Retiring or Relocating to Malta

Ordinary Residence in Malta

Ordinary residence in Malta requires individuals to physically live on the island for a period of six months or more in any calendar year. There is no minimum value property requirement or other conditions for non-residents seeking to obtain ordinary residence in Malta, unless there is the specific need for an Acquisition of Immovable Property (AIP) permit. Citizens of all European Union member states, including therefore Maltese Citizens, who have not resided continuously in Malta for a minimum period of five years, require an Acquisition of Immovable Property (AIP) permit to acquire immovable property for secondary residence purposes.

Individuals who are not citizens of a European Member state may not acquire any immovable property unless they are granted an Acquisition of Immovable Property (AIP) permit.

There are defined zones in Malta, referred to as special designated areas, where there are absolutely no restrictions to acquisition. There is also no restriction on acquisition through inheritance and there are also several other special exemptions. Different rules apply to the acquisition by bodies of persons.

EU/EEA Nationals

Rights of EU/EEA nationals

EU/EEA nationals have the right to reside in Malta if they are exercising any of their Treaty rights as workers, self-employed persons, economically self-sufficient persons or students.

Economic Self-Sufficiency
An applicant should show that he is able to provide for himself and for his accompanying dependants by being financially stable and not being in need of any financial support from the Maltese government. The current thresholds for EU/EEA nationals are set at a minimum capital of € 14,000 or a weekly income of € 84.95 for single persons, and at a capital of at least € 23,300 or a weekly income of € 93.10 for married couples.

Employment
A second ground on which EU/EEA nationals may obtain ordinary residence in Malta is employment. An individual must accept offers of employment or seek employment in Malta, work in Malta as an employee or be self-employed. Alternatively, an individual may opt to set up a business in Malta and work for his / her own business.

Third Country Nationals

The qualifying criteria for Maltese ordinary residence in respect of third country nationals vary from those applicable to EU/EEA nationals. An employment license is required in order for non-EU/EEA nationals to work in Malta. In order to qualify to apply for self-employed status, a third country national must meet certain criteria. A firm commitment regarding the engagement of EU/EEA nationals as part of the applicant’s staff will assist in the favourable consideration of an application.

Permanent or Long–Term Residence

Permanent or long-term residence status may be granted to individuals who have been legally residing in Malta for 5 continuous years. This means that such individuals must not have been absent from Malta for more than 6 consecutive months in any given year of the said 5 year period or for more than a total of 10 months throughout this whole period. However, a single absence of a maximum of 12 months for important reasons such as pregnancy, child birth, serious illness, study, vocational training or posting overseas, will not affect the required continuous residence.

A third country national who has been granted long-term residence status by another Member State other than Malta, may reside in Malta, for a period exceeding three months, for the exercise of an economic activity in an employed or self-employed capacity, provided that such person is in possession of an employment license, is pursuing studies or vocational training, or is engaged in other such activities.

Income Tax

A person who is both ordinarily resident and domiciled in Malta is taxable on worldwide income, irrespective of whether such income is received in Malta or not. Click here to view the current tax bands that apply to residents of Malta.

A person who is resident but not domiciled in Malta is taxable on all chargeable income arising outside Malta to the extent that such income is received in Malta and on all chargeable income earned or derived in Malta. All capital gains arising outside of Malta are not taxable in Malta irrespective of whether or not these gains are remitted to Malta. The same tax rates disclosed above applicable to persons both ordinarily resident and domiciled in Malta would apply here. Persons resident in Malta are normally liable to pay social security contribution. Click here to view the current rates.

A person who is neither ordinarily resident nor domiciled in Malta is taxable only on income arising in Malta. Personal income tax is charged at progressive rates up to a maximum of 35%. Please click here to view the current tax bands that apply to persons not residing in Malta.

Highly Qualified Persons

Although Malta has steadily gained an excellent reputation as an onshore domicile, notable for its competitive cost of living and the availability of well trained staff, the rapid development of the financial services and gaming industries in recent years means that Malta now requires highly qualified workers in those areas of the financial services and gaming sectors where local expertise is currently lacking.

The objective of Legal Notice 106 Highly Qualified Persons Rules, 2011 is the creation of a scheme to attract highly qualified persons to occupy an “eligible office” with companies licensed and/or recognized by the relevant Competent Authority (Malta Financial Services Authority, Lotteries and Gaming Authority). “Eligible office” comprises employment in one of the following positions:

Actuarial Professional,
Chief Executive Officer;
Chief Financial Officer;
Chief Commercial Officer
Chief Insurance Technical Officer;
Chief Investment Officer;
Chief Operations Officer;
Chief Risk Officer (including Fraud and Investigations Officer);
Chief Technology Officer;
Chief Underwriting Officer;
Head of Investor Relations;
Head of Marketing (including Head of Distribution Channels);
Head of Research and Development; (including Search Engine Optimisation and Systems Architecture)
Portfolio Manager;
Senior Analyst (including Structuring Professional);
Senior Trader/Trader.
Odds Compiler Specialist

“Eligible office” in an aerodrome licensed undertaking refers to employment in the position of Chief Executive Officer.

Individual income from a qualifying contract of employment in an eligible office with a company licensed and/or recognised by the Competent Authority is subject to tax at a flat rate of 15% subject to certain conditions.

The rules for the scheme came into force with effect from 1 January 2010 and apply to income which is brought to charge in year of assessment 2011 (basis year 2010) and apply to individuals not domiciled in Malta.

The Residence Programme

The Residence Programme (TRP) is designed to attract individuals who are nationals of the EU, EEA or Switzerland and who are permanent residents of Malta. Beneficiaries may also have household staff providing a service in their qualifying property, as long as the requisite procedures are satisfied. Furthermore, the applicant must

Own property of at least €275,000 if in Malta or €250,000 if in Gozo or €220,000 if in the South of Malta; or rent such property for a minimum rent of €9,600 annually if in Malta; €8,750 if in Gozo or in the south of Malta;
Not be a beneficiary of any other programme such as the High Net Worth Individuals Rules or the Highly Qualified Persons Rules;
Be in possession of sickness insurance which covers himself and his dependants in respect of all risks across the whole of the EU normally covered for Maltese Nationals.

An individual who has been granted special tax status in accordance with the TRP will be subject to tax at a rate of 15% on any income that is received in Malta from foreign sources by the beneficiary and his/her dependants. Any Malta source income that the individual and dependants may be in receipt of will be taxable at 35%. The minimum tax payable under such programme is €15,000 annually for the individual and his dependants.

Global Residence Programme

The Global Residence Programme (GRP) is designed to attract individuals who are not nationals of the EU, EEA or Switzerland and who are not long-term residents. Individuals benefitting from this programme are not precluded from working in Malta, provided they obtain a work permit. Furthermore, the applicant must

own property of at least €275,000 if in Malta or 250,000 if in Gozo or 220,000 if in the South of Malta; or rent such property for a minimum rent of €9,600 annually if in Malta, €8,750 if in Gozo or in the south of Malta;
not be a beneficiary of any other programme such as the High Net Worth Individuals Rules or the Highly Qualified Persons Rules;
be in possession of sickness insurance which covers himself and his dependants in respect of all risks across the whole of the EU normally covered for Maltese nationals.

An individual who has been granted special tax status in accordance with the GRP will be subject to a tax rate of 15% on any foreign source income that is received in Malta. Any Malta source income that the individual may be in receipt of will be taxable at 35%. The minimum tax payable under such a program is €15,000 annually for the individual and his dependants.

Malta Retirement Programme

The Malta Retirement Programme (MRP) is designed to attract nationals of the EU, EEA and Switzerland who are not in an employment relationship and are in receipt of a pension as their regular source of income. Individuals benefitting from this programme may hold a non-executive post on the board of a company resident in Malta but may not be employed with such company in any capacity. The applicant must

be in receipt of a pension which is supported by the original documentary evidence;
the entire pension declared in the application to be received by the individual in accordance with the documentary evidence must be received in Malta. Where a pension is not wholly received in Malta, the beneficiary cannot apply. Furthermore this pension needs to constitute at least 75% of the individual’s Malta chargeable income for any particular tax year;
own property of at least €275,000 if in Malta, €250,000 if in Gozo; or rent such property for a minimum rent of €9,600 annually if in Malta or €8,750 if in Gozo;
not be a beneficiary of any other programme such as the High Net Worth Individuals Rules or the Highly Qualified Persons Rules;
not be domiciled in Malta and does not intend to establish his domicile in Malta within five years from the date of application;
be in possession of sickness insurance which covers himself and his dependants in respect of all risks across the whole of the EU normally covered for Maltese nationals;

An individual who has been granted special tax status in accordance with the MRP will be subject to a tax rate of 15% on any foreign source income that is received in Malta. Any Malta source income that the individual may be in receipt of will be taxable at 35% and such income may not exceed 25% of the individual’s total taxable income for that year. The minimum tax payable under such a program is €7,500 and a further €500 for each of the individual’s dependants.