Author: Henno Kotze

Malta has introduced a New Start-up Residence Programme

At the 2-day “Start-In-Malta Festival” in October 2022, Malta Residence Agency announced a new residence programme: the Malta Start-Up Residence Programme.

• This new visa will allow non-European nationals to relocate and live in Malta, by establishing an innovative start-up.

The programme allows founders/co-founders to apply for a 3-year residency permit, together with their immediate family, and the company to apply for 4 additional permits for Key Employees.  

The Hon. Miriam Dalli (Minister for the Environment, Energy and Enterprise) stated “we want to be at the forefront of cutting edge technology innovation, research & development“.

Highlights of the new Start-Up Residence Visa

• Fast and efficient application process
• Founders/Co Founders receive a 3-year permit that can be potentially renewed for another 5 years (it is possible to include immediate family members in the application)
• Founders/Co Founders may apply for permanent residency after residing in Malta for 5 years
• The Start-up company can also apply for residence permits for up to 4 Key employees (of which they will need to satisfy the requirements of the KEI)
• Key Employees receive a 3-year residence permit that can be renewed for another 3 years (it is possible to include immediate family members in the application)
• Key Employees may apply for long term residency after completing 5 years in Malta

Salient Points:

• The Start-up Business Plan must be approved by Malta Enterprise
• Malta Enterprise will periodically review the start-up activities
• It is still possible to apply for all Malta Enterprise Support Measures, however the residence permit will only be approved once the funding is approved (if no funding is required, the Residence application process may be swift):
  • Funding Available for it and Fintech Business in Malta
  • Malta – The Package of Support Available for Research and Development Projects 

• It is expected that the successful applicants will reside in Malta and make Malta their permanent residence and therefore there is a minimum stay requirement of 183 days per year

Additional Information

For further information on the new Start-up Visa, 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

Introduction to the Malta Nomad Residence Permit

The new Malta Nomad Residence Permit, enables individuals to maintain their current job in another country, whilst they legally reside in Malta.

Malta Nomad Residence Permit – Eligibility for Third Country Individuals

To be eligible for this Permit, an individual must be able to work remotely and independently of his/her location, and needs to use telecommunication technologies.

Malta has already welcomed a number of EU digital nomads. This community of ‘nomads’, enjoys Malta’s climate and lifestyle, and have already begun to interact with people with similar ideas, to add value to the community.

The Nomad Residence Permit in Malta opens up this opportunity to third country citizens, who would usually need a visa to travel to Malta. This permit lasts for one year and can be renewed at the discretion of Residency Malta, as long as the individual still meets the criteria.

If the third-country applicant for the digital nomad permit wants to stay less than a year in Malta, he/she will receive a National Visa for the duration of the stay, rather than a residence card.

Criteria

Applicants for the Nomad Residence Permit must:

1. Prove they can work remotely using telecommunication technologies
2. Be third country nationals.
3. Prove they work in any of the following categories:
4. Work for an employer registered in a foreign country and have a contract for this work, or
5. Perform business activities for a company registered in a foreign country, and be a partner/shareholder of said company, or
6. Offer freelance or consulting services, mainly to customers whose permanent establishment is in a foreign country, and have supporting contracts to verify this.
7. Earn a monthly income of €2,700 gross of tax. If there are additional family members, they will each have to satisfy the income requirements as specified by the Agency Policy.

In addition to the above, applicants must also:

1. Possess a valid travel document.
2. Have health insurance, which covers all risks in Malta.
3. Have a valid contract of property rental or property purchase.
4. Pass a background verification check.

Application Process

• The applicant must complete all of the documents required by the Residency Malta Agency.
• After submitting all of the documents digitally, the individual will receive instructions for payment of a €300 administrative fee, for each applicant.
• The application will then be reviewed by the Agency and other Maltese Authorities, who will contact the individual by email, when the process is complete.
• Finally, the applicant will need to submit biometric data for the Nomad Residence Permit or National Visa, and the process will then be concluded.

Additional Information

If you require any further information regarding the Nomad Residence Permit, please contact Henno Kotze at the Dixcart office in Malta: advice.malta@dixcart.com, or speak to your usual Dixcart contact.

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

Background

Malta offers 9 residence programmes to meet different individual circumstances. Some are appropriate for non-EU individuals while others provide an incentive for EU residents to move to Malta.

The residence programmes and the tax benefits they can provide for individuals, where relevant, are detailed below.

1. Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment

‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment’ is Available to EU/EEA and Non-EU Passport Holders and provides foreign individuals and their families, who contribute to the economic development of Malta, a route to becoming citizens of Malta.

Applicants can opt for residence in Malta, leading to citizenship choosing between two options:

1. application after three years of residence in Malta, for a lower contribution fee; OR
2. application for citizenship after one year of residence in Malta.

To be able to apply for Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, an applicant needs to make a direct investment to the Maltese economy, make a donation, and hold a residential property.

Exceptional Services Requirements

• Direct Investment

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

If the applicant is accompanied by qualifying dependants, a further investment of €50,000 per dependant is 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 Donation

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.

• Property Investment

Once an applicant is approved and prior to the issue of a certificate of Maltese citizenship, the application must either purchase or rent residential property in Malta. If the applicant opts to purchase a property, an investment of at least €700,000 must be made. An applicant may alternatively take a lease on a residential immovable property in Malta, for a minimum annual rent of €16,000. The applicant must retain the property for at least 5 years from the date of the issue of the certificate of Maltese citizenship.

• Tax Advantages Available to Individuals

Individuals will be taxed on Malta source income and certain gains arising in Malta. They will not be taxed on non-Malta source income not remitted to Malta, or Capital remitted to Malta. In addition, they will not be taxed on capital gains even if this income is remitted to Malta.

• MALTA PERMANENT RESIDENCE

The Malta Permanent Residence programme is available to non-EU individuals and enables them to reside indefinitely in Malta.

Successful applicants receive Permanent Maltese residence immediately and a 5 year residence card. The card is renewed every 5 years if the requirements of the programme are still being met. There are two options with regards to this programme:

Option 1: Rent a property and pay the full contribution:

• Pay the €40,000 non-refundable administrative fee; AND
• Rent a property with a minimum of €12,000 per year (€10,000 if the property is situated in Gozo or the south of Malta); AND,
• Pay the full Government contribution of €58,000; AND
• Make a donation of €2,000 to a local philanthropic, cultural, scientific, artistic, sport or animal welfare NGO registered with the Commissioner of Voluntary Organisations.

Option 2: Purchase a property and pay a reduced contribution:

• Pay the €40,000 non-refundable administrative fee; AND
• Purchase a property with a minimum value of €350,000 (€300,000 if the property is situated in Gozo or the south of Malta); AND,
• Pay the reduced Government contribution of €28,000; AND
• Make a donation of €2,000 to a local philanthropic, cultural, scientific, artistic, sport or animal welfare NGO registered with the Commissioner of Voluntary Organisations.

It is possible to include up to 4 generations in one application if it can be proven that the additional applicants are principally dependant on the main applicant.

An additional Government Contribution of €7,500 is required for each additional adult dependant (excluding the spouse) included in the application.

Applicants must show capital assets of not less than €500,000, out of which a minimum of €150,000 must be financial assets.

• Tax Advantages Available to Individuals

Individuals, taking advantage of this programme, who are not of Maltese origin and intend to stay in Malta for some considerable time but do not intend to permanently establish themselves in Malta, will be classified as resident but not domiciled in Malta.

Such individuals will be taxed on Malta source income and certain gains arising in Malta. They will not be taxed on non-Malta source income not remitted to Malta. Capital gains will not be taxed even if they are remitted to Malta.

• GLOBAL RESIDENCE PROGRAMME

The Global Residence Programme entitles non-EU nationals to obtain a special Malta Tax Status and Maltese residence permit through a minimum investment in property in Malta.

Successful applicants can relocate to Malta if they choose to do so. They also have the right to travel to any country within the Schengen Zone of countries without the need for an additional visa(s). There is no minimum day stay requirement, however successful applicants may not reside in any other jurisdiction for more than 183 days per year.

To qualify for the scheme an individual must purchase property costing a minimum of €275,000 or pay a minimum of €9,600 per annum in rent. If the property is in Gozo or the south of Malta the minimum property value is €250,000 or €220,000 respectively, or a minimum rent payment of €8,750 per annum is required. In addition, an applicant must not spend more than 183 days in any other jurisdiction in any single calendar year.

• Tax Advantages Available to Individuals – Global Residence Programme

A flat rate of 15% tax is charged on foreign income remitted to Malta, with a minimum amount of €15,000 tax payable per annum (income arising in Malta is taxed at a flat rate of 35%). This applies to income from the applicant, his/her spouse and any dependants jointly.

Foreign source income not remitted to Malta is not taxed in Malta.

Individuals may also be able to claim double taxation relief under the regime.

• THE MALTA RESIDENCE PROGRAMME

The Malta Residence Programme entitles EU nationals to obtain a special Malta Tax Status and Maltese residence permit through a minimum investment in property in Malta.

To qualify for the scheme an individual must purchase property costing a minimum of €275,000 or pay a minimum of €9,600 per annum in rent. If the property is in Gozo or the south of Malta the minimum property value is €250,000 or €220,000 respectively, or a minimum rent payment of €8,750 per annum is required. In addition, an applicant must not spend more than 183 days in any other jurisdiction in any single calendar year.

There is no minimum day stay requirement, however successful applicants may not reside in any other jurisdiction for more than 183 days per year.

• Tax Advantages Available to Individuals –The Malta Residence Programme

A flat rate of 15% tax is charged on foreign income remitted to Malta, with a minimum amount of €15,000 tax payable per annum (income arising in Malta is taxed at a flat rate of 35%). This applies to income from the applicant, his/her spouse and any dependants jointly.

Foreign source income not remitted to Malta is not taxed in Malta.

Individuals may also be able to claim double taxation relief under the regime.

• HIGHLY QUALIFIED PERSONS PROGRAMME

The Highly Qualified Persons Scheme is directed towards professional individuals earning over €86,938 per annum (basis year 2021), employed in Malta on a contractual basis.

This scheme is open to EU nationals for five years (may be extended 2 times – 15 years in total) and to non-EU nationals for four years (may be extended 2 times – 12 years in total. A list of qualifying positions is available on request.

• Tax Advantages Available to Individuals – Highly Qualified Persons Programme

Income tax is set at a flat rate of 15% for qualifying individuals (instead of paying income tax on an ascending scale with a current maximum top rate of 35%).

No tax is payable on income earned over €5,000,000 relating to an employment contract for any one individual.

• RETIREMENT PROGRAMME

The Malta Retirement Programme is available to EU and non-EU nationals whose main source of income is their pension.

An individual must own or rent a property in Malta as his/her principal place of residence in the world. The minimum value of the property must be €275,000 in Malta or €220,000 in Gozo or south Malta; alternatively, property must be leased for a minimum of €9,600 annually in Malta or €8,750 annually in Gozo or south Malta.

In addition, there is a requirement for an applicant to reside in Malta for a minimum of 90 days each calendar year, averaged over any five-year period. Individuals must not reside in any other jurisdiction for more than 183 days in any calendar year during which they benefit from the Malta Retirement Programme.

• Tax Advantages Available to Individuals – The Retirement Programme

An attractive flat rate of 15% tax is charged on a pension remitted to Malta. The minimum amount of tax payable is €7,500 per annum for the beneficiary and €500 per annum for each dependant.

Income that arises in Malta is taxed at a flat rate of 35%.

• Key Employee Initiative

Malta’s ‘Key Employee Initiative’ is available to non-EU passport holders and is applicable to managerial and/or highly technical professionals with relevant qualifications or adequate experience relating to a specific job.

Successful applicants receive a fast-track work/residence permit, which is valid for one year. This can be renewed annually.  

Applicants must provide proof and the following information to the ‘Expatriates Unit’: Annual gross salary of at least €30,000 per annum. Certified copies of relevant qualifications warrant or proof of appropriate work experience. Declaration by the employer stating that the applicant has the necessary credentials to perform the required duties.

• Tax Advantages Available to Individuals

The standard Remittance Basis of Taxation apply. Individuals that intend to stay in Malta for some considerable time but do not intend to permanently establish themselves in Malta, will be classified as resident but not domiciled in Malta. Income earned in Malta is taxed on a progressive scale with a maximum rate of 35%. Non-Malta sourced income not remitted to Malta or Capital remitted to Malta are not taxed.

• The Qualifying Employment in Innovation & Creativity Scheme

The scheme is targeted towards certain professional individuals earning over €52,000 per annum and employed in Malta by a qualifying employer on a contractual basis. The applicant can be a national of any country.

The scheme is available for a consecutive period of not more than 3 years.

• Tax Advantages Available to Individuals

Income tax is set at a flat rate of 15% for qualifying individuals (instead of paying income tax on an ascending scale with a current maximum top rate of 35%).

• Nomad Residence Permit

The Malta Nomad Residence Permit enables third country individuals to maintain their current job in another country, whilst they legally reside in Malta. The permit can be for a period of between 6 and 12 months. If a 12 month permit is issued then the individual will receive a residence card which allow for visa-free travel throughout the Schengen Member States. The permit may be renewed at the discretion of the agency.

Applicants for the Nomad Residence Permit must:

1. Prove they can work remotely using telecommunication technologies
2. Be third country nationals.
3. Prove they work in any of the following categories:

1. Work for an employer registered in a foreign country and have a contract for this work, or
2. Perform business activities for a company registered in a foreign country, and be a partner/shareholder of said company, or
3. Offer freelance or consulting services, mainly to customers whose permanent establishment is in a foreign country, and have supporting contracts to verify this.
4. Earn a monthly income of €2,700 gross of tax. If there are additional family members, they will each have to satisfy the income requirements as specified by the Agency Policy.
5. Tax Advantages Available to Individuals

Successful applicants will not be taxed on their income as the income will be taxed in their home country.

How Can Dixcart Assist?

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.

Additional Information

For further information about moving to Malta please contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office in Malta. Alternatively, please speak to your usual Dixcart contact.

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

Background

In 2020, the Maltese government has revisited its citizenship legislation to consider all matters relating to citizenship by birth, by registration, by naturalisation, dual and multiple citizenships and for exceptional services by direct investment.

A Residency Route Which Can Lead to Citizenship in Malta

‘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 becoming citizens of Malta.

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

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

Under the new regulations, applicants can opt for residence in Malta, leading to  citizenship choosing between two options:

1. application after three years of residence in Malta, for a lower contribution fee; OR
2. application for citizenship after one year of residence in Malta.

To be able to apply for Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, an applicant needs to make a direct investment to the Maltese economy, make a donation and hold a residential property.

Exceptional Services Requirements

• Direct Investment

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

If the applicant is accompanied by qualifying dependants, a further investment of €50,000 per dependant is 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 Donation

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.

• Property Investment

Once an applicant is approved and prior to the issue of a certificate of Maltese citizenship, the application must either purchase or rent residential property in Malta. If the applicant opts to purchase a property, an investment of at least €700,000 must be made. An applicant may alternatively take a lease on a residential immovable property in Malta, for a minimum annual rent of €16,000. The applicant must retain the property for at least 5 years from the date of the issue of the certificate of Maltese citizenship.

Agent

All individuals interested in applying for this programme, are required to do so through a registered approved agent, who will be acting on behalf of the client in all matters related to the Application for Eligibility and Application for Citizenship.

The Dixcart office in Malta can assist with the agency services.

Eligibility Criteria for Applicants

The Malta government aims to attract people of the highest calibre through the Malta Citizenship by Direct Investment and grant them Maltese residence, following a rigorous due diligence process and adherence to strict criteria.

To be eligible for the Malta Citizenship by Direct Investment, an applicant must meet a number of criteria:

• Be 18 years of age, or older. Eligibility may also extend to applicant’s dependants including the spouse or de facto partner, or a person with whom a relationship is held through a status which is the same as or similar to marriage, children, parents and grandparents under certain terms;
• Is willing to contribute, through an exceptional direct investment, to the economic and social development of the Republic of Malta;
• Provides proof that he/she has been a resident in Malta for at least 12 or 36 months preceding the day of issue, of the certificate of naturalisation;
• Meets all the application requirements; and
• Commits to providing proof of residence in Malta and proof of title to a residential property in Malta in accordance with the regulations.

Quota

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

Additional Information

If you would like any further information on the 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

The Malta Retirement Programme – Background

Until recently, the Malta Retirement Programme was only available to applicants from EU, EEA, or Switzerland. It is now available to EU and non-EU nationals and is designed to attract individuals who are not in employment but instead are in receipt of a pension as their regular source of income.

Individuals taking advantage of the Malta Retirement Programme, can hold a non-executive position on the board of a company, resident in Malta. They would, however, be prohibited from being employed by the company in any capacity. Such individuals can also be engaged in activities related to an institution, trust or foundation of a public nature, that is involved in philanthropic, educational, or research and development activities in Malta.

Benefits of the Malta Retirement Programme

In addition to the lifestyle benefits of living on a Mediterranean island, which enjoys more than 300 days of sunshine per year, individuals benefiting from the Malta Retirement Programme are granted a special tax status.

• An attractive flat rate of 15% tax is charged on a pension remitted to Malta. The minimum amount of tax payable is €7,500 per annum for the beneficiary and €500 per annum for each dependant.
• Income that arises in Malta is taxed at a flat rate of 35%.

Who May Apply?

Applicants who meet the following criteria are eligible to apply for the Malta Retirement Programme:

• Non-Maltese nationals.
• Own or rent a property in Malta as his/her principal place of residence in the world. The minimum value of the property must be €275,000 in Malta or €220,000 in Gozo or south Malta; alternatively, property must be rented for a minimum of €9,600 annually in Malta or €8,750 annually in Gozo or south Malta. Applicants renting the property must take out the lease for a minimum period of 12 months, and a copy of the lease contract needs to be submitted with the application.
• The pension which is received in Malta must constitute at least 75% of the beneficiary’s chargeable income. This means that the beneficiary can only earn up to 25% of his/her total chargeable income from any non-executive post(s), as referred to above.
• Applicants must have Global Health Insurance and provide evidence that they can maintain this for an indefinite period.
• The applicant must not be domiciled in Malta and should have no intention of becoming domiciled in Malta, within the next 5 years. Domicile means the country where you officially have a permanent home or have a substantial connection with. You can have more than one residence, but only one domicile.
• Applicants must reside in Malta for a minimum of 90 days in each calendar year, averaged over any five-year period.
• The applicant must not reside in another jurisdiction for more than 183 days in any one calendar year during the period that they benefit from the Malta Retirement Programme.

Special Carer

A ‘special carer’ is an individual who has been providing substantial and regular, curative or rehabilitative health care services to the beneficiary or his/her dependants, for at least three years prior to an application for special tax status, under the Malta Retirement Programme.

A special carer may reside in Malta with the beneficiary, in the qualifying property.

Where the care has not been provided for a minimum period of three years, but has been provided on a regular basis for a long and established period, the Commissioner in Malta may assess that this criteria has been met. It is important that the provision of such services is formalised by a contract of service.

A special carer would be subject to tax in Malta, at the standard progressive rates and is precluded from benefiting from the 15% tax rate. The special carer must register with the relevant tax authorities in Malta.

Applying to the Malta Retirement Programme

An Authorised Registered Mandatory in Malta must apply to the Commissioner of the Inland Revenue on behalf of an applicant. This is to ensure that the individual enjoys the special tax status as provided in the programme. A non-refundable administrative fee of €2,500 is payable to the Government on application.

Dixcart Management Malta Limited is an Authorised Registered Mandatory.

Individuals with special tax status are required to submit an annual return to the Commissioner of the Inland Revenue, with evidence that they have met the specified criteria.

Additional Information

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