MALTA: An Introduction to Private Wealth Law

In 2024, Malta remained one of the most attractive European countries for private clients, with no indication that this will change in the coming years. Over the past few decades, Malta has systematically enhanced its legal and fiscal structures to appeal to international investors and expatriates. By aligning its policies with global best practices while retaining unique advantages, Malta has outpaced other jurisdictions that once held similar allure.

The origins of Malta's tax system date back to the 1940s, when the country was under British colonial governance, with the introduction of the Income Tax Act. Over the years, Malta has evolved from being perceived as an offshore tax haven to a reputable financial centre. Significant legislative changes, such as the Income Tax Act and the Income Tax Management Act of 1994, have modernised the tax framework. The 2007 tax reform introduced the participation exemption, further aligning Malta with international standards. Malta's tax system is designed to promote foreign investments and support the development of financial services. The stability of Malta's tax regime is a key feature, providing legal certainty and predictability for businesses and individuals alike.

Malta's Res Non-Dom Tax System

Malta's Res Non-Dom tax system offers significant benefits. Non-domiciled residents are only taxed on Maltese-source income and foreign income that is remitted to Malta. To qualify as a tax resident in Malta, an individual must either spend at least 183 days in Malta within a basis year or demonstrate an intention to reside in Malta. This intention can be evidenced by economic, personal, social, or other types of presence.

Malta's remittance basis regime applies a minimum annual tax of EUR5,000 on those claiming Maltese Res Non-Dom tax status, making the Mediterranean Island a front runner ahead of many European jurisdictions imposing minimum lump sum tax charges. Effective tax year 2025, Malta increased the tax-free thresholds across all brackets, providing annual savings of up to EUR675 per taxpayer.

Malta does not have a deemed domicile rule, allowing individuals to maintain their non-domiciled status indefinitely. Additionally, the Maltese tax system does not require individuals to be non-residents of Malta for any period before taking up tax residency. Malta does not impose inheritance or wealth tax. Stability is a key feature of Malta's tax regime.

A Crypto-Friendly Jurisdiction

Malta continues to position itself as a hub for crypto entrepreneurs, offering a competitive tax regime and a regulatory framework that encourages innovation in the digital asset space. The guidelines on distributed ledger technology (DLT) assets of the Commissioner for Revenue (CfR) provide much-needed clarity on the treatment of income from emerging crypto activities, including mining, staking, token generation events and the transfer of non-fungible tokens (NFTs). This guidance offers reassurance to crypto entrepreneurs dealing with the complex intersection of blockchain technology and tax compliance. Coupled with Malta’s EU membership and proactive stance on fintech, the jurisdiction remains an appealing base for founders, developers and investors building in Web3 and beyond.

Malta's Residency and Business Environment: Stability and Strategic Advantages

Maltese residency offers a culturally rich, Mediterranean quality of life within a historic European setting. With English and Maltese as official languages, the country provides a fully English-speaking environment that eases integration for international families and professionals. Malta’s healthcare and education systems are of exceptionally high quality, meeting and often exceeding international standards.

Malta’s official language is English, making integration seamless for international families. The country offers a balanced cost of living, providing affordable housing and services while maintaining a high quality of life. Additionally, Malta provides a gateway to Europe with full European Schengen residency rights, allowing for unrestricted movement and business expansion. Finally, Malta’s compact size and excellent air connectivity ensure that frequent travel for business or leisure is convenient, with minimal time lost in transit.

Malta stands out as a strategic choice for international living and tax residency, combining English-speaking accessibility, EU membership, a favourable tax regime and a Mediterranean lifestyle — advantages that set it apart from other comparable jurisdictions.

Even when Malta is not the destination, it can nonetheless serve as a tax-efficient European and Schengen residency base, offering the right to stay in several European destinations in any given year without the high lump-sum taxation and inheritance tax burden that tax residency in larger countries entails. As a base for a lifestyle spanning various continents, Malta ranks ahead of traditional destinations by allowing tax residency with an in-country physical presence of less than six months, and Malta takes all activities and ties with the country into account when considering one’s intention to establish residency in Malta.

Malta's Corporate Tax System

In addition to the favourable Res Non-Dom personal income tax system, Malta's corporate tax system continues to offer compelling benefits, including an effective 5% tax rate on corporate income through a full imputation system that allows shareholders to claim a tax refund on the tax paid by the company. This is particularly attractive compared to the higher corporate tax rates across Europe.

Additionally, Malta does not impose a withholding tax on outward dividends, making it an ideal location for profit repatriation. Various corporate vehicles can be effectively used for asset holding, leveraging the participation exemption regime and participation holding rules to provide exemption from tax on capital gains and dividends derived from qualifying participations, thereby further enhancing the attractiveness of Malta as a hub for international business operations.

Malta is also an attractive jurisdiction for family offices, offering a stable regulatory environment and favourable tax treatment for managing family wealth and investments.

Immigration Routes and Special Tax Regimes

Malta provides various immigration routes tailored to different needs, many of them accompanied by special tax regimes. These routes are open to both EU and non-EU citizens looking to establish tax residency in Malta. While holding a Maltese residency card does not automatically confer tax residency status, it is considered crucial when applying for a tax residence certificate in Malta, which is used to evidence one’s residence status to foreign institutions or tax authorities. Immigration routes include the following:

• startup visa – designed for innovative entrepreneurs, offering a supportive environment with access to incentives and resources;
• nomad residence permit – ideal for digital nomads and remote workers, allowing individuals to live in Malta while working remotely for foreign employers or clients;
• meeting the Highly Qualified Persons Rules – aimed at executives and highly qualified professionals in specific sectors such as finance, gaming, tech and science, offering reduced tax rates on employment income;
• investor residency – designed to attract high net worth individuals and their families, who contribute to the country's economic growth;
• permanent residence – long-term residency with access to various tax benefits, which is suitable for individuals seeking a more permanent presence in Malta; and
• citizenship for exceptional services by direct investment – a three-year residency route to citizenship, which can be shortened to one year with a higher direct investment.

These routes ensure that Malta can cater to the unique objectives and scenarios of a diverse range of individuals.

Conclusion

For individuals and businesses seeking a strategic base in Europe, Malta presents a well-structured and familiar alternative. By working with experienced lawyers and advisors, new residents and companies can confidently structure their affairs to benefit from Malta’s advantageous tax regime and legal framework. Malta offers financial and legal stability, providing an environment conducive to long-term wealth preservation and growth and thus ensuring peace of mind for those seeking a new jurisdiction.