MPRP

Malta & The Schengen Area

The Schengen Area is an area made up of 26 European countries who decided to abolish internal border controls and strengthen common external borders. The Schengen Area has a common visa policy and functions as one jurisdiction for travel purposes. Common rules and procedures are applied to border controls and short stay visas. Simultaneously, cooperation and coordination between Police services and judicial authorities guarantee security, supported by the Schengen Information System (SIS) which is a common database shared by countries forming part of the Schengen Area.

The Schengen Area is distinct from the European Union (EU) and in fact, there are countries who are part of the EU but not in the Schengen Area and there are countries which are not members of the EU but part of the Schengen Area.

The Schengen Countries

Iceland, Norway, Switzerland and Lichtenstein are members of the Schengen Area but not members of the European Union. On the other hand, Ireland, Romania, Bulgaria, Croatia and Cyprus are EU members but not yet part of the Schengen Area.

The 26 Schengen countries in alphabetical order are Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.

Malta and the Schengen Area

Malta joined the Schengen Area in 2007, three years after joining the European Union in 2004. On signing the Schengen Agreement, Maltese citizens or residents holding a Maltese residency card became no longer subject to border checks within the Schengen Area. Malta’s entry into the Schengen Area thus facilitated travel for citizens and residents of Malta especially coupled with the fact that most countries in the Schengen Area also adopted the Euro currency.

In a nutshell, the Schengen Area can be described as an area made up of 26 European countries which follow common rules in terms of police cooperation, strengthening of external borders and removing internal borders thus facilitating freedom of movement for its citizens and residents.

Malta Central Visa Unit

The Government entity in Malta, responsible for overseeing the Schengen Code and the national visa policies is the Central Visa Unit. The responsibility of issuing visas is shared also with the Maltese Embassies and Consulates outside of Malta. There are mainly 2 categories of visas which Malta issues:

  • Schengen Visa: This visa, also known as a short stay visa, is issued for a period not exceeding 90 days and is regulated by the EU’s common provisions.
  • National Type D Visa: This visa, also known as long stay visa, is issued for a period exceeding 90 days but not more than 365 days.

The Visa code establishes the conditions and procedure for issuing a short stay visa. Thus, any visa application to enter Malta for a short stay must conform with all the requirements in the Visa Code.

The Malta Permanent Residence Programme & Schengen Access

By virtue of the Schengen Agreement, the rights granted to nationals of countries within the Schengen Area are also extended to residents holding a visa or a residence card issued by a Schengen member state. Thus, a valid residence permit together with a travel document can be a substitute for a visa and a third country national presenting his own passport together with a Schengen issued residence permit is allowed to enter the Schengen zone for 90 days in a 180-day period.

The benefits of holding a Maltese residence card thus can be as simple as travelling to France for holidays with one’s family without the need of applying for a visa, paying fees, and waiting for the bureaucratic process to be completed. The benefits of a residence permit issued by a Schengen country are endless and significantly enhance one’s ability to move in the Schengen Area for any tourist or business-related travel.

Malta Permanent Residence Programme (MPRP) – For Non-EU Nationals

Non-EU nationals can benefit from Malta’s Permanent Residence Programme (MPRP) which is a residence by investment programme granting a Schengen Residence card and thus giving the ability of visa-free travel within the Schengen Area. The MPRP is a residence programme based on an investment in property and a donation to the Government of Malta and to charity. It grants permanent residence within 4-6 months of submitting an application. Beneficiaries of such a programme enjoy the right to reside permanently in Malta and enjoy visa-free travel within the Schengen Area for 90 out of 180 days.

The main requirements include:

• Making a non-refundable contribution to the Government of €68,000 if purchasing real estate or €98,000 if renting a property, and
• Making a non-refundable donation of €2,000 to a charitable organisation, and
• Renting or Purchasing a property in Malta.

Applications under the MPRP are only to be submitted through a licenced agent. Our firm holds licence number AKM-ACCA-21 and can assist applicants to successfully apply for permanent residence under the MPRP.

 

Malta Permanent Residence Programme (MPRP) – FAQ

The Malta Permanent Residence Programme (MPRP) is a route to obtain residence for non-EU nationals wishing to reside in Malta or to travel within the Schengen Area without the requirement of a visa. The MPRP is a residence by investment programme which is based on three main requirements, which are: an investment in property, a government contribution and a donation to a Maltese registered charity or NGO. The main benefit of the MPRP is that the programme is a straightforward one with applications processed within 4 to 6 months as long as the applicant satisfies all the eligibility requirements.

Which legislation regulates the MPRP?

The Malta Permanent Residence Programme was launched by means of Legal Notice 121 of 2021. This legislation lists down the eligibility criteria and requirements for non-EU nationals to obtain residence in Malta through the MPRP.

Is The Malta Permanent Residence Programme open only for non-EU nationals?

The MPRP is only available to Non-EU nationals. Currently the Malta residency agency is not accepting applications from nationals of Afghanistan, North Korea, Iran, Democratic Republic of Congo, Somalia, South Sudan, Sudan, Syria, Yemen and Venezuela.

Will holders of MPRP be allowed to travel visa-free in the Schengen Area?

Beneficiaries of the MPRP may travel Visa-free to Schengen countries, and for a maximum period of 90 days within a 180-day period. The 26 Schengen countries are Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.

Do I need to satisfy all the investment requirements under the Malta Permanent Residence Programme?

The applicant must satisfy all the investment requirements and cannot choose only one of them. The applicant must thus: 1) invest in property, 2) pay a government contribution and 3) give a donation to charity or an NGO.

How much is an applicant required to invest in property?

An applicant is only required to invest in property once a letter of approval is issued. This is different from the residence programmes of Portugal and Greece whereby the applicant is not able to submit an application without first purchasing a property.

In Malta, the applicant is required to either rent or purchase a property once the application is approved.

The applicant is required to rent a property for a minimum of €12,000 annually in Malta or €10,000 in the South of Malta or Gozo.

If the applicant opts to purchasing a property, he is required to purchase a property for a minimum of €350,000 in Malta or €300,000 in the South of Malta or Gozo.

How much is an applicant requited to contribute to the Government of Malta?

The Government contribution depends on whether an applicant decides to purchase or rent a property in Malta.

If the applicant decides to rent a property, the direct contribution and administration fee is of €98,000.

If the applicant decides to purchase a property, the direct contribution and administration fee is of €68,000.

At what stage is the applicant required to pay the Government Contribution and Administration Fee?

The applicant is only required to pay the €68,000 (purchase) or €98,000 (rent) once the letter of approval is issued. From this only €10,000 is to be paid within one month from the submission of the application.

Is the applicant required to pay additional fee for the spouse and children?

The Government Contribution and Administration fee of €68,000 (purchase) or €98,000 (rent) covers the main applicant, the spouse and their children. The applicant may also add the parents and/or grandparents at an additional government contribution of €7,500.

How much is an applicant required to donate to a charity organisation?

Once the letter of approval is issued, the applicant is required to donate €2,000 to a local registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society registered with the Commissioner for Voluntary Organisations, or as otherwise approved by the Agency.

Which family members are eligible to be added in the same application of the Main Applicant?

The main applicant may include in the same application, the spouse, financially dependent and unmarried children (no age limits) and parents/grandparents of the applicant and/or of the spouse who are also economically dependent on the main applicant.

Would a child of the main applicant be entitled to free education in Malta?

Under the MPRP, a minor is not entitled to free education. However, if the main applicant or spouse acquires a work permit, the children would be entitled to free primary and secondary education in state schools.

Is the permanent residence permit valid for life?

The residence certificate issued under the MPRP is valid for life as long as all the programme obligations are adhered to. The residence card is valid for 5 years and renewed every 5 years.

Can the applicant first rent and then buy a property?

An applicant may opt to rent a property and then replace it with a purchased property. During the first 5 years the applicant is however not allowed to first purchase, and then rent a property.

For how long is the applicant required to keep the property in Malta?

The applicant is required to hold the qualifying rented or purchased property for at least five years during which it cannot be rented out to other persons. After the five-year period, the applicant is still required to have a property rented or purchased in Malta to retain the residence card.

Is the applicant required to proof that he is economically self-sufficient?

The applicant is required to show evidence that he is in possession of €500,000 out of which €150,000 should be in the form of financial assets. This amount does not change according to the number of persons included in the application.

Liquid assets can be stocks, bonds, funds and bank deposits. Cryptocurrency does not qualify as financial assets.

For how long is the Applicant required to be in compliance with the economic self sufficiency requirement?

Monitoring of beneficiary’s €500,000 in assets, out of which a minimum of €150,000 need to be financial assets will be made yearly for the first 5 years.

Is the applicant required to have a Health Insurance Policy?

Under the MPRP, a health insurance policy is required. The health insurance should cover all beneficiaries for a minimum of €30,000 per annum and covering full expenses for Malta.

Is an applicant required to be in Malta to start the application?

The applicant is not required to be in Malta to submit an application, since an application can only be submitted by an Accredited Agent.

How can ACC Immigration Assist?

We are a licenced firm by Agenzija Komunita Malta, accredited to submit permanent residence applications on behalf of applicants. ACC holds licence number AKM-ACCA-21.

Personal Taxation of Maltese Residents

This overview of Malta’s personal taxation of Maltese residents applies to persons taking up residence under European freedom of movement rules, under any immigration rights or residence programme as well as under the Maltese Citizenship by Exceptional Services rules.

Personal Tax Connecting Factors

Under Maltese law, the connecting factors determining the taxability of individuals are domicile and residence, remnants of Malta’s British colonial history dating back to the 1940s.

Citizenship is not a factor that effects the taxation of individuals and therefore acquiring Maltese citizenship by exceptional services does not, alone and in itself, give rise to any tax consequences.  Contact us for Maltese tax advice on the tax implications of the residence required by the Maltese citizenship rules, to assess the extent to which it may result in tax residence and to plan all remittances required under the investor citizenship route.

Permanent resident status under immigration law, particularly the Permanent Residence Programme Regulations of 2021, is not equivalent to Maltese tax residence.  Accordingly, Maltese permanent residence permits issued under these Regulations do not automatically result in residents being considered tax resident in Malta given that this immigration programme does not require any minimum physical presence in Malta in any given year.  Contact us for a consultation on the requirements, implications and planning of tax residence in Malta.

Tax Resident Status

Tax resident status is not an automatic consequence of acquiring permanent residence in Malta.   Tax resident status results from a residence in Malta of over 183 days, or where residents have spent less than the 183 days in Malta, they may demonstrate various connecting factors evidencing their intention to reside in Malta ordinarily.  Permanent residents of Malta requiring formal confirmation of their tax residence status in Malta are able to obtain this through a separate procedure – prior legal advice is recommended.  Contact us for a tax consultation.

Taxation of Non-Malta residents

Non-tax residents are only subject to tax on local source income, that is income arising in Malta including salaries, local business profits, rental income and pension income.

Malta Tax of Foreign Domiciled Residents of Malta

Tax residents of Malta enjoy a remittance basis of taxation, often referred to as res non-dom taxation, whereby they are only subject to Maltese tax on their foreign income only to the extent remitted to Malta.  Res non-doms are not subject to Maltese taxation on their foreign source capital gains, whether remitted to Malta or not.   The enjoyment of the res non-dom tax regime by persons having incomes sources abroad exceeding €35,000 are subject to a minimum annual tax of €5,000.

Taxation of Income in Malta

Income is taxable in Malta only if it arises in Malta.  Income arising abroad, is only taxable in Malta if a person is tax resident in Malta and only on that portion that is remitted to Malta.  Capital gains are taxable in Malta only if arising in Malta but are subject to various exemptions.  Capital gains arising out of Malta are not subject to tax, nor are they reportable, whether remitted to Malta or not.

Other Maltese taxes

Malta has no wealth or capital taxes, no wealth reporting obligations, no inheritance taxation, no property taxes, no dividend taxes, and no system of rates.

Malta Permanent Residence Programme Accepting First Applications

The Malta Permanent Residence Programme is now accepting applications from prospective applicants seeking permanent residence in Malta. Following the publication of Legal Notice 121 of 2021 the Malta Permanent Residence Agency is now formally accepting applications under the MPRP, after having stopped receiving applications under the previous Malta Residence and Visa Programme on Friday 26th March 2021.

Two Investment Options for Applicants to choose from

The Malta Permanent Residence Programme is now accepting applications from prospective applicants seeking permanent residence in Malta. Following the publication of Legal Notice 121 of 2021 the Malta Permanent Residence Agency is now formally accepting applications under the MPRP, after having stopped receiving applications under the previous Malta Residence and Visa Programme on Friday 26th March 2021.

The new regulations lay down the legislative framework for the acquisition of residency under the MPRP. Residence cards under the MPRP are issued for 5 years and renewable for 5 years indefinitely as long as the applicant maintains a residential property in Malta. Holders of the MPRP enjoy permanent residency status in Malta granting the right to stay indefinitely in Malta subject to fulfilling the requirements set out in the legal notice.

Malta Permanent Residence Programme: Investment Options

Applicants under the MPRP may choose from two investment options:
1.Property Rental Option, or
2.Property Purchase Option

Whichever option is chosen the applicant is also required to make a one-time donation of €2,000 to a Maltese charity institution or non-governmental organisation.

Applicants are also required to make a contribution of €68,000 when buying a qualifying property; or €98,000 when renting a qualifying property.
If the applicant opts for the Property Rental Option, he should rent a property for at least €10,000 annually if the property is located in the South of Malta or Gozo, or €12,000 annually if located in the Central or Northern Part of Malta.
If the applicant opts for the Property Purchase Option, he should buy a property for at least €300,000 if the property is located in the South of Malta or Gozo, or €350,000 if located in the Central or Northern Part of Malta.

Malta Permanent Residence Programme – Eligibility

The MPRP is available only for Non-EU/EEA applicants of good repute. Applicants are required to show evidence of clean source of funds and wealth and a clean police record. In addition, applications under this programme are required to have capital of at least €500,000 out of which €150,000 must take the form of financial assets.

In the same application, the applicant may include the following family members:
•spouses or partners in a stable and durable relationship
•dependent unmarried children with no age limit, as well as
•economically dependent parents and grandparents of both the Main Applicant & the Spouse

Malta Permanent Residence Programme: Benefits

  • Permanent Residence is valid for life
  • Maltese Residence Cards are valid for 5 years and renewable for subsequent periods of 5 years
  • Applicants have the right to live, work and reside in Malta
  • Malta is part of the Schengen Area, the Commonwealth and the European Union
  • Visa Free Travel within the Schengen Area
  • Malta enjoys high quality education and healthcare services
  • The MPRP allows a property rental option in lieu of a buying option, making the process both easy and convenient.

Our Malta Permanent Residence Services

ACC Immigration is a Maltese licenced immigration firm guiding high net worth international families on diverse subjects such as residency & citizenship, corporate, tax, financial services, fintech & property acquisition. Over the last 20 years, our Malta Immigration specialists have successfully represented hundreds of individuals and families ranging from expatriate retirees, emigrants seeking employment and high net worth individuals.
We are able to advise you on the tax and legal implications and requirements of the residence application process and indicate expected time frames based on the specific circumstances and nature of your application. Our advice covers the rules applicable to immigrating to Malta under a number of available residence schemes as well as practical relocation assistance ranging from transportation and insurance to schooling and health insurance coverage.

ACC Advisors Limited holds licence number AKM-ACCA-21