Discover Malta - The Best Destination for Second Citizenship in 2024

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• The Arabic period proved the basis of the Maltese language;

• The period of the Knights of St John shaped the islands culturally, socially, commercially and artistically;

• Whereas the British period introduced British justice, a unified modern code of laws.

The government has a tradition of encouraging foreign investors to establish operations in Malta and has always adopted policies that favour an open economy and direct investment. Essentially, this makes Malta a suitable destination for second citizenship.

To that effect, Malta Enterprise, as the agency responsible for the promotion of foreign investment and industrial development in Malta provides for several fiscal and non-fiscal incentives to attract foreign direct investors and local enterprises with high value-added or high employment potential.

These fall under the following headings:

• Investment Aid;

• SME Development;

• Enterprise Support;

• Access to Finance;

• Employment and Training; and

• Research & Development.

In terms of the Investment Aid Regulations 2021, Investment Tax Credits are available in respect of qualifying expenditure incurred on, or after, 1st January 2008 by qualifying companies, i.e. businesses which carry on a trade or business which consists solely of one or more qualifying activities.

Qualifying companies include companies engaged in all types of manufacturing activities (with the exception of the production of certain commodities such as motor vehicles and synthetic fibres), information and communication technology; research, development and innovation; logistics operations and activities carried out by a company licensed under the Malta Free-ports Act.

Following an amendment to the regulations, companies engaged in the management and operation of hotels are also eligible for the Investment Tax Credits as expenditure incurred as from 1st January 2012.

Eligible enterprises can benefit from tax credits (ranging from 15% to 35% depending on their sizes) calculated as a percentage of the value of capital investment or the value of wages. Any tax credits not utilized during a particular year may be carried forward to subsequent years.

Enterprises engaged in the management and operation of hotels are eligible for a tax credit rate of 15%, irrespective of their size. Tax credits calculated as a percentage of qualifying research and development (R&D) expenditure are available as a deduction from the tax liability.

In addition to direct R&D expenditure, costs incurred for R&D-related training of personnel and hiring of new personnel may qualify.

The credit is granted in addition to the normal deduction of the expenditure from taxable income.

The applicable percentage varies from 10.5% to 35%, depending on the type of the R&D initiative and expenditure incurred, whether the taxpayer is a small or medium-sized enterprise and whether the project is EU funded.

Research and development activities are increasingly being considered as an essential sector of Malta’s economy. In this regard, various incentives, including tax credits to stimulate enterprises to engage in R&D, are offered under guidelines issued in terms of the Malta Enterprise Act.

Other forms of assistance include soft loans and loan interest rates subsidies which aim at supporting enterprise engaged in manufacturing through loans at low-interest rates for part financing investments in qualifying expenditure.

Soft loans are available to manufacturing enterprises, and only after Malta Enterprise completes a due diligence exercise on the applicant and the proposed project.

Soft Loans granted by Malta Enterprise usually cover 33% of an approved project but, in any case, may not exceed 75% of the cost of plant, machinery and equipment.

Learn more: Why are billionaires flocking to Malta?

• Agriculture and Fishing;

• Manufacturing;

• Wholesale and Retail Trade;

• Transportation and Storage;

• Accommodation and Food Service;

• Information and Communication;

• Real Estate;

• Professional, Scientific and Technical;

• Public Administration;

• Education; Human Health and Social Work; and

• Arts, Entertainment and Recreation.

Sustained by continued rapid growth, the Maltese economy retains a relatively low rate of unemployment. The economy is dependent on foreign trade, manufacturing (especially electronics and pharmaceuticals), and tourism. The economic recovery of the European economy has lifted exports, tourism, and overall growth. Major markets of Malta are Eurozone, USA and Singapore.

Film production in Malta is another growing industry, despite stiff competition from other film locations in Eastern Europe and North Africa, with the Malta Film Commission providing support services to foreign film companies for the production of feature cinema (Gladiator, Troy, Munich and Count of Monte Cristo, World War Z, amongst others, were shot in Malta over the last few years), commercials and television series.

A relatively new sector in Malta is the aviation industry which has been prompted, amongst others, through the facelift of the aircraft legislation in Malta in 2010 relating to aircraft registration (the ‘Aircraft Registration Act’) and the implementation of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol (the ‘Cape Town Convention’), ratified in February 2011.

A number of airlines, aircraft/aircraft engine owners and other aircraft operators are organizing their aviation activities in Malta including, but not limited to, aircraft financing, leasing and management of aircraft, insurance, brokerage, aircraft maintenance, classification and surveying (e.g. Lufthansa Technik).