, co-working spaces, or libraries with a Wi-Fi-connected laptop or smartphone from anywhere in the world.

Digital nomads tend to be freelancers or entrepreneurs who are self-employed, working for themselves or for companies as independent contractors.

In the past it has been difficult for entrepreneurs and freelancers to apply for traditional visas as either a contract with a local entity was required, or a letter of invitation. A tourist visa, for example, is not suitable as the individual might want to stay for a more extended period.

The Malta Nomad Residence Permit

The Malta Nomad Residence Permit can easily be obtained by; remote workers, digital nomads, and freelancers and it grants the holder a legal right to reside in Malta and travel visa free throughout the Schengen Member States.

About Malta

Malta has long been famous for its expat-friendly environment, which is well illustrated by the large expat community in Malta. Thanks to its favourable legislative system and tax benefits, the island is home to many foreign companies.

It is a small country in size but has a cosmopolitan soul. There are many cafes, bars, restaurants, and co-working spaces that make life easier for digital nomads. In addition, it is now one of the very few countries in the world with 5G nationwide coverage.

Along with its digital nomad-friendly environment, it also has everything an ideal island would have; beaches, 300 sunny days a year, a relaxed way of life, excellent seafood, and a lot of fun. Malta has it all and is a perfect base for remote working.

Eligibility Criteria for Malta Nomad Residence Permit

There is a specific set of rules for the program.

Applicants must:

• Be a third-country national (non-EU)
• Have a monthly income of €2,700 (gross of tax) for a single applicant
• Have a work contract for an employer that is registered in a country other than Malta, OR
• Be a partner/shareholder in a company that is registered in a country other than Malta, OR
• Offer freelance services to clients whose permanent establishments are in  countries other than Malta, and with whom the applicant has a contract(s)
• Have a valid travel document
• Have health insurance covering Malta
• Present a property rental or property purchase agreement

Cost of Application and Timeframe for Malta Nomad Residence Permit

The government fee for the main applicant is €328, with an additional €328 fee payable for each family applicant.

Applicants who intend to spend up to 180 days in Malta will be issued with a National Visa, while those who plan to spend up to 365 days or more will be issued with a Residence Permit.

Processing applications takes approximately 30 days, from receipt of all the required documentation and application forms.

Which Family Members can be Included?

The main applicant can include dependent family members. It is possible to add a spouse and minor children, as well as adults who are financially dependent on the main applicant.

Malta recognizes same-sex unions. A same-sex partner in a committed relationship for a defined period, can be included in an application.

Applicable Taxes

Nomad residence permit holders are not subject to personal income tax as they are  expected to pay tax in their country of origin. However, nomad residence permit holders will be subject to consumption tax (VAT) in the same manner as all Malta residents. 

How Can Dixcart Assist?

If you would like further information regarding Malta Nomad Residence Permit, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

There are several residence programmes available in Malta aimed at non-EU/EEA nationals to obtain residence status in Malta. The various programmes range from those intended to obtain a permanent residence status to programmes giving a special tax and temporary residence status.

In Malta the two most popular residency routes are the Malta Permanent Residence Programme (MPRP) and the Malta Global Residence Programme (GRP).

Malta Permanent Residence Programme (MPRP)

The MPRP is open to all third-country, non-EEA and non-Swiss nationals, with a stable income from outside Malta sufficient to maintain themselves and their dependants with adequate financial resources. 

Once applicants have successfully completed the application process with Malta Residence Agency who run the programme, they receive an e-Residence card that entitles them to live in Malta and travel visa-free throughout the Schengen Member States. More information about the MPRP program can be found here: Malta Permanent Residence Programme.

Malta Global Residence Programme (GRP) 

GRP is available to non-EU passport holders. The Global Residence Programme entitles non-EU nationals to obtain a Maltese residence permit, renewable annually, through a minimum investment in property in Malta and by paying a minimum annual tax. Individuals who are EU/EEA/Swiss nationals please see: Malta Global Residence Programme which operate on the same basis as the GRP.

The Main Difference

The main difference between the Global Residence Programme (GRP) and Malta Permanent Residence Programme (MPRP), is that the GRP does not offer permanent residence rights. A special tax status leads to an annual residency permit, whilst the MPRP offers permanent residence in Malta. 

Residence Status Explained

Residence status obtained under the MPRP is valid for life (provided that the requirements of the programme are still being met), whilst the residence status obtained under the GRP is renewed annually subject to paying an annual tax.

Annual Tax:

• Under the GRP, a beneficiary must pay a minimum annual tax of €15,000.

• Under the MPRP, there is a minimum annual tax of €5,000 if the person is ordinarily resident in Malta, or zero tax if the person is not ordinarily  resident in Malta. In both cases the tax rate on income remitted to Malta is a flat 35%.

Comparison of Programs: GRP and MRVP 

Conditions	Global Residence Programme	Malta Permanent Residence Programme
Financial requirements	Not specifically defined, but an individual should have sufficient resources to sustain himself and his dependants, without any recourse to social assistance in Malta.	No less than €500,000 in all assets (€150,000 of which should be in financial assets – for the first 5 years).
I. Option. Purchase a property with a minimum value of	Central/North Malta: €275,000 South Malta/Gozo: €220,000	Central/North Malta: €350,000 South Malta/Gozo: €300,000
II. Option. Rent a property with a minimum value	Central/North Malta: €9,600 South Malta/Gozo: €8,750	Central/North Malta: €12,000 South Malta/Gozo: €10,000
Minimum annual tax	€15,000 per year	From €5,000 per year, if ordinarily resident **
Tax rate	15%: Foreign Source Income remitted to Malta 35%: Local Source Income	If ordinarily resident: 0% – 35%**
Registration procedure	Application Fee + Property + Annual Tax	Application Fee + Contribution + Property + Charity
Application process	3-6 months	4-6 months
Official application fee	€6,000	1. Application Fee: €10,000 due within one month of submission 2. Letter of Approval: €30,000 due within two months of submission 3. 8 months to conclude the due diligence and a contribution of: €28,000 or €58,000 needs to be paid
Dependants	Spouse, Children up to 18 or adult children between 18 and 25 years old, including adopted children, provided that such children are not economically active and are financially dependent on the main applicant. Financially dependent parents.	Allowing 4 generations to be included in one application: spouse, children – regardless of age can be included in the application if they are unmarried and financially dependent, parents and grandparents if they are principally and financially dependent on the main applicant.
Donation to a Non-Government Organisation	Not applicable	€2,000
Additional Criteria	Applicant must not spend more than 183 days in any other jurisdiction in any single calendar year.	An additional €7,500 payment per person is required for each adult dependant included in the application.
Duration of status in Malta	One calendar year. Need to re-submit on an annual basis.	Permanent Status: a Malta residence card is issued for all family members for 5 years, then renewed without any additional contribution, if the requirements of the programme continue to be met.
Schengen Access (26 European countries)	Right to travel within the Schengen Area for 90 days in any 180 days.	Right to travel within the Schengen Area for 90 days in any 180 days.

** Annual minimum tax under the Permanent Residence Programme is Zero if you are not ordinarily resident in Malta. If you select to be ordinarily resident in Malta, then the annual minimum tax is €5,000.

How Can Dixcart Help?

Any individual interested in applying for one of these programmes is required to do so through a registered approved agent.

Dixcart is an authorised agent and offers a bespoke service. We will be by your side throughout the process from completing the required documents to meetings with the various Maltese Authorities.  We can support you in choosing the best residential programme in Malta for you and your family.

Additional Information

If you would like further information regarding MPRP or GRP in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23