• Malta Permanent Resident Scheme to be replaced by High Net Worth Individuals Scheme
  • September 23, 2011 | Author: Robert Taylor East
  • Law Firm: Zammit & Associates - Advocates - Swatar Office
  • Malta’s finance minister Tonio Fenech announced this morning that a High Net Worth Individuals Scheme will be replacing the now obsolete Permanent Residency Scheme.

    In turn, officials from the Inland Revenue Department have confirmed that differing sets of qualifying rules shall apply under the new scheme in respect of EU/EEA/Swiss nationals and nationals of other States.
     
    Still, the new scheme is similar in scope to the Permanent Resident Scheme and, accordingly, individuals benefiting under the new scheme would be taxable in Malta on foreign source income which is received in Malta at the flat rate of 15%. Malta source income and gains would be taxable in Malta at the higher rate of 35%. No Malta tax would be chargeable on foreign source capital gains even if these are received in Malta. Minimum annual amounts of Malta tax payable are fixed as follows:

    • EU/EEA/Swiss nationals - €20,000 per year plus €2,500 per dependent;
    • Nationals of other States - €25,000 per year plus €5,000 per dependent.

    Individuals seeking to benefit under the new scheme would be required to acquire immovable property in Malta having a minimum value of €400,000 or to lease such property against annual rental payments of at least €20,000. Recognised health insurance is also a must. Significantly, beneficiaries under the scheme shall be required to spend a minimum of 90 days a year living in Malta.
     
    The new scheme does not grant an automatic right to stay and reside in Malta. As a result, non-EU/EEA/Swiss nationals would also be required to apply for and regularly renew their entry visa or, alternatively to enter into a qualifying contract (subject to payment of a bond) in order to obtain special rights of residence.
     
    Existing permanent residents (that is, persons currently in possession of a Permanent Residents Permit) will not lose their status as such although such persons shall additionally be required to be in possession of appropriate health insurance and in receipt of regular and stable resources which are sufficient to maintain him/herself and his/her dependents without recourse to the Maltese social assistance system.
     
    Furthermore, the property declared as the Permanent Resident Permit holder’s place of residence in Malta must not be occupied by any person other than him/herself and members of his/her family. Should that property be transferred by the permit holder, s/he would be required to acquire/lease a new property having a value or rental value at least equal to the minimum values prescribed under the new scheme (see above).
     
    For further information about how Zammit & Associates - Advocates can help you with applying for this scheme kindly contact us on [email protected]