The Malta Residence Program (TRP) is an interesting residence program offering tax residency in Malta.
It’s also known under the name Malta Residency Program for EU nationals.
Overview of the Malta TRP (The Residence Program)
- The Malta Residence Program (TRP) offers EU/EEA/Swiss nationals tax residency without minimal physical presence in Malta
- Fixed 15% tax rate on remitted income from abroad
- Minimum annual tax of €15.000
- Tax exemption for foreign capital gains even if remitted back to Malta
- List of requirements and costs don’t make it suitable for everyone
What is the Malta Residence Program
The Malta Residence Program (TRP) or Tax Residence Program allows EU/EEA/Swiss nationals to obtain a temporary residence permit in Malta while enjoying tax benefits.
The Tax Residence Program is the counterparty of the Global Residence Program (GRP) which is only open to non-EU/EEA/Swiss nationals.
Eligibility for the Residence Program TRP
In order to apply for the Malta Residence Program (TRP) you need to meet certain criteria:
- Be an EU/EEA/Swiss national (excluding Maltese citizens)
- Be financially independent
- Valid health insurance with coverage in Malta
- Clean criminal record
- Not reside in any other country for more than 183 days per year
Apart from these requirements, you also need to meet the housing condition.
For this you have two options:
- Purchase: qualifying property with a value of at least €220.000 (in Gozo or the south of Malta) or €275.000 (rest of Malta);
- Rent: minimum annual rent of €8.750 (in Gozo or the south of Malta) or €9.600 (rest of Malta).
Tax Treatment under the TRP
Regarding taxes there are three main benefits under the TRP.
Minimal Physical Presence
The first interesting point about the TRP is that you don’t need to spend any minimum amount of time in Malta to qualify as a Maltese tax resident.
This differs from the standard rules whereby you need to spend 183 days in Malta to qualify as a Maltese tax resident.
Flat 15% Tax Rate
Furthermore, any foreign remitted income is subject to a flat tax rate of 15%. Any income you keep abroad remains tax free.
If you know the normal tax rates are progressive and go up to 35% you see why this is interesting. These tax rates still apply to local Maltese income.
Nevertheless, there is a minimum tax of €15.000 per year.
Tax Free Foreign Capital Gains
For foreign capital gains, the deal gets even better.
Foreign capital gains are fully exempt from taxes, even if you bring them back into Malta.
Great if you’re about to make an exit or liquidate some of your investments.
Malta Residence Program Costs
The application fee for the Malta Residence Program is €5.500 (for Gozo and the south of Malta) or €6.000 (others).
Apart from the application fee you also need to budget for the service fees of your authorized representative (see below). The fees will depend on your situation but you need to account for a few thousand euros.
Application Process & Timeline
Let’s have a closer look at the application process and timeline.
Appoint Authorized Mandatory
The first step is to appoint an Authorized Mandatory to help you with your application.
All applications for the Malta Residence Program (TRP) need to go through an Authorized Mandatory. You can’t file the application on your own.
You can find a list of recognized Authorized Registered Mandatories on the website of the Commissioner for Revenue.
Prepare Application
Together with your Authorized Mandatory (ARM) you will prepare your application.
You will need the following documents:
- Completed application form
- Certified passport copy
- Birth certificate
- Criminal record extract of previous country of residence
- Health insurance policy
- Proof of financial resources
- Housing documentation: proof of ownership or rental agreement meeting the minimum thresholds
- Power of attorney ARM
If any of the aforementioned documents are not in English you need to add an official translation.
How long it takes to prepare your application will mostly depend on how quick you can provide the requested documentation. On average we see that this takes 2-4 weeks.
File Application & Pay Fee
If your application file is complete your representative can submit it with the Commissioner for Revenue.
Upon submitting your application, the application fee of €5.500-6.000 becomes due.
The Commissioner for Revenue will send you an Acknowledgement Letter confirming your application.
Due Diligence
Now the Maltese authorities will start their due diligence and review your application.
If you were transparent and shared all necessary information with your Authorized Mandatory, this shouldn’t cause any issues.
Nevertheless, you can expect the whole process to take 2-3 months.
Letter of Intent (LOI)
If the authorities approve your application they will issue you an LOI confirming the principal approval.
Now you need to complete the final steps of your application. The most important step you still need to take is to prepay the first annual minimum tax of €15.000.
The time needed to complete the final conditions of the LOI will differ but it mostly takes another 2-4 weeks again.
TRP Certificate
After completing the final outstanding points of your LOI, you’ll receive a certificate confirming you qualify for The Residence Program. This mostly takes just one to two weeks.
In addition to this confirmation, you can also request a tax certificate confirming your Maltese tax residency.
You should also not forget to pick up your residency permit / ID.
Obligations to Maintain the Residence
In order to ensure you keep qualifying for the TRP you need to file your annual tax return in time and pay the minimum tax.
Moreover, you need to make sure you keep meeting the eligibility conditions (e.g. qualifying property/rent).
Yet, there is no minimum stay requirement in Malta which offers you the flexibility you want as a digital nomad.
Comparison between the TRP and Other Residence Regimes in Malta
We already mentioned that the TRP is the EU counterpart of the Global Residence Program. So, if you are a non-EU/EEA/Swiss national you have to look at the GRP.
Yet, both programs basically offer the same benefits and have the same conditions. The difference is the target group.
If you’re a EU/EEA/Swiss national looking for an alternative for The Residence Program you can just move to Malta based on the freedom of movement.
In this case, you can still benefit from the Maltese non-dom regime which also offers tax benefits.
Strategic Considerations about the TRP
Let’s compare the pro’s and con’s of the Malta Residence Program (TRP).
Pro’s:
- No formal minimum stay requirement for tax residency
- Flat tax rate of 15% on remitted foreign income
- Only tax on remitted income
- No tax on foreign capital gains even if remitted back to Malta
Con’s:
- High annual rent / purchase price to qualify which is not interesting if you only plan to spend minimal time in the country
- Minimum tax of €15.000 per year so only interesting for people with a higher income
- High application and maintenance cost
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