Introduction
Main eligibility criteria
Residence in Malta
Visa applications
Taxation
Residency Malta Agency, in collaboration with Malta Enterprise, recently launched the Malta start-up residence programme. The programme aims to attract non-EU/European Economic Area/Swiss nationals (known as "third country nationals") looking to establish highly innovative start-ups and scale-ups to set up their business in Malta and relocate to the country.
The programme offers a residence route to third country nationals, who are either founders, co-founders or core employees (as defined) of a start-up, and who are looking to establish themselves and the start-up in Malta. Founders and co-founders of eligible start-ups will be granted residence without the need to satisfy the stringent requirements set out in the Jobsplus Employment Licensing Unit Guidelines.
In order to qualify as a start-up for the purposes of the programme, the start-up must satisfy a number of criteria. Among other things, it must not have:
- been registered for over seven years, whether in Malta or elsewhere;
- taken over the activity of another enterprise;
- distributed any profits; or
- been formed through a merger.
In addition to the above requirements, the start-up, which must take the form of a Maltese limited liability company, is required to make a tangible investment in Malta (this has not yet been defined) and/or have paid-up share capital of no less than €25,000. Additional share capital requirements apply where the start-up has more than four co-founders applying for residence in Malta – up to a maximum of six co-founders may currently apply for residence.
The start-up must be engaged in one of a specific list of eligible activities set out under the programme – these include software development, manufacturing and eco-start-ups involved in sustainable industries. The start-up must also meet a number of criteria established by Malta Enterprise, such as proposing products and/or services that are new, innovative or substantially improved compared with similar products on the market. The start-up would need to set out the manner in which the criteria will be satisfied through the submission of a detailed business plan to Malta Enterprise.
Should the start-up's operations be approved, ongoing monitoring will be carried out by Malta Enterprise.
The programme offers founders, co-founders and core employees of approved start-ups a route to obtaining residence in Malta. Successful applicants will initially be issued with a three-year residence permit, allowing such individuals to reside and work for the start-up in Malta. In the case of founders and co-founders, the residence permit may be extended for a further five-year period, subject to the start-up continuing to meet the required criteria. Core employees' residence permits may be renewed for a further three-year period.
Applications for core employees may only be submitted after the start-up permit has been approved for the founder/co-founders.
The programme also permits third country national family members of founders, co-founders and core employees to apply for residence in Malta, subject to the satisfaction of a number of conditions. Eligible family members include the spouse, de-facto partner, minor children and adult children who are principally dependent on the founder, co-founder or core-employee. The validity of the family members' residence permits would depend on the validity of the founder's, co-founder's or core employee's residence permit.
Third country nationals who apply for the programme and who require a visa to enter the Schengen area may apply for a visa following the issuance of a letter of approval in principle issued by Residence Malta Agency. The applicant may make use of the visa premium service offered by the Central Visa Unit in Malta – this is a fast-tracked visa application process, through which the applicant is issued with a type D – national visa. Once the applicant arrives in Malta, the residence permit application is then finalised.
Founders, co-founders and core employees who benefit from the programme are required to physically reside in Malta, with Malta being their place of primary residence. The personal taxation of the founders, co-founders and core employees is in line with standard applicable provisions of the Income Tax Acts (chapter 123 and 372 of the laws of Malta).
As far as corporate tax is concerned, the start-up company would be subject to corporate tax, payable on net profits (ie, profits minus any deductible expenses).
For further information on this topic please contact Keith Grima at Fenech & Fenech Advocates by telephone (+356 2124 1232) or email ([email protected]). The Fenech & Fenech Advocates website can be accessed at www.fenechlaw.com.