Permanent Residence Scheme
A non-resident wishing to take up permanent residency in Malta would benefit from a tax rate at 15% which is only levied on income brought into Malta. It is important to note that global income is not taxed in any way.
A Permanent Residence Permit entitles the holder who is not a citizen of Malta, to reside permanently in Malta without the necessity of obtaining and renewing an entry visa; the Permanent Resident therefore has freedom of movement in Malta.
Provided that the Permanent Resident remains within the law, then the permit is renewed annually as a formality. Once granted, a permit will not be revoked unless the Resident breaks a condition of the permit.
The Permanent Residence Permit has no effect however on the visas the holder might need to enter other countries from Malta Furthermore, holding a Maltese Residence Permit does not exempt such persons from acquiring visas to enter other jurisdictions and as such they will need to abide with that particular jurisdictions entry requirements..
A Residence Permit will never entitle the holder to acquire Maltese citizenship.
Permanent Residence permit holders pay a flat tax rate of 15% on all income brought into Malta.
This is subject to a minimum payment of Euro 4,500 per annum. This minimum payment covers an income of approximately Euro 30,000. The Permanent Resident’s global income, which is not brought to Malta, is not taxed in any way.
Moreover, once the permit is issued and the permit holder has registered with the Inland Revenue Department in Malta, the Maltese tax authorities will certify that for Maltese taxation purposes, the permit holder is a resident in Malta.
On the basis of this certificate, most countries will consider the permit holder to be resident in Malta for tax purposes and as such the consequence of this varies from country to country. Some countries will not tax their citizens at all if they are a resident in Malta; others will tax them at a lower rate. However each case and country should be seen separately.
Furthermore, the holder of a Permanent Residence Permit also gets an exemption from customs duty on household and personal effects brought into Malta. This includes furniture and other domestic articles (excluding firearms and weapons of all kinds) and one car, provided they are brought to Malta within six months of the permit being issued. Equally, personal effects and the vehicle may be taken back out of Malta with no charge.
Permanent residency in Malta:
- No minimum stay or residence in Malta is required after the Permit has been issued (But the resident must come once in the first 12 months)
- The holder must either purchase an apartment for not less than Euro 75,000 or lease/rent property for not less than Euro 4,500 per year within the first 12 month
- Once a Permanent Resident decides to abandon his Maltese residence, accumulated capital and income may be taken back out of Malta with no restrictions.
- No death duty (succession tax) is payable in Malta but on a person’s death there is a 5% charge on immovable property situated in Malta.
- When the Permanent Resident abandons his Maltese residence, he is entitled to re-sell any immovable property and take the capital out of Malta but the profit made from the sale is taxed as a Capital Gain; the rate for Capital Gains Tax is 35% at the present moment.
- A Permanent Resident cannot take part in politics and cannot vote at elections, but a Permanent Resident is entitled to vote for Local Council elections.
- A Permanent Resident cannot work in Malta. However a Permanent Resident may use Malta as a base to work from, provided that he does not offer his services on the local market.
The content on this website is for information purposes only and should not be taken as tax, legal or any other professional advice.
Contact our CBDO on LinkedIn Deborah Vella or email us on email@example.com for more information as well as for a quote. We will happily guide you through the Malta company formation process and also advise you on the solutions that would best suite your needs!