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The Global Residence Programme


Information Leaflet


The Global Residence Programme (GRP) is designed to attract High Net Worth Individuals and their families who are not nationals of the European Union, European Economic Area or Switzerland to take up residence in Malta.

Why Malta

Malta has been a Member of the European Union since 2004, part of Schengen since 2007 and part of the Euro Zone since 2008. Malta offers a stable political climate as well as a safe living environment with a very low crime rate. Moreover, Malta has become an ever-growing international business hub, with its competitive tax system, strategic location and flight connections. Malta registered the highest economic growth in the European Union in 2014 according to Eurostat statistics. According to the European Commission’s Spring 2015 economic forecast, Malta’s economic growth is projected to remain robust. It was also forecast that job creation and the unemployment rate are projected to outperform euro-area peers.

Benefits of the GRP

For a reasonably modest capital outlay, the GRP grants the applicant and his family a notable return, inter alia:
- A residence permit;
- Schengen residence status rights including visa-free travel within Schengen; and
- A flat rate of 15% on all income, which arises outside of Malta and is remitted to Malta. No tax is charged in Malta on income arising outside Malta but not remitted to Malta.

Who may apply

To qualify for the GRP, the main applicant must be over 18 years of age, and must satisfy a 'fit and proper' test and be able to communicate in Maltese or English.
The applicant must not be:
- An EU, EEA or Swiss national;
- A long term resident or has applied for long term resident status in Malta; and
- A beneficiary under any other programme granting special tax status Malta offers.
The main applicant’s family and household staff may also be included in the GRP application provided that they all reside with the main applicant in the qualifying property.
Family and household staff is defined as follows:
- His/her spouse or the person with whom the main applicant is in a stable and durable relationship;
- Minor children including adopted children and children who are in the care and custody of the main applicant and/or his/her spouse or the person with whom the main applicant is in a stable and durable relationship;
- Dependants under the age of 25 years of the main applicant and/or his/her spouse or the person with whom the main applicant is in a stable and durable relationship, provided they are not currently working or seeking employment or available for work;
- Children who are not minors but because of circumstances of illness or disability are unable to maintain themselves;
- Dependent brothers, sisters and direct relatives in the ascending line of the main applicant and/or his/her spouse or the person with whom the beneficiary is in a stable relationship; and
- An individual who has been providing services to the mainapplicant in a systematic manner for at least 2 years prior to the application.

Requirements

Applicants must be represented by an authorized registered mandatary. DF Advocates is one such license holder. The requirements to benefit under the GRP are the following:

A. The rental of immovable property in Malta at an annual rate of not less than €9,600 or €8,750 fora property situated in Gozo or in the South of Malta
OR
The acquisition of immovable property at a value of not less than €275,000 for a property situated in Malta or €220,000 for a property situated in Gozo or in the South of Malta;

B. The main applicant must be in receipt of stable and regular resources which are sufficient to maintain himself/herself and his/her family;

C. The main applicant must be in possession of sickness insurance for himself/herself and his/her family;

D. The main applicant must file an annual tax return every year and pay a minimum tax of €15,000 on a yearly basis; and

E. The main applicant cannot live in another country for more than 183 days in a calendar year.

The Application Process


1. Submission of Application and Administrative Fee

The application must be submitted to the International Tax Unit. At the time of submission of the application, a non-refundable administrative fee of €6,000 or €5,500 where the qualifying owned property is situated in the South of Malta, needs to be paid by means of a bank draft payable to the Director General (Inland Revenue).

2. Acknowledgment letter


The application is checked for completeness and vetted accordingly. An acknowledgment letter is sent to the authorised registered mandatory indicating the progress of the application.At this stage the applicant need not be the owner or lessee of a qualifying property unless the applicant intends to avail of the reduced administrative fee in the case of a qualifying owned property situated in the South of Malta, in which case the final deed of purchase must be submitted at application stage.

3. Face- to-Face meeting and Letter of Intent


Once the due diligence process has been completed the authorised registered mandatory will be notified of the outcome. Where it results that the outcome is a positive one, a face-to-face meeting with the applicant and the authorised registered mandatory is scheduled. Where it results that the application can continue to be processed, a letter of intent is issued and sent to the authorised registered mandatory accompanied by a notice of primary residence which would need to be completed and signed by both the applicant and the authorised registered mandatary.

4. Confirmation letter


The letter of intent is valid for a period of 12 months within which the lease agreement or final deed will need to be submitted and minimum tax paid, in order for the confirmation letter to be issued.

5. Time Frame


The estimated time frame for a GRP application to be processed is 2 months.
- 1-2 weeks from the date of submission of the application and payment of the non-refundable administrative fee, for the issuance of the acknowledgement letter;
- 6-8 weeks for due diligence checks to be completed and the issuance of the letter of intent.


Tax Treatment


Once special tax status has been granted, the individual is deemed to be a resident for tax purposes in Malta and is chargeable to tax on his/her income as follows:


- Foreign source income, which is remitted to Malta, is taxable at the rate of 15% with the possibility of claiming double tax relief. This rate of tax will apply from the year of confirmation of the special tax status up to the year of cessation of the status both years included; - Income not remitted to Malta is not taxable in Malta;

- The individual must pay a minimum tax of €15,000 annually; and 

- Other income received in Malta that is not covered by these rules is charged separately at the rate of 35%. 


July 2015



Frequently Asked Questions

1. May a person benefitting under the GRP work in Malta?


Yes, provided that he satisfies the requisite conditions for obtaining a work permit. The GRP application would need to be accompanied by a letter addressed to the Department Manager (Employers Services), which must be received not later than 15 days from the date of the said letter. The letter will need to be endorsed by the International Tax Unit and submitted to the Employment and Training Corporation by the authorised registered mandatary.

2. Who benefits from the special tax treatment?


Apart from the main applicant, the following family members will also benefit from the special tax rate of 15% on foreign income that is remitted to Malta:
1. The beneficiary’s spouse;

2. Minor children; and

3. Children who are in the care and custody of the beneficiary or the beneficiary’s spouse, who are not minors but who because of circumstances of illness or disability are unable to maintain themselves.

The following will not benefit from the special tax rate of 15% on foreign income that is remitted to Malta:


1. The person with whom the beneficiary is in a stable and durable relationship;


2. Children who are over the age of 18 but under the age of 25 who are in the care and custody of the main applicant, his/her spouse or the person with whom the main applicant is in a stable and durable relationship, provided they not currently working, seeking employment or available for work;


3. Dependent brothers, sisters and direct relatives in the ascending line of the main applicant, his/her spouse or the person with whom the main applicant is in a stable and durable relationship; and


4. Household Staff.


3. What does the application process involve?


An individual who wishes to beneift form the GRP must authorise a person who is an authorised registered mandatory to act on his behalf. DF Advocates is one such authorised mandatory.The authorised mandatory on behalf of the individual applies to the Commissioner for Revenue who will decide whether or not the individual qualifies as a beneficiary of the GRP. If the individual qualifies, the commissioner will then determine in writingthat the individual is granted special tax status under the GRP rules.If the due diligence outcome is negative the authorised registered mandatary is notified of the main issues of concern further to which the Authorised registered mandatary together with the applicant may provide an explanation. It is in the Commissioner for Revenue’s discretion whether to refuse or proceed with the application process.

4. What is the application fee?


The main applicant must pay a non- refundable administrative fee of €6,000 upon application to the local authorities. However where the qualifying property is a qualifying owned property in the South of Malta the non-refundable administrative fee shall be that of €5,500.

5. What are the individual’s annual obligations?


1. The individual must not become a Maltese, EEA or Swiss national;
2. The individual must not become a long-term resident;
3. The individual must retain the Qualifying property Holding;
4. The individual must retain the health insurance and continue to have stable resources;
5. The individual must not stay in any other jurisidction for more than 183 days in a calendar year;
6. The minimum tax payable of €15,000 is payable in full in both the year when the special tax status is granted and in the year the individual ceases to possess the special tax status. This is payable by not later than the 20th April of the year immediately preceding the relevant year of assessment. This payment shall be accompanied by a return made to the Commissioner of Revenue that provides proof that all the requirements are satisfied. In case of the year in which the special tax status is granted, where it is evident that the special tax status will not be granted before the 30th April, the minimum tax is to be paid before the special tax status is granted;
7. Special reporting obigations such as the filing of an annual tax return and notifications must be complied with; and
8. Provisional tax payments must be made after the first year.

July 2015


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