Malta: Malta Citizenship And Residency By Investment (8 February, 2019)

Last Updated: 8 February 2019
Article by G M Corporate And Fiduciary Services

Most Read Contributor in Malta, January 2019

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As of 2019, the Individual Investor Program has received more than 1000 Malta passport applications on behalf of investors from more than 40 different countries.

The Malta Individual Investor Programme (MIIP) offers high and ultra-high net worth individuals and families worldwide citizenship in a highly respected EU Member Country.  Malta, a member of the European Union since 2004, enjoys a stable political climate, a buoyant economy, and has some of the soundest banks in the world. The Malta IIP is the first investment citizenship program of its kind to be acknowledged by the European Union.

The application process is extremely efficient, and the government of Malta is committed to the highest standard of due diligence and vetting of investor applicants ensuring only persons of impeccable standing and status will be admitted. Successful candidates will be granted citizenship in Malta by a Certificate of Naturalization, which can also be extended to include their families. Once a candidate is granted Malta citizenship, which includes EU citizenship, the right of establishment in all 28 EU countries and Switzerland is granted including ability to set up business in Malta. A Malta passport enables visa-free travel too.

Eligibility for Individual Investor Programme Malta

To be considered eligible for the Malta citizenship scheme, the main applicant must be at least 18 years of age and must meet all the Maltese immigration requirements outlined below.

Fit and Proper Test

As part of the Malta Individual Investor Programme, there is a four-tier due diligence process carried out directly by the government to assess candidates comprehensively. Applicants must have a clean criminal and documented record.

Good Health

All applicants must show that they do not suffer from any contagious diseases and are covered by an international health insurance policy.

Financial Contribution

All individuals and families applying must make a significant non-refundable contribution to the National Development and Social Fund set up by the Government of Malta and run by a board of trustees. The contribution must be made within four months of being issued the Malta IIP Letter of Approval in Principle. Meanwhile, to fund projects in the country linked to public health, education, job creation, social improvement, and innovation.

Apart from the financial contribution to National Development and Social Fund, successful candidates are obliged to make the following commitments: 

Real Estate Purchase or Rental

Applicants must commit to retaining (and provide evidence of owning or leasing) an immovable residence in Malta within four months of receiving a citizenship Malta Letter of Approval in Principle. This may be done through purchasing a property in Malta (minimum value of €350,000) or by leasing a property (minimum annual rent of €16,000). Upon purchasing real estate or entering a property lease in Malta, candidates are issued an eResidence card. This signifies the commencement of their residency in Malta and also demonstrates the candidate's genuine link with the country.

Bonds Investment

Applicants are required to invest at least €150,000 in government approved financial instruments (bonds, stocks, and debentures that benefit the nation) and must commit to keeping the investment for at least five years.

Residence Requirement

Applicants do not need to spend all the 365 days in Malta before citizenship is granted. Maltese law defines residence as "an intention to reside in Malta for any fiscal year, usually evidenced by a stay of a minimum of 183 days or by the purchase/rental of property together with a visit to Malta." 

The Tax System in Malta

Even if the primary residence is in Malta, applicants may retain the status of a "non-domiciled" person and therefore have an extremely advantageous tax exposure. Candidates that become a resident of Malta but are not domiciled in Malta are only required to pay tax on any income earnt in the country. Malta has no wealth or net worth taxes. Malta also has double taxation treaties with approximately 60 countries around the world. The corporate tax rate in Malta is 35%, but special tax concessions apply to non-resident or non-domiciled company owners.

Language Requirement

Applicants are not required to speak Maltese or even English, to be accepted into the financial citizenship program.

Yacht Registration in Malta

Malta has established itself as a flag of choice within the pleasure yacht sector, and consequently, has the largest shipping registry in Europe. An optimized VAT finance leasing structure in Malta can help minimize the amount of value-added tax payable upon yacht registration in order to gain legal access to EU waters.

In addition to being one of the top jurisdictions in Europe in yacht registration, citizens of Malta can directly register a yacht without the need to incorporate a local company.

Benefits of Maltese Flag

  • Outstanding Global Status - the Malta flag boasts a prestigious reputation within the international yachting community.
  • Advantageous Ownership - registering a yacht in Malta is fast and inexpensive. Following company formation, the necessary purchase occurs, and the company is now the direct owner of the yacht. This setup results in a flexible legal entity sanctioned to carry out a variety of shipping activities including chartering of the vessel.
  • Foreign Ownership Allowed - foreign corporations (including offshore companies) are permitted to register a yacht under the Maltese flag provided they have a resident agent in the country.
  • Anonymous Ownership - it is possible to achieve confidentiality on the ownership of the yacht by appointing a fiduciary.
  • Low Yacht Registration Costs - Malta has extremely low yacht registration and annual renewal costs.
  • No Mortgage Restrictions - Malta has no restrictions on the sale or transfer of shares of yacht-owning companies. The country also has no restrictions on the mortgaging of local vessels.
  • No Restrictions on Crew - Malta does not place any restrictions on the nationality of crew members serving on locally registered yachts. This allows employment of any ideal candidate as captain, officer, chef, deckhand, or other crew member position regardless of nationality.
  • No Age Limits - Malta does not have an age restriction on vessels. Ships between 15 and 20 years old must pass an inspection before or within a month of being provisionally registered; ships from 20 to 25 years old must pass an inspection prior to provisional registration, and any vessel older than 25 years old requires specific permission from Maltese authorities.
  • Peace of Mind - with fantastic year-round weather, graced with one of the most sheltered natural harbours in the World, and stunning marinas with exceptional facilities including top-notch security, Malta provides international yacht owners with a sense of safety and stability regarding valuable property.
  • VAT Savings - a yacht can become "EU VAT paid" granting unrestricted access to EU waters for as little as 30% of the normal VAT rate (5.4%) via a Malta yacht VAT leasing scheme.
  • Low Maintenance Costs - yacht berthing and maintenance costs in Malta are amongst one the lowest in the EU.

Should you require further information or clarification regarding MIIP, you may contact GM Corporate and Fiduciary Services Ltd. and its affiliates which provide a sterling and fully personalised service in assisting you through all the financial, immigration and legal formalities involved. Our decades of experience, reputable expertise and strong commitment to all our clients is further enhanced by our international desks communicating in fluent English, Maltese, Bulgarian, Greek, Italian, Lithuanian, Polish, Russian, Serbian and Spanish.

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.

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