Malta – Residency and Investment options Stanley Bonello | October 2014

Rental Investment  Growing rental market, partly due to influx of foreign nationals relocating to Malta for retirement, lifestyle or work reasons  Rental returns averaging at 4% to 6% per annum  Demand exceeding supply for commercial property leases.

Rental Investment Typical example – Tigne Point, Sliema  1 bedroom apartment purchased at €370,000, rents for about €15,000 per annum (circa 4% rental return)  3 bedroom apartment purchased at €500,000, rents for about €35,000 per annum (circa 7% rental return) Cost does not include furnishings. Rental return varies according to level of finishes, size of apartment and floor level

Rental Investment Typical example – Portomaso, St Julians  1 bedroom apartment purchased at €235,000, rents for about €11,000 per annum (circa 4.6% rental return)  3 bedroom apartment purchased at €315,000, rents for about €22,000 per annum (circa 7% rental return) Cost does not include furnishings. Rental return varies according to level of finishes, size of apartment and floor level

Rental Investment Typical example – Ta’ Monita, Marsascala  1 bedroom apartment purchased at €110,000, rents for about €7,200 per annum (circa 6% rental return)  3 bedroom apartment purchased at €133,000, rents for about €9,000 per annum (circa 6% rental return) Cost does not include furnishings. Rental return varies according to level of finishes, size of apartment and floor level

Rental Investment Typical example – Pender Gardens, St Julians  1 bedroom apartment purchased at €295,000, rents for about €18,000 per annum (circa 6% rental return)  2 bedroom apartment purchased at €380,000, rents for about €26,000 per annum (circa 6% rental return) Cost does not include furnishings. Rental return varies according to level of finishes, size of apartment and floor level

Malta / Global Residency Programme  15% flat tax rate on income remitted to Malta  No minimum stay requirements  Ability to work and/or set up business in Malta  Ease of movement within EU Schengen Zone countries  Application can be done through an authorised mandatory (not necessarily in person) benefits

Malta / Global Residency Programme  €15,000 minimum tax paid  Requires purchase of a property with a minimum value of Є220,000 or annual rental of €8,750  Residents and dependents require health insurance  Standard application processing fee from €5,500  Residents may not spend more than 183 days in any other single jurisdiction (based on a declaration by the applicant at the initial stage) conditions

Individual Investor Programme  Introduced in January 2014  Allows for the grant of citizenship to duly qualified, reputable foreign individuals and families (EU and non-EU nationals) who make a significant contribution to the economic development of Malta.  Dual citizenship allowed (as per Malta Citizenship act).  Ability to work and/or set up business in Malta benefits

Individual Investor Programme  Reasonable contribution and efficient application process.  World’s strictest due diligence standards and vetting of applicants, thus ensuring only highly respectable applicants will be admitted.  Visa-free travel to more than 160 countries in the world, including the USA  EU citizenship gives right of establishment in all EU countries and Switzerland.  Tax paid only on income remitted in Malta at progressive rates of up to 35%. (In the case of applicants domiciled in Malta, tax is applicable on worldwide income.) benefits

Individual Investor Programme  For the main applicant a contribution of €650,000 is required. An additional contribution of €25,000 is required for a spouse and for each child under the age of 18.  The application may include children between the ages of 18 and 25 years if they are financially dependent on the main applicant and not married; in those cases the additional contribution is set at €50,000 for each such adult child.  Parents over the age of 55 can also be included in the application as dependents, if they are living with and are fully supported by the main applicant. In this case, likewise, an additional contribution of €50,000 is required per person. conditions

Individual Investor Programme  Due Diligence fees applicable: €7,500 for main applicant; €5,000 for spouses, adult children and parents; and €3,000 each for children between 13 and 18 years of age.  The applicant must have no criminal record. A person who has been denied a visa to a country with which Malta has visa-free travel arrangement shall not be entitled to apply under the program.  A person who is deemed a potential national security or reputational risk, or is subject to criminal investigation will also be denied citizenship. conditions

Individual Investor Programme  Applicants commit to retain a residence in Malta for a period of at least 5 years, through the purchase of a property, for which the minimum value must exceed €350,000, or through leasing of a property (minimum annual rent €16,000 or over).  An investment of €150,000 in Government approved financial instruments is required, which must be maintained for a minimum period of 5 years.  The programme is limited to the first 1,800 approved applications.  Application is to be submitted through a local Approved Agent. conditions

Individual Investor Programme  Residency status: on buying/renting their property in Malta, citizenship candidates are issued an identity card. Citizenship is granted after 12 months from date of property purchase or rental. Candidates need not spend 365 days in Malta before citizenship is granted. Residence is defined under Maltese law 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. conditions

Malta Retirement Scheme  Introduced in September 2012  Ideal for mature adults with an EU passport considering retiring or taking up residence overseas.  15% tax rate on income remitted to Malta benefits

Malta Retirement Scheme  €7,500 minimum tax paid, plus €500 per dependent  Requires purchase of a property with a minimum value of Є250,000 if in Gozo and €275,000 in Malta, or an annual rental of €8,750 and €9,600 respectively  Applicant must be an EU national, EEA or Swiss national.  Applicant must reside in Malta for at least 90 days a year, averaged over a 5 year period.  Applicant may not spend more than 183 days in any other single jurisdiction  Standard application processing fee of €2,500 conditions

Malta Retirement Scheme  Applicants must be in receipt of a pension as supported by documentary evidence, all of which is received in Malta and constitutes at least 75% of the beneficiary’s chargeable income.  Applicant must be in possession of sickness insurance in respect of all risks across the whole of the EU normally covered for Maltese nationals, for himself and his dependants conditions

Ordinary Residence  Available to both EU and non-EU nationals  Local income tax rates in increments up to 35% apply  EU nationals need to show they are self-sufficient (with a capital of either €14,000 or a monthly income of at least €400. Alternatively they require employment in Malta, or setting up of a business venture.  Non-EU nationals need to either obtain an employment license (granted on satisfying a number of criteria) or setting up of a business venture, with a minimum investment of €100,000. conditions

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