The Malta Individual Investor Programme (MIIP) adds to the global citizenship menu an option with no parallel. In fact the Malta Individual Investor Programme is the first of its kind to have the approval of the European Commission.
Malta presents an array of possibilities that lead to the eventual attainment of citizenship, namely birth, descent, marriage and naturalisation.
The Malta Individual Investor Programme presents the possibility for the grant of citizenship through Investment. This is regulated by a revised Malta Citizenship Act (Chapter 188 of the Laws of Malta) which was amended in November 2013. These amendments provided the framework for the enactment of LN 47 of 2014, the “Malta Individual Investor Programme Rules”. Such rules enable persons of impeccable standing and repute to be naturalised and to receive Maltese Citizenship on the basis of a contribution to and investment into Malta. This is also the first programme that, for a pre-determined contribution to a Maltese sovereign fund, presents the attainment of European citizenship within a year.
Since the approval of the Malta Individual Investor Programme, Chetcuti Cauchi has handled the very first applications for Citizenship by Investment in Malta. Identity Malta, the Government agency receiving applications by accredited agents, has been very supportive in our first applications and has demonstrated the importance and professionalism that was promised by the administration in their relations with us as an accredited agent.
Besides the various personal fiscal advantages, the MIIP promises to be another success in the portfolio of achievements reached by Malta as a vibrant and sound financial services centre. The benefits of the Malta Individual Investor Programme include the issue of a Maltese passport within 1 year, citizenship of the European Union, visa free destinations to over 160 destinations including the United States and the United Kingdom, Schengen Residence status for 1 year prior to issue of passport, better education for children, stable political system and good quality of life.
Applicants must show that they are in good standing and repute. A thorough due diligence process is carried out by the Government to assess and ascertain that only deserving and reputable applicants are allowed to proceed for the grant of Maltese citizenship. Applicants must show a clean criminal record and must also demonstrate that they do not suffer from a contagious disease.
Malta Individual Investor Programme - Investment
To qualify, the main applicant is required to contribute at least €650,000 to Malta. Spouses and unmarried children under 25 are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents over 55 must contribute €50,000 each. Additionally, applicants are required to make an investment in government bonds of at least €150,000 and must either purchase property of at least €350,000 or lease property for at least €16,000 p.a. all for a minimum of 5 years.
Malta Individual Investor Programme - Physical Presence
The basis for the endorsement by the European Commission of the MIIP was the introduction of a genuine link requirement, often referred to as a 1 year residence requirement. The main applicant commences this one year residence period by visiting Malta to formally take up residence. This is complemented by other factors that render the residence element ‘effective’. From a practical point of view these factors would include membership of clubs, professional associations, sponsorships, local philanthropy and any business activity in Malta. Persons already resident one year prior to IIP approval already satisfy this requirement.
Basis of Taxation
The basis for taxation, under the Maltese tax system, is based on domicile and residence – not citizenship. The grant of Maltese citizenship to a non-domiciliary of Malta does not, of itself, cause the beneficiary to acquire a new domicile of choice in Malta. Residence for tax purposes is established by demonstrating an intention to reside in Malta indefinitely and definitely on the basis of a day count of 183 days.
Tax residents of Malta who are not domiciled in Malta are taxable on a remittance basis. Accordingly, non-domiciliaries who are not resident in Malta are not taxable on foreign source income not received in Malta, nor on any capital gains arising outside Malta whether remitted or not. Tax is due only on a sources basis on income and capital gains arising in Malta. A non-resident citizen of Malta is only taxable in Malta on Malta source income.
After the lapse of the obligatory 5 year period, property in Malta can be sold completely exempt from tax if such property is held for a period of 3 years as the resident’s sole and ordinary residence. If sold before the lapse of 3 years, a final property tax of 12% is chargeable on the selling price.
Other Tax Considerations
Other tax matters include no inheritance or death taxes, no estate duty, no net worth or wealth taxes and no municipal taxes, rates or real estate taxes.
Our Citizenship Services
Applicants must be represented by an Accredited Person that is a licensed Maltese Authorised Registered Mandatory (ARM). Dr Jean-Philippe Chetcuti (Chetcuti Cauchi Advisors Ltd) holds licence no. IIP 001 and has satisfied the additional requirements imposed by the IIP Regulations over and above the requirements for ARMs under other legislation. The programme imposes more responsibilities on ARMs to ensure the highest standards of quality are maintained throughout the application process, for the protection and benefit of applicants and the reputation of the Maltese citizenship by investment programme.