Malta Global Residence Programme (GRP)

Beneficiaries Of Other Tax Programme Limitations

Individuals who are already beneficiaries of other tax incentives may apply upon renouncing their benefits prior to their application for the Global Residence Programme. A declaration of this needs to be added to the application form in this case. The other tax incentive programmes include:

• Residents Scheme Regulations;
• High Net Worth Individuals Rules;
• Malta Retirement Programme Rules;
• Qualifying Employment in Innovation and Creativity Rules; or
• Highly Qualified Persons Rules.

Qualifying Property Requirements

It is required to own or rent a property in Malta which is used as the principle place of residence world-wide. A property is considered qualifying based on minimum values.

If owned, the immovable property must have a minimum value of:

• 220,000 EUR in the south of Malta;
• 250,000 EUR in Gozo, or
• 275,000 EUR in the remaining areas of the Island.

If rented, the value of the rent must be at least:

• 8,750 EUR per annum in the south of Malta or Gozo; or
• 9,600 EUR in the remaining parts of Malta.

Localities that are considered in the south of Malta are: Birżebbuġia, Cospicua, Fgura, Għaxaq, Gudja, Kalkara, Kirkop, Luqa, Marsascala, Marsaxlokk, Mqabba, Paola, Qrendi, Safi, Santa Luċija, Senglea, Siġġiewi, Tarxien, Vittoriosa, Xgħajra, Żabbar, Żejtun, Żurrieq

The lease agreement needs to indicate whether the property is being furnished or not. If not, any separate agreements for furnishings must be attached including the amounts.

It is important to note that only the applicant and his/her dependants and household staff may reside at the property. It is forbidden to let or sub-let.

If a qualifying property has already been purchased or rented by the time of application, a copy of the deed or rental agreement must be provided together with the application for the Global Residence Programme.

Self Sufficiency

Every applicant needs to demonstrate self sufficiency by receiving regular and stable income. It should be sufficient enough to maintain him or herself and dependents. A declaration needs to be submitted during the application process by the registered mandatary.

Valid Travel Documents

The applicant and the dependants need to have valid travel documents which must be certified and submitted together with the application.

Sickness Insurance

A valid sickness or health insurance which covers the applicant and any dependants across the EU must be in possession and issued by either a Maltese insurance intermediary or by a reputable international health insurance provider.

A certified copy of the insurance certificate must be provided together with the application for the residence programme.

Language Requirements

Every applicants needs to know and communicate adequately in either Maltese or English. The authorised intermediary can provide a valid declaration of this, or any documentation of certifications proving this requirement is satisfied.

The commissioner may also request an informal meeting with the applicant to ensure this requirement is met.

Being a “Fit and Proper Person”

Every applicant is required to provide a police conduct, together with the Apostille Certificate, issued no earlier than 6-month before the date of application. Furthermore, a sworn declaration taken before the Commissioner of Oaths in Malta is required to prove the applicant is not subject to any ongoing civil or criminal proceedings.

This requirements is also applicable to all dependants of the age of 18 and above together with all household staff part of the application.

When determining if the applicants are fit and proper, the following is taken into account:

• whether the individual is of good conduct and good morals;
• the individual’s reputation and character amongst which whether the individual has a criminal record, convictions for fraud or other dishonesty;
• disqualification or censorship by professional or regulatory bodies, such as being barred from entry to any profession or occupation;
• being adjudged bankrupt by a competent court or authority;
• offences connected to terrorism, money laundering, crimes against humanity and child abuse;
• whether in the past, the individual has been candid and truthful in all his dealings with the Maltese public administration.

Administration Fee

A non-refundable administration fee of 6,000 EUR is applicable for the Global Residence Programme. In case the qualifying property is situated in the South of Malta, the application fee due is 5,500 EUR.

The application process

1. Submission and Documents Requirements

Once the application, required documents and administrative fee is submitted, the application will be checked for completeness by the Commissioner. An acknowledgement is sent to the agent together with any outstanding or incorrect details needed to process the application.

The applicant does not need to be owner or lessee of the qualifying property during the application. This can be submitted at a later stage unless the property is in the south and the applicant wants to benefit from the reduced application fee. In this case the deed or lease agreement needs to be submitted during the application stage.

2. Due Diligence Process

Once the valid application is received, it is forwarded to undergo the due diligence process. Once the process is completed, the agent will be notified on behalf of the applicant of the outcome. If the outcome is negative, the agent and applicant may provide sufficient explanation in order to proceed with the application.

3. Face-to-face Meeting

If the application is successful, a face-to-face meeting is requested which will follow by the letter of intent once the application may proceed. During this time a notice of residence is to be submitted.

4. The Letter Of Intent

The letter of intent is valid for 12 months, in which time the final deed or lease agreement of the qualifying property must be submitted.  The confirmation letter will then be issued by the Commissioner.

Tax Treatment Under The Global Residence Programme

Tax Rates

Individuals that have been granted residence under the Global Residence Programme will be subject to a flat rate of 15% tax. This tax rate is applied to any foreign source income received in Malta by both the beneficiary and their dependants.

The tax rate applies from the year of confirmation of the residence programme until the year of discontinuance – both years included.

Any other income from local sources, such as bank interests and dividends received, will be taxed according to the Income Tax Act with the rate of 35%.

Minimum Tax

A minimum tax in terms of the Global Residence Programme is 15,000 EUR per annum. This minimum tax covers both the main beneficiary and their dependants on income that arises outside Malta and which is received in Malta. The minimum tax does not include income that arise in Malta.

If the tax payable, including tax credits and double taxation relief is less than the minimum tax amount, the minimum tax is still required to be paid. Furthermore, the minimum tax is payable in both the year of confirmation of the programme and during the year of discontinuance.

The minimum tax must be paid prior to confirmation is given during the application process.

Provisional Tax

The beneficiary will not be subject to provisional tax during the first year. Thereafter, provisional tax payments are required in accordance with the Payment of Provisional Tax (P.T.) Rules.

If the applicant was granted special tax treatment in terms of the Global Tax Residence Programme but receives a status of long-term residence, the person will become taxable on income derived from Malta or elsewhere according to the regular tax rates set out in the Income Tax Act.

Household Staff

Household staff are individuals who provide services to the applicant of the Global Residence Programme. The beneficiary may have more than one household staff but they must have been rendering the service at least 2 years prior to the application.

An exception of the two year period may be given by the Commissioner in case of sudden illness and the services are required, or for example in case of new household staff need to be recently engaged. It is important that the services are being regulated by a contract of service.

Tax Treatment of Household Staff

Household staff do not benefit from the special tax status of the applicant and are taxed according to the rates out out in the Income Tax Act. All household staff need to register with the relevant tax authorities as per usual.

Requirements When Working In Malta

Any third country nationals who wish to work in Malta need to apply for work permits issued by the Employment and Training Corporation Jobs Plus). This applies to both the beneficiary, dependants and household staff.

The application for the Global Residence Programme need to be accompanied with a letter addressed to the Department Manager for those requesting work permit.

Any changes in the number of dependants and household staff needs to be notified to the Commissioner within four weeks.

Annual Tax Return

Applicants who benefit from the Global Residence Programme need to submit the Annual Tax Return. The tax return includes a annual declaration of any material changes that affect the applicants special tax treatment.

The Commissioner may request further documentation such as certifications and declarations confirming the information provided.

Discontinuation of the Special Tax Status

By choice of the beneficiary

The beneficiary may choose to discontinue the special tax treatment granted by notifying the Commissioner. The discontinuation will take affect from the date in the notification, which must be at least 3 months prior, or immediately if no date is indicated.

By death of the beneficiary

Should the beneficiary who was granted special tax status pass away, the tax status is devolved onto only one of the dependants if the qualifying property is inherited. Proof of such circumstances must be provided to the Commissioner within 183 days.

By Breach of the Income Tax Act

A beneficiary will cease to have special tax status with immediate effect if the applicant is in breach of the income tax act. This could be negligence of compliance obligations or if requests for information has not been supplied to the Commissioner in time.