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High Net-Worth Individuals Programme

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Introduced by virtue of Legal Notice 400 and 403 of 2011, the HNWI Rules are aimed at high net-worth individuals who are resident but not domiciled in Malta. Applicants who have been granted the HNWI status are taxable in Malta at the rate of 15% on foreign source income that is remitted to Malta while also having the possibility of claiming double tax relief.
As in the case with all residence cards granted by the Government of Malta, successful applicants of the HNWI Programme are able to travel across all Member States of the EU without the requirement obtaining a visa.

Eligibility

 

1. Qualifying Property
The HNWI Rules require applicants and their dependants to reside in Malta and to have a fixed address. The property, which can either be purchased or lease, will be considered as a ‘Qualifying Property’ if:
i. It is purchased for a consideration of not less than €400,000; OR
ii. It is leased for an annual lease payment of not less than €20,000.

2. Health Insurance
The HNWI Rules require applicants and their dependants to be in possession of health insurance policy covering all possible risk and hazard across the European Union (EU). The cover is expected to be similar to the standard cover of a Maltese national and must be procured by either a company licensed by the Malta Financial Services Authority to provide insurance services, or by an international health insurance company of repute.

3. Fit and Proper Test
The HNWI Rules impose an obligation on the Commissioner of Inland Revenue to conduct a due diligence exercise on the applicant and his or her dependants. The fit and proper test is required to establish the reputational standing of an individual and, in particular, to verify whether there has been any involvement in criminal activity.

4. Non-Domiciled Status
As mentioned earlier on, applicants interested in the HNWI status must not be domiciled in Malta and should not intend to establish their domicile in Malta within 5 years from the date of the application. This condition is satisfied by means of a written declaration signed by the applicant during the application stage.

5. Tax Residence
The HNWI is considered to be a tax programme on the basis that it is regulated by the Income Tax Act. Accordingly, successful applicants are required to limit their presence in any other jurisdiction to 183 days, in excess of which, the benefits and rights of the HNWI Rules would be forfeited.

Additional Conditions solely to non-EU, European Economic Area and Swiss Nationals
1. Applicants are required to enter into a qualifying contract with the Government of Malta in the form prescribed by the Minister of Finance if he or she is or intends to become a long-term resident in Malta.
2. Applicants are required to deliver to the Government of Malta the sum of €500,000 and an additional €150,000 for every dependant, which sums will be held under the title of gratuitous voluntary deposit.
NB: If the applicant intends to become a long-term resident of Malta prior to the expiration of 4 years from the date on which her or she has applied in terms of the HNWI Rules, then the applicant will automatically forfeit all rights over the deposit.
3. Applicants are required to be fluent in either Maltese or English.

Tax Treatment

 

Upon successful completion of the application, the applicant is taxed at the rate of 15% on any foreign source income that is remitted to Malta. A claim for double taxation may also be made provided the minimum payable tax amount has been paid, that is to say €25,000 for the main applicant and an additional €5,000 for each dependant.
Any other income that is not foreign source income is charged in Malta at the rate of 35%.

Administrative Fees

 

An application made in terms of the HNWI Rules may only be submitted to the Commissioner of Inland Revenue through the services of a person that qualifies as an Authorised Registered Mandatory. A non-refundable fee of €6,000 applies for every application submitted.

If you are interested in finding out more about this programme, get in touch for a no obligation consultation. Contact us now.