Malta is all about history, long hot summers, being outdoors, stunning beaches and low-tax living. You could call it a tax haven and wouldn’t be too wrong. This is exactly why Malta is a popular destination for global expats and businesses.
Living in Malta – overview
Malta is tiny. It is made up of three islands which put together make it the smallest EU member state. It’s also one of the most densely populated countries in the world.
It features an amazingly beautiful coastline and stunning scenery. With its warm climate, numerous sandy beaches and three UNESCO World Heritage Sites (including the ancient Megalithic Temples), Malta offers the perfect home for those who wish to retire to the Mediterranean region.
Malta is quite popular with foreign retirees. The country ranks high on Expatra Global Retirement Index and is rightfully featured among the best countries to retire abroad.
Expats cite Malta’s beautiful climate, widespread English, relaxed lifestyle and proximity to the continent. Plus, of course, a beneficial tax regime.
Malta’s climate is splendid: the country boasts more than 3,100 hours of sunshine a year with an average temperature of 19C. Summers are hot and dry, autumns, warm and short, and winters, quite mild. Daytime temperatures rarely fall below 10ºC and summer temperatures are usually above 30ºC.
English is widely spoken on the Maltese Islands. Maltese and English are both official languages of the country, with Maltese being the national language as well. It is estimated that about 88 percent of the population can speak English.
British expats especially appreciate the use of three-pin plugs.
Travelling to and around Malta
There are direct flights to Malta from most European countries.
Malta is also well-connected to the Middle East and Africa. There are no direct flights from North America, however, layover flights are available. Flights are more frequent during the tourist season.
All international flights arrive at Malta International Airport. It’s the only airport in Malta and serves all of the Maltese Islands. The airport is located on the main island of Malta, between Luqa and Gudja.
There are various dedicated bus services that connect the airport to the main cities and towns of the island. Taxis and hire cars are also available from the arrivals terminal, which makes it generally easy to access the main locations of Malta.
Public transport in Malta is cheap and you can easily get around the island using the bus service. It is sometimes up to 3 times cheaper than a taxi and is pretty efficient.
The island of Gozo can be accessed from the Circewwa Harbour, Malta’s most northern point, via a regular ferry. The trip takes just half an hour and is a pleasure in itself.
You can also get to Italy by ferry. The Valletta to Salerno ferry crossing operates once a week and takes about 7 hours.
Residency in Malta for non-EU nationals
Malta joined the EU in 2003, meaning it’s part of the Schengen visa area. For EU nationals, this translates to easier travel and permanent residency.
But, for third-country citizens, the process is a bit harder. Since Brexit, the UK now counts as a third country, meaning it must follow the same rules as other non-EU countries.
Malta long-stay visa
If your country has a visa-free travel arrangement with the EU, you can come and stay in Malta for up to 90 days in a period of 180 days. To stay longer, you need to obtain a long-stay “D”visa.
If you are going to working Malta, you have to get a work permit.
You should apply to the nearest Malta Embassy or Consulate in your country of residence.
The required documents:
- Completed Visa Application Form
- Two recent passport-sized colour photos with white backgrounds in electronic format
- Your passport which should be valid for at least 3 months beyond the return date
- Confirmed Flight Booking or copy of actual flight ticket
- Proof of accommodation
- Health Insurance acceptable in the Schengen Area (minimum coverage has to be 30,000 Euros) and which should cover the period of validity of visa.
- Proof of civil status (marriage certificate, birth certificate of children, death certificate of spouse, etc).
- A visa cover letter stating the purpose of the visit to Malta and itinerary,
- Proof of sufficient financial means for the period of stay in Malta (minimum 48€/day for the period of stay)
Temporary residence permit
The “D” visa is valid for a year. If you wish to stay for longer, you need to apply for a temporary residence permit after your arrival.
This is done in the nearest office of the Identity Malta Agency. The temporary residence permit is valid for one to five years and you can renew it.
You must submit the following:
- proof that you have no criminal record
- Proof of adequate health insurance
- Proof of income
Malta permanent residency
To obtain permanent residency status in Malta, you must live in the country legally for five years. After this point, you can apply to the Maltese immigration board for permanent status.
You must have the following information handy when you apply:
- A copy of the passport used for your previous visa applications
- List of dates showing your entry and exit from Malta
- Proof of medical insurance
- Five years’ worth of tax declarations confirming you earned at least the national minimum wage or are self-sufficient
- Evidence of integration
- A covering letter explaining your history in the country
Evidence of integration comes from two sources. The first is the I Belong course, issued by the Maltese Directorate of Human Rights and Integration. It includes the history of Malta and other important information.
You must show 100 hours of attendance on the course and an overall pass mark of 75%.
You also have to complete a Level 2 MFQ Maltese language course. The pass mark for this is slightly lower: 65%. Finally, you must have proof of payment where relevant, although the I Belong course is free.
If your application is successful, you then have to get a few more documents. These are a CEA Form L, the application for residence, and Form ID 1A to register for an ID. This is the only cost involved, which is €137.50. However, you also have to pay a residence permit fee, which is around €24 a year.
Malta’s Retirement Programme
If you wish to retire to Malta you can receive special tax status through the Malta Retirement Programme, which will allow you to keep 85% of your pension income that you receive in Malta.
Applicants need to meet the following requirements:
- To purchase a property for a minimum of €275,000 or rent a property for a minimum of €9,600 per annum. If the property is situated in Gozo or in the South of Malta, the minimum purchase value is €220,000 and the minimum rental value is €8,750 per year
- To have adequate health insurance covering the EU territory
- To not spend more than 183 days in any one foreign jurisdiction in a year (i.e., to spend the majority of time in Malta)
- To satisfy a “fit and proper” test which assesses the applicants’ integrity, competence, and solvency
- Under this programme, you will pay a flat 15% rate of tax in respect of foreign income remitted to Malta. The minimum annual tax under this programme is €7,500, with an additional €500 per dependant. A one-time registration fee of €2,500 is levied by the Maltese Government
Applicants would need to apply for a residence card on the basis of their retirement in Malta.
You can only apply through an Authorised Registered Mandatory.
The Residence Scheme
If you are not receiving a pension, but have other sources of income instead, you can still retire to Malta under the Residence Scheme.
The Residence Scheme provides special tax status to EU/EEA/Swiss nationals wishing to gain residence in Malta under certain conditions:
- A governmental contribution of €68,000 with a property purchase from €300,000 in South Malta or Gozo or €350,000 in popular coastal resorts.
- Or a €98,000 donation, plus property rental of €10,000 in South Malta and Gozo, or €12,000 in the rest of the country.
- To be in receipt of stable and regular financial income
- To hold adequate health insurance covering the EU territory
- To pass the “fit and proper” test
- Not to spend more than 183 days outside Malta
The tax rate under this scheme is also 15% of foreign income remitted to Malta with the minimum annual tax of €15,000. A one-time registration fee amounting to €6,000 is levied by the Malta Government.
When you receive special tax status, you can proceed to apply for a residence card.
You can only submit your application through an Authorised Registered Mandatory.
You can find additional information and professional advice on our Golden Visa page.
Banking & bank accounts for expats living in Malta
Banking services are offered in Maltese and English.
There is at least one bank located in every village in Malta, with major banking centres in Sliema, Birkirkara, and Valletta.
The three main banks operating in Malta are HSBC, Bank Of Valletta (BOV) and APS Bank. There are branches of other foreign banks on the island like Lombard, Banif and so on.
If you wish to open a bank account in Malta, use the bank’s New Accounts department, which can be found in almost every branch.
You will generally have to provide details of your current home-based bank account so that your new bank can contact them and ask for a bank reference.
After that the bank has to do internationally required ‘know your client’ due diligence checks, and then your account will be operative.
Depending on your circumstances, it might also make sense to open an international bank account.
- Banking, Saving, & Investments Abroad Guide – all the information you need to understand whether you can benefit from having an international bank account and how to open one.
Malta generally offers expats favourable tax treatment. The country is trying to attract high-net-worth individuals with its Retirement Programme and Residence Scheme. Under these schemes, expats pay just a flat rate of 15% tax on any income they remit to Malta.
Income in Malta is taxable only to the extent that it is remitted to the country, where the top tax rate at the highest margin is 35%, while the capital and overseas capital gains can be remitted tax-free.
There is no minimum income level required, so if you have capital, it is possible to live entirely off capital, tax-free. It is important to seek professional advice to be sure that you stay tax compliant.
Conveniently for retirees and expats, Malta has neither wealth nor inheritance taxes, nor annual property taxes.
When you de-register in your home country as a tax resident and become an expat, advice from an international financial advisor can sometimes make a difference to your financial affairs.
- The Expat Guide To UK Pensions Abroad – understand your pension options and the ways you can maximise your retirement income when living abroad.
Cost of living in Malta
In general, it is less expensive to live in Malta compared to large cities in the north of Europe, North America or the UK. The cost of living in Malta is significantly lower than in European capitals like London or Berlin, but so are the average incomes.
So if you are an expat in Malta drawing your income from abroad, that can work well for you.
As usual, rental prices differ from area to area. A one-bedroom apartment in a new complex in a highly sought-after area of St. Julian’s can cost you as high as €1,600 per month.
However, apartments in regular complexes aren’t too expensive, if you don’t expect anything extremely luxurious of course. There is a lot on offer for even lower prices if you look outside city centres or on Gozo.
The average bill for water, electricity, gas and internet can be anything between €150 and €200 depending on your tariff and usage.
Groceries and household goods
The cheapest food shopping comes from buying the local produce in the supermarkets or from roadside markets or farmers’ markets.
Imported brands are slightly more expensive, as are the costs in the smaller grocery stores. Household and personal care items are more expensive due to the fact that they are all imported.
Eating out and entertainment
Eating out in Malta is not too expensive. Takeaways like pastizzi are very cheap, as is most snacking at regular, local cafes.
Entertainment in Malta is not expensive on the whole. If you are a lover of historic sites, which Malta has in abundance, it is worth getting a Heritage Malta Multipass.
Private heritage organisation Fondajjoni Wirt Artna runs the saluting battery, Fort Rinella, the War Rooms and other sites of interest, and offers membership, which allows you to visit the sites regularly for a much cheaper price than the one-off entrance fee.
Cinema tickets are cheap. Theatre tickets or entry to various shows can be more expensive, and the choice is not always great.
Finally, Malta is of course blessed with countless beaches where you can spend your time at no cost at all.
Property & housing in Malta
As usual, when you move to a new country, common advice is to rent a property for at least 6 months, get to know the country, the area, the property market and how things work in your new country of residence.
Renting in Malta is a simple process. Foreigners can rent a property with no restrictions.
You will find that most properties in Malta are rented fully furnished. Don’t be surprised to see your rented place coming equipped with dishes, cutlery, cookware and even rubbish bins. TVs and electronics might also be included.
Short-term rentals (6 months or less) are usually more expensive than long-term rentals (6 months or more).
When you have found a property you like, make sure that your financial obligations, landlord’s financial responsibilities and any future rent increase are clearly stated in the contract.
A very useful tip: utility rates in Malta depend on how many residents/non-residents are registered in the property and the registration type of the property.
Ask your landlord to verify the registration type of your property in writing. You don’t want to end up living in a converted office that has lower standards and higher utility rates.
You can also register the utilities of the property in your name if possible. To register utilities in your name you must have a Maltese ID card.
Once you’ve been through this, you will find how much more you understand about the local property market and how things work when it comes to housing. You will be more confident when the time comes to buy your own dream house.
- Buying A Property In Malta – everything you need to now to safely buy your dream house in Malta.
Schools and education
There are state, church and independent schools in Malta. State schools are free for all the residents. The core curriculum is taught in Maltese except for English lessons.
Church schools are run by the catholic church and do not charge fees either. However, parents do contribute donations and pay for school supplies.
Independent schools include various private and international schools. The biggest advantage is that private schools teach in English.
There are state-run and private universities in Malta. State universities are free for EU students and citizens of Malta. Non-EU students have to pay tuition fees.
Private universities charge fees and can be quite expensive.
According to the UniRank, the top state university is the University of Malta, while the American University of Malta is the best-ranking private one.
Healthcare in Malta
Malta is quite proud of its healthcare system. The quality of healthcare is generally good, and the cost of insurance is much less than in many other parts of the world.
EU citizens staying in Malta for 3 months or less can use the European Health Insurance Card (EHIC) and receive medical attention from public clinics and hospitals at no cost.
Non-EU citizens must purchase insurance that covers medical treatments overseas and ensures that it also covers medical evacuations, as some policies do not.
Private healthcare is popular with many Maltese citizens even though they qualify for free state healthcare. Those who can pay for private treatment do so because, as with anywhere else in the world, the private hospitals in Malta offer a better range of services.
Malta has one main public hospital, Mater Dei, located in Msida. It is a general teaching hospital offering hospital and specialist services.
There are eight public health centres in Malta and Gozo, which provide general practitioner and nursing services, as well as specialised health services such as immunisation, speech and language therapy, antenatal and postnatal clinics, and wound clinics.
There are also a number of private hospitals and clinics, which offer services by general practitioners, specialist doctors and dentists.
UK citizens and an S1 (E121) form
If you reside in Malta and are in receipt of a state UK pension, you may be entitled to state healthcare paid for by the UK. For this, you need to get an S1 (E121) form before moving to Malta.
You can apply for your S1 form via the International Pension Centre on 0191 218 7777.
When you arrive in Malta, register your S1 form with the Maltese Ministry of Health Entitlement Unit, which will issue you with a certificate of entitlement. You will need to show this form when seeking treatment in public health facilities.
Private health insurance and pay-as-you-go
If you prefer to receive private treatment, as many expats do, you have to think about buying health insurance or using the pay-as-you-go option (self-funding).
Self-funding, i.e. paying as you go, is only worth considering if you are absolutely sure that the risk of something bad happening to your health is minimal. In such cases, self-funding is a good way to avoid paying for insurer profit, insurance taxes and administrative costs.
Another solution may be to buy health insurance and have high excesses to be insured against the most expensive misfortunes only and pay out of your own pocket for minor treatments.
In this case, your monthly insurance premiums can be quite low and you will have peace of mind knowing that you are covered in case of a critical emergency.
Taking out an international health policy has its advantages: it covers you in as many countries as you wish to travel to, so you are free to travel without taking out new health cover for every country you want to visit.
- How To Access Best Quality Affordable Healthcare When You Retire Abroad – a detailed guide to essential paperwork needed to access healthcare abroad, health insurance, tips on saving money on private health plans and much more.
Benefits of setting up a business in Malta
Setting up a business in Malta can have many benefits: Malta’s taxation policies guarantee up to 6/7 tax refunds to foreign shareholders (both residents and non-residents), full tax exemptions for holding companies and no withholding taxes or stamp duties in case of profit repatriation.
Company formation and maintenance costs are pretty low, so no wonder that the number of foreign investors setting up companies in Malta is growing every year.
Setting up a business in Malta is generally straightforward and relatively fast.
For opening a private Limited Liability Company, €1,165 of share capital deposit is required. For the public company, the minimum share capital is approximately €46,600.
Both types of companies must have at least two shareholders.
Malta rivals Cyprus as one of the best low-tax destinations for entrepreneurs and businesses inside the EU. These two sweet Mediterranean islands are competing hard with each other in a bid to attract more wealthy individuals and companies to their sun-lit shores.
In such a case, you would imagine that Malta’s corporate tax would be very low. Yet, it is not!
Companies registered in Malta are considered to be resident and domiciled in Malta, thus they are subject to tax on their worldwide income at 35%.
At first glance, Malta’s corporate tax rate of 35% seems to be extortionate compared to Cyprus’ 12.5%.
However, it’s not that straightforward. Various deductions and refunds are available. Here lies the secret of Malta’s attractiveness for investors – in certain cases, the refunds bring investors’ total tax liability to a mere 5% or sometimes even zero.
Shareholders of a Maltese company receive dividends free of Maltese tax. Upon the receipt of dividends, the shareholders can claim a refund of all or part of the Malta tax paid by the company on the income distributed as dividends.
It is possible for a shareholder of a Maltese company to claim a 6/7ths of the tax paid by the company in respect of trading income, and 5/7ths of the tax paid by the company on interest and royalties. The refund is reduced to 2/3rds where the distributing company claims double taxation relief.
When they meet certain criteria, holding companies’ income is totally exempt from tax.
Both resident and non-resident shareholders are entitled to claim tax refunds
As an example, a Maltese company declares profits of €100,000 on which it pays €35,000 of corporation tax, and distributes the rest €65,000 as dividends. The shareholders then claim a tax refund of 6/7th of the €35,000 tax paid, which amounts to €30,000 being refunded. Total tax paid is €5,000 (5%).
Tax refunds are Malta tax-exempt and payable within a deadline of a few weeks.
Holding companies and participating exemption
Malta is fast becoming one of the best jurisdictions for forming a holding company. There is a reason why a growing number of multinational groups opt to set up their holding company in Malta. Malta offers participating exemption which guarantees zero tax on dividends from such holdings and gains arising on the disposal of such holdings.
For a Maltese resident company to hold a “participating holding” in a company incorporated abroad, it must hold at least 10% of the equity shares in the non-resident company. If this condition is not met, there is a number of alternative tests to define whether the company is eligible for participating exemption.
The holding companies that satisfy all the conditions can enjoy 100% income tax relief both on the dividends derived from a participating holding and on any capital gains earned on the sale of shares.
For non-domiciled residents of Malta income is taxable only to the extent that it is remitted to the country. The top tax rate at the highest margin is 35%, while capital and overseas capital gains can be remitted tax-free. There is no minimum income level required, so if you have capital, there is a possibility to live entirely off capital tax-free.
It is important to seek professional advice to be sure that you stay tax compliant.
In Malta the taxation of an individual’s income remitted into the country is progressive, the rates are from 0% to 35% depending on the income.
You can be taxed as a single person, a married couple or a parent. Depending on your category there is a tax allowance of €9,100, €12,700 and €10,500 respectively.
Above the tax allowance, the rates are 15%,25% and 35%.
Conveniently for expats, Malta has neither wealth nor inheritance taxes, nor annual property taxes.
Living in Malta – summary
On the whole, Malta is a very beautiful place to retire to and has a lot to offer those who choose it as their home.
It has a lovely Mediterranean climate, favourable tax regime, no language barrier, good travel links, a moderate cost of living, splendid beaches and historic sites and very low crime rates. It is also quite easy to acquire property in Malta.
The island offers a chance for a quiet and tranquil life, and if that’s what you seek, it can be an ideal nation to consider.
You might find useful:
- The Best Places To Live In Malta For Expats – an overview of the most popular expat locations in Malta that can help you start your research into where in Malta you want to live;
- A Complete Guide To Buying A Property In Malta – understand the process and how to protect yourself when buying a property in Malta;
- Visit our Malta Country Guides page for more guides and information on Malta.