The launch of a new residency scheme for foreigners owning property in Malta has been launched in the same week that saw stricter requirements for Schengen visa applications, a coincidence which might boost Malta as a destination for South Africans seeking dual residency status.

 

On 1 June, the Maltese government announced a new residency scheme, known as the Malta Global Residence Programme, to replace the existing High Net Worth Individuals Tax Residence Scheme.

 

The new scheme seeks to attract economically self-sufficient expatriates looking for an alternative residence base in a European country.

 

It is particularly attractive for those holding passports issued by other than EU or EEU countries, such as South Africa, wrote Mel Roberts.

 

Mr Roberts, consultant to Maitland in Malta, says that one of the side benefits of the scheme is that once residence status is granted, the need to obtain a Schengen visa for Europe falls away.

 

"This attractive new residency scheme comes just as the EU introduces its new visa information system in Southern Africa requiring applicants from there to appear in person at the nearest consulate for visa applications to enable the collection of biometric data."

 

Mr Roberts says that the new Maltese residence scheme offers advantages over the previous scheme in that it provides more certainty and offers stronger incentives.

 

"Successful applicants are offered a flat 15% tax rate on income remitted to Malta and are not required to disclose worldwide income which is not so remitted."

 

"There is no CGT applicable to capital gains on assets located outside of Malta, no inheritance tax, and no rates and taxes on property owned in Malta. There is however a requirement to pay a minimum tax of €15,000 per family, per annum," he says.

 

The salient features of the Malta Global Residence Programme are:

 

- Applicants must demonstrate that they are financially self-sufficient and must be in possession of adequate medical insurance cover which is applicable to the whole of Europe.

- They must commit to buying or renting a property in Malta at a certain minimum amount within 12 months of being accepted into the scheme. Depending on the area they wish to live, rentals vary upwards from a minimum of €8,750 per annum, and purchased property should have a minimum cost of at least €220,000 (in Gozo and southern Malta;  €9,600 pa or €275,000 in the more upmarket central and northern areas).

- Applicants must agree to spend no more than 183 days a year in a foreign jurisdiction.

- They are permitted to accept employment or establish a business in Malta, but such earnings will be taxed at a 35% rate.

- The scheme applies to individuals and families comprising a husband and wife, and dependent children up to the age of 25 years. Other dependent bona fide family members can be included in the application.

Applications must be submitted via an "authorised mandatory" who acts as a liaison between the applicant and the Maltese authorities.

From all reports, it would seem this new scheme is selling like hot cakes – a welcome development after the stasis that lasted two years as the previous government first withdrew the previous scheme (which wasn’t so bad) and then spent upwards of one year to come up with a vastly unsatisfactory alternative.

This government, as stated, spent two months and some days to come up with this new scheme.