Malta’s Individual Investor Program, like similar initiatives from Cyprus and Bulgaria, is a highly sought after “golden passport” gateway to EU citizenship and access to almost all of Europe, including Switzerland and Norway. This is the second in a three part series on investment driven migration, focusing on new possibilities that may be overlooked in the shadow of more commonly known programs like Portugal’s “golden visa” and the UK’s Tier 1 investor visa.
Malta is a savvy choice for those considering a second citizenship because of the simplicity of the application procedure, guarantee of success, tax advantages and unparalleled freedom of movement that successful applicants can enjoy. The flexibility of visa free travel and right of residence in the EU without an overbearing tax regime means the best of both worlds is easily within reach with Maltese citizenship.
Malta joined the European union in 2004 and the Schengen Area in 2007. In addition to visa free travel and right of residence in all 28 EU countries, Maltese passport holders can travel to Switzerland and Norway without a visa. Outside of Europe, Maltese citizens enjoy visa free access to the USA and Canada. The degree of flexibility this brings to personal and professional pursuits is unparalleled, with even American passport holders needing visas to visit some EU and Schengen countries for business purposes.
More than a passport
Beyond the European access that Maltese citizenship provides, the country itself presents exciting investment opportunities. Malta has a thriving economy and stable government and continues to offer a safe harbor from economic uncertainty and social upheaval. The country’s GDP, as of 2017 is 12.54 billion USD, with a growth rate of 6.4% annually. Politically, Malta is a parliamentary representative democratic republic, rated as a full democracy by The Economist Intelligence Unit. Society in Malta, united around its cultural heritage, is largely free of the heightened political tensions sweeping much of Europe. Life in Malta offers year round warm weather, picturesque beaches and first world standards of living with well developed infrastructure and good education. The local lifestyle is noted for its relaxed pace, while Maltese people across have a reputation for being welcoming and accommodating to foreigners.
Smooth application, strong investment
Malta has issued over 500,000 passports through its Individual Investor Program, which is expected to continue to grow in popularity. The basic requirements are that the applicant is 18 years or older, provides a clean record, earns at least 100,000 Euro per year, maintains official residence in the country (with no requirement to be physically present) and invests in the designated sectors in Malta at total of €1.1M.
The three required areas of investment are the National Development Social Fund, a government supported Financial Institution, and local real estate. Applicants should contribute a minimum of €650,000 to the National Development and Social Fund, with a further €25,000 required for each dependent, including the applicant’s spouse, parents aged above 55 and adult children aged between 18 and 26. An investment of at least €150,000 in government backed stocks, shares or bonds should be made with a five year commitment.
The government funds and institutions are guaranteed investments that mainly serve to demonstrate the applicant’s commitment to the Individual Investor Program. The real estate investment, however, is an exciting opportunity in its own right.
Maltese passport applicants must commit to ownership of a residential property worth €350,000 or more, for at least five years. Alternatively, investors can lease a property, paying rent in excess of €16,000 per year. The purchase option is far more attractive because Malta’s real estate value increased by 16.9% in 2018, more than anywhere else in the world, including Hong Kong. Almost any property investment in Malta is likely to deliver strong returns on investment given the growth of the economy, job creation and increasing number of expatriates.
Investors should cautioned when approaching Malta’s real estate market because the €350,000 figure, as it applies to the Individual Investor Program, is often an overvaluation of properties that are actually worth less, due to unethical practices by some real estate agents acting in the interest of the seller, targeting overseas buyers that lack familiarity with the local market. Given that properties cannot be rented out during the five year commitment, It is important to purchase real estate with local advisory services and representation.
In fact, applications to the Individual Investor Program without professional representation are prohibited by the government. It is therefore both necessary and prudent to engage a lawyer referred by advisors acting in your interest.
The Maltese Tax Advantage
Malta has no requirement to be present in the country to gain or retain citizenship, while non domiciled citizens do not pay tax for income or capital gains sourced outside of Malta. Citizens are considered tax residents if they spend more than 183 days of a year in Malta. There are no taxes on high net worth, no real estate taxes, no estate duties and no inheritance taxes. The corporate tax rate is set at 35%, but a non resident business owner can reduce their rates to as low as 5%. For both local investments and global wealth structuring, Malta delivers the ideal advantage with no drawbacks.
With no language and physical presence requirements, an unbeatable tax advantage and a passport that puts the world at your feet, the 12-24 month application process to gain Maltese citizenship could be the savvy decision of a lifetime that pays dividends for finances and family. We are excited to offer our Malta relocation services, covering all aspects of the application and investment, guaranteeing both passport and prosperity. We can prepare your application, advise you on your tax structuring and refer you to the best local representation. Whenever you are ready, please don’t hesitate to open the door to your new life overseas by contacting us for a consultation.
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