Ordinary Residence Program

Any EU/EEA & Swiss citizens, for example business owners, digital nomads seeking to transfer their tax residence to a safe and tax efficient environment.

Benefits

Right

Right to reside and work in Malta

Family

Family members are included in the program

Apply

Apply on a number of grounds including economic self-sufficiency, employment or self-employment in Malta

No Tax

No tax on overseas capital gains remitted to Malta as well as on income not remitted to Malta, if one's worldwide income does not exceed 35.000€ annually.

Procedure

6-8 weeks

Get in touch

Get in touch

Individuals are subject to income tax. The tax liability of individuals depends on their residence, ordinary residence and domicile.

Resident individuals are those, who permanently reside in Malta. However, temporary absences, that the Commissioner of Inland Revenue may consider reasonable, is acceptable. In practice, an individual counts as resident in Malta if he/she stays for a minimum of 183 days in Malta in one calendar year.

Ordinary Residence

The term ordinary residence is not defined in the Maltese tax law. However one could say that there are three attributes to ordinary residence. A residence that one take up voluntarily, a residence that one take up for a settled purpose and one which forms part of the regular order of one’s life.

Domicile

An individual is deemed to be domiciled in the country where he/she has his/her permanent home. It is the place the person is mostly connected to and determines the way he/she conducts his/her lifestyle.

Capital gains

Individuals who are both domiciled and have ordinary residence in Malta are taxable on their worldwide income and certain capital gains.

Individuals who are either ordinarily resident or domiciled in Malta, need to pay tax on income arising in Malta. Besides, also on certain capital gains arising in Malta and on income arising outside Malta which is received or remitted to Malta. Such persons are not taxable on capital gains arising outside Malta, whether received in Malta or not.

Taxation of individuals with ordinary residence

Individuals who are ordinarily resident, but not domiciled in Malta, are subject to income tax on income and capital gains arising in Malta. From the basis year 2018 onward a resident but not domiciled individual or married couple residing in Malta who have a foreign source income of not less than €35,000 (not remitted to Malta) are subject to a minimum tax liability in Malta of €5,000 provided that any tax paid abroad on income actually remitted to Malta can be set off against the minimum tax liability as a relief of double taxation.

No tax is chargeable on foreign capital gains even if such gains are received in Malta. This could be especially advantageous for business owners or digital nomads for example. Personal income tax is charged at progressive rates of tax up to a maximum of 35 per cent.

The following tables are illustrating the taxation of individuals:


Taxable Income €Rate %
0 - 9,1000
9,101 - 14,50015
14,501 - 60,00025
60,001 & over35
Taxable Income €Rate %
0 - 12,7000
12,701 - 21,20015
21,201 - 60,00025
60,001 & over35
Taxable IncomeRate %
0 - 10,5000
10,501 - 15,80015
15,801 - 60,00025
60,000 & over35

Get in touch

Get in touch

FAQs

Can anyone open a bank account in Malta or does one have to have Residence status?

“Any foreigner can open a bank account in Malta even though they might not be residents there. This therefore means that, if clients open their bank account before they become Residents, they would be given a non-resident account with a foreign residential address. They can then change the same to a resident account with a Maltese residential address after their Residence is approved and they have obtained a Maltese identity card.”

As a UK passport holder, would a client be entitled to free health care?

“EU citizens permanently residing in Malta are entitled to free health care from public hospitals and clinics. However one must apply for Form E121 from the overseas authority (in this case the UK). Once this is issued it will be registered with the Malta Health Department Entitlement Unit and a Certificate of Entitlement will be issued.”

Should the primary OR applicant pass away (the EU passport holder) and the rest of the dependents on the application are non-EU passport holders, would the dependents be able to remain in Malta?

“Dependents may remain living in Malta provided that they would have been living in Malta together with EU national for at least 1 year prior to his/her death.”

Would the applicant need to be present for the full 3 weeks that the application process is said to take?

No, his physical presence is not required throughout the entire application process.