What residency by investment options does Malta offer?

By Charlotte Brun

Over the years, Malta has become more and more popular with expats, with one in five inhabitants in Malta today being a foreigner. Being an archipelago in the middle of the Mediterranean Sea, situated 80 kilometers south of Italy, Malta enjoys a warm and sunny climate all year round. The Maltese islands are the ideal place for those craving swims in the clear waters of the Mediterranean almost all year round or long hikes in the countryside. Malta also offers a wide range of entertainment options, with many restaurants offering cuisine from all around the world, as well as a vibrant nightlife scene.

For many years, Malta has ranked as one of the safest countries to live in Europe, which is one of the first things that expats seek while relocating, especially those with families and children.

With a steadily growing economy as well as a sound banking system, Malta is expected to have one of the highest GDP growths in 2022 across the European Union, with an estimated 5.2% growth rate. As a result, Malta has a very low unemployment rate and offers many job opportunities for expats. The projections for 2023 show that Malta’s economy will stay robust and grow consistently, with an estimated 4.5% growth rate.

Being an English-speaking country, full member of the European Union, part of the Schengen Area and having Euro as its currency, Malta has a lot one would need in a country of second residency.

When it comes to education, Malta leaves little to be desired as the Maltese education system is based on the British curriculum, which sets high standards of education for the country’s youth and providing the job market with the needed skills to flourish.

Healthcare is another factor making Malta an attractive destination for expats. Maltese residents can benefit from the high standards of healthcare provided across the islands with both public hospitals and private clinics delivering the highest quality of care, which is particularly sought after for the older generation of expats and soon-to-be parents. Especially after the pandemic, families would consider Malta as a viable contingency plan in order to seek better healthcare than in their countries of origin. Having supported the vaccination effort against Covid-19, Malta has built a safe, healthy haven for its residents.

For all these reasons and more, Malta has been attracting High Net-Worth Individuals (HNWIs) and their families who would like to obtain a second residency in a safe and stable country.

In fact, Malta offers various residency programs for third-country nationals (non-EU nationals) who wish to obtain residency rights in Malta. Such programs have different conditions and benefits, in order to suit any applicant’s profile and requirement.

As a Maltese resident, one can stay in Malta for an indefinite period of time and travel visa-free to any country within the Schengen Area for a maximum of three months within a six-month period. But what are the easiest routes to becoming a permanent resident in Malta?

MALTA PERMANENT RESIDENCE PROGRAMME

The Malta Permanent Residence Programme (MPRP) is a residency by investment program launched in 2021. It allows individuals to obtain permanent Maltese residency when investing in Malta’s economy. Upon fulfilling certain requirements, such individuals, along with both their parents and dependents,  would be eligible to become permanent Maltese residents, even though no minimum stay in Malta is required.

By fulfilling the conditions of the program, namely being a fit and proper individual, owning or renting qualifying real estate in Malta and satisfying the financial criteria, the main applicant along with the dependents would be granted a Certificate of Residency valid for life as well as a residence card to be renewed every five years. 

The MPRP is an investment in the family’s future, as the Certificate of Residency may be passed on to future generations, and the future spouse of the dependent children, as well as their own children, would be able to obtain Maltese residency by being added to the main applicant’s application.

The application process typically takes between four and six months to be completed, after which the main applicant and any dependents would be required to visit Malta for the collection of their biometrics and the issuance of their Maltese residence card, granting them the right to live in the country and visa-free travel across the EU.

GLOBAL RESIDENCE PROGRAMME

The Global Residence Programme (GRP) is a tax residency program launched in 2013. It allows reputable individuals to take up tax residence in Malta and benefit from a Special Malta Tax Status. Indeed, under the GRP, the applicant would be taxed in Malta by following two mechanisms: the first is a flat income tax rate of 15% on foreign-source income remitted to Malta, subject to a minimum annual Malta tax of €15,000; and the second taxation mechanism is a flat income tax rate of 35% on Malta-sourced income. Therefore, there would be no income tax levied in Malta on any world-wide income that would not be remitted to Malta.

By fulfilling the conditions of the program, namely being a fit and proper individual, owning or renting qualifying real estate in Malta and paying the minimum annual tax, the main applicant along with the dependents (if any) would be granted a residence card which is renewable every year. The main applicant would therefore be able to reside in Malta without any limitations and would also be able to work in Malta, subject to the issuance of a work permit. Although no minimum stay in Malta is required under the GRP, the applicants should not spend more than 183 days per calendar year residing in another jurisdiction, as this may impact their tax residence status.

The application process typically takes between three and six months to be completed, after which the main applicant and any dependents would be required to visit Malta for a meeting with the International and Corporate Tax Unit, the collection of their biometrics and the issuance of their Maltese residence card. Such residence card may be used to travel visa-free to any country within the Schengen Area for a maximum of three months within a six-month period.

The GRP is particularly attractive for entrepreneurs and business people who travel extensively and do not spend more than six months per year living in a specific jurisdiction.

NOMAD RESIDENCE PERMIT

The Nomad Residence Permit (NRP) is a residency program launched in 2021 by Residency Malta Agency. It allows individuals to work remotely from Malta for their foreign employers, or to offer their freelance services from Malta. Upon fulfilling certain requirements, such individuals, along with their direct family members, would be eligible to become Maltese residents for a maximum period of three years.

With remote work becoming more widespread, the NRP has been a success since its inception, especially amongst the digital nomad community from the UK and the US.

By fulfilling the conditions of this program, namely being a fit and proper individual, being able to work remotely from Malta, earning a minimum salary of €2,700 per month (gross) and owning or renting qualifying real estate in Malta, the main applicant along with the dependents (if any) would be granted a residence card to be renewed every year, for a maximum of three years. 

The application process typically takes about a month and a half to be completed, after which the main applicant and any dependents would be required to visit Malta for the collection of their biometrics and the issuance of their Maltese residence card. Such residence card may be used to travel visa-free to any country within the Schengen Area for a maximum of three months within a six-month period.

STARTUP RESIDENCE PROGRAMME

The Startup Residence Programme (SRP) is the latest Malta residency program, launched in October 2022 and managed by Malta Enterprise in conjunction with Residency Malta Agency. This program is specifically targeted at startups / scaleups and their founders and core employees, including their direct family members.

This program would be accessible to non-EU startups and scaleups that are less than 7 years old, with a minimum investment or paid share capital of €25,000. Malta Enterprise, which is Malta’s economic development agency tasked with attracting foreign direct investment to Malta, would initially be reviewing the startup’s business plan and financial projections to ensure that only the most innovative startups would be able to proceed with their application via this route. Malta Enterprise can also provide various grants and incentives to eligible startups and will be monitoring the financial progress of the startup bi-annually.

On the one hand, the founders and/or co-founders of the qualifying startup as well as their direct family members, would benefit from three initial years of residency and work rights in Malta, renewable for an additional five years. On the other hand, the core employees of the startup – earning at least €30,000 annually – and their direct family members, would also benefit from three initial years of residency and work rights in Malta, renewable for an additional three years. Such qualifying employees may obtain Maltese residency once the founder(s)/co-founder(s)’s application is finalized and approved.

The application process is expected to take about three months to be completed, after which the main applicant and any dependents would be required to visit Malta for the collection of their biometrics and the issuance of their Maltese residence card. Such residence card may be used to travel visa-free to any country within the Schengen Area for a maximum of three months within a six-month period.

The SRP is expected to be successful among the startup business community as it offers a great opportunity for startups to grow and flourish in Malta, while allowing such businesses to access the vibrant European Union market, potentially scaling up and expanding further in other European Union countries. Moreover, the founders and core employees will have the right to settle and work from Malta, along with their families.

By expanding its residency options, Malta is reaffirming its position as a strong jurisdiction for permanent relocation or second residency. It has been witnessed over the past few years that more and more high-net-worth individuals and their families, not only from developing countries but also from countries such as the US, the UK and other European jurisdictions, are choosing Malta as their second home. With geopolitical instability and health crisis concerns all over the world, Malta remains a safe haven to invest in and an excellent contingency plan for the future.

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