Malta is an EU member and a country that offers its tax residents a number of significant advantages, so gaining residency in Malta is a very popular thing to do. Let’s take a look at why people often chose Malta above other EU countries, what opportunities for residency there are, and why it makes sense to act now and apply before the end of 2017.

We have gathered here five of the most popular reasons for why you should not put off gaining Malta residency until 2018.

   

Reason 1: Automatic exchange of tax information (CRS)

CRS is an international agreement signed by 51 countries in 2014. It includes countries such as Russia, as well as Malta. Why are residents of Malta at an advantage here? To understand this, let’s take a look at how CRS works.

Without getting too into the technical and legal details, the aim behind this international agreement is to combat tax evasion, offshoring, and shady business deals. A distinctive feature of CRS is that information is automatically recorded about financial transactions made and income received. Employees of the revenue services of all countries participating in CRS can access this information. There is no need to ask for anyone’s consent: as soon as the operation is done through the bank, a record of it is automatically recorded in the database.

In fact, CRS have ruined the fundamental approach to banking secrecy. Tax authority of each country that joined the standard (including Russia) can any time immediately posses the information about the vast majority of individual account owners, and in some cases about legal account owners (for example when getting dividend, percentages, profit from bonds) when dealing with transactions after agreement enters into force. Also new accounts and accounts, which are open for CRS automatically become "transparent" for supervisory bodies. At the same time, the list of subjects, who are obliged to disclose such information also include banks, financial, investment and insurance companies, investment trusts and retirement funds.

So, why should you be considering Malta in this context?

• Tax residents of this country get very favorable tax rates: you can pay less simply taking advantage of what the law allows. There is no need to deceive anyone or violate any laws.
• Malta offers very convenient terms for obtaining residency: there are programs that allow you to receive residency through investment in state bonds or the purchase of real estate, without any additional obligations, unlike the majority of European countries where there are strict requirements on living and traveling abroad.
• Maltese law is very strict when it comes to confidentiality. Information about individuals – such as company owners – is not subject to disclosure. Thus, CRS only deals with information about the company itself, which does not invite extra scrutiny.
• As a followup to the above point, setting up your own business in Malta is not difficult. There are no legal obstacles, no strict restrictions on entrepreneurs’ citizenship, and the process for setting up most businesses does not take a great amount of time.
• Malta residents can be protected against double taxation: it is enough to pay one’s taxes after taking advantage of all the benefits, and then other countries can make no claims for payment of taxes.

Considering that many countries are “tightening the screws”, aiming to scrutinize their taxpayers’ activities as closely as possible, Malta’s legislation remains quite favorable. At the same time, the country is an EU member country and is not seen as a tax-dodge jurisdiction like many Caribbean states. In our opinion, that is a strong reason to obtain Malta residence now, and not wait for the new tax year 2018.

Reason 2: Political stability

Though it might not seem the most important factor, issues of stability are a concern for many people, such as Russians who await the presidential elections there in 2018. Malta is a country that has not known any political upheavals since the Second World War. There have not been any high-profile scandals or trials, no revolutions bloody or bloodless, no armored vehicles outside government buildings, and no oppression of the opposition or other signs of a breakdown in society.

Malta’s state authorities are known for their lack of corruption and unnecessary bureaucracy. Simply put, you can count on this country to protect your interest. From a political and social point of view, Maltese society is very tranquil: the local people have a highly developed sense of things, and foreigners are subject to strict background checks. That means it is almost impossible here to meet anyone with a criminal past or a criminal present.

Many countries are facing uncertain futures, with government instability or looming elections. In Malta, however, everything is just fine.

Reason 3: Investment opportunities

The best way to save and increase your capital is to invest it in something. And the best thing to invest in is real estate: unlike other assets, real estate properties are the least subject to changes and outside risks.

So, what about real estate in Malta? It is an attractive option for many reasons:

• A favorable climate. Unlike most European countries, Malta has moderately warm summers and gentle winters. The real estate that interests investors mainly consists of apartments, homes, villas, and commercial properties, mainly along the coast.
• Maltese real estate steadily grows in value. The annual increase in a property’s value can reach 6%, while inflation does not exceed 3% annually. Thus, an investor can look forward to a 3% growth on his or her invested capital annually.
• Malta offers programs for residency in which you can participate by buying or renting a property worth a certain value. By choosing such an option, you can become a tax resident while, at the same time, making a profitable investment. According to the terms of these programs, you cannot divest of the real estate property before five years have passed. In five years you can then, if desired, sell the real estate that you purchased and make a solid profit.

Not all countries provide a stable real estate market with properties that can be called interesting on an international level. For those who want to invest in real estate without risk, it is worth taking a look at Malta.

Reason 4. Develop a business without limits

The more promising a business venture is, the more difficult it is to set it up, even if you have the skills necessary. Entrepreneurs in many countries have to face corruption, bureaucracy, or monopolies, and getting involved in business might involve political risks.

But what about Malta?

• Business and politics are separate. There is no “important substitution”, no desire to maintain an isolated policy in raw materials and industry. Business owners can easily find employees, clients, and partners in other countries irregardless of their status.
• There is real support for businesses, not just on paper. Due to the lack of corruption, there are opportunities to use tax preferences and, in many cases, reduce your actual tax rate to zero. There is no trick here: the government of Malta is truly interested in developing certain industries and writes openly of this when describing its programs for residency. The important thing for developing a business is correct planning and structuring of your own funds and competent forecasting, and these things are much easier and more effective in a stable, healthy environment.
• There are a few industries that are high-priority for Malta, where the country provides subsidies and especial privileges. This includes mainly tourism, shipping, gaming, IT, and aviation.
• English is one of the country’s two official languages. Business negotiations are commonly conducted in English and laws are published in English. When the official language of a country is also the main language of international business, this is an enormous help.

When certain countries have undergone a financial crisis and it is unclear whether they will ever find an exit, it makes sense to set up a business now in Malta, where it is easier and safer, and without delaying until the end of 2017 when new residency program measures may be taken.

Reason 5: You can take care of those you love

People who are planning ahead for several years and who are able to ensure a large income, can take care of their loved ones. Malta is a country with a high level of social responsibility, where even the highest levels of the country are concerned with supporting families.

• The advantages of Malta’s residency programs are available not only to the applicant, but also to his or her close relatives. This will definitely include the applicant’s spouse and any underage children. Some programs include grandchildren, mature but dependent children, dependent parents, life partners, and family friends. The applicant’s loved ones will enjoy the same opportunities for living and moving as the main applicant.
• Opportunities that arises from the previous paragraph include studying, traveling, and leisure. You can get your children into a good school, college, or university. As for elderly people, they can count on full social support and good medical care.
• For anyone thinking about future children and grandchildren, many residency programs can serve as preparation for receiving Maltese (and EU) citizenship. This status, unlike mere residency, will last without any time limit.

For those who want to change their family’s life for the best, Malta provides all opportunities to do so. Many countries have declining educational standards or increasing costs for university, and the retirement age is raised endlessly. In Malta, on the other hand, children and young people can learn from the best teachers, while retirees can enjoy a quiet, measured, and comfortable life.

The sooner, the better!

The most important feature of any of Malta’s programs for residency with all its benefits, is that the program might end. Malta is not a philanthropist to the world. Rather, each program for investors, businessmen, or professional experts is an exchange between the state and the residenct. The state receives a contribution to its economy, while the residency receives advantages and privileges.

Some programs contain quotas: once the quota is reached, the program is ended. While other programs have no official quota, the conditions for participation can become stricter over time: the qualification for holding real estate is raised, the amount that must be paid goes up, or background checks are stricter. Usually, decisions to make changes to programs come into force at the beginning of the calendar year, so it is always easier to secure residency by the end of the previous year. 2017 is no exception.

Those who want to change their lives for the better right now, should take a look at Malta’s residency programs as soon as possible. It might be more difficult – or even impossible – to take advantage of them later. It doesn’t make sense to put off a prosperous future when you could already be enjoying it right now.

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