High Net Worth Individuals Rules

  • By:Corrieri Cilia Legal
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By means of Legal Notice 400 of 2011 the Maltese government introduced ‘The High Net Worth Individuals – EU/EEA/Swiss Nationals Rules’ (HNWI Rules). The HNWI Rules intend to attract EU nationals, nationals of Iceland, Norway, Liechtenstein and Switzerland.

In order to benefit from the rules an individual will have to satisfy all eight conditions outlined below.

  1. The individual must be;
    1. An EU national (excluding a Maltese national) ; or
    2. A national of Iceland, Norway or Liechtenstein; or
    3. A national of Switzerland.
  2. The individual must not be a beneficiary of any of the following programmes;
    1. Residents Scheme Regulations;
    2. Malta Retirement Programme Rules;
    3. Highly Qualified Persons Rules.
  3. Owns or rents a qualifying property which the individual occupies as his principal place of residence worldwide. The owned or rented property must have the following nature;
    1. Owns an immovable property situated Malta purchased after 1st January 2011 must be at least of valued at €400,000;
    2. Rents an immovable property situated in Malta for at least €20,000 per annum;
  4. The individual must be in receipt of stable and regular resources sufficient to maintain himself/herself and his/her dependents without recourse to the social assistance system in Malta.
  5. Is in possession of a valid travel document.
  6. Is in possession of sickness insurance which covers himself and his dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals.
  7. The individual is a fit and proper person.
  8. The individual is not domiciled in Malta and does not intend to establish his domicile in Malta within 5 years from the date of application.

Tax Treatment

Once an individual’s application is approved he/she is thereafter granted a special tax status in accordance with the HNWI Rules (hereinafter the ‘HNWI Beneficiary’). The HNWI Beneficiary will be subject to a rate of 15% on every euro thereof on any income that is received in Malta from foreign sources by the HNWI Beneficiary. Any income which is not taxed at the rate of 15 cents on every euro will be charged at the rate of 35 cents on every euro. Therefore income arising in Malta from any trade, business, profession or vocation will be subject to a flat rate of 35%.The HNWI Beneficiary is obliged to pay the Maltese Inland Revenue Department an annual tax charge of least €20,000 and an additional €2,500 for every dependent for every year of assessment he/she remains an HNWI Beneficiary.

Ongoing Obligations

The HNWI Beneficiary’s special tax status will be terminated if the HNWI Beneficiary;

    1. Does not remain a citizen of an EU Member State, Iceland, Norway, Liechtenstein or Switzerland; or
    2. Does not hold a qualifying property; or
    3. Is not in possession of a sickness insurance for himself or his dependents; or,
    4. Is no longer in receipt of stable and regular resources which are sufficient to maintain himself and his dependents without recourse to the social assistance system in Malta; or
    5. If the Minister of Justice deems that the HNWI Beneficiary’s stay in not deemed to be in the public interest; or
    6. Stays in any other jurisdiction than Malta for more than 183 days in a calendar year.
    7. Establishes his domicile in Malta; or
    8. Becomes a citizen of Malta.

It should be noted that in order to be considered a HNWI Beneficiary an individual must pay the necessary administrative fees and engage an Authorised Registered Mandatory to assist in the submission of an application.

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