Malta Individual Investor Programme (IIP)

Published 2 Dec 2014

 

MALTA IIP – CITIZENSHIP BY INVESTMENT

The Malta IIP allows for the granting of citizenship by a certificate of naturalisation to individuals and their dependents who contribute to the economic and social development of Malta.  Subject to a vetting and due diligence process, the applicants and their dependents are granted citizenship in exchange for such a contribution.

Why Malta?

The key objectives for obtaining Maltese citizenship and the benefits gained will vary between individuals and include:

  • Visa-free travel to more than 160 countries in the world;
  • Tax planning benefits;
  • Dependence on more than one passport;
  • Right of work and establishment in all EU countries;
  • Personal security;
  • Stable, neutral and highly respected country;
  • Good quality of life; and
  • Good quality education.

IIP Qualifications and general Requirements

To qualify for the Malta IIP, the main applicants must:

  • be at least 18 years of age;
  • provide proof of having been a resident of Malta for a period of 12 months immediately preceding the issuing of a certificate and provide title to residential address in Malta; 
  • meet the application requirements;
  • be committed to make the contributions determined; and
  • be committed to make investments in Malta

Documents Required

  • Global Health Insurance coverage for at least €50,000 for the main applicant and each of the dependents;
  • Medical certificates confirming that the main applicant and dependents are not suffering from any contagious disease and that they are otherwise in good health;
  • Police conduct certificate;
  • Proof that the main applicant has been a resident of Malta for a period of 12 months preceding naturalisation;
  • An affidavit of support for each dependent who is over 18 years of age; 
  • Evidence, through the due diligence process, that the main applicant and his/her dependents are fit and proper persons to hold Maltese citizenship;
  • An undertaking to remit the total of the required contribution;
  • An undertaking to purchase or take on lease of immovable residential property in Malta;
  • An undertaking to make such other investments in Malta; and
  • Any other document as may be required from time to time.

All applicants aged 18 years and over are required to attend in person in Malta to undertake the Oath of Allegiance. The process takes between 6 to 24 months and currently the programme is capped at 1,800 main applicants.

Residence

  • The main applicant must prove that he/she has been a resident of Malta for a period of at least 12 months preceding the issuance of the naturalisation certificate.

Investments Required

Property*

  • Acquire a property in Malta with a minimum value of €350,000 and retain it for a period of at least 5 years; or
  • Lease a property in Malta at an annual rent of at least €16,000 and retain it for a period of at least 5 years.

* Please note the property cannot be let or sublet.

 Investment

Invest in Malta an amount of at least €150,000 in Government approved financial instruments (stocks, bonds or special purpose vehicles) which must be maintained for a minimum period of 5 years.

Contributions to the National Economic and Social Development Fund payable after the issue of the Letter of in Principal Approval (non-refundable):

  • Main applicant: €650,000;
  • Spouse and minor child: €25,000 each;
  • Each dependent child 18 to 26 years or dependent parents above 55 years: €50,000 each. 

 Fees:

Initial one-time fee (non-refundable):

  • Per application: €10,000

Due diligence fees (non-refundable):

  • Principle applicant: €7,500
  • Spouse / dependents: Dependents: €3,000 - €5,000

 Passport fees:

  • Per person:  €500

Bank charges (non-refundable):

  • Per application: €200

Taxation of new Citizens

In itself, becoming a citizen of Malta under the IIP does not require one to transfer his/her taxability to Malta. However, should the applicant consider this to be advantageous, one may carry out such a transfer.

It is necessary to consider both domicile and residence to establish the exact tax situation of individuals in Malta (not citizenship).  The grant of Maltese citizenship to a non-domiciliary of Malta does not cause the beneficiary to acquire a new domicile of choice in Malta.  Residence for tax purpose on the other hand is established by demonstrating an intention to reside in Malta for a period of more than 183 days in a calendar year.

A non-resident, non-domiciled citizen of Malta would be taxable in Malta as follows:

  • Income arising outside Malta which is received in Malta would be chargeable to tax in Malta at progressive rates, the maximum being 35%; 
  • Income arising in Malta and capital gains realized in Malta would be taxable in Malta at 35%;
  • No Malta tax would be chargeable on income arising outside Malta which is not received in Malta; and
  • No Malta tax would be chargeable on capital gains realized outside Malta even if these are received in Malta

Individuals also have the possibility of claiming double tax relief. Such relief would be available under a treaty in force between Malta and the country of source of the relevant income or, alternatively, by way of unilateral relief – available in terms of domestic tax legislation.  Treaty or unilateral relief would generally be available in the form of an ordinary credit against the beneficiary’s Malta income tax liability.

Application

An application seeking the naturalization as a citizen of Malta under the IIP must be submitted by an Accredited Person.  To this effect, JTC is able to assist you with your application.

Once all requirements are fulfilled and the Certificate of Naturalisation has been issued, the Maltese citizenship granted would be considered as permanent.

Emigration / Immigration Planning

We can help HNWIs who are planning to relocate.  Leaving one country/jurisdiction and taking up residence in another often offers the opportunity to structure one’s financial affairs in a way which reduces exposure to taxation in the new jurisdiction and at the same time establish holding structures in order to maximise privacy.  A trust or a foundation structure often lies at the core of such structures.

Malta has a large and expanding double tax treaty network currently in force.  Malta currently boasts numerous tax treaties, including treaties with all EU Member States.

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