Home News & Events RESIDENCE LAW NEWS: Malta Adopts New Residence Regulations

RESIDENCE LAW NEWS: Malta Adopts New Residence Regulations

Monday, 26 December 2011 01:43

During the last quarter of the current year, specifically on the 24 October, 2011, by virtue of Legal Notices 400 and 403 of 2011, Malta has adopted the ‘Special Tax Status Under the High Net Worth Individuals Rules’ replacing what was previously known as the ‘Permanent Residence Scheme Regulations’ which new regime is of particular interest for foreigners who would wish to take up residence in Malta, irrespective whether they are nationals from the EU or the EEA Member States or nationals from a ‘Third Country’ outside the European Union the latter having  to follow certain conditions which are deemed to be restrictive within the Schengen legal framework.

In brief, since Malta’s accession to the European Union, nationals coming from the EU and /or the EEA Member States as well as nationals coming from a Third Country, could apply to reside in Malta.The approved residence permit would specify for what term it would have been issued and for what purpose, that is whether for study, employment or other purposes. Certain requirements must be respected by those seeking to acquire a residence permit including although not limited thereto, the completion of an application with the Immigration Office under the responsibility of the Commissioner of Police, a valid identification document, a comprehensive health insurance cover, evidence that the applicant has sufficient financial resources during his or her residence, and in the case of a national from a Third Country, a valid visa.

With the advent of the new ‘High Net Worth Individual Rules’, a national hailing from an EU Member State as well as from an EEA Member State (Iceland, Norway, Liechtenstein and Switzerland), has the option to file an application for a ‘Special Tax Status’ rather than applying for a residence permit as explained above. For the ‘Special Tax Status’ to be approved, the applicant must provide evidence that he or she owns an immovable property in Malta or Gozo serving as the applicant’s residence which would have been purchased after the 14 September, 2011 for the value of not less than € 400,000 or has entered a lease agreement for an immovable, also serving as the applicant’s residence, which lease would not be less than € 20,000 per annum. With the relative application, a person must inter alia provide a valid travelling document, a copy of his or her identification document, a comprehensive insurance cover, evidence that he or she has adequate financial resources and that he or she is ‘a fit and proper person’ which criteria is determined by the Commissioner of Inland Revenue as to whether, for example, the applicant has a criminal record or has been declared bankrupt.

In the case of a non-EU and non-EEA, hence a Third Country national, the same conditions applicable to EU and EEA nationals for the filing of an application for a Special Tax Status under the new ‘High Net Worth Individual Rules’ must also be satisfied together with certain other criteria including that the applicant must be fluent in either the English or Maltese language and that the applicant may still benefit from the new rules without acquiring any special rights of long term residence but must every time apply to seek a visa renewal to keep on residing in Malta.

In seeking a long term residence under the new ‘High Net Worth Individual Rules’, an applicant must alternatively, enter into a qualifying contract with the Government of Malta which would contemplate a financial bond of €500,000 and €150,000 for the applicant and for every dependant thereof, to cover possible costs and hence not deemed to be a social burden on the State. The Bond would eventually be restored to the applicant should he or she would have renounced to the special tax status granted under the new ‘High Net Worth Individual Rules’ prior to the expiration of four years from the date of the qualifying contract; however, the bond could be forfeited by the applicant should for example, he or she commit a serious crime in Malta following his or her grant of the ‘Special Tax Status’.

The’ Special Tax Status’ granted by the the new ‘High Net Worth Individual Rules’ entitles the beneficiary to be taxed at the rate of tax of fifteen per centum (15%) on foreign-sourced income that is remitted to Malta and this apart from the fact that the beneficiary retains the right to make a claim for relief of double taxation under certain conditions.

For further full information on the new regulations please submit your request by e-mail to This e-mail address is being protected from spambots. You need JavaScript enabled to view it