Ordinary, Permanent and Long term resident
Any EU, EEA or third country national who resides in Malta for more than three months is required to apply for a Residence Permit. Residence permit holders are taxed at normal progressive income tax rates, with the current maximum rate being 35%.
There are various grounds upon which an applicant may apply to acquire a residence permit, including:
Employment or Self-Employment
- EU, EEA and third country nations are entitled to apply to work in Malta.
- However, prospective employers of third country nationals are obliged to acquire an employment license for the particular individual, issued by the Employment and Training Corporation subject to various considerations.
- EU, EEA and Swiss nationals who are financially stable are entitled to apply for a residence permit provided they fulfil the following criteria:
- Study Purposes
- EU, EEA and third country nationals are entitled to apply for a residence permit to study in Malta.
- Certain conditions which must be fulfilled include: enrolment in a recognized educational establishment and the submission of a declaration of resources
- The guardian accompanying the minor applicant will also be entitled to apply for a residence permit on the basis of the student permit
Ordinary Residence Permit
Ordinary residence in Malta requires individuals to physically live on the island for a period of six months or more. The qualifying criteria, varies according to whether the individual is seeking to obtain ordinarily residence in Malta is an EU/EEA national or a third country national. In summary, the key points to consider are the following:
- EU/ EEA nationals
- Applications of third country nationals are approved at the discretion of the authorities
- Must physically live in Malta for a period of six months or more
- No minimum value property requirement, unless there is the need for an Acquisition of Immovable Property Permit
- The transfer of one’s residence from a high-tax jurisdiction to a lower tax overseas country is available to both EU/EEA and non-EU/EEA citizens
- Renewable every five years
Individuals who are ordinarily resident, however not domiciled in Malta, are taxed on chargeable income arising in Malta or remitted to Malta and on capital gains arising in Malta. The applicable tax rates are illustrated in the tables set out below:
Permanent Residence Permit
EU/ EEA /Swiss Nationals and their family members may apply for permanent resisdence upon completing a continuous five-year period of legally living in Malta. Applicants must not have absented themselves from Malta for more than six months a year. Non EU nationals may apply for a resident permit if they will be working in Malta or upon opening a business in Malta provided certain criteria are satisfied.
- Key aspects of the permit:
- Owns assets outside Malta worth €349,000 or more
- Has an annual income of €24,000 or more, arising outside of Malta
- The holder is taxed a flat rate of 15%, subject to a minimum annual tax liability of €4,192 after double taxation relief
- Tax is calculated on chargeable income arising in Malta or remitted to Malta and capital gains arising in Malta.
- Renewable every year
Long Term Residence
Long-term resident status is granted to individuals who have resided legally and continuously in Malta for five consecutive years immediately prior to the submission of the application. In calculating the period of five years, an absence from Malta shorter than six consecutive months shall not be taken into account.
The total absence from Malta cannot exceed ten months within the five-year period. However, a longer period of a further 12 months may be considered by the authorities in specified cases including; health reasons, business travel and education and training.
Other requirements which are considered during the application process are include stable and regular financial resources which have subsisted for a period of two years, appropriate accommodation, sickness insurance and valid travel documents among others.
An individual residing in Malta for a period not exceeding 183 days, shall not be taxed in Malta on foreign income and gains, whether these are remitted to Malta or otherwise. Tax liability arises solely on Maltese sourced income and capital gains.