The Mediterranean island boasts both citizenship and residency programs with various benefits, eligibility and requirements.
Malta Investment Immigration Programs Overview
Malta’s Individual Investor Program (IIP) offers a swift, straightforward and affordable pathway to a European Union passport. This program is widely acknowledged in the industry as being one of the most efficient currently available world-wide, with a solid reputation based on its rigorous due diligence and vetting procedures.
Investors with no preexisting ties to Malta can expect to obtain citizenship within around 12 months, a wait which compares very favorably to other similar programs. It is a donation-based system, with the principal investment being a monetary contribution to a National Development and Social Fund established by the Maltese government. This is then used for infrastructure, education and other social projects.
IIP investors can also benefit from Malta’s well-designed and comprehensive tax regime, which is fully compliant with current international and EU rules and treaties. These benefits include a 15 percent foreign-earnings tax rate for non-residents and an exemption for foreign capital gains for all non-domicile Maltese residents.
Malta’s program, which launched in 2014, is currently capped at 1,800 participants and at least 1,200 applications have already been received.
HOW TO APPLY
Malta requires that investors maintain residency for 12 months before receiving citizenship, although that doesn’t necessarily mean being physically present on the island: it’s possible to qualify as resident by demonstrating a legitimate connection, perhaps through business activity or philanthropic work, accompanied by a few in-person visits.
Still, investors can expect a multi-step application process that begins with the payment of a 5,000-euro deposit (plus another 1,000 euros per dependent) to start the residency clock ticking. The next step is a formal CBI application, which includes a further 10,000-euro payment towards the 650,000-euro donation, and due-diligence fees of 7,500 euros for the applicant, 5,000 euros for the spouse and adult dependents, and 3,000 euros for each minor dependent. Advisors recommend filing for residency before beginning the CBI paperwork, to minimize the overall waiting time.
It typically takes four months for the CBI application to be approved, at which point investors must pay the remainder of their 650,000-euro contribution. Investors also have 240 days from filing their initial application to demonstrate that they have met the real-estate and bond-purchase requirements. Both applicants and their dependents must also visit Malta in person to take an oath of allegiance prior to receiving citizenship. Qualified investors can obtain citizenship within six months of filing their papers, but in practice most will need to wait a full year to meet the residency requirement.
Malta was under British rule until 1964, and prides itself on maintaining elements of British culture, including an efficient civil service, a parliamentary political system, and a common-law legal framework. The country has a robust economy underpinned by financial services, manufacturing, and shipping, and buoyed by the many tourists who flock to enjoy Malta’s sunny weather and historic architecture. Maltese nationals also benefit from free access to one of the world’s best healthcare systems: Malta’s health service was ranked 5th in the world in a recent World Health Organization ranking.
Citizenship By Investment
Though at its core a donation-based program, investors must make a number of different investments to qualify for Malta’s IIP:
- Contribution: Applicants must make a nonrefundable 650,000-euro donation to the island’s National Development and Social Fund, plus an additional 25,000-euro donation for their spouse and each minor dependent, and an additional 50,000-euro donation for each adult dependent.
- Real estate: Applicants must acquire a personal residency in Malta, either by purchasing a property worth at least 350,000 euros, or leasing a property at an annual rent of at least 16,000 euros. Both purchased and leased properties must be retained for at least five years.
- Stocks and bonds: Applicants must invest at least 150,000 euros in government-approved stocks, bonds, or other financial instruments, and maintain their investment for at least five years.
Investors should also be prepared to pay due diligence fees that begin at 7,500 euros for a single applicant, but that can climb to 18,500 euros for a family of four. Passport fees total 500 euros per person, and applicants must also pay 200 euros for bank charges. Children aged up to 26 and adult dependents aged 55 or more are eligible for inclusion in an application, subject to the additional donations and fees described above.
Residency By Investment
Malta also offers a number of attractive options for investors seeking residency, but who don’t need the additional perks that come with a Maltese passport. Among the most interesting for immigration investors:
- Malta Residency & Visa Program (MRVP): A standard golden-visa system, the MRVP confers permanent residency in exchange for a 30,000-euro donation and a five-year, 250,000-euro investment in government bonds. Investors must also purchase or lease property worth at least 270,000 to 320,000 euros, depending on location, and demonstrate an income of at least 100,000 euros or net assets of at least 500,000 euros.
- Global Residence Program: Only available to non-EU investors, this option provides significant tax benefits, with zero taxation on foreign income not remitted to Malta, and a 15 percent tax rate for remitted earnings. To qualify, investors must purchase property worth a minimum of between 220,000 euros and 250,000 euros, depending on location, or lease an equivalent property; demonstrate that they have the resources to support themselves in Malta; and commit to spending no more than 183 days in any other single tax jurisdiction in any given calendar year. Unlike the MRVP, the Global Residence Program is renewable annually, and has a 15,000-euro annual minimum tax requirement.
Other residency programs are available to EU citizens, including several programs aimed at attracting retirees. All the programs have the potential to confer significant tax advantages, but applicants should seek professional advice to ensure they’re selecting the program that’s best suited to their individual needs.
The Quebec Immigrant Investor Program
A passport for the Mediterranean island country opens the doorway to much of the world, including educational and employment opportunities in the European Union.
When are investors considered residents of Malta for tax purposes and what are the basis for taxation?
March 27, 2018
The clock is ticking for investors hoping to take advantage of Malta’s flagship citizenship-by-investment initiative, industry professionals say.