High Net Worth Individuals Scheme Malta


The High Net Worth Individual Scheme (“HNWI”) is a programme designed to attract investment from European nationals of high net worth. The main benefit of the programme is that it applies a 15% fixed tax rate (with the possibility of double taxation relief) on all foriegn sourced income that is remitted to Malta.

 

 

MAIN OBLIGATIONS

In order for an individual to be eligible to apply for special status in terms of the HNWI Rules, the applicant must satisfy the following conditions:

i. The applicant must hold a 'Qualifying Property Holding*.

ii. The property holding must not be shared with other individuals.

iii. The applicant must not be domiciled in Malta and must not intend to establish his domicile in Malta within 5 years from the date of application;

iv. The applicant must be in possession of health insurance which covers himself and his dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals;

v. The applicant must be deemed to be a fit and proper person, and therefore, an international due diligence exercise shall be carried out prior to the granting of the special tax status;

vi. A non-refundable one-off registration fee of €6,000 must be paid by the applicant.

 

 

* an  applicant is said to hold a qualifying property if he owns a property for a value of not less than €400,000; or he rents an immovable property in Malta for not less than €20,000 per year.

( an exception applies in the case of properties acquired prior to the 1st of January 2011)

 

 

CONTINUING OBLIGATIONS

An individual must comply with the following obligations on a yearly basis:

i. The qualifying property must be retained;

ii. The applicant must retain his health insurance and continue to have stable resources;

iii. The applicant must not become domiciled in Malta;

iv. The applicant must not reside in any other jurisdiction for a period exceeding 183 days;

v. Special reporting obligations (the filing of an annual return together with the annual tax return).

 

 

TAX OBLIGATIONS

i. all foreign sourced income which has been remitted to Malta shall be taxable at 15%, with the possibility of claiming double tax relief on such income;

ii. the applicant must pay a minimum tax of €20,000 every year;

iii. a beneficiary with dependents must pay an additional €2,500 per dependent;

iv. a beneficiary and his spouse cannot opt for a separate tax computation;

v. chargeable income derived in Malta will be charged at 35%.

 

Written by: Dr. Mark Hyzler, LL.B, LL.M.(Lond), LL.D.

Email Address:

You can read more about Maltese residency and citizenship rules here.

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