The island has recently implemented a new residency programme, which has made relocating to the island easier and more affordable than ever before. This programme ultimately offers foreign nationals a flat tax rate of 15 per cent if they purchase or rent property on the Maltese Islands. Seeking to attract highly talented and networked people from around the world to Malta, the country has also introduced legislation for a citizenship by investment programme. While living in Malta has long been popular with European nationals, and especially with people from the UK and Scandinavia, the new wave of expatriates choosing the island to work, live and invest in, is expected to include individuals and families from Asia, the Middle East and the Americas.
There are many reasons why expats have joined more than one million tourists flocking to the Maltese Islands every year. Year-round sunny skies have definitely been one of the foremost draws to this alluring island, while a beneficial tax treatment has helped to attract foreign residents to Malta for the past 50 years. The first measures to attract foreigners came into place following independence from Britain in 1964, when a fiscal strategy was implemented offering a special tax rate to foreign residents that had an above-average income at their disposal. At that time, most individuals who relocated to Malta were British. A further residency programme was introduced in 1988, which built on this idea, offering foreign nationals a 15 per cent at tax rate and attracting expats from all parts of the world. While this programme has been updated at different times over the years, the flat tax rate has been retained to this day.
While Malta has historically been a popular choice for those looking for increased quality of life in a Mediterranean island setting, economic growth and investments from international companies have also caught the attention of high-flying foreign professionals. Malta is fast becoming an all-round top expat destination that ranks well as a place for career progression and financial gain as well as a lifestyle change, demonstrating that the country delivers across numerous elements of expat life. In particular, the continuous development of Malta’s International Finance Centre contributes to attracting expats from all over the world. The country continued to open its borders through accession to the EU in 2004 and the Schengen Area in 2007; the fruits of which can be illustrated by the fact that there are currently over 21,000 foreigners, about 5 per cent of the total population, living in Malta and contributing to the island’s economy.
Malta aims to attract both foreigners from inside and outside the EU. While EU nationals are free to live and work on the island, non-EU nationals are required to adhere to visa policies. Affluent non-EU foreigners can also take advantage of the country’s Global Residency Programme, including the 15 per cent flat tax rate on income remitted to Malta. The programme is linked to the purchase of property, however investment can be as low as €220,000 for property in the south of Malta or in Gozo, whereas the value of property bought in the remaining parts of Malta has to be at least €275,000. Alternatively, they can rent property for €9,600 per year in Malta and €8,750 per year in Gozo or the South of Malta. Industry professionals point to the benefits derived from this scheme for foreign entrepreneurs, international consultants, intellectuals, authors, musicians or athletes who can establish a second residence in Malta that suits their lifestyle and tax profile.
Gateway into Europe
Possibly the most attractive feature of the Global Residence Programme for non-EU nationals is the opportunity of visa free travel throughout the Schengen zone. Applicants from unstable countries in search of a safe residency location for their families are expected to see the benefit of the programme as well. They might also be attracted by Malta’s recently introduced Individual Investor Programme (IIP). The programme, which is capped at 1,800 applicants, offers foreign nationals the possibility to obtain Maltese citizenship by paying €650,000 to the National Economic and Social Development Fund, purchasing or renting property of a certain value and invest €150,000 in government-approved financial instruments, in addition to fulfilling a number of other criteria. IdentityMalta, the agency that oversees the IIP, is responsible for all aspects pertaining to residency and citizenship.
Attracting the Best
Over recent years, Malta has attracted younger, career-oriented expats who work in many sectors of the island’s growing economy and have chosen to relocate to take advantage of job opportunities. They are employed by foreign and local firms, in sectors such as financial services, gaming and aviation. Malta introduced a scheme that offers professionals, in a range of executive positions in these sectors, a flat tax rate of 15 per cent for a number of years, provided they have an annual income of at least €75,000. Any income over €5 million is tax-free. Conveniently located at the centre of the Mediterranean within a few hours flying time from major European cities, the country is also the ideal location for globetrotting professionals working in Europe, Africa or Asia.
In addition, the island’s popularity as a retirement location has increased. Pensioners can benefit from the Malta Retirement Programme which has been designed to attract nationals of the EU, EEA and Switzerland and offers a 15 per cent tax rate for individuals. Retirees can make use of Malta’s wide network of double taxation agreements. Under most tax treaties that Malta is party to, pensions are tax-exempt from the country in which they are sourced if the person is residing and receiving the pension in Malta. This means pensioners can remit their pensions to Malta and have them taxed at only 15 per cent in Malta if they apply for the Malta Retirement Programme.
Living the Lifestyle
Aside from the fiscal benefits of relocating to Malta, expatriates can rest assured that they would be living in a country where crime is virtually non-existent. Despite the island’s size, there are always new experiences to be enjoyed from scuba diving and jetskiing to exploring Malta’s vast and engrossing history first-hand in its preserved medieval cities. Malta’s climate has been voted the best in the world in the most recent survey by International Living magazine which also ranks the island in the top three places for quality of life. The country also makes it among the top 10 places to retire the world over.
Leveraging a rich legacy of historical buildings and magnificent architecture, Malta boasts an abundance of lifestyle properties, ranging from sea-front apartments to exclusive villas with private pools. Anyone seeking to purchase property in connection with the residency programme will be spoilt for choice. Many expats also report that they have a better standard of living and more luxurious life since relocating due to the island’s lower cost of living. In addition, exclusive, five-star restaurants combining the finest seasonal produce with innovation and expertise can be found all over the island. While some of the high fashion brand names, designers and upmarket services present in Monaco or Milan are not as common on the island; this merely serves to accentuate the unpretentious and genuine nature of Malta and its people.
A Network of Support
In order to support the thousands of foreigners who have chosen to live in Malta, a large and experienced network of professionals has developed including estate agents, lawyers and other service providers. There are also a number of relocation specialists. They advise on all administrative matters such as applying for the respective permits, taxation, the sourcing of property and even with issues such as schooling for children to help foreigners settle in to life on the island.
A Simple Choice
With 300 days of sunshine in a year, idyllic seafront properties and efficient connections to so many major cities, it is easy to see why Malta is among the foremost international expat destinations. As well as a rich history and enduring traditions, the island also enjoys a modern, lively atmosphere. With a high standard of living, reasonable costs and no inheritance, wealth, or annual property taxes in place, expats need to look no further. Unlike in many other destinations such as the UAE or India, where foreigners do not stay for long periods, expats in Malta often spend many years in the country. Some even stay until they retire, knowing that Malta offers the best fusion of the traditional and the sophisticated, the luxurious and the intimate, and embodies the very best in Mediterranean charm.