A high net worth individuals’ scheme has just been launched to replace the permanent residence scheme. Sources from the Inland Revenue Department indicated that there were going to be two sets of rules, one for EU nationals and one for third country nationals.
Under the new rules, it is understood that the property bought by foreigners has to be worth a minimum of €400,000 or, in the case of rental, the rental cost shall be at least €20,000 per year.
Moreover, people buying property under the new scheme have to pay 15 per cent tax on foreign income remitted to Malta. With the new scheme, foreigners will be allowed to work in Malta and will be subject to the normal rates of tax on any local income (up to 35%). The minimum tax payable by applicants from the EU is €20,000 a year and €2,500 tax per dependent, whilst the minimum tax payment due by non-EU applicants will be €25,000 a year. Non-EU applicants will also be expected to renew their entry visa every three months or alternatively enter into an agreement with the Government of Malta subject to a five-year financial bond of €500,000 and €150,000 per dependent forfeitable in favour of the Government of Malta, to effectively qualify for long term residence after five years.
All applicants will be required to maintain health insurance cover recognised across Europe and pay an application fee of €6,000 to cover fees the government will be incurring through a sub-contracted international firm to run an international 'fit and proper' background check. Applications will need to be submitted by Maltese warrant holders registered with the Inland Revenue Department as authorised people.
It is also our understanding that existing permanent residents (under the old regime) will not lose their status unless they sell their Maltese property. More detailed and exact information will follow once the relative regulations and ancillary guidelines are published.
Furthermore, Malta is working to attract foreign specialized executives in the gaming and financial services industry with a 15% flat personal tax rate on annual income exceeding €75,000 up to €5 million arising in the course of their employment in Malta. Annual income in excess of €5 million will be exempt from Malta tax. The eligible offices for the 15% tax rate will be foreign-domiciled chief executive officers, chief risk officers, chief financial officers, chief operations officers, chief technology officers, portfolio managers, chief investment officers, senior traders/traders, senior analysts (including structuring professionals), actuarial professionals, chief underwriting officers, chief insurance technical officers, marketing heads, investor relations heads, Chief Risk Officers (including Fraud and Investigations Officers), Chief Technology Officers, Chief Commercial Officers, Odds Compiler Specialists, Heads of Research and Development (including Search Engine Optimisation and Systems Architecture) and Heads of Marketing (Heads of Distribution Channels). Individuals must be in possession of relevant professional qualifications or adequate professional experience relevant to the profession or sector specified in the work contract and employment shall be with a company that is licensed and/or recognised by the Malta Financial Services Authority or the Lotteries and Gaming Authority (as applicable). The rules do not apply where the employer benefits from incentives granted in terms of the Malta Enterprise Act and the Business Promotion Act.
The employee is to submit an application to the competent Authority for a formal determination as to eligibility to benefit under these rules.
Press
