Minimum Share Capital in Malta
June 20, 2023
Transfer Pricing Rules
July 3, 2023
Q: What is the GRP?
A: “The GRP is designed to attract individuals who are not nationals of the EU/EEA/Switzerland who want to be able to reside in Malta. It is a special tax status programme, whereby a beneficiary with status under the programme is taxed in Malta at the rate of 15% on his/her chargeable income in Malta.”
“A beneficiary’s chargeable income will be calculated by adding any income arising outside Malta which is received in Malta, any income arising in Malta and any capital gains arising on assets situated in Malta.”
“Income arising outside Malta which is not received in Malta will not be part of the beneficiary’s chargeable income in Malta. Capital gains arising on assets situated in Malta will not be part of the beneficiary’s chargeable income in Malta, even if such proceeds are received in Malta.”
“The GRP is also open to a beneficiary’s spouse/partner in a stable and durable relationship, dependents and household staff. Dependents include minor children, children under the age of 25 who are not economically active and dependent on their parents, children over the age of 25 who are unable to maintain themselves due to illness or disability and dependent brothers/sisters and direct ascendants of the beneficiary or his/her spouse or partner if they reside with the beneficiary.”
“A beneficiary and his/her spouse/partner and dependents and household staff are granted a residence permit to live in Malta.” – Thomas Jacobsen
Q: How can people benefit from GRP?
A: “Individuals who want to reside in an EU country (i.e. Malta) and who would not normally be granted a permit to reside in Malta under any other provision can take advantage of the Malta Global Residence Programme benefits. It can also be beneficial for individuals with substantial income (especially income from pensions, investments, etc.) arising outside Malta, whereby such income is not taxed in Malta unless it is received in Malta and if it is received in Malta it is taxed at the rate of 15%.” – Thomas Jacobsen
Q: Can you explain a situation of how this has worked before?
A: “Individuals who receive pensions, investment income or large capital gains can benefit from the GRP. It has worked for individuals taking out private pension benefits and individuals divesting themselves from ownerships in businesses, etc. Malta is an island in the middle of the Mediterranean and offers a typical Mediterranean climate and life style which is attractive to many.” – Thomas Jacobsen
You can learn more about Malta here.
Q: What are the GRP Requirements?
A: “To be eligible for the GRP, non-EU/EEA/Swiss nationals must meet certain criteria and requirements including having regular and stable income, a valid travel document, a European Health Insurance policy for yourself and any dependents and being able to communicate adequately in Maltese or English. Applicants must be of fit character with no criminal record and hold a qualifying property. This property could be purchased in Malta for at least €275,000 (or €220,000 if based in Gozo or the South of Malta). On the other hand, applicants can also rent a property in Malta for at least €9,600 per annum (or €8,750 if rented in Gozo or the south of Malta). One must not reside in another jurisdiction for longer than 183 calendar days and must pay a minimum tax of €15,000 per year.” – Thomas Jacobsen
Q: What are the steps to apply?
A: “Applications for the GRP may only be submitted through the services of an authorized registered mandatory (ARM). An application and questionnaire need to be submitted to the authorities, together with all relevant supporting documents. A non-refundable application fee needs to be paid to the authorities upon submitting the application.”
“A valid application will go through a due diligence process and the applicant’s ARM will be notified of the outcome. If the outcome is positive, a letter of intent is issued. The letter of intent is valid for 12 months, during which proof of the qualifying property must be submitted and the payment of the first year’s minimum tax will need to be paid. Once these requirements have been satisfied, a confirmation letter of the status under the GRP will be issued and the applicant will be able to have the relevant residence card/s issued.” – Thomas Jacobsen
Contact us to learn more about the Malta Global Residence Programme.
Szabolcs Toth |
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