Tax residency in Malta in the “resident non domiciled” scheme can be a highly attractive solution, allowing for efficient reduction of income tax, provided that the individual obtaining the “resident non domiciled” status does not simultaneously have their main center of vital interests in another country.
An individual holding the “resident non domiciled” status in Malta is subject to taxation solely on income derived from local sources (income generated in Malta in any form) and on capital gains originating from local sources. As for income from foreign sources, such individual is only subject to taxation to the extent that this income has been remitted to Malta.
In practice, this means that an individual holding the “resident non domiciled” status in Malta – generating profits outside of Malta and not remitting these profits to Malta – might not be subject to any income tax at all.
Tax residency in Malta is available in several different formulas, including the Residence Programme Rules (2014), Residents Scheme Regulations, High Net Worth Individuals Rules, Malta Retirement Programme Rules, Global Residence Programme Rules, Qualifying Employment in Innovation and Creativity Rules, and Highly Qualified Persons Rules.
The primary program targeted at citizens of the European Union and European Economic Area countries is the Residence Programme (2014). An individual interested in utilizing the Residence Programme Rules must purchase or lease a property in Malta, which will become their primary place of residence worldwide. In the case of opting to purchase a property, its value must be at least 275,000 euros (properties located in Malta other than the southern part of the island) or 220,000 euros (southern Malta or the island of Gozo). However, if choosing to rent a property, the annual rental fee must be at least 9,600 euros (Malta excluding the southern portion) or 8,750 euros (Gozo or southern Malta). The lease agreement must be for a period not shorter than twelve months and be appropriately documented.
An individual applying for residence must also meet a number of additional requirements, overseen by the Office of the Treasury. For instance, the applicant must also have health insurance that covers both themselves and any dependents in case of risks throughout the EU. This insurance must be purchased through a company licensed in Malta or a reputable international insurance firm.