The Global Residence Programme
The Global Residence Programme (GRP) has been introduced for individuals who are not nationals of the EU, EEA or Switzerland. The GRP Rules confer on the successful applicant a special tax status.
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An individual who is eligible to apply under the GRP Rules must prove to the satisfaction of the Commissioner for Revenue (“the Commissioner”) that such individual:
- Holds a ‘Qualifying Property Holding’ which is defined as immovable property situated in the Maltese islands which was either (i) purchased in Malta for a consideration of not less than €275,000 or in Gozo or the South of Malta for a consideration of not less than €220,000; or, (ii) rented for not less than €9,600 per annum for a property situated in Malta or €8,750 for a property situated in Gozo or the South of Malta. In all cases, the said property must be occupied as the primary place of residence;
- Does not benefit under the Residents Scheme Regulations, the High Net Worth Individuals – EU/EEA/Swiss Nationals Rules, the High Net Worth Individuals – Non-EU/EEA/Swiss Nationals Rules, the Malta Retirement Programme Rules, the Qualifying Employment in Innovation and Creativity Rules or the Highly Qualified Persons Rules;
- Is not a “long-term resident” of Malta and consequently does not have long-term resident status under the Status of Long-term Residents (Third Country Nationals) Regulations, and must not have resided legally and continuously in Malta for five years;
- Is in receipt of stable and regular resources which are sufficient to maintain himself/herself and his/her dependents without recourse to the social assistance system in Malta;
- Is in possession of a valid travel document;
- Is in possession of sickness insurance which covers himself/herself and his/her dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals;
- Is a fit and proper person; and
- Can adequately communicate in one of the official languages of Malta.
The above noted conditions must be satisfied on an ongoing basis.
According to the Global Residence Programme, a flat rate of tax of 15% is applicable on income declared in Malta. The minimum tax of €15,000 is payable by not later than the 30th April of the year in which the income is received in Malta and such payment must be accompanied by a return made to the Commissioner that provides proof that all the requirements continue to be satisfied. The minimum tax for the first year is paid before the special tax status is granted.
Applicants of the Global Residence Programme have no minimum stay requirements. However they may not spend more than 183 days in any other jurisdiction.
A non-refundable one-off registration fee of €6,000 (€5,500 in the case of applications involving a qualifying property holding in the south of Malta) must be paid by bank draft payable to the Commissioner of Inland Revenue and attached to the application form.
Applicants of the Global Residence Programme will also be able to work or set up business in Malta and will be taxed at a flat rate of 35% on any income arising in Malta.
Under the Global Residence Programme, foreign residents including their dependents have to be covered by health insurance.
By dependents of the main applicant, it is meant either one of the following:
- the beneficiary’s spouse or a person with whom the beneficiary is in a stable and durable relationship;
- minor children, including minor adopted children, who are in the care or custody of the beneficiary or person mentioned in the first point of this list;
- persons under the age of 25, including adopted persons, who are children of, and are in the care and custody of, the beneficiary or the person mentioned in the first point of this list, provided that such persons are not economically active;
- persons, including adopted persons who are children of, and in the care and custody of, the beneficiary or the person mentioned in the first point of this list, and who, because of illness or disability, are unable to maintain themselves;
- dependent brothers, sisters and direct relatives in the ascending line of the beneficiary or the person mentioned in the first point of this list.
An individual who has been granted the special tax status must satisfy the following obligations on an ongoing basis:
- The individual must not become a Maltese, EEA or Swiss national;
- The individual must not become a long-term resident;
- The individual must retain the Qualifying Property Holding;
- The individual must retain the health insurance and continue to have stable resources;
- The individual must not stay in any other jurisdiction for more than 183 days in a calendar year; and
- Special reporting obligations (the filing of an annual tax return) and notifications must be complied with.
An application for the special tax status must be made through the services of a person that qualifies as an ‘Authorised Mandatory’ and is registered as such with the Inland Revenue Department. ACT Advisory Services Limited is able to offer this service as it is registered as an Authorised Mandatory.
ACT is a well-known and respected boutique tax advisory firm providing high-quality tax advice to Multinational Enterprises, SMEs including family owned and other owner-manged companies, family offices, trusts, foundations, employees and high net worth individuals.
Maltese companies are subject to tax at the rate of 35% on their worldwide income and capital gains. Malta grants various fiscal incentives to both companies and their shareholders upon the distribution of a dividend.
Malta has recently seen an increase in the number of Electronic Money Institutions (EMIs) looking to set up their operations in Malta. This has been largely due to the growth in the e-commerce and the i-gaming industries.