Move to Malta for Tax Savings: Complete Guide

1. Why Malta?

Malta is a small but highly attractive EU member state for tax planning, offering a unique combination of low effective corporate tax rates, a non-dom remittance basis for personal tax, and English as an official language. Its well-established financial services sector and regulatory framework make it a serious jurisdiction for international business structuring.

Key advantages:

• 5% effective corporate tax via the imputation and refund system
• Non-dom remittance basis — foreign income not remitted to Malta is not taxed
• Global Residence Programme offering 15% flat rate on remitted foreign income
• 0% tax on foreign-sourced capital gains (even if remitted)
• EU membership — access to EU directives and freedom of movement
• English-speaking (official language alongside Maltese)
• Mediterranean climate with excellent quality of life
• Strong regulatory framework for financial services, gaming, and blockchain

2. Non-Dom Remittance Basis

Individuals who are resident in Malta but not domiciled in Malta are taxed on the remittance basis. This means:

• Maltese-sourced income: taxed at normal progressive rates (0-35%)
• Foreign-sourced income remitted to Malta: taxed at progressive rates (0-35%)
• Foreign-sourced income NOT remitted to Malta: not taxed
• Foreign-sourced capital gains: not taxed, even if remitted

This is a critical distinction: while foreign income is only taxed when remitted, foreign capital gains are never taxed regardless of whether they are brought into Malta. This makes Malta particularly attractive for investors and those with significant capital gains.

There is a minimum tax obligation of €5,000 per year for non-dom residents who remit income to Malta. If your Maltese and remitted foreign income does not generate at least €5,000 in tax, you must pay the difference.

3. Global Residence Programme (15% Flat Rate)

The Global Residence Programme (GRP) is available to EU/EEA/Swiss nationals and offers:

• 15% flat tax rate on foreign income remitted to Malta
• Minimum tax of €15,000 per year (reduced to €7,500 for Gozo residents)
• 0% on foreign-sourced capital gains (even if remitted)
• 0% on foreign income not remitted to Malta

Requirements:

• Purchase property worth at least €275,000 (€220,000 in Gozo or South Malta) OR rent property for at least €9,600/year (€8,750 in Gozo/South Malta)
• Not benefit from any other special tax programme in Malta
• Be in possession of a valid travel document
• Have health insurance covering all risks in Malta
• Be a fit and proper person

For non-EU nationals, the Malta Residence and Visa Programme (MRVP) offers similar benefits with different property requirements and a government contribution.

4. Nomad Residence Permit

Malta introduced the Nomad Residence Permit in 2021 for remote workers employed by or contracting with companies outside Malta. Key features:

• Valid for 1 year (renewable for up to 3 years)
• Minimum monthly income of €2,700 (or €32,400/year)
• Must be employed by or contracted with a company registered outside Malta
• Income is not taxed in Malta (subject to conditions) — you remain taxed in the employer’s country or under a tax treaty
• Available to both EU and non-EU nationals

5. Company + Holding Structure (5% Effective Tax)

Malta’s most distinctive tax feature is its imputation and refund system, which creates an effective corporate tax rate of just 5%:

1. A Malta trading company earns profits and pays 35% corporation tax
2. The company distributes dividends to its parent holding company (typically also a Malta company)
3. The shareholders of the holding company claim a 6/7ths refund of the tax paid by the trading company
4. Net result: 35% - 30% (6/7ths refund) = 5% effective tax rate

For passive income (royalties, interest, passive dividends), a 5/7ths refund applies, resulting in a 10% effective rate. The refund is typically processed within 14 business days of the claim.

This system has been approved by the European Commission and is not considered state aid, as it is part of Malta’s full imputation system (the tax refund corresponds to the tax already paid by the company).

6. Cost of Living

Malta is affordable by Western European standards, though housing costs have increased significantly in recent years, particularly in popular areas like Sliema, St. Julian’s, and Valletta.

7. Step-by-Step Process

1. Decide on your structure: Non-dom remittance basis, GRP (15% flat rate), or Nomad Residence Permit
2. Secure accommodation in Malta (rental or purchase, meeting minimum value requirements if GRP)
3. Incorporate your Malta companies (trading company + holding company if using the 5% structure). Timeframe: approximately 5-10 business days.
4. Apply for your residence: EU citizens register at Identity Malta. Non-EU citizens apply for a residence permit through the relevant programme.
5. Obtain a Malta tax number from the Inland Revenue Department
6. Register for GRP (if applicable) with the Commissioner for Revenue
7. Open Malta bank accounts (Bank of Valletta, HSBC Malta, or international alternatives like Revolut Business)
8. Obtain health insurance covering all risks in Malta

8. Who It’s Best For

• Business owners who can benefit from the 5% effective corporate rate
• Investors with capital gains — foreign capital gains are never taxed in Malta, even if remitted
• iGaming companies — Malta is the EU’s leading gaming jurisdiction (MGA licence)
• Financial services firms seeking an EU-regulated jurisdiction
• UK residents seeking an English-speaking EU alternative post-Brexit
• Those from Ireland, the UK, or France seeking a warmer, lower-tax EU jurisdiction