Why choose the Malta Individual Investor Programme?
Few people outside of Europe have heard of the island of Malta. On the continent, its known as a tourist paradise, but beyond that, it’s building a reputation of having the best citizenship-by-investment programme in the world: The Malta Individual Investor Programme. For those of you who are unfamiliar with Malta, here’s an introduction and a look at what the island has to offer.
Malta is a small island of 450,000 inhabitants in the Mediterranean Sea, south of Sicily. The capital of Malta is the historic city of Valletta, established by the Romans over 1500 years ago. Today Valletta encompasses both ancient and modern architecture, making the port city one of the gems of the Mediterranean. English is an official language in Malta and is spoken by the vast majority of the island’s inhabitants. This makes Malta the only country in Europe with a citizenship-by-investment programme that has English as an official language.
The Malta Individual Investor Programme will permit you to receive the Maltese passport in roughly 13 months. This might be a longer wait than other citizenship-by-investment programmes require, but it’s well worth it. Malta has the only citizenship-by-investment programme whose passport permits visa-free travel to the USA. This is why Malta’s citizenship-by-investment programme is the most sought- after on the planet. It is also, with Cyprus, one of the only citizenship-by-investment programmes to enable freedom of movement across the Schengen Area.
The 2018 Henley Passport Index ranks Malta in 7th place, with 173 visa-free destinations. The Maltese passport enables visa-free travel to the USA, Canada, Brazil, Australia and many other countries. You can also travel to China if you are in transit, and are authorized to stay visa-free for 72h or 144h in the main Chinese cities.
What has made Malta a popular place to relocate for Europeans – especially British nationals – is the island’s temperate climate. For most of the year, temperatures vary between 18°C and 30°C, with temperatures reaching 30°C and above in summer and dropping to a still-comfortable 15°C in winter. Malta has one of Europe’s lowest rainfalls, with an annual average of only 530 mm of rain. It rarely rains in summer, as precipitation falls in winter. Malta receives a lot of sunshine and the climate is mostly dry, although it can get humid at the peak of summer. All in all, if you’re thinking about relocating to Europe – but are repelled by the continent’s cold weather – Malta would be an ideal compromise.
The Maltese taxation system is very attractive to foreigners and helps cement the island as hub for trade and finance. Maltese taxation on individuals, like that in the UK, is based on the principle of domicile. One can be resident of Malta and not be domicile (i.e., not having vital interests in Malta). Those who qualify as non-domicile will only be taxed on foreign income if the income is remitted in Malta. Otherwise, for those who plan to make Malta their base of professional activities, Individual Investor programme applicants can apply to the HNWI tax scheme and have their personal income taxed at a flat rate of 15%. That flat rate would apply to capital gains and dividends received and remitted to Malta. Those who apply to the HNWI tax scheme must have residential ties of at least 90 days a year in Malta and not spend more than 182 days in any other jurisdiction. Inheritance tax to direct descendants is not truly existent and only applies in the form of a stamp duty to the transfer of shares (2%) and properties (4%) located in Malta.
Malta Real Estate
What makes Malta so attractive compared to other sunny low-tax jurisdictions is its affordable cost of living. Many Europeans leave the mainland for Malta and see not only their tax liability shrink tremendously, but also their cost of living. Malta’s property market is more affordable than most western European cities. The average price of a 3-bedroom apartment in Valletta is € 1,500. The Malta Individual Investor Programme and Malta Residence and Visa Programme (MRVP) allow for the purchase of properties at minimal values of € 350,000 and € 270,000 respectively, which is roughly the price of a 50m2, 1-bedroom flat in Valletta. What makes real estate investment in Malta so attractive is the lack of annual property tax levied by the municipalities; this makes holding property for your lifetime sound a lot less frightening than it first sounds. At purchase, buyers pay a 5% property transfer tax. The seller is not required to pay any capital gains tax if he/she has held the property for more than 3 years and if it’s his/her main residence. For those looking to invest in property and rent it out to generate income, the rental yield is estimated at around 3% in Valletta, and the tax on rental income is a flat 15%.
There’s much more to know about what makes Malta such an idyllic place to live. Download our factsheet on Malta, or get in touch with us by calling +852 5808 1895 or send us an email [email protected]. One of our representatives in your region will be delighted to assist you.