Relocating to Malta, Everything you need to know

Introduction

There are many reasons why you might want to relocate.

The financially savvy might decide to do so for investment opportunities or for tax reasons. A family might relocate to get a better quality of life. A retiree may wish to settle somewhere easy-going and warm. Someone young and ambitious might wish to relocate for better job opportunities and a chance to carve out an outstanding career.

At RE/MAX Malta, we understand that the reasons for anyone relocating to the island are plentiful and personal. We are therefore able to provide a multitude of services that can assist you to relocate to Malta in a smooth, stress-free and successful manner.

Service Promise

At RE/MAX MALTA, we take pride in providing an unmatched service to our clients. We ensure that every client is treated with the utmost professionalism, while being given that personal approach that ensures they feel they are in good hands. Our approach to clients is not a one-size-fits-all. It’s a personal investment in meeting the specific needs of any individual or company.

Our years of experience and the quality of our trained associates are essential when it comes to understanding the needs of the client and guiding them through the potential minefield that is relocation. From negotiating the best price possible to keeping in touch to make sure that each client is completely satisfied, RE/MAX Malta is committed to delivering a fully comprehensive, professional, stress-free service at value for money to all customers. This absolute commitment is reflected in a service that is available to all clients 24 hours a day, 7 days a week.

Services from RE/MAX Malta

RE/MAX Malta boasts one of the most experienced teams on the island, and one that is ready to assist you in searching for the ideal home or strategic business premises.

Our team has access to what is possibly the largest database of residential and commercial properties available on the market, as soon as they become available. We are therefore always in a position to offer a wide range of choices to suit any client, not only in terms of location but also size and level of finish. This applies to all kinds of properties, from high-end offices or high street retail units, to rambling townhouses or super-sleek penthouses. Whatever the size, location or specific requirements of the client, RE/MAX has the ability to comb through our comprehensive database and select those properties that are ideally-suited to meet their needs.

Renting an Office

Once we know our client’s specific requirements, we get to work searching through our database of office space available. This ranges from managed office space ideal for small and medium businesses to large office complexes with plenty of parking and easy access for staff and customers. Offices are finished with all amenities such as air-conditioning, separate bathrooms, good lighting and modern partitioning as standard. Many high-end office spaces boast state-of-the-art technology catering specially for the ICT industry. Be it a modern, glass-plated building, or characterful, converted ex-townhouse, we can source it and help our clients through the process of renting the space. More information on Commercial Office space

Renting a Home

Renting a property in Malta can be simple and straightforward, especially with the help of an experienced associate to guide one through the process. When renting a home, a Tenancy Agreement is signed. This specifies the dates of the tenancy, gives details on the rent and bills and how they should be paid, clarifies the services to be provided by the landlord, and states the length of notice before vacating the property. Most landlords require a deposit of one month’s rent and rent is normally paid in advance. Our team can offer guidance and advice on they types of properties available to best suit your needs, as well as their locations and price range. RE/MAX Malta also offers a complete concierge service, helping clients install utilities and other amenities required throughout their tenancy. More info on Renting a Property

Buying a Property

Buying a property can be an enjoyable and stress-free process if you have the best by your side. At RE/MAX Malta we know the pitfalls and stumbling blocks when it comes to buying a property and, more importantly, we know how to avoid them. Our associates are able to guide the client through the entire process ensuring that everything runs smoothly, from viewings, to signing the Preliminary Agreement, right through to dealing with notaries and completing the Final Deed. More info on Buying a Property

Working in Malta - What jobs are available?

Recent years have seen Malta become a focus of investment from overseas, as companies and organisations, both large and small, set up shop on the island to benefit from the many financial incentives it has to offer.

Economic stability, healthy industrial relations and competitive labour costs have helped sustain the number of foreign company success stories over the years.

Such a pro-business environment makes Malta an attractive destination for foreign direct investment. And, with investment, comes jobs. In fact, in 2014, Malta registered its lowest unemployment rate since EU accession – an enviable 5.7%.

Malta was also chosen as the first Smart City outside of Dubai, catering for world class IT companies wishing to relocate to the island. Recent legislation allows international online gaming companies to use Malta as a European base of operations. These companies have found a true home in Malta with many executives enjoying life on the island with their families. Beyond that, the sector has expanded to include software development companies and other ICT related businesses.

Malta is also the hub for iGaming in the Mediterranean. Accounting for a recorded circa 5% of the National jobs, of which some 40% are taken up by expatriates working in Malta.

The Financial Services sector is one of Malta’s strongest industries, offering stability and growth within a transparent legislative structure. As this sector continues to grow, so does its requirement for executives with the necessary expertise.

Malta is also a centre of excellence in the production of electronics, medical equipment, pharmaceuticals, plastics, automotive components, tool-making, aviation-related services, furniture, and food.

As a destination for tourists from all over the world, Malta attracts high-quality catering and hospitality staff, as well as event management and logistics operators.

Becoming a Resident of Malta – GRP EU and non-EU

Global Residence Programme Summarised

The Global Residence Programme is designed to attract individuals who are not ordinary residents, and who are not a beneficiary of other tax programmes the Maltese government offers.

To qualify, applicants must own or rent a property in Malta which they must occupy as their principal place of residence worldwide, and which must be valued at between €220,000 and €275,000 if owned, or between €8,750 and €9,600 a year if rented, for no less than 12 months. In both cases, the location of the property determines the minimum purchase price that needs to be satisfied. Properties in the south of Malta are on the lower end of the scale.

Under the GRP, a flat rate of 15% is applicable on income declared in Malta and beneficiaries will need to pay a minimum annual tax of €15,000. The 15% rate applies on income generated overseas and declared in Malta. Any other income will be taxed at a flat rate of 35%.

The administrative fee for the application is between €5,500 and €6,000, depending on where the qualifying owned property is located.

Applications for the GRP can only be made via an Authorised Registered Mandatary.

Malta Residence Regulations Rules 2014 Summarised

There exists a similar residence programme for EU nationals, known as the Malta Residence Programme, in which beneficiaries may pay tax on all foreign source income at a flat rate of 15% as long as it is remitted to Malta.

There is a flat rate of 35% tax on any other income, which is subject to a minimum annual tax liability of €15,000 per application.

Applicants to this programme must own or rent a property in Malta, with a minimum price of between €220,000 and €275,000 if purchased or between €8,750 and €9,600 a year if rented. The minimum cost of the property depends on its location. There is also an administrative fee of between €5,500 and €6,000.

More info on Taking up Residence in Malta.

Retiring to Malta

A safe environment, a generous tax regime, a reasonable cost of living and an agreeable climate make Malta the ideal place to retire.

The Maltese government has a residency scheme that caters specifically for those who wish to retire to this sunny island in the Mediterranean. The scheme is open to all EU, EEA and Swiss nationals.

Eligible applicants need to purchase a property for no less than €275,000 if situated in Malta, or €250,000 for a property situated in Gozo. Alternatively they need to live in a property with an annual rent of €9,600 in Malta or €8,750 in Gozo.

In addition, applicants must receive a pension that makes up at least 75% of their chargeable income and which is entirely received in Malta. Applicants must also reside in Malta for no less than 90 days a year, on average, over a period of 5 years, and may not be away from the island for more than 183 days in a calendar year.

Finally applicants must have medical insurance, must not be a beneficiary of any other tax programme or scheme in Malta, and must not be domiciled in Malta.

The application fee for this scheme is €2,500 per application.

The successful applicant will benefit from a tax rate of 15% on any income from outside Malta which is received in Malta, with the possibility to claim relief of double taxation. This applies to the beneficiary and any dependant. A minimum tax amount of €7,500 a year is payable for the beneficiary and €500 a year for each dependant. Any other income not covered by this scheme is taxed at 35%.

IIP – Maltese Citizenship

The Malta Individual Investor Programme (IIP) offers Maltese citizenship to qualified, reputable individuals and their families who make a significant financial contribution to Maltese economic development.

The programme is open to non-Maltese nationals that satisfy the following criteria:

• Applicants must be over 18 years of age
• Applicants must acquire a residential immovable property in Malta of a minimum value of €350,000, or annual minimum rent of €16,000, for at least 5 years from the date of purchase.
• Applicants must be resident in Malta for at least 12 months before naturalisation (proof is required).
• Applicants must invest €150,000 in the Maltese economy, with the investment being retained for at least 5 years.
• Applicants must make a contribution to the Maltese Government of €650,000, part of which is a €10,000 non-refundable application fee. Additional fees consist of €25,000 for a spouse, €25,000 to €50,000 per child (depending on their age), and €55,000 for every dependant parent over 55 years of age.

All applicants to the programme will undergo a detailed due diligence process to ensure that they are a person of good repute. The fees attached to this service are €7,500 for the main applicant and between €3,000 to €5,000 per person for a spouse, child or dependant.

Finally, there are passport and bank fees that amount to €500 per person in the case of passports and €200 per application in bank charges.

Applications for the Malta Individual Investor Programme may be made only through an Authorised Agent.

Successful applicants and their families will then receive a Maltese passport along with all the benefits that accompany such a privilege.

Setting up a Business in Malta – Tax Incentives

For companies engaged in particular manufacturing and qualifying activities, the Maltese Government offers some extremely attractive fiscal incentives. These include reduced rates of income tax for qualifying companies in the form of Investment Tax Credits, as well as other incentives such as a Tax Refund System, Double Taxation Relief and Company Redomiciliation programmes.

Malta is a favourite jurisdiction for international holding companies in Europe, the majority of which are taxed at 0% in the hands of the investor.

The general corporate tax rate is 35% although, after tax credits are applied, the resulting rate can be as low as 5% effective taxation or less. Additionally, company profits are only taxed at the company level. The shareholder is not taxed again as there are no withholding taxes on dividends.

As one of the most tax-friendly countries in the world, Malta’s incentives are aimed at attracting direct foreign investment to the island. It is currently reaping the rewards as an increasing number of tax planning and corporate structures recognise its ideal position in the financial services industry.

Investment Tax Credits

This incentive, in terms of when the tax payable is reduced and even eliminated, may only be availed by those qualifying companies entitled to benefit from reduced rates of income tax.

Investment tax credits are calculated as follows:

Either

• (a) 50% of investment on capital equipment; or
• (b) 50% of the first 2-year wage costs of new jobs created.

Note: For SMEs the applicable percentage is increased to 65%

Tax credits unutilised during a particular year are carried forward to the following year and increased by 7%.

The combination of the above incentives normally results in minimal or no taxes being paid for a number of years.

Value Added Incentive Scheme

This incentive is applicable to those qualifying companies that are not eligible for reduced rates of income tax, and consists of a scheme whereby such companies benefit from reduced rates of income tax according to the increase in value added derived from their activities.

The reduced rates of tax applicable are as follows:

• (a) 5% for the first 7 years of operation;
• (b) 10% for the next 6 years;
• (c) 15% for the following 5 years.

The reduced rates of tax apply to part or, indeed, a multiple, of the increased profit when compared to a base period. For new companies, since the base period would be nil, all the profits in the initial three years would be taxed at the reduced rate of 5%.

Investment Allowances

Tax deductions in addition to normal tax depreciation are provided as follows:

• (a) Plant and machinery – 50% of the investment;
• (b) Industrial buildings or structures – 20% of the investment.

Reduced Rates of Tax on Reinvested Profits

The tax on profits that are reinvested in projects approved by Malta Enterprise is reduced by 19.25% from 35%.

Incentives for Job Creation

The creation of new jobs for particular people, for instance those who have been unemployed for more than two years or those with a disability, would entitle a company to an additional tax deduction based on their wage cost.

Tax Treaties

Malta has concluded tax treaties with a number of countries (mainly European, but including Canada and Australia) which enhance the incentives provided by Maltese domestic legislation.

Most of these treaties ensure that profits generated in Malta are either exempt from tax in the country of residence of the investor, or that that country will provide a tax credit for the Malta tax spared as a consequence of the incentives Malta provides.

At RE/MAX Malta, our tax advisors will be able to guide you on the best decisions to take. Please Contact Us for more information.