10 things people looking to set up in Malta should know
21 December 2022
Whether you are thinking about relocating for work, advantageous business prospects or to benefit from year-round sunshine, Malta has a lot to offer. As an independent nation ideally located in the heart of the Mediterranean and a prosperous member of the European Union (“EU”), it comes as no surprise that 20% of Maltese residents are expats. Everything from the rich history, sparkling blue waters and gorgeous weather to the high level of education and favourable tax rates make our tiny island a preferred choice for relocation among many.
But what should you know about Malta before deciding to make it your home? In this article, we answer 10 probing questions about moving to Malta.
What is the currency used in Malta?
In Malta, the official and only used currency is the Euro (€) which was adopted on 1 January 2008 after Malta joined the EU on 1 May 2004. Having been around for over 20 years, the Euro has proven to be a stable and trusted currency. It is also quite a convenient currency to own. With 19 countries sharing Euro as a single currency, gone are the days of having to line up at foreign exchange bureaus to swap your money when travelling within the Eurozone.
Is it easy to travel outside of Malta?
The Maltese islands are ideally located at the heart of the Mediterranean Sea between the southern part of Europe and the coast of the North of Africa. This makes travelling to other European countries such as Italy, France or the UK as well as African countries such as Morocco or Tunisia extremely accessible. Besides having the luxury to travel via short flights to major European airports with connecting flights to the rest of the world, you can also travel to the rest of Europe by car starting with a 1hour 45minutes ferry ride to Sicily. If eligible to become an owner of a Maltese passport, you would also enjoy visa-free travel to 186 countries including the UK, USA and Canada.
Does Malta have an open border policy?
Recording a long-standing history of immigration, Malta has an open and welcoming policy towards foreigners. Indeed, Malta enjoys an open border policy with the EU and the European Economic Area (“EEA”). This means that citizens of such countries can enter, reside and work in Malta without a visa. Malta also offers several resident programs for non-EU/EEA citizens, including the recently launched Malta Permanent Residency Programme and the Startup Residence Programme.
What can I expect from the Maltese work scene?
Malta boasts a solid economy and plenty of work opportunities, recording the lowest unemployment rate in all of Europe this year. Finding work in Malta should be a straightforward experience. As mentioned, EU/EEA citizens have the right to work in Malta without having to obtain a work visa. On the other hand, third-country nationals are required to obtain a work visa based on a job offer from a local employer. The two largest sectors for work opportunities in Malta are the hospitality and iGaming industries, with the latter creating over 10,000 jobs in 2021.
What are the Maltese educational and healthcare systems like?
The Maltese educational and healthcare systems are well-respected worldwide. At the turn of the 21st century, the World Health Organisation had ranked Malta’s healthcare system 5th globally. Maltese residents can opt for public or private healthcare. Public healthcare is free for all registered working residents who make yearly NI and social security contributions. Similarly, public education in Malta is of very high standards and is free for EU students and citizens of Malta.
Is housing affordable in Malta?
In recent years, Malta has witnessed an escalation in property prices due to strong demand and limited supply. A recent study by Grant Thornton and Dhalia showed that residential house prices increased by 100% between the first half of 2013 and the first half of 2022. Similarly, the rental price index increased by 42% over the same nine-year period.
Nevertheless, housing in Malta can still be considered relatively affordable, especially when compared to other European countries. According to Numbeo’s cost of living index, the average price of a one-bedroom apartment in the city centre of Valletta is €905 per month, which is still much lower than the average in cities like London, Paris or Amsterdam at £1,963, €1,286 and €1,707, respectively.
Is opening a bank account in Malta difficult?
Opening a bank account in Malta is a simple process, provided that you have the required documents and meet the eligibility criteria set by the bank you opt for. The process generally involves a series of steps including (1) researching and choosing your preferred bank; (2) gathering the required documents; (3) completing the application process; and (4) activating your bank account by making an initial deposit or setting up a direct debit or standing order.
It’s worth pointing out that the Maltese banking system is made up of several thriving local and international banks which are regularised and supervised by the Malta Financial Services Authority. As a member of the EU, Maltese banks are also subject to EU financial regulations and derivatives including the EU’s deposit guarantee scheme which entitles depositors to receive up to €100,000 in compensation if their bank becomes insolvent.
To become a Maltese resident, do I need to spend a minimum amount of time in Malta, and will I be eligible to apply for a Maltese passport?
As a general rule, one must spend a minimum of 183 days in Malta in any calendar year to be considered a resident for tax purposes in Malta. However, it is important to note that this is merely a general guideline and may not be the only factor that determines your residence status.
As a Maltese resident, you will not be automatically eligible to apply for a Maltese passport. To apply for a Maltese passport, you must meet a series of requirements including becoming a citizen of Malta. Citizenship can be acquired through naturalisation, registration or direct investment.
Is Malta’s low tax regime accepted by other countries?
Malta exercises a favourable tax regime, which is perhaps the strongest card the country holds in such a competitive world. Thanks to a series of tax credits and refunds, the effective tax rate on foreign companies could be as low as 5%. Although Malta’s tax regime remains widely accepted by other countries, extensive investigations have at times cast a critical light on Malta’s low-tax incentives, accusing the country of potentially contributing to tax avoidance and evasion. In response, Malta implemented measures to address these concerns and continues to be committed to transparency and cooperation with other countries on tax matters, including adhering to EU regulations such as DAC 6.
If my Maltese company sends dividends to my home country, do I get taxed again?
Whether you will be taxed on dividends received from your Maltese company depends on the tax laws and regulations of your home country and whether there is a tax treaty between Malta and your home country. Malta has signed tax treaties with 78 countries (including many countries in the EU) which provide for a reduced or eliminated withholding tax on dividends, interest and royalties. In addition, under the EU Parent-Subsidiary Directive, payments of withholding tax on dividends between companies registered within different member states are generally eliminated, provided that the recipient company holds at least 10% shareholding in the company paying the dividends for a minimum period of 2 years.
How we can help
Are you thinking of becoming a Maltese resident? At AE Business Advisors, we are registered with the Residency Malta Agency and all other competent authorities as accredited agents for all immigration programs currently available in Malta. In addition, we are a multi-disciplinary firm with over 20 years of experience in legal, corporate, tax and financial advisory. This puts us in an optimum position to guide and support you throughout the whole process of relocating to Malta.
We will assist you when submitting your residency application and pro-actively advise you on the relevant aspects of Maltese laws and regulations. We will also continue to work on your behalf, even after the issuance of your residence permit, to ensure uninterrupted enjoyment of your right to reside in Malta.