Malta: A Tax Residence Destination & a Non-Dom Base for International Living

This article was published in Taxation Magazine, 24 March 2025.

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The  Origin and Evolution of the Res, Non-Dom tax system in Malta: The Res, Non-Dom tax rules of Malta are deeply intertwined with the British tax system, from which it originates. The introduction of Malta’s Income Tax Act in the 1940s under British colonial governance established the foundation for Malta's personal tax framework, which has since imposed taxation on non-domiciled resident individuals, known as Res, Non-Doms. This historical connection ensures that UK residents will find Malta's tax environment both familiar and beneficial advantageous option. Malta imposes tax on Res, Non-Doms only on Maltese-source income and foreign income that is remitted to Malta.  

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Malta's journey to becoming a premier residency destination is rooted in its strategic efforts to create a competitive and favourable tax environment. 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.

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. In contrast to the UK Res, Non-Dom system, in Malta, unremitted foreign income and capital gains, whether remitted or not, are not subject to taxation, providing substantial tax relief for Maltese non-domiciled residents.

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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.

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Malta's remittance basis regime applies a minimum annual tax of €5,000 on those claiming Maltese Res, Non-Dom tax status. This is significantly lower compared to the charges imposed by the UK, as well as the minimum lump sum taxes payable by Swiss and Italian residents, making the Mediterranean Island a frontrunner ahead of many European jurisdictions.

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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.

Malta’s Personal Tax System compared

Malta is known for efficient residency programmes offering legal certainty, stability and the ability to plan ahead, unlike more bureaucratic Mediterranean alternatives. HNW Individuals resident in Malta enjoy a remittance basis of taxation, residency rights and a tax resident status in Malta without the need for negotiations with tax authorities or any high minimum taxes required by lump sum tax regimes of Switzerland and Italy.  Malta does not have inheritance taxes or wealth taxes, unlike Spain that imposes high personal income tax rates and wealth tax on its residents.

Destination Malta compared to conventional relocation destinations

Maltese residency offers a culturally rich, Mediterranean quality of life within a historic European setting. Compared to Switzerland, Italy, Spain, Portugal and Dubai, Malta is a fully English-speaking environment with both English and Maltese as official languages. Family safety is doubly underscored. Healthcare and education are of remarkably high quality even by international standards and are free after obtaining Maltese citizenship by investment, a legal one-year path that is unique to Malta within Europe.

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Malta’s official language is English, making integration seamless for international families, unlike Italy and Spain, where English proficiency is often limited outside major cities. Compared to Switzerland’s and Dubai’s high cost of living, Malta offers a balanced cost of living, with more 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 strong air connectivity make it easier to travel frequently for business, unlike Switzerland’s and Italy’s large, spread-out regions, where travel time can be a challenge.

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

Base Malta compared to traditional hubs for international living.

Where Malta is NOT the destination, Malta can nonetheless prove to be the tax-efficient European and Schengen residency base that offers the right to stay in several European destinations in any given year: without the high lump-sum taxation, and the inheritance and tax burdens that tax residency entails in larger countries.

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As a base for a lifestyle spanning various continents, Malta comes ahead of traditional destinations by allowing tax residency with less than 6 months of in-country physical presence, by taking into consideration all activities and ties with Malta in considering one’s intention to establish residency in Malta.

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Combining Mediterranean charm, global mobility, tax efficiency, and business-friendly policies, Malta positions itself as a practical alternative for those seeking both a tax residency destination and abase for international living.

Malta's attractive Corporate Tax System

In addition to the favourable personal income tax system for Res, Non-Doms, Malta's corporate tax system offers compelling benefits and opportunities. One of the standout features is the effective 5% tax rate on corporate income, achieved 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 in the UK and across Europe.

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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 providing an exemption from tax on capital gains as dividends derived from qualifying participations, further enhancing the attractiveness of Malta as a hub for international business operations.

Immigration Routes and Special Tax Regimes

Malta provides various immigration routes tailored to different needs, each accompanied by special tax regimes. These routes are open to both EU and Non-EU citizens looking to establish Res, Non-Dom status in Malta. Whilst holding a Maltese residency card does not automatically confer Res, Non-Dom status, it is considered a crucial document when applying for a Tax Residence Certificate in Malta, a document used to evidence one’s residence status to foreign institutions or tax authorities.

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• Startup Visa: This route is designed for innovative entrepreneurs looking to establish their business in Malta. It offers a supportive environment for startups, with access to various incentives and resources to help businesses thrive.
• ‍Nomad Residence Permit:  Ideal for digital nomads and remote workers, this permit provides a temporary yet flexible immigration option. It allows individuals to live in Malta while working remotely for foreign employers or clients, enjoying the Mediterranean lifestyle and favorable tax regime.
• ‍Highly Qualified Persons Rules: This route targets executives and other highly qualified professionals in specific sectors such as finance, gaming, technology and science. It offers reduced tax rates on the employment income, making it an attractive option for those looking to advance their careers in Malta.
• ‍Investor Residency: This route provides residency to individuals who make significant investments in Malta's economy. It is designed to attract high-net-worth individuals and their families, who can contribute to the country's economic growth, offering them various benefits in return.
• ‍Permanent Residence: This option offers long-term residency with access to various tax benefits. It is suitable for individuals looking to establish a more permanent presence in Malta, enjoying the stability and opportunities the country has to offer.
• ‍Citizenship for Exceptional Services by Direct Investment: a three-year residency route to citizenship that can be shortened to one year by making a higher direct investment.

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The various routes ensure that Malta can cater to a diverse range of individuals and their unique objectives and scenarios.

International Trusts and Family Trusts in Malta

Malta’s Trusts and Trustees Act of 2004 has a robust history rooted in both civil and common law traditions based on the Jersey law, providing a familiar, flexible and secure environment for wealth management and succession planning.  International and family trusts in Malta provide a legally sound vehicle to protect assets, ensure confidentiality, and optimize tax planning.  Malta’s favorable tax treatment allows certain trusts to benefit from tax neutrality, meaning income and gains derived from assets situated outside Malta and not remitted to the island may be exempt from Maltese tax.

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Malta’s trusts also offer flexibility in terms of asset management and distribution, catering to the specific needs of high-net-worth individuals and their families. This includes multi-generational wealth preservation, philanthropic endeavours, and tailored succession strategies. Additionally, Malta's rigorous regulatory framework, coupled with a highly skilled financial services sector, ensures both compliance and peace of mind for settlors and beneficiaries alike. 

Malta Family Office Structures

Malta has become a leading jurisdiction for the establishment of family offices, offering a combination of regulatory stability, tax efficiency and tailored financial services providing secure environment for managing and preserving wealth across generations.  The country’s strategic geographic location, coupled with a multilingual and highly skilled workforce, enhances its appeal as a hub for international wealth management.

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Family offices in Malta benefit from a comprehensive range of services, including investment management, estate planning, philanthropy, and succession planning. The Maltese regulatory framework allows for the creation of both single-family and multi-family offices, providing flexibility to cater to the unique needs of each family. Additionally, Malta’s favourable tax regime, including access to a broad network of double taxation treaties, enhances the financial efficiency of family offices, while Malta’s flexible legal environment supports bespoke solutions tailored to individual family goals.

Malta's Investor Route to Citizenship

Malta’s Citizenship by Naturalisation for Exceptional Services by Direct Investment offers a prestigious route for high-net-worth individuals seeking EU citizenship. This program provides the opportunity to obtain Maltese citizenship through a combination of strategic investments, contributing to the country’s economic development.  Key benefits include visa-free travel to over180 countries, access to the EU's single market, and the right to live, work, and study across all EU member states.

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One of the program’s defining features is its rigorous due diligence process, a four-tiered system ensures that only reputable individuals of the highest integrity are granted citizenship, safeguarding Malta’s international standing and the program's credibility.

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Importantly, acquiring Maltese citizenship is a tax-neutral event. Citizenship status does not automatically confer tax residency, and individuals are only subject to Maltese tax if they meet specific residency criteria or if their income is sourced within Malta.

Important Non Dom Considerations

While the Res, Non-Dom tax status offers numerous benefits, there are practical aspects that new residents should consider during their pre-immigration planning.  For instance, segregating bank accounts for remittance planning is crucial, but this will be familiar to former UK Res, Non-Doms who employed similar strategies in the past. Understanding the nuances of Malta’s remittance basis—where foreign income is taxed only if remitted to Malta, and foreign capital gains remain untaxed even when brought in—is straightforward with proper record-keeping.

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Additionally, while Malta’s extensive double taxation treaties may differ slightly from those in the UK, engaging experienced cross-border advisors during the pre-immigration phase ensures optimal tax efficiency. With thoughtful planning and professional guidance, transitioning to Malta’s Res, Non-Dom system is seamless, providing both financial clarity and peace of mind.

Conclusion

For individuals seeking a new residency in Europe after the abolition of the UK’s Res, Non-Dom regime, Malta presents a well-structured and familiar alternative. The principles underlying Malta’s system will resonate with former UK Res, Non-Doms, making the transition straightforward with the right preparation. By working with experienced advisors, new residents can confidently structure their affairs to benefit from Malta’s advantageous tax regime and legal framework. Malta not only offers financial and legal stability but also provides an environment conducive to long-term wealth preservation and growth, ensuring peace of mind for those seeking a new jurisdiction to call home.

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