Malta & Money: Tax Benefits and EU Market Access
Apart from its idyllic location in the Mediterranean Sea – between Sicily and North America – Malta is becoming increasingly popular due to the financial benefits it boasts.
There are numerous factors that have played a part in the rising trend of South Africans exploring residency, citizenship and business expansion options in Malta. These include South Africa’s volatile economic and political climate, the desire for a secure future and the fact that Malta is one of the safest countries in the world.
Dr. James Muscat Azzopardi, Director at Credence – a leading corporate advisory firm based in Malta – says he believes that the archipelago is the next best strategic hub when it comes to tax advantages and seamless EU market access for South Africans.
Tax Benefits in Malta
Malta’s tax system can deliver substantial savings to expats, especially for those with foreign investments or retirees who draw pension income. Its Global Residence Programme allows the applicant (and his or her family) to live in Malta permanently and provides visa-free travel across the EU for 90 days in each 180-day period.
Furthermore, a very favourable flat tax rate of 15% on foreign income remitted to Malta applies. This provides a tax-efficient structure for international earnings.
More so, extensive treaties ensure that income earned abroad is not taxed twice. This enhances financial efficiency and South Africans aren’t required to relinquish their citizenship or property holdings, making it simple to retain connections to home.
“For South African business owners, relocating to Malta brings with it extensive tax benefits,” Dr. Muscat Azzopardi says. That includes “exemptions from capital gains, wealth and inheritance tax.”
Malta’s EU Market Access
With the island country forming part of the European Union, South Africans acquiring Maltese citizenship through investment can live, work and study in any of the 27 EU member states without any restriction. It also offers the sixth most powerful passport globally with visa-free access to over 170 countries, including the United States and Canada.
Further to this, “Malta provides a strong framework for expatriates looking to optimise their tax position while retaining South African citizenship,” Dr. Muscat Azzopardi says.
Of course, Malta’s EU affiliation also aids in providing South African entrepreneurs direct access to one of the world’s largest markets. This ultimately simplifies cross-border operations, allowing a stable business environment.
Dr. Muscat Azzopardi says: “Malta presents a unique opportunity for South African businesses to access the European market without necessarily uprooting their operations completely from home.”
He also says that “in recent years, a significant number of South Africans have moved their companies from Mauritius to Malta due to a Mauritius presence raising red flags with European and American banks and counterparties.”
Finance, technology and real estate sectors in Malta have seen significant growth. Meanwhile, Credence has seen a rise in inquiries from companies keen on leveraging Malta’s business-friendly regulations and extensive network of trade agreements.
It might have become known for its enviable lifestyle, excellent infrastructure and secure environment, but it is clear that Malta is also a popular destination for those seeking a favourable tax environment.
