Car bombs, inflation, rising interest rates, smokers condemned to the steps and alleyways and the waters of environmental peril breaking their banks. A picture postcard of Britain in July 2007. Home sweet home gone sour. I wonder how many people stay "home" without giving a second thought to how much threat "home" might pose to their health, wealth and happiness?
Most people stay "home" because they don’t think of themselves as having a choice to make. Home is the country in which they happened to be born and raised. Home is where they will live their lives and die — no matter what circumstances and conditions prevail. They are happy to accept whatever "deal" an accident of birth subjects them to — be it terrorist activity, draconian restrictions on civil liberties, removal of personal and financial privacy, high taxation or the intrusive demands and controls of big government. They are resolved to ignore the better deals available to those who step outside "home" borders.
Expatriation is a big step — and not one that can be taken lightly. It isn’t easy to leave family, friends or the habits and patterns of a lifetime behind. However, if you’re unhappy with the "deal" you’re getting at home and you’re intent on accessing something better for you and your family — looking offshore can pay handsome dividends.
I’m looking at the best alternative residence havens on the planet right now. I’m looking at governments in the same way I look at any product or service provider — doing my due diligence and comparing what I get from each deal available to what I’m expected to give.
And when judged on that level Malta ranks very highly as a first-class alternative residence for UK expatriates. There’s a bonus. The country is also actively seeking and encouraging new residents. For several years the Maltese government has sought to make residence attractive to foreign investors and entrepreneurs by offering attractive incentives — including generous tax breaks.
English speaking and the € from Jan 08!
A British colony until 1964, Malta consists of three islands located in the central Mediterranean — Malta, Gozo and Comino. Four hundred thousand people live on the islands and they pretty much all speak English.
The climate is what you’d expect in the Mediterranean — mild winters, pleasant spring and autumn seasons and hot summers the like of which the UK will never provide.
The country’s amenities and its infrastructure are first class and will more than live up to your expectations. Malta is a developed country — on a par with the first-world. Health services, telecommunications, postal services, banking and all other important public services are efficient and all conform to first-world standard. The currency is the Maltese lira and the current rate of exchange is 1.58 lira to the £1. This will disappear from next January when Malta joins the euro. An event likely to spur its attractions for new residents.
Private English-speaking primary and secondary schools are available. Classes at the University of Malta also are taught in English. There are good air links to mainland Europe destinations.
The pace of life is slower in Malta than in most other European countries. Crime is almost nonexistent. The people are friendly and helpful and as Malta is a small, low-profile country, the people who live there do not find themselves the targets of terrorists, hijackers or hostage takers bent on punishing them for the international actions of the Maltese government. Malta truly is a safe haven — relatively untouched by the wider world.
Low cost of living
The cost of living in Malta is surprisingly low — less expensive than in many other European countries. Surprising when you consider Malta is highly dependent on imports. Expect to pay approximately £100 per month for electricity and water in an apartment — though more for larger accommodations.
Food and other necessities are reasonably priced. A couple can expect to spend around £375 each month on supplies. Local telephone calls are inexpensive too.
Housing remains relatively affordable compared to the rest of Europe. Two-bedroom apartments in the more popular residential areas will cost a minimum of £80,000. Expect to pay a premium for properties with seas views and other special or popular amenities. The capital, Valletta, is expensive. But there is property in Malta to suit every taste and pocket whether you are buying or renting. Take a look at this link for examples within your own budget: http://www.propertymaltadirect.com/
There are no restrictions on permanent residents buying or selling property. You are not allowed to own more than one property at a time though and the qualification process for residency demands that you either own or rent property at all times. Note however, profits made on a re-sale may be taxed at 12% unless you are a permanent resident and it is your main residence.
And low taxes...
As a permanent Maltese resident you would pay income tax at a 15% rate — and that tax is only applied to income you actually transfer to Malta. Malta does not tax you on foreign income that is not sent to or received in Malta making the island a highly desirable residential haven for any high net worth individual seeking to significantly minimise his tax liabilities.
This low 15% tax rate is attractive when set against UK rates of 22% and 40% but is subject to a minimum payment requirement of £1,750 per annum. This means you will need to remit around £11,700 pa in income to meet the threshold.
If you need to earn income whilst resident in Malta bear in mind you will not be entitled to be employed by a Maltese person or a Maltese registered company. Nor will you be able to offer freelance services to Maltese persons or Maltese registered companies. However, you may use Malta as a base to work from. This makes it ideal for those with a portable trade or occupation whose customers are outside Malta.
Once you’ve registered with the tax authorities, you will receive a certificate confirming your Maltese tax residency. This can then be used as legitimate evidence of your non-residency with the UK tax authorities.
As such, the UK’s Revenue & Customs will only tax you as a non-resident citizen if you are resident in the UK for 183 or more days in one tax year or your visits to the UK average 91 or more days each tax year over a period not exceeding four years. Make sure you don’t jeopardise your status by over-staying. The penalty for doing so would mean being drawn into the UK tax net again and getting taxed on worldwide income. So keep an accurate, documented record of any visits you make to the UK — and make sure you don’t exceed the permitted days. Making mistakes could prove very expensive.
No estate or death duty is payable in Malta but it is wise to prepare a will according to Maltese law. Without one, your property will pass to your children or next of kin rather than directly to your spouse. Any local notary public can prepare a will and register it in the Maltese Public Registry.
If, or when, you end your Maltese residence accumulated capital and income can be removed from Malta tax-free.
£185,000 capital to obtain residency
The fact that everybody in Malta speaks English and that English is the language of officialdom and commerce eases integration and communication. All official documentation relating to residence is produced in English too.
To obtain permanent residency in Malta you will need what is called a Permanent Residence Permit (PRP). The PRP entitles you, your spouse, your parents or parents-in-law (if dependant on you) and any children under the age of 21 to reside in Malta permanently and set up home there. At death, the permit will pass to your spouse but not subsequently to your children. Children who attain the age of 21 must submit a separate application for a PRP to remain.
The PRP does not lead to Maltese citizenship. Nor is it a travel document. You will need to obtain whatever visas you need for your passport to travel outside Malta. The PRP must be renewed annually but once granted it will not be revoked unless you violate any condition of the permit, commit a crime or fail to pay your taxes.
To qualify for a PRP, you must submit a banker’s declaration certifying that you have either an annual income exceeding £13,000 or capital assets totalling at least £185,000.
You must also submit a certificate from police stating that you are not a convicted criminal. You can reside in Malta for as long as you like.
Unlike some other residence havens there are no minimum stay requirements. However, when your PRP is first issued you need to travel to Malta at least once within the first 12 months to get your passport stamped and to register with the Inland Revenue Department.
To consider the idea of Maltese residence, make sure you get professional advice from an organisation experienced in overseas jurisdictions. One such contact is listed below.
Action to take: For further specialist information about Malta and how you can obtain residence there look up advisers Henley & Partners at www.henleyglobal.com/malta1.htm
