Malta citizenship by investment is one of the most popular programs in Europe. It allows high net worth individuals who make investments in the country to acquire citizenship in Malta.
In this comprehensive guide to Malta Citizenship by Investment 2020, we cover the following:
*** Please note that as of September 7, 2020, the Malta Citizenship by Investment Program reached its maximum quota of applicants for the year. Applications for the new citizenship program will be launched in October 2020. For more information on enrolling, contact us. ***
Your guide to citizenship by investment in Malta
Citizenship by investment is when individuals are able to obtain nationality in a country by making an investment, usually in real estate or government bonds. In Malta, citizenship by investment is obtained by making a real estate investment, as well as contributions to a government fund and an investment in government-approved bonds.
The Maltese citizenship by investment program is one of the most popular in Europe primarily because of the benefits it provides to those who invest in the program, as well as the short timeframe within which you can acquire a passport.
Malta Individual Investor Programme
Officially known as the Malta Individual Investor Programme, the Malta citizenship by investment scheme was first introduced in 2014, aimed at attracting the investment of high net worth individuals of good moral standing. Each year over 1,000 investors are granted citizenship in Malta through the program.
Benefits of Maltese citizenship by investment
Malta citizenship by investment allows applicants to enjoy all the benefits that come with having a European passport, and more.
1 – Freedom of movement within the EU
Malta is a full member of the EU, which means investors who acquire Maltese citizenship are entitled to live and work anywhere in Europe. Malta also lies within the Schengen Zone, meaning there are no visas or passport checks when traveling within the European Schengen Zone countries.
2 – Visa-free travel
The Malta passport is one of the strongest in the world, and besides freedom of movement and visa-free travel within Europe, a Maltese passport also allows visa-free travel to 168 countries worldwide.
3 – Obtain citizenship in Malta fast
Another key benefit of Maltese citizenship by investment is that it allows investors to obtain citizenship within a much shorter timeframe than other citizenship by investment programs in separate countries. You can obtain Maltese citizenship in just one year.
4 – Passports for your whole family
Investing in Maltese citizenship means you can obtain a European passport not just for yourself, but also for the rest of your family. Do note that extra contributions must be made for dependents to obtain citizenship alongside the main applicant. Children born to Maltese citizens also automatically get citizenship, so your children and grandchildren will inherit Maltese nationality for life.
5 – Tax efficiency
Malta’s tax system is based upon residency, not citizenship, meaning that you may not have to pay tax in Malta even if you obtain citizenship. Malta also has special tax schemes for new citizens which can result in additional tax efficiency.
6 – Stable and secure country
Malta has one of the highest GDPs in Europe and one of the lowest unemployment rates. It’s also regarded as one of the safest countries in Europe.
7 – Quick processing times
Unlike other citizenship by investment programs, Malta has a relatively quick processing time, which can lead to investors obtaining citizenship in a year.
Eligibility for the Malta Individual Investor Programme
In order to be eligible for the Malta Individual Investor Programme, you must:
- Be over the age of 18
- Have a clean criminal record
- Meet the minimum investment threshold
Malta citizenship by investment requirements
Investors must fulfill a series of requirements in order to qualify for Maltese citizenship by investment.
“Fit and proper” test
The Maltese government requires all applicants for Malta citizenship by investment to pass the “fit and proper” test. This involves a thorough background check to ensure that investors hold no criminal records and the due diligence checks are done by INTERPOL and the International Criminal Court. You are also required to submit a criminal record from the police in your country of origin.
Applicants for Malta citizenship by investment must show that they are in good health, and must also be covered by an international health insurance policy.
Upon applying for Malta citizenship by investment, it is essential that all investors and their dependents provide biometric data to the Maltese government.
Financial requirements for Malta Individual Investor Programme
There are a series of financial requirements that must be fulfilled in order to apply for Malta citizenship by investment.
€650,00 contribution to Maltese National Development and Social Fund
This contribution is non-refundable and does not provide any returns. Additional payments of €25,000 must be made for spouses and children (under the age of 25), €50,000 for older children and parents. The Maltese National Development and Social Fund contribute to Malta’s social spending and infrastructure, and further finances projects for education, healthcare, and job creation.
€350,000 investment in real estate
This investment must be maintained for at least five years in order for investors to maintain their Maltese citizenship. It is also possible to acquire Malta citizenship by investment through a five-year rental contract, however, this route can be slightly more complicated to navigate.
€150,000 investment in government-approved bonds
This investment must be made into shares or an investment fund that has been vetted by the Maltese government. The investment fund is typically assessed by the Maltese government and must benefit the country’s growth and prosperity.
Malta citizenship by investment processing fees
There are some additional fees required for the processing of the Malta citizenship by investment application.
Due diligence fees:
- €7,500 for the main investor
- €5,000 for spouse and other dependents
- €3,000 for children between the ages of 13 and 18
- €500 per person
- €200 per application
Residency requirements for Maltese citizenship by investment
Applicants for the Malta Individual Investor Programme must prove that they have a genuine link to the country. This means that investors must establish residence 12 months before applying for the program, which entails purchasing or leasing an apartment. If investors intend to rent a property long term, they must be able to provide a copy of the lease agreement and proof of being a Maltese resident for at least 183 days of the year. If investors choose to buy a property in Malta, there is no minimum number of days they are required to spend in the country, however, they are not permitted to rent out their property during the five years they are required to maintain their investment.
Tax treatment of new citizens in Malta
Tax in Malta is calculated not by citizenship, but by the tax residence of the individual and the source of their income. This means that even in acquiring citizenship in Malta, investors should not have to pay tax in the country, particularly as most investors are not based in Malta. Foreign assets and income are charged at the source, so as long as the income is not sourced within Malta, it should not be liable to be taxed in the country.
Property tax on citizenship by investment in Malta
At the end of the mandatory five year investment period, investors may wish to sell their property in Malta. If the property has been listed as the resident’s sole residence during a period of at least three years, the sale is exempt from property tax. If the owner has not been resident in the property, it is liable for a 12% tax on the sale price.
Taxation in Malta
It is also important that investors from Malta’s citizenship by investment scheme know that the state has:
- No inheritance tax
- No estate duty
- No wealth tax
- No municipal taxes
- No property ownership tax
What to consider before applying for citizenship by investment in Malta
There are a number of different considerations to take into account before applying for Malta citizenship by investment, specifically that under certain conditions citizenship can be refused or revoked if the correct requirements are not met.
Grounds for refusal for citizenship by investment in Malta
In recent years there has been an increasing number of refusals in applications for Maltese citizenship by investment. This is due to an increasingly strict due diligence process for vetting prospective citizens. The main reasons for the refusal of Maltese citizenship are:
- Not having a clean criminal record
- The investor is a potential threat to Maltese national security
- The investor has previously been denied a visa to the country
- Providing false information
- Funds come from a suspicious source
Grounds for revocation of Malta citizenship by investment
It is possible to have your Maltese citizenship revoked if you do not comply with the requirements of the program. After being granted citizenship, applicants must maintain their residence in Malta for at least five years. If the initial investment is sold before the five years are up, they can have their citizenship revoked and their European passport taken away.
Malta citizenship by investment application process
A step-by-step guide to citizenship by investment in Malta
1 – Purchase qualifying real estate in Malta and register for residency
2 – Apply for Malta citizenship by investment, pay the due diligence fees and deposit, submit all the correct forms and supporting paperwork as well as pass a criminal background check for main applicant and dependents from their country of origin.
3 – After 120 days the Maltese government will officially confirm whether the application has been successful and provide a conditional acceptance.
4 – The investor must then pay what remains of the €650,000 contribution to the Malta development fund.
5 – The investor must provide evidence of property investment and make a further €150,000 contribution to an investment fund.
6 – Upon completion of all of the specified requirements, the investor and dependents will receive a naturalization certificate and be given a Maltese passport.
Malta citizenship by investment timeline
Maltese residency vs citizenship
One of the main benefits of obtaining citizenship by investment in Malta as opposed to just obtaining residency is that once your citizenship been granted, investors hold citizenship for life, even if they sell their investment after the mandatory five-year period.
Children of Maltese citizens also automatically inherit citizenship, which means you can pass on European citizenship to your children and grandchildren.
How can Global Citizen Solutions help me?
Investors can encounter many difficulties when applying for citizenship or residency, which is why it is beneficial to have an expert on hand to provide you with personalized assistance throughout the process.
A specialist can help you with the following:
- Minimize the visits you have to make to the designated country
- Have someone who works solely on your behalf
- Reduce the hassle associated with putting your application together
- Acquire insider knowledge from someone with years of experience of the market