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44 | GENERAL OUTLOOK WORDS | Geoff Hadwick


MALTA


www.opp.org.uk |MAY 2012


(Above and front cover photo accredited to Tigne Point) Small can be beautiful


Malta may be the European Union’s smallest independent country, both in terms of population and size, but it is doing remarkably well. Having avoided the massive fi scal defi cits of its Mediterranean neighbours Greece, Spain and Italy, Malta has weathered the recession rather well. The country achieved a perfectly respectable GDP growth rate of 2.7% in 2011, driven primarily by exports and residential tourism. The young and the wealthy are fl ooding in to buy a second home overseas and the coffers are overfl owing. What’s going on?


A


resurgence … that’s what’s going on. Malta is suddenly fashionable again, attracting crowds of young and wealthy ex-pat overseas property buyers. And they are all coming to set up home on Malta because of its tax-friendly “Permanent Residents Scheme.” It hasn’t happened overnight though. The benefi ts offered by the Maltese Permanent Residents Scheme have encouraged a steady stream of ex-pats to set up home on the island for more than 20 years now. Today, Malta has more than 15,000 homeowners based abroad. “Foreign residents have no tax levied on their worldwide income or wealth and are subject to a fl at income tax rate of 15% on remitted income,” local tax consultant Dr Pierre Mifud of EMD Advocates told OPP.


“Stamp duty is also low,


and pension funds are easily transferable, which makes relocation an attractive proposition, especially when you consider that there is no inheritance tax or capital gains tax on a primary residence.”


“Today Malta has more than 15,000 homeowners based abroad, many not paying income tax”


And the situation has been boosted by a new “High Net Worth Individuals Residents Scheme.” The new rules, which came into effect in the autumn of last year, are bringing in a new generation of enquiries from a broader-based global investor pool. Applicants must live in Malta for at


An island that is over-achieving


Record numbers of businesses are setting up shop in Malta. In 2011, Malta recorded a net national budget surplus of €25 million, up by €181.7 million versus 2010. Malta’s current account deficit with the EU improved by €33.1 million last year as well. The island has a net positive balance of trade of €148.6 million with the rest of the world. Key industries include pharmaceuticals, shipping, gaming and financial


services. The World Economic Forum ranked Malta as the 12th safest banking system and the fourth most tax-friendly country on earth last year. January 2012 also saw Malta named top of the list for The Best Climate


in the World in 2011 and third place in the overall 2011 Quality of Life index(International Living (IL) Magazine Index). Malta was dubbed favourite by IL magazine due to its stable government


and economy, safe environment and English-speaking people. Crime hardly exists, the locals are extremely hospitable, healthcare is excellent, there are no property taxes and other general tax levels are generous. There is a regular ferry service to Sicily, which is only 90 minutes away, and the airport at Luqa is well connected.


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