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Guidelines for Permanent Residencyin MaltaSummary :

1. Malta advantages

2. Background

3. Overview and advantages

4. Requirements to obtain a PRP

5. Continuing requirements for permit holders

6. Taxation

7. Time to process the application

8. Advent UK Team

9. Contacts

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MALTAADVANTAGES

MALTAPERMANENT RESIDENCY

· Flat 15% tax rate on income remitted to Malta

· Minimum tax €3,450 per annum.

FACTSHEET

· No tax on other worldwide income.

· No requirement to live in Malta

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BACKGROUND

Malta, a small island (just 16.5 x 8.7 miles) is situated some 56 miles from Sicily and 186 miles from North Africa in the Central Mediterranean. It became independent in 1964 but retains strong links with the UK.

The principal business language is English and the legal system although of Roman Law origin, is a hybrid because of the strong elements of common law – company and commercial law tends to be similar to that in the UK.

Malta is a stable parliamentary democracy.

This info sheet is intended to be a short guide outlining the procedures and benefits of obtaining a Permanent Residence Permit in Malta. It is not intended to be definitive and comprehensive.

OVERVIEW AND ADVANTAGES

People of any nationality are eligible for Permanent Residence Permits. There are fivemain advantages to establishing residency in Malta.

1. Tax – this is levied at a flat rate of 15% on income brought into Malta and is subject to aminimum payment of €4,150 per annum. Income earned in other countries and notremitted to Malta is not taxed in any way.

2. EU – Malta is in the EU and, following some minor amendments, the permanent residentscheme is not under threat. Malta has also entered into double taxation treaties with around30 other countries making residence a very attractive solution for tax exiles.

3. Language – Malta is bilingual (Maltese and English) and all official documentation iswritten in English; laws are written in English (and also in Maltese). Commercial andbusiness relationships are also generally speaking carried out in English.

4. Lifestyle – The Mediterranean climate is a particular attraction, there is a good selection ofgood residential property for rent or purchase. As a tourist destination there is a selection ofrestaurants and other entertainment. There is a very low crime rate.

5. Communications and banking – Malta has modern telecommunications and direct airconnections to main business destinations are good. The postal service is also efficient.With regard to banking HSBC is represented along with a number of local and other banks.

REQUIREMENTSTO OBTAIN

A MALTA PRPThe requirements to obtain a Malta Permanent Resident Permit (PRP) are not onerous.

· Applicants need to show EITHER nett worth of c. €349,000 OR an annual income of €23,000).

· They also need to show they are of good character (this will normally involve obtaining a policegood conduct certificate and professional references).

· Once the permit is issued, applicants have up to one year to take up residence. On doing so, theymust purchase or rent a suitable property. (Minima are purchase price of c. €70,000 for a flat and€117,000 for a house or €4,150 per annum rent).

· There is no requirement for permanent resident holders to spend any particular amount of time inMalta each year. It is therefore not uncommon for permanent resident holders to rent a property atthe minimum rent payable and to rarely, if ever, come to Malta.

CONTINUING REQUIREMENTS FOR

PERMIT HOLDERSThe Permanent Resident must have a bank account in Malta into which account he must depositevery year the sum of €13,950 plus €2,300 for each dependent although the tax is calculated “as if” €23,000 hadbeen remitted (i.e. the tax due is 15% of €23,000 i.e. €3,450). The Permanent Resident can freely use this moneyfor any purpose whatsoever including outside Malta.

A Permanent Resident cannot work in Malta – or more accurately cannot work within the Malteseeconomy.

Specifically, the Permanent Resident cannot be employed by a Maltese person or Maltese registeredcompany and cannot offer freelance services to persons or companies in Malta.

However a Permanent Resident may use Malta as a base to work from, provided that he does not offer hisservices within Malta.

The permit is subject to annual renewal although this in effect mean that as long as you (a) submit your taxreturn, (b) pay taxes due and (c) confirm that you maintain a residence this is a formality and once granted, apermit will not be revoked unless the Resident breaks its conditions. At the end of the first year of residenceand subsequently at the end of each year, individuals are required to complete an Annual Declaration form(which we can arrange if desired) to confirm that the conditions attached to the permit have been fulfilled.

TAXATIONIncome taxes – once the permit is issued and the permit holder has registered with the Inland Revenue inMalta, the Maltese tax authorities will certify that for Maltese taxation purposes, the permit holder is residentin Malta. This can be very useful where permit holders have residential property in other countries, and needto demonstrate that they are resident outside that jurisdiction.

Capital taxes – Accumulated capital and income may be taken back out of Malta with no restrictions. If aPermanent Resident sells his Maltese residence this is tax free as long as the property has been held for threeyears. If a property is sold within 3 years the profit made from the sale is taxed as a Capital Gain; the rate forCapital Gains Tax is 35% at present.

Inheritance taxes – no death duty/inheritance tax is payable in Malta except for 5% stamp-duty on thetransfer of immovable property situated in Malta.

INHERITANCE LAWS

In matters of inheritance, Malta is a Roman Law jurisdiction and unless a will is made, estates passautomatically to children. We therefore strongly recommend that clients purchasing property in Malta orholding assets there, make a will. We can arrange this if required.

OTHERS

Household goods etc may be imported into Malta free of duty and there is also a concession whereby thepermit holder’s car may be imported at a very reduced rate of tax into Malta provided he has owned it for 6months prior to the permit being granted.

TIME TO PROCESS THE APPLICATION

The processing of applications for permanentresidence normally takes around 12 weeks from thetime that all documents are submitted to relevantdepartment.

Please contact us for a complete list of requirements, application forms and further information on meetingthe residential requirements etc. If you are engaged in business you will also need to consider a suitablestructure for ensuring that you comply with Maltese “remittance requirements”.

COSTS1. Minimum one off fees for residency : EU 10,000 (2)

2. Minimum revenu to remit on Maltese bank account : EU 23,000 (1)

3. Minimum annual rent of EUR 4,150 (1) per year.4. Minimum tax of EUR 3,450 (1)

5. Annual renewal fees : EU 5000 per year (2)

(1) Note / This may fluctuate according to exchange rate maltese £ to Euros(2) Note / Price for european citizens, other nationalities, please contact us.

ANNUAL CALCULATIONMinimum income on maltese bank A/C 23000Government Tax - 3450Minimum Rent - 4150Advent UK renewal fees - 5000YOUR REMAINING FUNDS 10400

Advent UK team

Patricia Goodenough

President

Pierre FourèsDirector Project

Finance

Michel LubacMarketing

Director France

Ian LeapingwellBusiness

DevelopmentDirector

Joel Barlier PropertyProjects

Consultant

Rupert PotierBusiness

DevelopmentDirector

ContactsADVENT UK LTD

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