The Malta High Commission in Canberra today issued a media release drawing attention to a press release (PR1707) issued by the Finance Minister Tonio Fenech regarding changes and amendments to the Permanent Residency Scheme regulations published yesterday by the government of Malta.
The new High Net Worth Individuals Rules will run in parallel with the Permanent Residency Scheme suspended abruptly earlier this year, Finance Minister Tonio Fenech announced. The Minister explained that the new rules are aimed to address the weaknesses of the previous scheme, which imposed no periods of stay and thus meant that applicants did not necessarily spend money in Malta, and could exploit the benefits extended to Maltese citizens.
The scheme was apparently suspended after a British cancer patient received €500,000 worth of free treatment after purchasing a €100,000 property.
The new scheme aims to address such cases by significantly increasing the minimum value of property applicants have to purchase to be eligible, among other conditions.
Applicants must now purchase a property worth at least €400,000 – or pay €20,000 a year in rent – in order to qualify. Previously, the threshold was just €60,000 in property value or €4, 100 in annual rent.
Applicants also have to possess – and maintain – health insurance and pay an application fee of €6,000 to cover the cost of a “fit and proper” test which determines whether they are desirable. They also had to live in Malta for at least 90 days a year, and not stay in any other jurisdiction for more than 183 days to avoid becoming tax residents in that jurisdiction.
Beneficiaries would then pay 15% tax on foreign income and normal tax on any local income. They have to pay a minimum of €20,000 in tax annually, with an additional minimum tax of €2,500 per dependant.
More stringent rules apply for applicants from outside the EU or EFT A. Those intending to become long-term residents – or are already so – must renew their visa every 3 months and enter into a qualify in contract with the government with a €500,000 financial bond – plus €150,000 per dependent. The money becomes the government’s when permanent residency is obtained after 5 years.
Moreover, third-country nationals must be fluent in English or Maltese and have to pay a minimum annual tax of €25,000 plus €5,000 per dependant.
Those who obtained permanent residency under the previous scheme will not lose their status but must nevertheless prove that they have stable resources and health insurance, and that the property they reside in is not occupied by others. Those who sell their property or terminate their lease would then have to meet the new requirements to continue to benefit from permanent residency.
Further information and guidelines on the new regulations may be obtained from the Inland Revenue website.