Why wealthy families are rushing for Maltese passports

While plenty of citizenship and residency by investment options are available, recently, Malta has started to feature extensively as the country of choice for wealthy families. Khaleej Times sat down with Oliver Said from Integritas Endevio, a leading high-net-worth advisory firm to find out more.

Why is Malta in vogue?

Historically Malta citizenship by investment has always been the country of choice for the wealthiest families who wanted to have the best. Think of it as the Rolls Royce or Ferrari of citizenships.

The revised permanent residency option has also made it further accessible for those families with a lower budget.

But what’s led to the increase in demand?

A few years ago, several options were available for people who wanted to secure citizenship in a European Union country. Many of these options are no longer available. Cyprus has shut its programme, Bulgaria never relaunched, and Montenegro’s accession to the EU has been delayed.

Portugal’s golden visa is actually a renewable residency. The requirements to convert to citizenship that includes annual minimum stays coupled with fluent knowledge of the Portuguese language, make it an impractical solution for most applicants.

As a result, many applicants have come to realise that their only viable option is Malta. Since the country limits citizenship by investment to only 400 applications per year, demand is exceeding supply, hence the rush.

Last week, Fitch reaffirmed Malta’s credit rating at A+, which is one rating higher than Japan. How is this possible for a small country?

As a result of its economic diversification, Malta’s growth has consistently outperformed most of its European peers. In fact, Malta was running a budget surplus before the exceptional measures taken by the government to contain the advsre impact of Covid-19.

To give some perspective, Malta’s projected GDP per capita of $ 43,200 on a PPP basis for 2021 is the same as the UK.

What is the impact of taxation on new citizens and residents?

Malta distinguishes between residency and domicile in a way similar to the UK.

Once a person becomes a citizen or permanent resident, it does not automatically make them domiciled. As a result, they benefit from an advantageous tax regime. Even if repatriated to Malta, worldwide capital gains are not taxable. Global income continues to be not taxable as long as such income is retained overseas. There are also no inheritance, gift, or wealth taxes.

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