Malta

Market Overview

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A Mediterranean archipelago, the Maltese islands are located at the crossroads between Europe and North Africa. Long popular for beach holidays, the islands also offer prehistoric temples, fossil-studded cliffs and a history of extraordinary grandeur.

Over the years, the islands have served as a geographical vantage point to its many invaders, with architecture and traditions reflecting a wide range of influences. A bi-lingual nation, both English and Maltese are the official languages of the island state.

Back in 1994, Malta issued a series of laws aimed at making Malta attractive to the foreign investor, a strategy that bore great success. Prior to joining the European Union in 2004, Malta revamped its legislative framework to meet compliance with all prevailing EU directives and requirements. This, together with Malta integration of the region’s common currency, the Euro, continued to propel Malta’s economic success. Nonetheless, the sovereign country’s freedom of movement has been amplified upon becoming a member of the Schengen Area, enabling its citizens to move and travel freely to an additional twenty-six countries.
THE LEGAL SYSTEM
Malta has a hybrid legal system, as a result of both common and civil law influences. Malta’s EU membership binds it to transpose all EU directives into domestic law and to abide by regulations issued, and decisions taken, by any of the EU institutions.
THE ECONOMIC AND POLITICAL CLIMATE
Malta enjoys a stable and bi-partisan political scene, which is largely convergent on issues of national and economic importance. Being a parliamentary republic fully adherent to its non-alignment provisos, the country enjoys political neutrality in an international context. Indeed, Malta has very good relationships with its neighboring countries, both to the North and the South of the Mediterranean. It also benefits from a well-established network of bilateral and multi-lateral relationships across the globe.

As a crown colony, the country once relied heavily on British commerce for economic growth. However, that changed with Malta’s independence in 1964 when the foundations for a successful economy were laid down. In fact, the islands’ economy has been incredibly resilient even in times of financial turmoil. It was the only state, alongside Germany, to maintain economic growth during the financial crisis.

Over the past five years, Malta experienced increased economic activity and registered some of the highest GDP growth rates in Europe. In 2017, Malta’s GDP grew by 6.6% and registered a surplus of 3.9%. In 2018, GDP was expected to grow by more than 5% with the surplus estimated to be in the region of 1%. In 2019, Malta is set to remain one of the top performers in the European Union with a projected real GDP growth of 5%, much higher than the average 2.0% expected in the Eurozone.
Malta has additionally maintained a steady level of competitiveness, especially with regards to the cost of living, salaries and property. Whilst maintaining traditional sectors such as manufacturing and tourism, new economic sectors have emerged, namely financial services, iGaming and digital technology, as well as within the pharmaceutical industries. Political stability, and Malta’s economic performance, have resulted in a good quality of life, in turn attracting high levels of Foreign Direct Investment, as well as families and retirees choosing Malta as their place of residence.
BUSINESS ENVIRONMENT AND FDI
Malta is a well sought-after destination for businesses and investors who desire a business-ready European location. As a free-market economy, with no restrictions or legal prohibitions on FDI and no exchange controls, Malta benefits from few obstacles to trade and enterprise. The country does not impose any limitations on the inflow or outflow of funds although, business and trade dealings must be in line with EU and national legislation and regulations.

Alongside its booming economic climate, the islands possess a highly professional and multi-lingual workforce, and adopt a pro-business approach which not only encourages business, but is also attractive for new investment

In fact, in the first half of 2018, the level of foreign direct investment in Malta stood at €176.5 billion. This represents an increase of €8.6 billion over the corresponding period during the previous year. Financial and insurance activities contributed €166.4 billion representing 97.3% of the total stock of FDI in Malta.
MALTA’S SUCCESS STORIES
Malta has always been quick to legislate and to keep up with an ever-changing world and economic and social progress.  It recently implemented sound laws and regulations which, while considerate to the needs of the market, allow businesses to operate in a safe yet attractive environment. In turn, the Maltese legislator has molded Malta into an onshore jurisdiction which offers numerous cost-effective opportunities which continue to entice business to its shores.
AVIATION
Malta’s aviation industry is crucial to its development, as it is one of the main sectors responsible for the country’s substantial economic growth. Apart from being a hub for international commerce and travel throughout history, the island was considered as one of the most strategic geographical points during WWII. Throughout the years, we have seen many multinational companies relocate to Malta, such as Lufthansa Technik, VistaJet and EasyJet. Nonetheless, Malta has implemented the Highly Qualified Persons Rules, which have further attracted various aviation executives to relocate their businesses to our shores.
ART & CULTURAL PROPERTY
Malta’s promotion of its arts and culture is at full-speed, thanks to Valletta’s reign as the European City of Culture for 2018. Culture and art are now prevalent on the national agenda and have an immensely important role to play. Indeed, this industry is multi-faceted in nature and addresses the rights of a very wide range of individuals – dealing with artists, art collectors, auctioneers, museum curators and owners of art work, financiers or insurers. Subsequently, art and cultural property touch upon various legislations, including intellectual property laws and taxation laws.
RESIDENCY AND CITIZENSHIP SCHEMES
In 2013, amendments to the Maltese Citizenship Act were passed, allowing one to become a citizen of Malta, provided, of course, that the applicant satisfies the relative conditions of the said Act. These amendments provided for the LN of 2014, which kickstarted the Malta Individual Investor Programme (MIIP). The MIIP regulations provide for affluent persons of impeccable repute to be naturalized and to receive Maltese citizenship, by means of a contribution to the Maltese economy. Therefore, upon obtaining citizenship, the applicant would automatically acquire the status of a European Union citizen and obtain access to 160 visa-free destinations, including the USA.
FAMILIES AND WEALTH
The ever-growing influx of high-net-worth individuals heading to Malta to invest in the country’s extensive investment sectors brought on the demand for sustainable tax planning and legal considerations. Indeed, such a thriving and flourishing sector generally includes trusts law, foundations law and estate management. Malta’s legal system is more than well-catered to suit the needs of HNWs looking to achieve well-established succession, philanthropic and estate planning objectives.
FINANCIAL SERVICES
The Financial Services sector in Malta has grown exponentially in the past twenty-five years, as Malta sought to position itself as the jurisdiction of choice for businesses wanting to set up in a business-friendly EU jurisdiction which embraces innovation. The Malta Financial Services Authority (MFSA), which is the sole regulator for financial services in Malta, maintains a pro-business approach and an open-door policy which has led to the growth of the local capital markets, banking, insurance and investment services industries.

Despite the size of the jurisdiction, the local capital markets are steadily thriving and growing in size, liquidity and sophistication. The Malta Stock Exchange (MSE) offers various listing options for seasoned companies as well as small to medium enterprises seeking to raise finance.

The MSE plays host to numerous equity and debt transactions, providing facilities by means of which securities can be admitted to trading, and subsequently traded over a secure, well-regulated secondary market. There are various listing options through the MSE, namely the Official List, the Alternative Companies List, the Institutional Financial Securities Market, and Prospects - a multilateral trading facility aimed at small to medium enterprises and family businesses. Listing on the MSE main market is not only a cost-effective solution of raising finance, but also affords a European Passport, and the prestige and brand exposure that comes with being listed on a European capital market.

Whilst still relatively small, Malta also offers the possibility to set up securitization vehicles as an alternative means of raising finance.

Malta is also becoming an increasingly popular jurisdiction for investment services firms seeking to offer their services to persons in EU member states under the simplified passporting procedure. It is also gaining traction as a funds domicile, particularly through its home-grown hedge fund structure, the Professional Investor Fund, which itself has gained popularity for its flexibility. Malta also offers the possibility of setting up Alternative Investment Funds (AIFs) and Undertakings for Collective Investment in Transferable Securities (UCITS), as well as has recently set up a bespoke Notified AIF (NAIF) regime. The NAIF, which is a fully EU law-compliant product, provides a fast-track possibility of accessing the market within just 10 days, by shifting the burden of regulation onto the Fund Manager and allowing the fund to be notified to the MFSA.

The local banking and financial institution sector has also evolved from a handful of domestic banks into an industry which operates across all the EU Member States, set up as both ‘brick & mortar’, as well as online. The industry is experiencing renewed vigor since the advent of Fintech, which is reshaping the services which consumers are expecting from credit institutions, electronic money institutions and payment services providers.

Malta’s insurance sector is also steadily growing since Malta’s EU accession and now comprises commercial insurance companies carrying out both general and long-term business, subsidiaries of major international insurance and reinsurance undertakings, Affiliated Insurance Companies (Captives) and Insurance Management Companies. Malta has become a particularly attractive domicile for Captives and Protected Cell Companies and is increasingly being eyed as a potential domicile of choice by UK insurance companies seeking an EU domicile post-Brexit.
FINTECH AND BLOCKCHAIN
The Maltese Government is always on the lookout to excel in emerging industries and to convert the Island into specialized centers of excellence. Throughout 2017-2018, the Malta Financial Services Authority, together with stakeholders, drafted the first regulations of the disruptive technologies of blockchain and cryptocurrencies. Towards the end of 2018, three legislative instruments became effective in regulating cryptocurrencies, referring to   virtual financial assets and service providers, distributed ledger technologies, and innovative technology arrangements. A new regulatory authority called the Malta Digital Innovation Technology was also established. The new laws put Malta on the blockchain map with large renowned crypto-exchanges such as Binance, Coinvest and OKEx, as well as other international crypto-based companies, such as Yovo and Neufund, relocating headquarters or opening operations in Malta.
GAMING
The gaming industry in Malta has flourished in just a decade, making the islands the top European jurisdiction for operators. Malta has now become the foremost legal and operational infrastructure in the gaming industry, a success also synonymous with innovation, professionalism, regulation and trust. In 2018, the laws, rules and regulations governing gambling were complete overhauled in order to meet the needs of the ever-growing gaming presence in Malta. Moreover, the Malta Gaming Authority’s (MGA) role was expanded with further discretion in its compliance and enforcement functions, to better achieve regulatory objectives. To remain at the forefront of gaming laws and disruptive technologies, the MGA also launched a Sandbox Framework, pertaining to the use of Virtual Financial Assets (VFAs) and virtual tokens, as well as Innovative Technology Arrangements (ITAs) within the gaming industry as a means of payment for gaming services.
MARITIME
The island’s fate has always been linked to the sea. Due to its strategic location right in the center of the Mediterranean, alongside its deep and sheltered harbors, Malta has the advantage of being a thriving maritime base. In turn, the country has developed an avant-garde variety of integrated maritime services, complemented by numerous dependable marine facilities. Indeed, the Maltese Ship Registry has experienced steady growth over the years and is the 6th largest registry in the world.

Additionally, the Maltese flag is synonymous to a mature and safe jurisdiction with regard to the world of sailing. Vessels bearing the country’s flag are less susceptible to detainment and inspections at foreign harbors, as Malta’s flag belongs to the White List of the Paris and Tokyo MoU. Moreover, the country also offers cost-effective solutions for yacht owners and shipping companies, while at the same time provides state of the art services and infrastructure to a range of vessels. In the first quarter of 2019, the Commissioner for Revenue of Malta issued new guidelines in relation to the calculation of VAT on the leasing of yachts.
SETTING UP IN MALTA
CORPORATE VEHICLES
Business in Malta may be conducted through a number of different vehicles such as partnerships, sole proprietorships, branches of foreign companies, co-operatives, trusts, investment companies with varied share capital (SICAV), protected or incorporated cell companies. The most common vehicle is the limited liability company, whilst partnerships are also popular, although the latter are normally associated with the professional services sector. SICAVs are principally used in investment fund structures and incorporated or protected cell companies popular within the insurance sector.

In addition to the various structuring options, Malta offers an attractive tax regime for carrying out business or the holding of investments through Malta.
COMPANY FORMATION
The ease with which a company can be set up in Malta is a convenient feature of setting up a business here. Provided the requirements of Maltese law are complied with and the necessary due diligence procedures are carried out, a company can be incorporated in as little as 24 to 48 hours from the receipt of documentation.
ADVANTAGES OF SETTING UP IN MALTA
Malta is a popular and reputable destination for both start-ups and well-established businesses that wish to set up HQs, branches, or finance and investment companies in a European jurisdiction. Due to its pro-business approach, the islands are now home to some 70k companies, with 30% of them having been registered in the last 5 years.

As mentioned above, setting up in Malta is a relatively straightforward process. No licenses or permits are required, save for businesses operating within certain sensitive sectors such as pharma, gaming, finance, insurance and medical sectors.

A brief overview of the benefits which businesses in Malta can obtain through setting up in Malta are:

  • competitive set-up and operations costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • a favorable tax regime and an extensive double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

COMPANY TAXATION
Companies incorporated in Malta are deemed to be resident and domiciled in Malta and are therefore subject to tax on their worldwide income less permitted deductions at the corporate income tax rate of 35%. However, income or gains from qualifying investments may be exempt from tax in Malta under the participation exemption provisions.
Participation Exemption

Income or capital gains derived by Malta companies from qualifying “participating holdings” (PH) may be exempt from tax in Malta at the option of the company.

An investment qualifies as a PH where a Malta company is an equity shareholder in another company and:

(a) holds directly at least 5% (five percent) of the equity shares of such a company, which holding confers an entitlement to at least ten percent of any two of the following (“equity holding rights”): right to vote; profits available for distribution; and assets available for distribution on a winding up; or

(b) is entitled at its option to call for and acquire the entire balance of the equity shares not held by that equity shareholder company to the extent permitted by the law of the country in which the equity shares are held; or

(c) is entitled to first refusal in the event of the proposed disposal, redemption or cancellation of all equity shares of that company not held by that equity shareholder company; or

(d) is entitled to either sit on the Board or appoint a person to sit on the Board of that company as a director; or

(e) holds an investment representing a total value, as on the date or dates on which it was acquired, of a minimum of one million, one hundred and sixty-four thousand euro (€1,164,000) (or the equivalent sum in a foreign currency) and that investment is held for an uninterrupted period of not less than183 days; or

f) such shares are held for the furtherance of its own business and the holding is not held as trading stock for the purpose of a trade.

Equity shares refer to a holding of the share capital in a company which entitles the shareholder to at least any two of the following three rights: the right to vote, the right to profits available for distribution to shareholders and the right to assets available for distribution on a winding up of the company. Capital gains derived from the disposal of such PH may be exempt from tax in Malta. Where Malta holding companies receive dividend income from a participating holding, such income may also be exempt from tax in Malta provided that the company in which the PH is held falls within one of the following safe harbors:

  • it is resident or incorporated in the EU;
  • it is subject to any foreign tax at a rate of at least 15%; or
  • less than 50% of its income is derived from passive interest or royalties .

Where a PH does not fall within one of the safe harbors described above, a company may still opt for such income to be exempt from tax in Malta, if both anti-abuse conditions below are satisfied:

  • the equity shares held in the non-resident company do not represent a portfolio investment; and
  • the non-resident company or its passive interest or royalties have been subject to tax at a rate which is not less than 5%.

TAX REFUNDS
Where the participation exemption does not apply, upon receipt of a dividend, shareholders of a Malta company, or a foreign company which is resident in Malta for tax purposes, are entitled to a refund of all or part of the Malta tax paid at the level of the company on such income. The type and source of income received by the company must be considered when determining the amount of refund which may be claimed. Shareholders of companies that have a branch in Malta, who are in receipt of dividends out of branch profits subject to tax in Malta, are also eligible for the same tax refunds as shareholders of a Maltese company.

Full Imputation System

Malta operates a full imputation system of taxation whereby shareholders in receipt of dividends out of a Malta company receive a credit for the tax suffered at the company level, thus eliminating any further taxation being due on the dividend by the shareholder.
OPPORTUNITIES & FUTURE PROSPECTS
BREXIT
With the UK projected to leave the European Union by 2020, concerns regarding businesses which presently benefit from the EU market and its harmonization are on the rise. With regards to this, the UK financial services industry is weighing out the options related to the maintenance of passporting rights within the EU. Malta is well positioned to attract such business and offers the possibility of re-domiciling all manner of business and licensed financial services operators, including funds and asset managers, insurance operators, banking and electronic money institutions (EMI). Concerns related to Brexit aside, co-locating to Malta for operational aspects is an ideal prospect. Its favorable tax regime, historical and contemporary ties to the UK, the fluent use of the English language, laws based on common law equivalents, portfolio of fund options, and lastly, its stable financial services industry, all point towards a seamless integration.
PROPERTY MARKET
Malta’s tax regime has proven beneficial in many sectors and it undoubtedly features very prominently in the property market. Even despite the decade’s worth of global financial and political turmoil, Malta has continued to feature on the radar of investors interested in investing in Europe’s growing property market. The Maltese property rates, nonetheless, have remained relatively stable throughout the years.

Indeed, the tax regime alongside its favorable environmental climate, has attracted many to move their personal and business affairs to Malta or to invest in Malta. The country’s tax system protects both buyer and seller in property deals and has contributed to maintain the strength and perseverance of the Maltese property market, especially with relation to high-end properties. Moreover, residential prices in Malta saw a roughly 17% year-on-year increase from Q2 2017 to Q2 2018, putting the country in the lead worldwide in relation to house price rankings. In the first quarter of 2018 alone, residential prices had undergone a 3.6% average price increase.

The demand for property and steady price increments are nevertheless supported by a strong growth in disposable income, which continues to benefit from advantageous labor market conditions. Nevertheless, the fact that Malta has a low interest rate make it all the more attractive for investment. In turn, these factors continue to contribute to Malta’s exponential growth in lending for house purchases. Nonetheless, the increase in the foreign work force in Malta and, to a limited extent, the MIIP, have also been supporting demand for housing.
PROSPECTS FOR FAMILY BUSINESSES
Small-to-Medium Enterprises and family businesses lie at the heart of the Maltese economy and the Maltese government is aware of how crucial their contribution is. Intent on fostering the best possible thriving business environment, besides the implementation of a family business legislation which ultimately allows businesses that have a sound business plan to access financial support, the Malta Stock Exchange’s ‘Prospects MTF’ allows SMEs to access finance of between €1 to €8 million.

Therefore, SMEs can confidently seek access to funding without relinquishing ownership or control of their company, through the capital markets, traditionally associated with far higher levels of funding.
FINTECH, BLOCKCHAIN & ARTIFICIAL INTELLIGENCE HUB
Malta implemented groundbreaking legislation in the Blockchain or Distributed Ledger Technology (DLT) field in the shape of a trio of Acts that took force of law in 2018. The Malta Digital Innovation Authority Act (Cap. 591) sets out the basis for the creation of a digital authority, with the remit of regulating innovative technologies. The Innovative Technology Arrangements and Services Act (Cap. 592) sets out the legal basis under which the MDI will regulate such technologies, currently DLT platforms and smart contracts.
The Virtual Financial Assets Act (Cap. 590) regulates the launch of virtual financial assets (VFAs or cryptocurrencies) in or from Malta, as well as those providing services to VFAs, such as advisers, brokers, portfolio managers, or crypto exchanges. The VFA Regulations (S.L. 590.01) provide further guidance on how the act is to be applied in practice.
A national Artificial Intelligence (AI) taskforce has been set up with the vision of making Malta the ultimate AI launchpad, by creating an innovation sandbox and bringing together innovators, business angles, investors and users in a secure environment. No regulation has to date been announced, however the intention with technology with so many potential uses in different fields is for a light touch regime rather than a rigid approach that would stifle the necessary dynamism. The scope of both MDIA and ITAS are expected to include AI in the near future.
WHY MALTA CAN BE THE RIGHT JURISDICTION TO DO BUSINESS
Malta is a popular and reputable destination for start-ups and well-established businesses alike, who wish to set up or co-locate in Europe. Due to its long-standing pro-business approach, the islands are now home to over 70,000 international companies, with 30% of them being registered in the last 5 years.
As mentioned above, setting up operations in Malta is a relatively easy process. In general, no licenses or permits are required, save for businesses operating within certain sensitive sectors such as medical/pharma, gaming, financial services and aviation sectors. Convincingly, businesses in Malta can benefit from;

  • a competitive set-up and operational costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • 5% net effective corporate tax rates and an efficient double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

Interest or royalties are deemed to be passive when they are not derived directly or indirectly from a trade or business and where such interest or royalties have suffered foreign tax at a rate of less than 5%.

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Residency

Moving to Malta from the USA

By Antoine Saliba Haig and Claudia Cilia Buhagiar For Americans considering relocation, understanding the various residence pathways is essential. This article explores the main options available to U.S. citizens looking to move to Malta. Moving to Malta from the USA Malta’s affordable lifestyle and high standard of living make it an increasingly popular destination for expatriates, especially among U.S. nationals. The island offers a unique blend of Mediterranean charm, historical heritage, and modern amenities. For Americans considering relocation, understanding the various residence pathways is essential. This article explores the main options available to U.S. citizens looking to move to Malta - namely the Global Residence Programme (GRP), the Malta Permanent Residence Programme (MPRP), and the Nomad Residence Permit(NRP) - offering a comprehensive guide for prospective expatriates. Benefits of moving to Malta from USA Malta’s attraction lies in its year-round sunny climate (with over 300 days of sunshine annually), multicultural environment, and strategic location at the crossroads of Europe, North Africa, and the Middle East. The island has excellent air connectivity, with direct daily flights to major European cities, the UK, Istanbul, and Dubai. English is an official language in Malta, which eases the transition for American nationals. Additionally, Malta offers appealing tax benefits and provides access to the Schengen Area, allowing visa-free travel across 29 European countries. Top Residence Programmes for U.S. Citizens Moving to Malta Global Residence Programme (GRP) The Global Residence Programme is designed for non-EU, non-EEA, and non-Swiss nationals, making it a suitable option for U.S. citizens seeking a tax-efficient relocation to Malta. This program offers several advantages including a flat tax rate of 15%. Eligibility Criteria for US nationals: Property Requirement: Applicants must either: Purchase property in Malta valued at a minimum of €275,000 (or €220,000 in Gozo or the south of Malta), or Rent property with a minimum annual rent of €9,600 (or €8,750 in Gozo/southern Malta). Financial Self-Sufficiency: Applicants must be able to support themselves and any dependents without resorting to social assistance. Health Insurance: Comprehensive coverage across the EU is required for all included family members. Fit and Proper Test: Applicants must pass a strict due diligence process to confirm they are of good standing. Applicants must also pay a one-time government fee of €6,000 on submission of the GRP application. Key Benefits for US Nationals Moving to Malta under GRP: Flat Tax Rate: 15% tax on foreign income remitted to Malta (with a minimum tax of €15,000 annually). Family Coverage: Dependents including spouse, unmarried children up to 25 years, and financially dependent parents and siblings can be included. Residence and Travel: Right to reside in Malta and visa-free access across the Schengen Area. Malta Permanent Residence Programme (MPRP) The Malta Permanent Residence Programme (MPRP)is another attractive option for Americans looking into moving to Malta. It offers permanent residence rights and is ideal for non-EU families, including American nationals, looking for long-term EU residency. Eligibility and Requirements for US Nationals: Property Requirement: Either Purchase property worth at least €375,000, or Rent a property with a minimum annual rent of €14,000. Government Contribution: €80,000 if purchasing property, or €110,000 if renting a property. An additional €10,000 per family member applies beyond the main applicant and spou Donation Requirement: A minimum of €2,000 must be donated to a registered Maltese NGO operating in philanthropic, cultural, scientific, sport, or animal welfare sectors. Financial Resources: Applicants must show: Capital assets exceeding €500,000, of which €150,000 must be in financial assets, OR Capital assets of at least €650,000, of which €75,000 are in liquid form. Health Insurance: Required for the entire family. Key Benefits for US nationals moving to Malta under the MPRP: Permanent Residency for Life: Granted indefinitely with no expiry. No Minimum Stay: The MPRP does not impose physical presence requirements. Family Inclusion: Spouse, unmarried and financially dependent children up to 28 years, and dependent parents/grandparents may be included. Visa-Free Travel: Access to the Schengen Zone. Nomad Residence Permit (NRP) The Nomad Residence Permit targets remote workers and digital nomads, including U.S. professionals seeking a Mediterranean base while working for companies outside Malta or else having their own company or business with foreign clients. Eligibility & Requirements for US nationals: Remote Work Requirement: Must be employed by or offer services to clients based outside Malta. Minimum Income: A gross yearly income of €42,000 is required. Health Insurance: Comprehensive coverage is mandatory. Accommodation: Must rent or purchase property in Malta. Key Benefits for American nationals: Remote Flexibility: Allows Americans to live in Malta while maintaining foreign employment or freelancing. Lifestyle Perks: Malta offers a rich history, beautiful landscapes, and vibrant expat community. Professional Networking: Growing ecosystem of entrepreneurs and digital professionals. Popular Property Locations for U.S. Expats Malta offers a diverse selection of residential areas to suit various lifestyles and preferences: Sliema: A cosmopolitan hotspot with modern apartments, seaside promenades, and retail outlets. St. Julian’s: Ideal for those who enjoy nightlife, luxury living, and entertainment. Mellieħa: A tranquil town with sandy beaches and family-friendly environments. Valletta: The capital city, rich in cultural landmarks and historic charm. Marsaxlokk: A traditional fishing village with a slower pace, famed for its Sunday markets and seafood. Getting Around in Malta Malta’s compact size makes transportation straightforward: Public Transport: Buses are the primary mode of transport and are free for residents. Ferries: Regular services operate between Valletta and Sliema, the Three Cities, and Gozo. Car Rentals & Ride-Sharing: Available through local and international providers including Uber, Bolt, and eCabs. How We Can Help Relocating to Malta from the U.S. opens the door to a rich cultural experience, excellent quality of life, and access to the European market. Each programme caters to different personal and professional needs. At Chetcuti Cauchi Advocates, we guide U.S. nationals through the complexities of relocation and residence & citizenship planning. Our team provides expert legal advice, tax structuring, and property sourcing, ensuring a smooth transition to life in Malta. Get in touch with us today.
Chetcuti Cauchi Advocates - June 30 2026
European Union constitutional and citizenship law

European Citizenship after Commission v Malta: From Transactional Access to Contributive Belonging

Executive Summary One year on, Commission v Malta has become far more than a judgment about the closure of one Maltese investor route. It is now a central reference point in the debate on how citizenship may lawfully be granted within a European legal order shaped by mutual trust, sincere cooperation, and the constitutional consequences of Union citizenship. The Court’s objection was not to wealth, mobility, or contribution as such. It was to the institutionalised transaction. Where nationality, and therefore Union citizenship, follows from pre-determined payments or investments through a structured process resembling a price-led exchange, the route ceases to look like admission into a constitutional community and begins to resemble the sale of legal status. That is why European Citizenship After Commission v Malta matters well beyond Malta itself. For advisers, the consequence is immediate. What survives is no longer what is most marketable, but what can be defended as constitutionally serious: a pathway grounded in lawful ties, authentic connection, real presence, family linkage, or contribution capable of individual assessment. What Citizenship Pathways Remain A common misunderstanding is that Commission v Malta has closed the door on alternative citizenship pathways. It has not. Across the European Union, nationality remains governed by national law, and legal routes continue to vary across Member States. What has changed is the threshold of defensibility. The pathways most likely to remain stable are those that can be explained in non-transactional and connection-based terms. These include citizenship by descent, family-based acquisition, residence-led naturalisation, and, in a narrower class of cases, merit-based acquisition grounded in public interest or exceptional contribution. This distinction is explored more fully in European Citizenship After Commission v Malta, and in practical Maltese terms through Maltese Citizenship and How to Get Maltese Citizenship under Maltese Law. The key shift is conceptual. The question is no longer which route exists in theory, but which route can be justified in practice as credible constitutional membership rather than packaged access. Why Malta Still Matters Malta remains highly relevant after Commission v Malta, but for a fundamentally different reason than before. Its relevance no longer lies in investor citizenship. It lies in the clarity with which its legal framework now distinguishes between a repealed transactional route and a contribution-based, discretionary model. In Malta’s post-2025 legal order, Malta Citizenship by Merit is not a continuation, substitute, or rebranding of the former investor model. It is legally distinct in rationale, structure, and method. Maltese legal materials place emphasis on exceptional service, exceptional contribution, national interest, and individualised assessment rather than pre-determined exchange. That distinction is legally central. It reflects a repositioning of citizenship within a constitutional framework aligned with European law rather than a market-facing model of access. For private client advisers, Malta is now important not as an exception to the new order, but as one of the clearest jurisdictions in which that order is being worked out in real legal form. Doctrine of Contributive Belonging The most important question left open by Commission v Malta is not what the Court rejected, but what positive standard should now govern lawful citizenship acquisition. The answer, in my view, lies in the doctrine developed in Malta, Contributive Belonging and the Reordering of European Citizenship Law. Contributive Belonging offers a legal framework for understanding how genuine integration may be evidenced in modern, globally mobile lives. It recognises that belonging must be real, but that it need not be expressed solely through static or traditional settlement models. Lawful presence, sustained ties, family life, economic activity, philanthropy, innovation, and public-interest contribution may all constitute credible forms of integration, provided they are proportionate, demonstrable, and individually assessed. This avoids two unsatisfactory extremes. It rejects the commodification of citizenship, but also avoids an undefined and subjective notion of belonging. Instead, it offers a structured, legally intelligible standard that can guide legislation, administrative practice, and advisory work. High-Profile Merit Cases For advisers working on high-profile citizenship matters, the focus has shifted from route comparison to evidentiary design. In serious merit-based cases, the decisive work lies in demonstrating that the applicant’s contribution is exceptional and relevant to national interest, that ties to the state are lawful and credible, and that the case is individually assessable rather than formulaic. That is reflected in Malta Citizenship by Merit. Language matters. Guaranteed outcomes, fast-track narratives, threshold-led positioning, and product-style framing are no longer merely unattractive. They are incompatible with the legal category that must now be defended. Where merit genuinely arises, Malta offers one of the clearest European frameworks in which citizenship can be granted on a non-transactional basis. Where it does not, the correct route will usually remain descent or residence-led naturalisation. Closing Perspective Commission v Malta closed an era of overt commercialisation. It did not remove the demand for European citizenship planning. It changed the legal method by which that planning must now be approached. The future of European citizenship law lies in pathways that can be defended as real constitutional membership, grounded in lawful ties, authentic connection, and recognised contribution. That is why European Citizenship After Commission v Malta should be read not only as a critique of what has ended, but as a framework for what must now replace it. And it is why Malta’s post-2025 position, reflected in Malta Citizenship by Merit, is now at the forefront of the shift from transactional access to contributive belonging in European citizenship law. How Our European Citizenship Advisory Lawyers Can Help Our European citizenship lawyers advise internationally mobile individuals, families, and their advisers on lawful pathways to citizenship across Europe, including descent, family-based acquisition, residence-led naturalisation, and citizenship by merit. In Malta-specific matters, we assist on post-Commission v Malta Citizenship by Merit cases, helping ensure that applications are framed around lawful ties, recognised contribution, and national interest rather than transactional logic. About the Author Dr. Jean-Philippe Chetcuti is a Maltese advocate and internationally recognised citizenship and immigration lawyer with over 25 years of specialised experience in European citizenship, Maltese citizenship by investment and Maltese citizenship by merit, and tax law across jurisdictions. He is co-founder and senior partner at Chetcuti Cauchi Advocates. He is a member of the International Bar Association, the American Bar Association, the European Immigration Lawyers Network, and the American Immigration Lawyers Association. He has been recognised by Lexology Who’s Who Legal, Legal 500, Mondaq, Chambers & Partners, Uglobal, and International Tax Review World Tax. He is the author of the Dual Citizenship Report and the Mobility Assets Spectrum, and has contributed to policy development in citizenship law and sustainable mobility frameworks, including advancing the Doctrine of Contributive Belonging within European nationality law discourse. Dr. Chetcuti holds a Doctor of Laws degree from the University of Malta and an LL.M. in International Economic Law from the University of Warwick, and regularly speaks at international legal and academic fora on citizenship, residence, and cross-border legal issues.
Chetcuti Cauchi Advocates - June 25 2026
Citizenship

Malta Citizenship by Merit

Summary Since 28th November 2017, Malta’s citizenship by merit route offers a path to naturalisation for individuals who have rendered exceptional services to the Republic of Malta or to humanity in fields such as sports, culture, the arts, science, or research. This selective process acknowledges outstanding contributions by global talents and is regulated under Article 10(9) of the Maltese Citizenship Act. Under the Granting of Citizenship for Exceptional Services (Amendment) Regulations 2025 published on 29th July 2025, Maltese citizenship by naturalisation may also be granted to entrepreneurs, technologists, and philanthropists who demonstrate exceptional merit whether through exceptional contributions to Malta, services of exceptional interest to Malta or to humanity. ‍Key Legal Points Legal Notice 335 of 2017, which was the first legislation enacted on this matter, recognises exceptional contributions to Maltese society in national security, science, health, education, culture, sports, and innovation. Legal Notice 159 of 2025 (most recent amendment) lays down the main conditions to grant naturalisation on the basis of exceptional contributions or exceptional services to Malta or humanity. In the Maltese Citizenship Act, citizenship by merit is allowed under Article 10(9). Legal Basis for Citizenship by Merit The legal foundation for citizenship by merit is found in Article 10 (9) of the Maltese Citizenship Act, which allows the Minister responsible for citizenship to grant naturalisation to foreign nationals or stateless persons who: Renders an exceptional service to Malta, or Makes an exceptional contribution to Malta Whose naturalisation is of exceptional interest to Malta. Updated by the Maltese Citizenship (Amendment) Bill 2025, the naturalisation model is built on a principled assessment of merit, with a focus on contributions in the public interest. Eligible Individuals May Include: Innovators and scientists advancing Malta’s knowledge economy; Cultural figures enhancing Malta’s global artistic and heritage presence; Humanitarian leaders or educators contributing to social cohesion; Professionals in public health, security, and national resilience; Distinguished figures in sport, diplomacy, or public policy. Philantrophists, Technologists and Entrepreueners Eligibility and Legal Process To be considered for citizenship by merit, the applicant must: Have applied for a Maltese residence permit; Hold title to a residential property in Malta; Have or will render exceptional services or exceptional contributions towards Malta or humanity In an application, an applicant may include a spouse/partner and unmarried children who are financially dependent on the applicant under the age of 29. Applicants considering Maltese citizenship by merit should view their contribution in light of Malta Vision 2050, the country’s long-term roadmap for sustainable economic and social development. The vision highlights strategic growth in sectors such as fintech, artificial intelligence, the blue and green economies, sustainable housing, advanced manufacturing, and clean energy, among others. By engaging with these future-facing industries, applicants position themselves not only as beneficiaries of Maltese citizenship, but as partners in driving innovation, sustainability, and resilience in line with Malta’s national priorities for the decades ahead. Application Process Residency Stage The applicant is to visit Malta and apply for a residence permit through Community Malta Agency. Once the application is approved, the applicant attends a biometrics appointment in Malta, and a residence card is issued. Submission of Proposal Letter A comprehensive proposal letter is then prepared and submitted via Community Malta Agency to the Evaluation Board. This document outlines the applicant’s background, proposed contribution, and post-naturalisation plans. Initial Due Diligence & Evaluation Board Assessment Before the proposal is referred to the Evaluation Board, Community Malta Agency conducts a four-tier initial due diligence check and collects the applicable administrative fees. If the Agency is satisfied, the proposal is forwarded to the Evaluation Board consisting of a chairman and two members, which may request further information or conduct interviews before issuing a recommendation. The proposal submitted by the applicant should also be endorsed by a designated competed body which the Agency may designate and is capable of determining whether an individual is recognised in a particular field as a leading  talent, or has demonstrated exceptional promise and is likely to become a leading talent or is of exceptional interest to the Republic of Malta. Letter of Approval In Principle Following a favourable recommendation from the Evaluation Board, the Minister may approve the proposal and issue a Letter of Approval in Principle. Investment & Submission of Citizenship Application Once the Letter of Approval in Principle has been obtained and the applicant has completed at least eight months of legal residence in Malta, a formal application for naturalisation on the basis of merit may be submitted. The application must be supported by proof of residence, ownership or lease of adequate residential property, evidence of the required contribution or service, endorsement by a designated competent body, language proficiency in English or Maltese, and demonstration of ties created with Malta. Letter of Approval & Oath of Allegiance Upon submission of the citizenship application, the Agency conducts a second round of due diligence and charges further administrative fees. Once the application is deemed complete, it is referred back to the Evaluation Board for review. If the Evaluation Board issues a favourable recommendation and the Minister approves the application, a Letter of Approval is issued. The applicant must then take the Oath of Allegiance within six months, extendable if necessary, having first signed a written undertaking to uphold ongoing obligations. Ongoing Compliance Monitoring Following naturalisation, the Agency monitors the applicant’s continued compliance with post-naturalisation commitments. In cases of serious non-compliance, the Minister retains the authority to revoke citizenship. Required Documents Applicants must provide the following: Birth certificate Valid Maltese residence permit Valid passport biometric page Proof of residence in Malta prior to submission Police conduct certificate(s) covering the last 10 years (for countries where the applicant resided at least 6 months) Proof of title to residential property in Malta Detailed Curriculum Vitae Proof of exceptional services rendered, including: A written report by a competent body confirming recognition or exceptional talent; or evidence of promise to become a leading talent in the relevant field Various Government Application Forms A Route Reserved for the Remarkable Citizenship by merit is Malta’s sovereign expression of appreciation for individuals whose exceptional accomplishments bring prestige, progress, and value to the country. Whether you're a Nobel laureate, Olympic athlete, groundbreaking researcher, or a cultural icon Malta offers a path to citizenship based on merit, excellence, and integrity. Our Global Citizenship Practice Chetcuti Cauchi's acclaimed Immigration and Global Citizenship law practice offers seamless and holistic legal and tax advisory services in relationship to the acquisition of Maltese Citizenship: advising you on your eligibility before filing a citizenship application; providing you with pre-immigration legal and tax advice; guiding you with the preparation and forwarding of the necessary documentation; vetting and preparing all supporting documentation for submission; assisting you with the purchase / rental of property in Malta including applications for AIP permits (foreigners need AIP permit to purchase property in Malta), reviews of your contract, liaising with the notary. Published: 29 May 2025 Author: Antoine Saliba Haig
Chetcuti Cauchi Advocates - June 25 2026
Real estate

Strategic Real Estate Management for Malta Family Offices

By Maria Chetcuti Cauchi Managing Real Estate through Family Office Structures in Malta This article explores how family offices in Malta strategically manage real estate assets through tailored structures such as trusts and holding companies. It covers key legal and tax considerations, governance practices, rental management, and commercial property strategy, with a focus on compliance, asset protection, and long-term value preservation within Malta’s favourable regulatory environment. Key Legal Issues: Use of Real Estate Structuring Vehicles Lease & Rental Oversight Succession & Tax Issues Regulatory Compliance Matters Management of Malta Real Estate through Family Offices Real estate continues to serve as a foundational asset class within family office portfolios, offering long-term value retention, income generation, and a vehicle for strategic diversification. In Malta, the management of real estate through family offices requires a highly coordinated approach that merges regulatory compliance, tax optimisation, and cross-border structuring with asset management and intergenerational governance. The jurisdiction’s stable legal environment, EU-aligned regulatory standards, and flexible structuring options make it particularly suited to the complexities of private wealth and multigenerational planning. Malta Property Legal and Regulatory Compliance Real estate investments managed through a family office must comply with Maltese statutory and regulatory requirements. This includes: Planning and Zoning Permits: Complying with the Planning Authority's development policies and zoning frameworks. Licensing and Approvals: Obtaining trade, commercial, or hospitality permits where relevant. Title Verification and Land Use Rights: Conducting due diligence on freehold/leasehold titles, easements, and restrictive covenants. In cross-border situations, legal advisors must also address conflicts of law, tax residency risks, and succession law compatibility. Maltese trusts and private foundations may be used to own real estate, enabling efficient inheritance planning and asset protection, especially when assets are held across multiple jurisdictions. Governance and Ownership Structures Optimal real estate structuring within a family office involves establishing governance models that ensure accountability, transparency, and long-term stewardship. Common structuring vehicles include: Private Trust Companies (PTCs): Allowing the family to retain control through a bespoke trustee entity, with board representation and fiduciary oversight. Real Estate Holding Companies: Offering liability shielding and tax efficiency, particularly when used in tandem with Malta’s participation exemption regime. Family offices should implement internal policies that define decision-making authority (e.g., acquisitions, divestments, leasing), reporting protocols, and mechanisms to involve and educate the next generation. Malta’s robust regulatory environment for corporate governance supports the creation of such frameworks. Asset and Rental Management Effective asset management is central to preserving real estate value. Key considerations include: Tenant Due Diligence: Rigorous vetting to ensure financial stability and compatibility with the intended use of the property. Lease Structuring: Drafting agreements that include provisions on rent escalation, default remedies, and compliance with Maltese rental legislation. Compliance and Oversight: Adhering to the Private Residential Leases Act, particularly for long-let and short-let arrangements. Regular maintenance inspections, particularly by licensed property managers or surveyors, are necessary to meet legal obligations and avoid structural degradation. Property Management Daily operational oversight is critical to value preservation. This includes: Condominium Management: Ensuring shared facilities are maintained in accordance with the Condominium Act. Tenant Relations: Addressing disputes, renewals, and terminations in line with lease covenants. Health & Safety Compliance: Meeting standards under Maltese and EU health and safety directives for occupied buildings. Professional third-party managers may be retained to ensure operational efficiency and audit-readiness. Maintenance Planning Preventive maintenance is vital to safeguarding capital value. Family offices should adopt: Scheduled Maintenance Plans Routine Building Inspections Issue Tracking Systems Prompt resolution of issues can reduce long-term repair costs and mitigate liability for tenant or third-party claims. Acquisitions and Disposals Transaction structuring must be underpinned by comprehensive legal and financial due diligence: Title and Planning Searches: Involving notaries and architects to identify potential encumbrances or compliance risks. Valuation Reports: Carried out by certified property valuers using internationally recognised methodologies (e.g., RICS standards). Negotiation Strategy: Leveraging market comparables and scenario modelling to support price and exit analysis. Strategic acquisitions should be aligned with family wealth goals—such as legacy building or philanthropy (e.g., converting historical properties for cultural use). Property Valuations Valuations serve both regulatory and strategic purposes. They inform acquisition pricing, internal asset monitoring, loan structuring, and succession planning. Valuers must account for: Location-Specific Demand Property Condition and Age Comparable Market Transactions Income Potential These metrics support data-driven decision-making and compliance with financial reporting standards. Commercial Property Strategy Family offices active in the commercial real estate market must consider: Market Research: Conducting feasibility studies and demand assessments to identify the optimal use case—retail, office, industrial, or hospitality. Tenant Mix and Lease Terms: Aligning leasing strategy with location profile, intended ROI, and exit planning. Sectoral Diversification: Expanding into logistics hubs, healthcare facilities, or student accommodation to hedge economic cycles. Lease contracts should be structured to include inflation-linked rent reviews, renewal flexibility, and ESG-compliant clauses, especially in sustainability-conscious sectors. Real estate management within a Maltese family office setting involves a multidisciplinary approach that spans structuring, legal compliance, tax efficiency, and active asset governance. The use of trusts, holding companies, and professionally managed portfolios enables families to meet both income and legacy objectives in a jurisdiction recognised for its legal certainty and cross-border compatibility.
Chetcuti Cauchi Advocates - June 25 2026
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