Obtaining Maltese Citizenship: Everything You Need to Know

Benefits of Being a Maltese Citizen

Foreigners become Maltese citizens to benefit from:

• European respect for democracy and human rights
• High-quality medical and educational services
• Top-notch infrastructure
• Superb business opportunities
• Picturesque landscapes
• Excellent cuisine
• Low crime rate
• Easy access to the other EU states, including the right to live and work there
• Favorable location, from where you can easily travel to different regions

After you become a local resident, you'll be able to travel without a visa to nearly all countries on the planet.

Ways of Obtaining the Maltese Citizenship

You can become a citizen of this island state through descent, registration or naturalisation. Plus, foreigners can acquire Maltese citizenship by investment. Below, we'll list the respective requirements for each method.

By Descent

Until 21 September 1964, this island used to be a British colony. If you were born in Malta after this date and either your mother or father is a local citizen, you'll automatically get citizenship too. There are some exceptions to this rule but we won't focus on them in this article.

By Naturalization

To resort to this method, it's mandatory to live legally on this island for at least 7 years as a resident. This path suits individuals who meet these criteria:

• Are aged 18 or older
• Are law-obedient
• Speak Maltese and are familiar with the local culture

Two sponsors from the island need to vouch for you. The first sponsor should be a high-ranked police officer, judge, medical practitioner, notary, legal procurator or member of parliament. The second one should have some other occupation. Both should have come of age. You can't ask your family members to become your sponsors.

By Registration

For foreigners who weren't previously linked to the island, this option is synonymous with applying for citizenship thanks to their marriage with a Maltese partner. Feel free to apply if you:

• Officially tied the knot five years ago and are still living together
• Divorced after having spent at least five years as official spouses
• Are a widow or widower of a Maltese citizen

Your partner's gender doesn't matter. This state began to recognize same-sex marriages in 2014.

You can also apply for citizenship by registration if you have some links to Malta — for instance if you or your parents were born here but didn't live here for all your life. Each case is individual, so it would be wiser to consult a legal specialist;

By Investment

There is the National Development and Social Fund on the island that sponsors strategically important projects, such as innovation, education and public health. Before applying for citizenship, foreigners should invest money in this fund and get a residence permit in exchange.

Here are your upcoming expenses:

Before transferring the full amount of €600,000 or €750,000, you should make a €10,000 deposit.

If your kids, parents and grandparents apply together with you, you should prove that they depend on your financially.

You'll be allowed to apply for citizenship after you spend one or three years as a local resident. If you don't want to become a citizen, you can extend your residence permit. If you get such a permit without making an investment, it won't be possible to extend it.

Who Is Eligible

To get the right to buy Maltese citizenship, it's necessary to tick these boxes:

• Prove that you've always been law-obedient
• Have no contagious diseases that would pose a threat to the residents of this island state
• Have enough funds

The authorities carry out a thorough background check for each applicant.

Terms and Requirements

As soon as the authorities approve your application, you'll have four months to donate €10,000 to a local non-profit organization. You'll be allowed to choose from an extensive range of recipients in the niches of science, sports, art or philanthropic activities.

Besides, it's necessary to invest at least €700,000 in local real estate and avoid reselling your purchase for at least 5 years. You won't be allowed to sublease your house or apartment. Alternatively, you may rent accommodation for a minimum of 5 years with an annual rent of at least €16,000.

Paperwork

To apply for Maltese citizenship, be ready to prepare these papers:

• Passports of all applicants
• Biometric data of all applicants aged 12 or older
• Birth, marriage, civil partnership and divorce certificates
• Custody or court documents
• Bank statements from a banking institution in your homeland
• Proof of having enough money that you've earned legally
• Proof that the family members who apply together with you depend on your financially
• Proof of having been law-obedient
• Medical reports
• Proof of having complied with the process of due diligence
• Application form

Depending on your individual circumstances and the reason for applying for citizenship, you might need to attach additional documents to the set. Please consult a legal advisor in advance.

Real Estate Prices in Malta

Compared to the real estate prices of 2015, the current ones tend to be up to 30% higher. The current global economic crisis might temporarily slow down their growth — but then, they will be likely to keep increasing.

Here is the approximate range of prices:

As a foreigner, you'll be allowed to buy only one object from one of the dedicated areas and use it only for yourself. If you want to purchase several properties, rent out your property or get a property outside from a dedicated area, you'll need a special permit.

Step-by-Step Guide on Buying Citizenship (Timeline Included)

If you opt for becoming a Maltese resident in exchange for investment, stick to this scheme:

1. Visit the island in person to submit the application and provide your biometric data
2. Get your residency card
3. Within five business days, the authorities will take the decision on whether you're eligible for citizenship or not — if yes, you'll need to pay the due diligence and administrative fees
4. Wait for a month for the authorities to complete your verification
5. In one or three years, apply for citizenship
6. After receiving approval, fulfill your investment requirements in four months
7. When the authorities approve your application, they will send you a letter of invitation
8. Within six months, you should visit the island in person to take the Oath of Allegiance

After that, you'll receive the local passport. Make sure to keep all the proofs and receipts that confirm the facts of investing in the local economy and meeting all the requirements.

Dual Citizenship

In 1964, this island state gained independence. Back then, it allowed dual citizenship only for minors. When they came of age, they had to renounce one of their citizenships.

In 1989, the government allowed selected emigrants to preserve their Maltese citizenship. To be eligible for this offer, people had to be born on the island and spend at least six years in the country where they emigrated.

In 2000, the authorities allowed dual citizenship for anyone who wants it. If you become a citizen of Malta today, you won't have to renounce the passport of your homeland.

Taxation

If you spend at least 183 days per year on the island, you'll become its tax resident. Then, you'll have to pay taxes here for the income that you receive both locally and abroad. If you remain a tax resident of another state, you'll need to pay in Malta only the taxes on the income that you generate on the island.

If you're a Maltese tax resident, be ready for the following expenses:

To qualify as a parent, you should have a son or daughter aged younger than 18. If your kid attends a Maltese university, you'll be able to benefit from the parental tax rate until your child turns 22.

At first sight, it might seem that the local taxes are rather high. But you might be able to benefit from deductions. For instance, if you're married and earn over €60,001 per year, you can deduct up to €9,905 from your tax. The deadline for submitting tax returns is June, 30.

If you remain a tax resident of another state, here is the approximate range of your taxes in Malta:

It doesn't matter whether you're married and have kids or not. Unlike tax residents, non-residents in Malta can't benefit from deductions.

To enjoy tax benefits in terms of a special regime, consider joining the Global Residence Programme. Its target audience is non-EU investors who rent or purchase accommodation on the island and stay here for at least half a year each year. The members of the program buy mandatory health insurance as well as pay for legal services and an administrative fee. According to the terms of the program, the investor's family pays a minimum of €15,000 in taxes per year. If the investor doesn't transfer their foreign income to Malta, they don't pay a local tax for it — and if they transfer it, the tax rate will be 15%. If they generate income on the island, the tax rate will be 35%.

Here are the key taxes for those who'd like to work or run a business on the island:

• If you're planning to work in Malta as a self-employed professional, be ready to pay social contributions from your own pocket. This will be up to 15% of your income.
• Employed specialists pay up to €50 per week for social contributions. Plus, the organizations that they work for pay the same sum for them.
• The corporate tax is 35% flat and you should pay it every year. If you're a shareholder of a local business, you may end up paying nothing thanks to a tax refund.
• The standard VAT percentage is 18%. For the use of sporting facilities and renting out tourist accommodation, it's 7%. For insurance, financial and healthcare services, it's 0%.
• The amount of the excise duty depends on the type of goods. For instance, for 1,000 cigarettes, it's €22 plus 50% of their retail price.
• The formula of the import duty is calculated individually for each type of goods. Goods imported through the local Free Port or from the EU are exempt from this duty.

Finally, let's sum up the information about the taxes related to selling, buying, inheriting and owning properties:

• Instead of a property tax, owners pay a land tax here (usually up to €250 per year).
• If you rent out accommodation, you'll pay an income tax by default. Alternatively, you can apply for paying a dedicated 15% tax on rentals that fails to offer any deductions.
• The maximum stamp duty is 5%. You'll have to pay it when buying or selling properties or securities. When buying a property, you pay 1% after signing the promise of sale and the rest after finalizing the purchase agreement.
• You have the right to resell the property that you're about to purchase. If you do so before becoming the owner of the object, you'll pay a capital gains tax of 15%.
• The longer you remain the owner of the property, the higher the tax that you pay when reselling it: from 5% to 12%.
• There is no inheritance tax for the kids of the deceased person. The widow or widower is exempt from this tax if, together with their deceased partner, they had no other place to live. Otherwise, the heirs will need to pay a stamp duty of up to 5%.

Even though the local tax system is a bit complicated, Malta is a great place to live and work.