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Citizenship

Having Maltese citizenship means citizenship in an EU Member State that is stable, neutral and highly respected, tying in a solid investment and a lasting bond with the country. New Malta citizenship rules are in the process of being enacted. These rules shall allow 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.

Successful candidates will be granted citizenship by a certificate of naturalization, which can also be extended to include their dependents. The Maltese authorities guarantee an efficient application process, and strict due diligence and vetting of applicants, thus ensuring only highly respectable clients will be admitted.

Once a candidate is awarded Malta citizenship, this automatically includes EU citizenship, thus obtaining the right of establishment in all 28 EU countries and Switzerland. Other benefits include the ability to work and/or set up business in Malta and visa-free travel to more than 160 countries in the world, including the USA. The application will be processed by Identity Malta (a government institution). Applications may only be filed through an Approved Agent.

ELIGIBILITY CRITERIA

FINANCIAL CONTRIBUTION

Applicants applying under the new Malta citizenship rules must make a contribution of €600,000 and reside in Malta for 3 years before applying for citizenship or make a contribution of €750,000 and reside in Malta for 1 year before applying for citizenship. Moreover, the applicant is required to make a philanthropic donation of €10,000.

PROPERTY

Applicants must purchase a property for a minimum value of €700,000 or lease a property for at least €18,000 per annum.

TAXATION

The acquisition of Maltese citizenship under the IIP does not have any tax consequences, and even if one’s residence is moved to Malta, one would still retain the status of a non-domiciled person and thus have a limited, advantageous tax exposure. Candidates that become residents and domiciled in Malta are required to pay income tax on their worldwide income. Personal income is taxed at progressive rates. However, individuals that are resident in Malta but not domiciled in Malta will only be subject to tax on income and capital gains arising in Malta and foreign income (excluding capital gains) if it is received in Malta. Foreign capital gains received in Malta are not subject to Malta tax.

PROPERTY TRANSFER TAX

A seller who has resided in his other property (the address of which is listed on their Identity Card), for over three years, does not pay any form of tax (capital gains, local council or municipal tax) when he or she sells their home.

However, on selling an immovable property (NOT one’s primary residence), a seller has to pay a transfer tax, today referred to as a Final Withholding Tax on the value of the transfer. In fact, as from the 1st of January 2015, the option of taxing a transfer of property at the rate of 12% on Capital Gains has been done away with. It has now been replaced with a lower rate of final withholding tax of 8%, which is simply calculated on the sale value of the property. Exceptions to this rule would be the following scenarios:

  • If a property was acquired before January 2004, a seller is subject to a Final Withholding Tax of 10% on the value of the property.
  • If one transfers an immovable property (not one’s primary residence) within five years from the date of acquisition, one may benefit from the low rate of a Final Withholding Tax of 5%. Furthermore, a 2% Withholding Tax applies upon a transfer of a property, that was immediately before the transfer, owned by an individual or co-owned by an individual, provided that the transfer is not made later than 3 years. A 5% Final Withholding Tax is also applicable when a transfer pertains to a property located in an urban conservation area when such property has been restored or rehabilitated.

This Final Withholding Tax (FWT) is the full and final payment of income tax due from the recipient of the income.

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