Parliamentary Secretary Edward Zammit Lewis. Photo: Jason BorgA new residence programme for foreigners investing in high-value property in Malta and benefiting from a residence permit was launched yesterday to replace a controversial scheme introduced in 2011.
The Global Residence Programme will boost various economic sectors and revitalise the property sector, Parliamentary Secretary Edward Zammit Lewis told a news conference.
The GBR will be replacing a “failed scheme” introduced by the previous Government, and the requirements are much more attractive for people outside the EU and the European Economic Area, he said.
The old Permanent Residence Scheme had been suspended in January 2011 and replaced with the High Net Worth Individuals (HNWI) scheme in September that year.
The old scheme was viewed as open to abuse, including beneficiaries who purchase property and never visited Malta and others accessing healthcare treatment exceeding the value of their contributions to the economy.
GBR will be replacing a failed scheme
But the HNWI changes meant the minimum required expenditure on property increased from €116,000 to €400,000. Third-country nationals also had to enter into a contract with the Government with a financial bond of €500,000 and €150,000 per dependent.
Under the new GRP, the financial bond has been removed, while the value of immovable property bought in Malta has to be at least €275,000. When the property is in the south of Malta or in Gozo, the minimum value can be €220,000, taking into consideration that prices of property in these areas are lower.
Under the previous scheme, applicants would also have been eligible if they rented a property for a minimum of €20,000 annually, but that threshold has been lowered to €9,600 in Malta and €8,750 in Gozo or the south.
The minimum tax – previously €25,000 plus €5,000 per dependant for third-country nationals – has been reduced to a minimum of €15,000 and has to be paid in advance.
The incentive of paying just 15 per cent tax on overseas earnings received in Malta will remain in place.
The new regulations will be introduced through a legal notice by the end of the month.
Regulations for EU nationals will eventually be brought in line with these changes.
Applicants and their dependants have to be covered by health insurance and will not be entitled to health benefits, to make sure the scheme is not open to abuse. The authorised registered mandatory people (acting as middlemen) will be carrying more responsibilities, Dr Zammit Lewis said.
“The HNWI had tarnished Malta’s reputation, and the country needed to win the status back. This new programme has a simplified bureaucratic process and is more attractive because we took on board the stakeholders’ feedback of where the previous scheme had failed,” he said.
Dr Zammit Lewis added that while investors previously had to wait a long time to acquire paperwork, they will now have to visit Malta only once for the final deed of sale.
This programme was drawn after consultation with stakeholders and a committee.
The Real Estate Business Section of the Malta Chamber of Commerce welcomed the re-establishment of the programme and expressed satisfaction that some of its proposals were taken on board.
In a statement, it said the 2011 modified scheme was largely ineffective and unattractive to potential investors.