Taxation

Residence Regimes with Special Taxation

Malta offers attractive tax regimes for those individuals planning to relocate, for job-related reasons or retirement, to a quieter place with a high standard of living in Europe. Malta also offers benefits for professional experts and businessmen who perform high value-added, intellectual property, industrial or know-how activities who create or relocate their businesses in Malta.

Maltese residents are taxed on income from Maltese sources and are exempted from foreign income is exempted (unless these are received in Malta) and capital gains.

Residents are subject to a minimum 15.000€ annual tax (tax rates are incremental to a maximum of 35%). Foreign-source income received in Malta is taxed at a fix rate of 15%, with the possibility of applying international double taxation agreements.

Malta offers a special regime of 15% income tax rate for up to five years, for EU, American or Swiss citizens and for up to four years for citizens of the rest of the world, applicable to managers from the financial or gambling sectors, regulated by the MFSA (Malta Financial Services Authority) or LGA (Lotteries and Gaming Authority). The main objective of this special regime is to stimulate the finance and gambling sectors, two key areas for the country development.

Residence program for EU, American and Swiss citizens

EU, American and Swiss citizens wishing to move and live in Malta, will obtain a residence permit when completing the following prerequisites:

• Be at least 18 years old and have not been domiciled in Malta before.

• Own or rent qualified property in Malta. A qualified property meets the following criteria:

• Purchase value is at least 275.000 €

• Rent is at least a 9.600 € annually.

• It is the beneficiary’s main residence .

• The property is not shared with other individuals, except family.

• The resident and his family must be covered by a health insurance policy.

• Earn enough to support himself and his family.

• Do no benefit from any other special tax regime.

• Hold a of valid passport.

• To be suitable person who speaks Maltese or English fluently.

• Pay an inscription fee of 6.000 €.

Global Residence Program

Citizens from countries other than the United States, Switzerland or the EU, who wish to move and live in Malta, will obtain a residence permit completing the following requisites:

• Be at least 18 years old and have not been legally domiciled for 5ive continued years in Malta.

• Own or rent qualified property in Malta. A qualified property meets the following criteria:

• Purchase value is at least 275.000 €

• Rent is at least a 9.600 € annually.

• The resident and his family must be covered by a health insurance policy.

• Earn enough to support himself and his family.

• Do no benefit from any other special tax regime.

• Hold a of valid passport.

• To be suitable person who speaks Maltese or English fluently.

• Pay an inscription fee of 6.000 €.

High-qualified Business Executives Regime

This special tax regime only applies to professionals working for a company authorized or recognized by the Maltese financial or gambling sectors (MFSA o LGA). This regime may last up to 4 or 5 years.

The following prerequisites must be met to qualify for the regime:

• Be domicile outside Malta.

• Hold a leadership position and earn a salary of at least 75.000 € per year from a company in Malta, and have the necessary professional experience

• Earn enough to support himself and his family

• Live in a qualified property

• Hold a of valid passport.

• The resident and his family must be covered by a health insurance policy.

Real Estate Taxation

Buyers of real estate property in Malta must pay the transfers tax and stamp duty tax.

The applicable tax rate is 5% of the property value or the price paid for it (whichever is higher).

At the moment of signing the buying promise, the buyer must pay 20% of the transfer tax and inform local authorities of this amount.

Transfer tax reduction: EU citizens who live in Malta during 5 continuous years before buying a real estate property with the intention of keeping it as their primary residence, have the right to pay a reduced tax of 3,5% on the first 116.500€ of the property value; the remainder is taxed at a rate of 5%.

Tax reimbursement: EU citizens buying a second home have the right to get a refund for 1,5% of the tax paid, as long as they sell their primary residence within a year.

Tax exemptions: the following cases are tax free:

• Property transferred between spouses under profit regime (including transfer due to divorce or property partition).

• Property transferred within the same group of companies when the beneficiaries are the same and have similar stakes in the company.

• Property owned by a Company transferred to the Company’s shareholders when they have held 100% of the company equity for the past 5 years before the property transmission.

Real Estate Sector

Why invest in Maltese real estate?

Even though the economic crisis affected many EU countries, Malta has gotten out free. Even so, average price of real estate property has fallen about 11% since late 2007.

The purchase of Maltese real estate is considered a safe investment. Since Malta has a healthy economy, based on international services and oriented to foreign investment and has established a stable and safe business network. Besides, it has excellent technology and logistic structures and a strategic position at the center of the Mediterranean Sea, with excellent sea and air connections.

Property prices vary depending upon the island it is located. For example, average prices in Valletta, its capital city, are around 2.500 €/m2 approximately. However, in the island of Gozo, real estate property prices are cheaper.

Finally, Malta’s natural beauty competes with its year-round nice weather, its safe environment and its low criminality rate.

Services

Fees

After analyzing the client’s expatriation/relocation to Malta project, whether it is an individual or business unit relocation, we prepare a budget according to the services the client requests, on a case by case basis.

Our fees our very competitive. Our clients are informed all the time about the status of their relocation process; this follow-up is included in our initial fees.

Besides, our personnel is fluent in English, Spanish, Portuguese, and French who always accompany our clients through their relocation to Malta guarantying a hassle-free process.