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Tax havens: Malta

Sitting just below Sicily in the Mediterranean Sea, Malta is a popular bolt hole for high-net-worth individuals (HNWIs) who are keen to preserve their wealth.

The island's financial incentives benefit both working and retired expats, despite a fairly steep income tax rate of 35 per cent for people who earn more than €60,000 (£46,900) a year.

Here is a brief rundown of some of Malta's preferential rates and schemes.

Highly Qualified Persons Rules

Introduced in 2011, this initiative allows individuals who work in certain senior roles to pay a flat tax of just 15 per cent on their earnings.

To qualify for the scheme, the worker must be earning more than €81,000 annually and hold one of these jobs:

  • Chief executive officer, chief financial officer, chief technology officer, chief risk officer
  • Head of investor relations or head of marketing
  • Senior trader, senior analyst, portfolio manager, chief investment officer, chief insurance technical officer, actuarial professional

Furthermore, any income over €5 million a year is tax free. There is a caveat – the preferential rates only last for five years if you are an EEA or Swiss national and four years for everyone else.

HNWI Scheme

Retired expats have the option of applying for the HNWI scheme, which provides a 15 per cent income tax rate for those who remit overseas income to the island. Non-remitted foreign income is tax free.

However, the individual must pay at least €20,000 a year in tax, plus a €6,000 one-off administration fee. Applicants also need to buy or rent a local property within a certain price range.

Other taxes and benefits

There is no inheritance, wealth or gift taxes in the country. Businesses rates are 35 per cent at the high end, but certain rules surrounding dividend payments mean companies can effectively reduce this to 5 per cent.

Malta is also an excellent place to settle down, boasting a very high standard of living at a much lower cost than many other European countries. In particular, crime rates are low, medical facilities are among the best in the world and education is excellent.

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