Malta Non-dom Program: Taxes are not cheap in Europe. That being said, several nations offer tax relief programmes. Europe is a desirable place to live, especially if you’re from the West and want to be in a similar cultural setting.
When it comes to EU nations that have a non-domicile tax structure, Malta is among the greatest choices.
For high-net-worth individuals, Malta offers a distinctive and intriguing opportunity with its Mediterranean lifestyle and attractive tax structure. This article examines the advantages of Malta’s non-dom programme as well as the country’s lifestyle and tax benefits.
Why choose Malta?
About 80 miles from Sicily, in the Mediterranean Sea, is the island nation of Malta, which is part of an archipelago between Libya and Italy. Malta welcomes thousands of visitors each year because of its wonderful climate, breathtaking shoreline, and mouthwatering food.
The people of Malta are a fusion of North African, Mediterranean, and other southern European cultures. Despite being an independent EU member, Malta retains its commonwealth status.
Maltese speak English. Its reputation as a great expat country stems from its sunny weather, low crime rate, and excellent standard of living.
Malta’s Numerical Representation
- 535,064 people live there.
- GDP in 2022 of US$17.77 billion.
- 83 percent of people identify as Roman Catholics.
- 115,449 people, or 22.3% of the total population, are not Maltese.
- At least 300 days of sunshine are to be expected annually.
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Malta’s Financial Sector
According to the IMF, Malta is an advanced economy with a service-based, innovation-driven economy. It is regarded as a centre for iGaming and financial services.
Approximately 11% of Malta’s GDP is derived from financial services, specifically from asset management, insurance, private wealth, and corporate services. Many people regard Malta’s innovation as a thought leader in e-payments, cryptocurrencies, and fintech. Opening bank accounts is also convenient for international nationals and offshore businesses.
This bitcoin-friendly island, dubbed “The Blockchain Island,” passed the Virtual Financial Assets Act, a set of laws governing cryptocurrency exchanges, digital wallets, and initial coin offerings. Its welcoming atmosphere, tax breaks, and grants for bitcoin companies have produced a thriving cryptocurrency ecosystem that is home to numerous important exchanges.
Malta is a safe haven for iGaming businesses as well, especially those engaged in the gaming industry. It is regarded as one of the most well-known gaming jurisdictions in the world.
Malta has welcomed more than 300 businesses involved in the online gambling sector and does not impose any limitations on licence grants. 10,861 people are employed in this sector, which accounts for up to 10% of the GDP in 2022.
All of these elements have contributed to Malta’s economic prosperity, with tourism growing by 1.3 million in 2022 to reach 2,286,597 visitors after experiencing a few difficult years. Economic growth in 2023 could reach seven times the average for the Eurozone (3.9% to Q2).
Malta Non-dom Program
Malta is well known for its appealing tax system, which has several benefits for both individuals and companies.
In certain cases, there are no dividend taxes, stamp duty, or withholding taxes for corporations. Although foreign-owned Maltese companies are eligible for tax refunds, the effective corporation tax rate is only 5%, which is the lowest in Europe, despite the flat 35% corporate tax rate. A business owner is entitled to 30% of the tax refund if they are not regarded as a tax resident in Malta.
Let’s say you wish to establish a new business or relocate an existing one to Malta. There are few costs involved, and foreign-owned Maltese holding companies are completely tax-exempt. Additionally, research and development companies are eligible for considerable subsidies, incentives, and reliefs.
Subsidiary profits can be distributed as dividends to registered holding corporations with no tax obligation due due due. Income tax is paid at progressive rates, with the highest amount owed for income over €60,000. Rates range from 0% to 35%. Malta does not impose wealth tax, estate duty, or inheritance tax, among other taxes.
Malta Non-dom Program Benefits
So, what is a tax regime that is not domiciled? This indicates that you are viewed as a non-domiciled tax resident in that nation. You can never be without a place to live as an individual. It is generally accepted that your country of origin, or the place where you have lived for the majority of your life, is where you have your permanent home.
A domicile of origin may be given up after the age of eighteen and a domicile of choice may be obtained. Intentionality and bodily presence are significant variables in this case.
It is imperative to take into account the legal framework of the country you are contemplating, as the definition of residence differs slightly among nations.
In the legal system of Malta, domicile and residence are two separate terms with different meanings and implications. People who live there full-time and regard it as their permanent home are deemed to be domiciled in Mata, according Maltese law.
But unlike dwelling, home in this sense can also mean a person’s place of belonging and suggests closer ties to a nation. Your domicile is actually the place where your important interests are. Therefore, residence is independent of nationality under Maltese law.
This implies that some people may become citizens of Malta through investment, maintain their non-dom status, and avoid paying all of their normal taxes there.
A person who establishes long-term or permanent residence in a country does not gain domicile there if they plan to return to their country of origin at a later time, according to Maltese law.
You can only have one domicile at a time, thus it also applies if you want to move to another nation in the future. The catch is usually that you have to provide substantial evidence proving you are not a citizen and that you plan to remain so.
What Justifies the Claim of Non-dom Status?
The remittance basis of taxation is applicable if you meet the requirements for Malta’s non-dom tax regime.
In the system based on remittances:
- All income earned in Malta, no matter where it comes from, must be paid in taxes.
- Only to the extent that you transmit and receive any income generated outside of Malta is it liable to Maltese tax.
- There is one exception, though: even if they are received in Malta, capital gains that originate outside of the country are not taxable.
This is one major benefit that Malta provides. For non-domiciled people, in addition to these tax duties, there is an annual minimum tax responsibility of around €5000 that needs to be paid.
Those who want to live in the EU under a tax-friendly regime may only have to pay the fixed amount of €5,000 if the arrangement is done correctly. This is particularly true for those whose primary source of income is cryptocurrency, real estate, equities, or bonds.
How Do You Get Malta Non-dom Status and What Does It Mean?
A tax plan that only taxes income earned or remitted in Malta is especially appealing to potential residents. You don’t need to have a permanent or fixed address in Malta to be a tax resident there.
You may qualify for the non-dom tax regime if you have a close relationship with another nation.
Your only taxable income will be capital gains, local income, and overseas income remitted to Malta.
How Do You Operate On A Remittance Basis?
It consists of:
- Transferring dividends to a personal Malta bank account
- Transferring capital gains or interest to that individual’s bank account.
- Using an ATM or debit card for regular purchases.
Prior to establishing residency, you can remit any earnings without incurring taxes. The minimum €5,000 fee only applies if you fail to send any money.
It’s crucial to understand which of Malta’s many residency programmes and High Net Worth Individuals Rules is ideal for you if you’re looking to apply for a special tax status.
Malta Non-dom Program Conclusion
Those who have accumulated significant wealth and assets through business and financial endeavours need non-dom programs to safeguard their assets.
In our observation, these individuals are typically wealthy investors and entrepreneurs in their seventies and eighties. They are typically individuals who wish to reside in nations that provide advantages for travel and lifestyle.
Malta is a great choice since it offers low taxes, a high level of living, and citizenship opportunities. With Malta’s Non-dom programme, it can be taxed almost entirely with the optimal arrangement of residence, asset protection, and tax planning techniques.
