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Malta: Offshore Legal and Tax Regimes

Employment and Residence

Although Malta'a accession to the EU has brought with it freedom of movement and employment for EU nationals, in other respects Malta operates quite strict policies as a result of historically high unemployment, although it is now much less of a problem. Normally a work permit will only be issued to a foreigner if there is no suitably qualified local, and the employer will need to operate training and 'understudy' schemes. The regime is less restrictive when foreign investment is involved, and if an expatriate controls 40% of a project, he will always be able to get work permits for himself and for one other expatriate.

As of December 21, 2007, Malta became part of the Schengen area. European Commission President José Manuel Barroso announced ahead of the enlargement of the area that:

"As from this week, people can travel hassle-free between 24 countries of the Schengen area without internal land and sea border controls- from Portugal to Poland and from Greece to Finland. I wish to congratulate the nine new Schengen members, the Portuguese presidency and all EU Member States for their efforts. Together we have overcome border controls as man-made obstacles to peace, freedom and unity in Europe, while creating the conditions for increased security".

Following enlargement, all citizens of the enlarged Schengen area will benefit from quicker and easier travelling. From December 21, 2007 onwards, a citizen can travel from the Iberian Peninsula to the Baltic States and from Greece to Finland without border checks.

Anyone who wishes to reside permanently in Malta other than in conjunction with permitted work must apply for a residency permit.

In June 2013, a new Global Residence Programme was launched by the Maltese Government. Applicants qualify for the scheme if they are not EU nationals; or nationals of Iceland, Norway, Liechtenstein or Switzerland. Individuals already having residence permits issued under one of the other schemes must give up their rights under the existing scheme in order to apply for the GRP. Furthermore, the individual must own property at a value of no less than EUR275,000 in Malta (other than the south of the island). In the south of the island the property must be worth a minimum of EUR220,000 while in Gozo the amount is EUR250,000.Persons living in rented accommodation eligible if the annual rent is at least EUR9,600 in Malta other than the south of Malta; EUR8,750 in the south of Malta and Gozo.

Under the scheme, income received in Malta from foreign sources will be subject to a tax rate of 15%. Tax on income originating in Malta will be charged at the rate of 35%. In any event, a qualifying individual will be subject to an annual minimum tax of EUR15,000.

All applicants must be fluent in either Maltese or English and will be eligible to apply for a work permit in Malta.



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