Following the UK's withdrawal from the European Union, all UK nationals (and their family members) who currently reside or will soon take up residence in Malta, must apply for a Residence Document, within stipulated time-frames, in order to continue to reside in Malta.
All UK nationals, and their family members who were exercising their right to reside in Malta under Union law, now need a Residence Document, issued by Identity Malta, which, during the transition period before the UK formally leaves the EU, will allow them the same freedom of movement in and out of the country, as well as other associated rights as specified in the Withdrawal Agreement.
More specifically, such a right to a Residence Document applies to:
- UK nationals and their family members who reside in Malta between 1st February 2020 and 31st December 2020, unless the UK and EU agree to extend this period, ("the Transition Period") – as long as they apply before June 2021;
- UK nationals and their family members who have the right to commence residence after the end of the Transition Period - as long as they apply within 3 months after arrival or, from June 2021, whichever is the later;
- UK nationals and their family members who intend to start residing in Malta during the Transition Period - who will only be allowed to submit an application after a period of three (3) months from the date of arrival in Malta;
UK nations must:
- Apply within the legally prescribed time-frames;
- Submit all relevant and supporting documentation in the prescribed manner;
- Declare, by means of documentation, any past criminal convictions which appear in their criminal record in accordance with the law of the State of conviction at the time the application has been submitted;
- Pass background checks conducted by Identity Malta.
Such Residence Document will be valid for 10 years, and renewable thereafter by further application, as long as the conditions under which the Residence Document was issued, continue to subsist.
It is important to note that "family members" has a strict definition in the Withdrawal Agreement, and, with the exception of children, a person will only be considered a "family member" if the relationship with the applicant commenced before the end of the Transition Period.
What rights can be enjoyed by UK nationals in virtue of this Residence Document?
- The right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.
- Freedom of movement for workers, which shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. It shall also entail the right, subject to limitations justified on grounds of public policy, public security or public health, to accept offers of employment actually made, to move freely within the territory of Member States for this purpose, to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action and to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission.
- Freedom of establishment in the territory of another Member State. Restrictions on the setting-up of agencies, branches or subsidiaries by UK nationals established in the territory of any Member State shall be prohibited. Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54 of the TFEU, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.
- The right of residence on the territory of another Member State for a period of up to three months without any conditions or any formalities other than the requirement to hold a valid identity card or passport.
- The right of residence on the territory of another Member State for a period of longer than three months if they are workers or self-employed persons in the host Member State, have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State or are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training and have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence.
- For the purpose of point 5 above, a UK National who is no longer a worker or self-employed person shall retain the status of worker or self-employed person where he/she is temporarily unable to work as the result of an illness or accident, he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office or he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months, and where he/she embarks on vocational training.
- The right of residence as provided for in point 4 above, as long as they do not become an unreasonable burden on the social assistance system of the host Member State. UK nationals and their family members shall have the right of residence provided for in Articles 7, 12 and 13 of Directive 2004/38/EC of the European Parliament and of the Council, as long as they meet the conditions set out therein. An expulsion measure shall not be the automatic consequence of a UK national's or his or her family member's recourse to the social assistance system of the host Member State. By way of derogation from the above and without prejudice to the provisions of Chapter VI (on the restrictions to the right of residence and entry on the grounds of public security, public policy and public health), an expulsion measure may in no case be adopted against UK nationals or their family members if:
- the UK nationals are workers or self-employed persons;
- the UK nationals entered the territory of the host Member State in order to seek employment. In this case, the UK nationals and their family members may not be expelled for as long as they can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged;
- The right of permanent residence granted to those who have resided legally for a continuous period of five years in the host Member State. This right shall not be subject to the conditions provided for in Chapter III of Directive 2004/38/EC.
- The right of permanent residence in the host Member State, by way of derogation from point 8 above, shall be enjoyed before completion of a continuous period of five years of residence by:
- workers or self-employed persons who, at the time they stop working, have reached the age laid down by the law of that Member State for entitlement to an old age pension or workers who cease paid employment to take early retirement, provided that they have been working in that Member State for at least the preceding twelve months and have resided there continuously for more than three years. If the law of the host Member State does not grant the right to an old age pension to certain categories of self-employed persons, the age condition shall be deemed to have been met once the person concerned has reached the age of 60;
- workers or self-employed persons who have resided continuously in the host Member State for more than two years and stop working there as a result of permanent incapacity to work. If such incapacity is the result of an accident at work or an occupational disease entitling the person concerned to a benefit payable in full or in part by an institution in the host Member State, no condition shall be imposed as to length of residence;
- workers or self-employed persons who, after three years of continuous employment and residence in the host Member State, work in an employed or self-employed capacity in another Member State, while retaining their place of residence in the host Member State, to which they return, as a rule, each day or at least once a week. For the purposes of entitlement to the rights referred to in points (a) and (b), periods of employment spent in the Member State in which the person concerned is working shall be regarded as having been spent in the host Member State. Periods of involuntary unemployment duly recorded by the relevant employment office, periods not worked for reasons not of the person's own making and absences from work or cessation of work due to illness or accident shall be regarded as periods of employment.
- The right to leave the territory of a Member State to travel to another Member State with a valid identity card or passport and in the case of family members who are not nationals of a Member State, the right to leave the territory of a Member State with a valid passport, without prejudice to the provisions on travel documents applicable to national border controls.
- The right to enter the territory of a Member State with a valid identity card or passport and in the case of family members who are not nationals of a Member State, the right to enter the territory with a valid passport, without prejudice to the provisions on travel documents applicable to national border controls.
Provided that, five years after the end of the transition period, Malta, as a "host State" may decide no longer to accept national identity cards for the purposes of entry to or exit from its territory if such cards do not include a chip that complies with the applicable International Civil Aviation Organisation standards related to biometrics.
Tax implications for beneficiaries of this programme
Individuals who become resident in Malta in terms of this Programme would be considered as individuals who are resident and not domiciled in Malta and accordingly would be subject to tax in Malta as follows, on:
- income arising in Malta; and
- income arising outside Malta and remitted to Malta;
- capital gains arising outside Malta and remitted to Malta would not be subject to tax in Malta.
Income tax rates for individuals who are resident and not domiciled in Malta are at progressive rates from 0-35 %. Flat rates of taxation may also apply if the individuals opt for one of Malta's tax programmes such as the Malta Retirement Programme, Global Residence Programme and Highly Qualified Persons Rules.
Originally published May 26, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.