Malta Start-Up Residence Programme
In October 2022, the Malta Start-Up Residence Programme was launched. Open to non-EU and non-EEA entrepreneurs looking to start or scale-up their businesses in Malta. The programme also provides residency for applicants and their family members with a three-year residency permit, which can be extended for a further five years if the start-up is still running and still meets the eligibility criteria. Eligible family members include spouses, de-facto partners, children under 18 and adult children who are dependent on the applicant. Core employees and co-founders of the business are also eligible to apply, should the business meet the criteria.
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Persons aged 18 and above who are founders or co-founders of an enterprise business can apply. Applicants must be non-EU, EAA or Swiss nationals and excludes those from Afghanistan, North Korea, Iran, Democratic Republic of Congo, Somalia, Syria, Sudan, South Sudan, Yemen and Venezuela (or persons with close ties with these nations).
To be eligible to apply, the applicant must:
- Have a concrete intention to develop or expand their business in Malta.
- Be a founder or co-founder of an enterprise which has not been registered for more than seven years and which meets the following criteria:
- Has not taken over the activity of another enterprise,
- Has not distributed profit,
- Has not been formed through a merger.
- The incorporated start-up must have a tangible investment and/or paid share capital of minimum €25,000. If more than four co-founders apply, an additional €10,000 is required per co-founder. The maximum number of co-founders is limited to six.
- The applicant must have physical presence in Malta and pay taxes in Malta upon successful completion of the application.
- Have appropriate health insurance for residing in Malta for themselves and all dependents living with them.
- Have sufficient financial resources to both themselves and their dependents upon living in Malta.
- Have no criminal record or pending criminal charges and does not pose a risk to national security or public policy, health or interest.
- Cannot have previously been rejected for residence or citizenship status in Malta or elsewhere.
The eligible businesses must also be engaged in one of the following activities:
- Software engineering;
- Industrial services analogous to manufacturing;
- Health, biotechnology, pharmaceuticals and life sciences;
- Eco start-ups involved in the blue, green and sustainable industries;
- Other innovative economic activities which are enabled through knowledge and technology providing services or products which are currently not readily available in the relevant market or which shall be provided through a process which is novel.
The eligible business must also meet two out of three of the below:
- Propose products and/or services that have the potential to generate income from various geographical markets;
- Produce products and/or services which are new, innovative or substantially improved compared to similar products on the market;
- Utilise processes which are new or substantially improved compared to those adopted in current comparable activities
To obtain a residence permit, applicants must complete an online application to Malta Enterprise, which includes a business plan or an application for assistance which is the equivalent of a business plan. Applicants may also be asked for monitoring reports and documentation to prove that all conditions of approval are met. All immediate family members must be included in the initial application, even if they are not intending to relocate, and any subsequent applications for family members to relocate will be assessed individually and are not automatic. Once the start-up is fully registered in Malta, successful applicants will receive their residency card.
Considering that the Programme requires a prospective applicant to have tangible presence in Malta by way of paying taxes, it would be pertinent to note that tax status in Malta is based on two major principles: domicile and residence.
In brief, the domicile of a person is based on the intention to permanently reside in a place. Domicile usually follows the person’s country of origin. That is, where the person was born or where their parents were born. On the other hand, a person may also opt to acquire a domicile of choice, if they can prove that they do not intend to return to their domicile of origin and permanently reside in the country of the domicile of choice. Residence in turn requires physical presence in Malta, and tax residency is generally determined based on whether a person has resided in Malta for at least 183 days in a calendar year. Residence may also be determined according to the person’s personal, social, and economic ties with Malta. Third-country nationals residing in Malta would generally be considered as being non-domiciled and resident in Malta and would thus be taxed on a source and remittance basis of taxation.