New Global Residence Programme Launched

  • By:Corrieri Cilia Legal
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On 1 June 2013, the Maltese government announced the re-launch of the Permanent Residence Scheme which had been suspended in 2011 and substituted by the highly controversial High Net Worth Individuals (HNWI) Scheme seen by many as too restrictive. The new scheme has been rebranded as the Global Residence Programme.

The main tax advantages applicable under the old Permanent Residence and HNWI and Schemes i.e. the flat rate of 15% on income applicable on income remitted to Malta has been retained. Persons benefitting under this new Global Residence Programme by moving their residence (but not their domicile) to Malta will therefore be taxable only on income arising in Malta or foreign income that is remitted to or received in Malta. Capital and capital gains are not taxable even if remitted to Malta. The main difference is that the minimum tax to be paid has been reduced from €25,000 plus €5,000 per dependant per year to a minimum of €15,000.

Some important changes relate to the value of immovable property that must be bought or rented in Malta by foreigners wishing to benefit from this programme. The minimum value in case of purchase of property has been reduced to €275,000 from the €400,000 applicable under the previous HNWI scheme. In addition, when the property is in the south of Malta or in Gozo, the minimum value may be as low as €220,000. The minimum possible rental value has also been reduced from the minimum of €20,000 annually applicable under the HNWI Scheme to €9,600 in Malta and €8750 in Gozo or the South of Malta.

The financial bond with the government of €500,000 (and an additional €150,000 per dependant) previously required from third country nationals to benefit from the HNWI Scheme has been abolished under the new Global Residence Programme. It has also been made clear that foreigners wishing to benefit under this programme and their dependants will not be entitled to health care and must be covered by health insurance. The relative implementing legislation is expected to be enacted in the coming days.

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