Citizenship by Investment In Malta

The government of Malta established the Individual Investor Programme (IIP) in 2014. The Malta IIP is aimed at ultra-high net worth individuals and families worldwide. It offers citizenship in an EU Member State that is stable, neutral and highly respected, an efficient application process, and the world’s strictest due diligence standards and vetting of applicants, thus ensuring only highly respectable clients will be admitted.

EU citizenship gives the right of establishment in all 28 EU countries.

Citizenship is granted to suitable individuals and families who hold resident status in Malta for a period of twelve months immediately preceding the day of issuing of the certificate of naturalisation and who qualify under the very strict due diligence regime. All individuals and families applying to the Malta Individual Investor Programme must make a significant contribution to the National Development and Social Fund established by the Government. The minimum contribution levels that must be met in the initial phase of the program have been set as follows:

• Contribution to National Development and Social Fund of EUR 650,000 for the main applicant
• Contribution for spouse and minor children: EUR 25,000 each
• Contribution for dependent children 18 to 26 years or dependent parents above 55 years: EUR 50,000 each

Furthermore, Due Diligence fees apply, and these have been set at the following levels: For the main applicant: EUR 7,500; for the spouses, adult children and parents: EUR 5,000; for children between 13 and 18 years of age: EUR 3,000 each.

The applicant must commit to retaining a residence in Malta for a period of at least 5 years, either through the purchase of a property, for which the minimum value must exceed EUR 350,000 or through leasing of a property, for which the minimum annual rent must exceed EUR 16,000.

In addition, an investment of EUR 150,000 in Government approved financial instruments, which must be maintained for a minimum period of 5 years is required.

When you acquire citizenship under the Malta Individual Investor Programme, you and your family enjoy full citizenship for life, which can be passed on to future generations by descent.

Malta Real Estate Market and Values

The Malta property market is correcting itself after the global financial downturn, which creates a strong opportunity for investors for the following reasons:

• The number of new properties added to the Maltese real estate market each year has been declining significantly since 2009
• This shrinkage has helped stabilize the situation, and prices started to pick up
• With the lower supply of new properties, demand is focused on existing properties, creating an increase in price/value for those properties, which is positive for current or new property owners and investors

The Maltese Individual Investor Program offers the option to invest in real estate, thus ensuring the recoverability of those funds after the required five-year holding period.

Trusts in Malta

Creating a Maltese trust governed by the Trust and Trustees Act is a vital and resourceful legal way to facilitate tax planning in accordance with Maltese Law. This is an efficient way to have tax efficiency without which a lot of directly owned companies and corporations will not obtain.

We are a Maltese licensed trustee who offers a wide range and reliable trust services that can cater to international business-oriented customers. Sterling Migration can set up a trusted service that consists of discretionary trusts set up, trusts with fixed interest rates and accumulation and maintenance trusts and revocable trusts.

Fiduciary Services

The public Register of Companies has records of the identity of the shareholders of all Malta companies and makes it available for public access. There is an option to obtain shares and have them held confidentially on behalf of an undisclosed beneficial owner by trust and fiduciary company.

Under the Civil Law Institute of Mandate, licensed trust companies are allowed to hold shares on behalf of ultimate beneficiaries although they are no longer allowed the option for the offshore concept of a nominee shareholder as per Maltese Law.

Depending on the need, there may be occasions when a Malta company will need to employ directors locally to be able to successfully manage and organise the business in Malta.

Maltese Laws on Confidentiality

The Professional Secrecy Act of Malta ensures that there is a high standard of confidentiality for all businesses. The Criminal Code Section 27 allows for the prosecution of anyone who does not comply with this law. Any and all court-ordered disclosure as mandated by law should only be granted access to the court and the concerned parties.

Appoint a Maltese Trustee

Civil law countries like Malta do not, as a rule, conform to the systems of law based on Common Law that governs trusts. Malta has initiated trust in its legislative framework and thus created an exception to the Common Law with its growth as an outstanding Financial Services jurisdiction.

A trust fund is a trust that is composed of an absolute owner of an identified property who is referred to as the settlor and who is the creator of the trust.

This individual will then appoint a trustee to keep the property in trust for the beneficiaries as mandated by the settlor or in some cases appointed by the trustee; referred to as discretionary trusts. The Maltese trust law defines this as:

Trust is in evidence when an individual thus referred to as a trustee, owned or is delegated a property in his name with responsibility for that property on behalf of the individuals, referred to as beneficiaries; proven to be in existence or not, which is not for the benefit of the trustee alone, or for a charitable purpose, or for both such benefit and purpose aforesaid.

A property with a trust has an independent fund that is not part of any property owned by the trustee and is not connected to any personal property as well as other properties of the trustee with another trust. This is one of the most significant attributes of a trust. A property under trust has the following legal effects based on TTA:

(a) That there is no option for the personal creditors of the trustee to use the trust property against him;

(b) That in the event of the trustee filing for bankruptcy, the trust property shall not be considered as part of the trustee‘s personal estate

(c) That in case of the death of the trustee, the trust property will not be considered as part of the matrimonial property of the trustee or his spouse nor part of the trustee’s estate

The trustee is given the right to act in his capacity as trustee for any official function on the property before a court, notary or individual once the trust has been settled. The trustee has the right to disclose the existence of the trust and register a movable or immovable property or the title of documents to them.

The beneficiary of the trust is always the one favoured when fiduciary obligations are created by the trustee. The only rights granted to the settlor of trusts are the ones provided by the Trusts and Trustees Act.

In order for the trust to be announced, the settlor should be able to present and obtain all the rights to be settled on the trust. The absolute property is given to the settlor until such time that the trust has been established.

The terms of the trust will dictate that the trustee is to gain legal title to the trust fund and all beneficiaries will obtain equitable title; which is the highest interest in the trust fund, as soon as the trust is established.

To guarantee that the trustee will perform his job as determined by the terms of the trust, the beneficiary will get equitable proprietary rights against the trust fund as well as personal claims to the trustee.

Malta Company Formation

Sterling Migration assists with company formation with roots in sound legal and tax advice supported by fully-fledged company formation, company administration and company accounting teams and all provided in-house.

Malta Company Formation Process

Usually, the formation process can be finalised within 24-48 hours from receipt of the documentation and satisfaction of requirements established by Maltese law.

A company is set up through the drafting and registration of its Memorandum of Association. All shareholder/s must subscribe thereto and a certificate of registration is issued in respect thereof. The following details should be included in the MOA:

• Company name
• Address and official identification of the subscribers thereto
• The nature of the company (private or public)
• The registered office of the company in Malta
• The object and purpose of the company to be incorporated
• Details of the authorised issued and paid-up share capital
• Judicial and legal representation of the company
• Details and number of directors and secretary

Malta Company Formation Services

CC provides all company setup and management services in-house without outsourcing any aspect of the process. This enables us to offer an all-around professional administration service whilst maintaining a single point of contact for all company-related matters.  This ensures a seamless service, eliminating service overlaps and reducing the cost of managing Malta companies without compromising quality.  We offer full company formation and administration services including:

• Back Office & Virtual Office
• Bank Accounts
• Company Administration
• Company Incorporation
• Company Redomiciliation
• Company Secretary
• Company Domiciliation
• Fiduciary Shareholding & Management

Our Malta Company Formations Services

Our Malta Company Formation team is able to deliver very short response times for queries related to company formation in Malta and fast Malta company formation and company incorporation service, if required, even within 24 hours. 

As leaders in the area of company formation in Malta, enjoying the cumulative experience of fifteen years of experience in Malta company formation, we are able to be practical, responding without hesitation while maintaining high levels of legal and fiscal compliance, often necessary in company formation cases that are less straightforward.

Doing Business in Malta

In recent years the Maltese government has actively sought to attract foreign capital with attractive incentives, including generous tax breaks, aimed at international investors and entrepreneurs. During the last fifteen years, Malta has developed into a modern financial centre and today is one of the most important jurisdictions within the Southern European region. Malta is an excellent jurisdiction to establish low-taxed international trading companies and treaty-protected international holding companies. Malta also has an important shipping register and is one of the world’s preferred jurisdictions for tax-free yacht registrations.

The workforce in Malta is English speaking, motivated and well educated. Malta grants tax and other incentives to foreign persons or companies setting up business in Malta, including low rents for factories and low-interest loans.

Besides this, its strategic location, excellent international trade relations and a good quality of life make it one of the most attractive places for business in the Mediterranean.

The Law in Malta

Although a former British dependency, Maltese law is codified and there is no British “common law” tradition. Broadly speaking, the law is divided into two main branches, the Civil law and Criminal law, which follow different traditions.

Maltese Civil law is based on the Napoleonic Code, itself based on the older Roman Law concepts. Therefore, particularly in the older areas of civil law, especially those concerning property, contracts, obligations and so on, Maltese law is very similar to French and Italian law and reference is often made to French and Italian authors in the interpretation of Maltese law.

In the Criminal Law field, however, Malta has borrowed heavily from the British system. Therefore all trials are tried by juries (except for lesser offences) and the whole system is based on the British Criminal Law set-up.

In the newer fields of law, particularly in the environmental, financial, company and fiscal legislative areas, a large number of new laws have been enacted over the past ten years and these tend to be borrowed from other countries (in particular from Britain) and adapted to Maltese requirements. Today Malta is amending its body of laws to bring it into line with the laws of the European Union for which Malta has applied for membership and is now in the process of negotiations.

Malta offers many advantages, including:

• Very low-income tax, no capital gains tax, no inheritance tax
• Favourable double-taxation agreements with key countries
• Highly respected jurisdiction for incorporating low-tax companies
• Excellent banking centre with a presence of major international banks
• Ideal location in the centre of the Mediterranean
• Excellent access by sea and the international airport of Malta
• English-speaking environment, high standard of living

More about Malta

Geography

The Republic of Malta consists of three islands, situated just 80 kilometres off the southern coast of Sicily, Italy, in the centre of the Mediterranean sea. The climate is typically Mediterranean with scarce rainfall between March and October. The population is just under 400,000 and the official languages are English and Maltese, though Italian is widely spoken.

Political situation

Malta became independent from Britain in 1964 and is a Republic since 1973. It is a democratic country with respect for the rule of law. Malta is a member of the major international organizations including the United Nations and the Council of Europe, the International Monetary Fund and is a member of the European Union as well as the Eurozone and the Schengen Area.

Living in Malta

Malta has a sound infrastructural setup. Telecommunications, postal and courier services, banking and all other services are generally very efficient and of a high standard. The national airline, Air Malta, operates 35 flight routes, mostly within Europe and the Mediterranean region, and most major European airlines have frequent flights to Malta. There is a regular sea link with Italy.

Malta is one of the most attractive locations in Europe for tax-advantaged private residence.

The English-speaking population makes integration and communication easy. All official documentation is in English, commercial and business relationships are in English, and laws are in English and Maltese. There are also private English-speaking schools, which offer a high level of education; the University is open to children of Permanent Residents. There are also a number of private hospitals offering high-quality medical services. Malta has been ranked 5th in the world by the World Health Organization for medical services and facilities.

While Malta has a high standard of living, comparable to other European countries of the Mediterranean region, the cost of living is generally lower than in Europe. It is, therefore, possible to live a comfortable life with lesser expenses. Life is more laid back than in Europe, and particularly in Gozo the pace of life is slow and relaxed and the charm of this little island is difficult to get away from. The crime rate is very low, drug abuse is still very limited and is not a problem. Children can be very safely brought up and there is general care and awareness given by the people to children and elderly persons, particularly where foreigners are concerned. Most foreigners who come to live in Malta are surprised at the help and attention they are given by the local population.

The warm climate is a particular attraction to persons coming from colder regions of the world. Particularly in spring and autumn, Malta is an excellent place to be.

The taxes imposed on Permanent Residents are very low. The low tax rate, coupled with the many double taxation treaties that Malta has negotiated with other countries, makes residence in Malta a very attractive solution for high-net-worth individuals. An income tax of just 15% is levied only on income brought into Malta. There is no tax on worldwide income or assets.