Malta-nomad-residence-permit

Maltese Citizenship by Naturalisation for Exceptional Services

Background

In 2020, the Maltese government has revisited its citizenship legislation to consider all matters relating to citizenship by birth, by registration, by naturalisation, dual and multiple citizenships and for exceptional services by direct investment.

A Residency Route Which Can Lead to Citizenship in Malta

‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment’ provides foreign individuals and their families, who contribute to the economic development of Malta, a route to becoming citizens of Malta.

Malta is a member of the European Union and all its citizens can travel, live, work, study and set up business in any of the member countries together with visa-free travel rights to more than 180 countries.

Community Malta Agency (the Agency) is the authorised Maltese Government Agency responsible for administering the processing of all applications, leading to Maltese Citizenship.

Under the new regulations, applicants can opt for residence in Malta, leading to  citizenship choosing between two options:

  1. application after three years of residence in Malta, for a lower contribution fee; OR
  2. application for citizenship after one year of residence in Malta.

To be able to apply for Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, an applicant needs to make a direct investment to the Maltese economy, make a donation and hold a residential property.

Exceptional Services Requirements

  • Direct Investment

Applicants, who can prove residency status in Malta for 36 months prior to the naturalization, are required to make a direct investment of €600,000 whilst applicants who prove a residency status in Malta for at least 12 months are required to make an exceptional direct investment of €750,000.

If the applicant is accompanied by qualifying dependants, a further investment of €50,000 per dependant is to be made. 

An applicant cannot apply for a certificate of citizenship by naturalisation for exceptional services, before he/she has proved that he/she has become a resident of Malta for the minimum period required.

  • Philanthropic Donation

Prior to the issue of a certificate of Maltese citizenship, the applicant must donate a minimum €10,000 to a registered philanthropic, cultural, sport, scientific, animal welfare or artistic non-governmental organisation or society, or as otherwise approved by the Agency.

  • Property Investment

Once an applicant is approved and prior to the issue of a certificate of Maltese citizenship, the application must either purchase or rent residential property in Malta. If the applicant opts to purchase a property, an investment of at least €700,000 must be made. An applicant may alternatively take a lease on a residential immovable property in Malta, for a minimum annual rent of €16,000. The applicant must retain the property for at least 5 years from the date of the issue of the certificate of Maltese citizenship.

Agent

All individuals interested in applying for this programme, are required to do so through a registered approved agent, who will be acting on behalf of the client in all matters related to the Application for Eligibility and Application for Citizenship.

The Dixcart office in Malta can assist with the agency services.

Eligibility Criteria for Applicants

The Malta government aims to attract people of the highest calibre through the Malta Citizenship by Direct Investment and grant them Maltese residence, following a rigorous due diligence process and adherence to strict criteria.

To be eligible for the Malta Citizenship by Direct Investment, an applicant must meet a number of criteria:

  • Be 18 years of age, or older. Eligibility may also extend to applicant’s dependants including the spouse or de facto partner, or a person with whom a relationship is held through a status which is the same as or similar to marriage, children, parents and grandparents under certain terms;
  • Is willing to contribute, through an exceptional direct investment, to the economic and social development of the Republic of Malta;
  • Provides proof that he/she has been a resident in Malta for at least 12 or 36 months preceding the day of issue, of the certificate of naturalisation;
  • Meets all the application requirements; and
  • Commits to providing proof of residence in Malta and proof of title to a residential property in Malta in accordance with the regulations.

Quota

It is important to note that a maximum quota of 400 applicants per year will be accepted with a total maximum number of applicants set at 1,500 for the entire scheme.

Additional Information

If you would like any further information on the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment please contact the Dixcart office in Malta: advice.malta@dixcart.com or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-22

Enhanced Certainty Regarding St Kitts & Nevis Companies

Guidance on Tax Residence and Taxable Presence in St Kitts & Nevis

In September 2020, the Federation of St Kitts & Nevis published new guidelines relating to companies registered in this jurisdiction and the definition of tax residence.

A summary of this guidance is detailed below:

Tax Residence: Definition

Tax residence determines whether a company will be subject to worldwide taxation in St Kitts & Nevis.

  • Tax residence is determined by the central management and control test, as established under common law.

Whether a company is tax resident is determined separately from where it has its legal ‘seat’.

If a company is incorporated in St Kitts & Nevis, it does not necessarily mean that it will be tax resident in this jurisdiction. Equally, it is possible for a company to be incorporated outside of St Kitts & Nevis and to be tax resident within it, if centrally managed and controlled in St Kitts & Nevis. The converse is also applicable.

Management and Control: Clarification

Generally, central management and control will be located in the jurisdiction where the Board of Directors (BoD) convene and make management decisions, on behalf of the company.

This will be further substantiated where:

  • The BoD is comprised of individuals suitably qualified and capable of managing the affairs of the company;
  • The key strategic decisions of the company (especially relating to its capital structure, business strategy, investments, and dividend policy) are made at the BoD meetings; and
  • Documentation (e.g. minutes of the BoD meetings), clearly indicate that such meetings are the medium through which the strategic decision-making of the company is carried out.

The delegation of corporate secretarial type functions to third parties in St Kitts & Nevis, is not sufficient to consider these companies having central management and control undertaken in this jurisdiction.

A St Kitts & Nevis ‘Business Enterprise’

Where a company is not tax resident in St Kitts & Nevis, it needs to consider whether it has sufficient operational presence in St Kitts & Nevis to be considered to be a ‘Business Enterprise’. If so, it would then be considered taxable in this jurisdiction.

Definition of a ‘Business Enterprise’

A non-resident company will have a taxable presence in the Federation where it has a ‘Business Enterprise’ in St Kitts & Nevis, which is being run along commercial lines for profit.

To meet ‘Business Enterprise’ criteria, it is necessary for the business to have a physical presence in St Kitts & Nevis, for example by having an office or branch located in this jurisdiction.

Circumstances Not Meeting ‘Business Enterprise’ Criteria

Actions undertaken to ensure that the company complies with its corporate requirements in St Kitts & Nevis, such as the establishment of a financial business account, and investment in equity holdings in the Federation, will not necessarily mean that the non-resident company has a ‘Business Enterprise’ in St Kitts & Nevis.

The delegation of; corporate secretarial, shareholder stewardship, or other administrative functions to corporate service providers in St Kitts & Nevis, does not in itself lead to the creation of a ‘Business Enterprise’.

Liability to Taxation

Where a company has a ‘Business Enterprise’ in the Federation, it will be liable to tax on income generated through the activities undertaken by this entity in St Kitts & Nevis.

Alternatively, where a company is not tax resident in the Federation and does not have a ‘Business Enterprise’ in the Federation, it would fall outside the scope of tax and would not be taxable in St Kitts & Nevis.

Additional Information

Dixcart has had an office in St Kitts & Nevis for over 20 years. We are experienced in  offering comprehensive professional advice to clients wishing to establish a company or ‘Business Enterprise’ in this jurisdiction. We can also provide expertise regarding the potential tax advantages and liabilities that are legitimately available.

Please contact John Mellor at our office in Nevis: advice.nevis@dixcart.com or your usual Dixcart contact.

Key Routes to Swiss Residence: Working in Switzerland or The Lump Sum System of Taxation

Why Switzerland?

There are many reasons why Switzerland is a desirable country to live in.

  • A high standard of living with excellent working conditions and business opportunities.
  • Beautiful scenery and an active outdoor lifestyle.
  • A central location within Europe, with flight connections to over 200 international locations.

Non-Swiss nationals are allowed to stay in Switzerland as tourists, without registration, for up to three months. After three months, anyone planning to stay in Switzerland must obtain a work and/or residence permit, and formally register with the Swiss authorities.

How to Become a Legal Swiss Resident

There are two alternative routes to become a Swiss resident:

  • By working in Switzerland
  • Through the Swiss ‘Lump Sum System of Taxation’

Working in Switzerland

The acquisition of a Swiss work permit allows a non-Swiss national to become a Swiss resident.

There are three ways to be entitled to work in Switzerland:

  • Being hired by an existing Swiss company.
  • Forming a Swiss company and become a director or an employee of the company.
  • Investing in a Swiss company and become a director or an employee of the company.

When applying to work in Switzerland and/or for residence permits, different regulations apply to EU/EFTA nationals, compared to nationals of other countries.

It is a straightforward process for EU/EFTA citizens as they enjoy priority access to the labour market in Switzerland.

Non-EU/EFTA nationals can work in Switzerland as long as the are appropriately qualified, for example managers or specialists and/or with higher education qualifications.

An alternative route is for non-Swiss nationals to form a Swiss company and obtain a residence permit in Switzerland. Relevant individuals must be employed by the company that they establish in Switzerland.

Non-EU/EFTA businesses need to create jobs and business opportunities in Switzerland, as specified by each particular canton.

Lump Sum Taxation

A non-Swiss national, who does not work in Switzerland, can apply for Swiss residency under the system of ‘Lump Sum Taxation’.

  • The taxpayer’s lifestyle expenses are used as a tax base instead of his/her global income and wealth. There is no report of global earnings and assets.

Once the tax base has been determined and agreed with the tax authorities, it will be subject to the standard tax rate relevant in that particular canton.

Work activities outside Switzerland are permitted. Activities relating to the administration of private assets in Switzerland can also be undertaken.

Third country nationals (non-EU/EFTA), may be required to pay a higher lump-sum tax on the basis of “predominant cantonal interest”. This will depend on a number of factors and varies case by case.

How can an Individual Become a Swiss Citizen?

  • An EU or non-EU/EFTA national must have lived in Switzerland for at least 10 years, to be able to apply for a Swiss passport.
  • However, if an EU or non-EU/EFTA national is the spouse of a Swiss national, they need only to have lived in Switzerland for 5 years.

Additional Information

If you require additional information regarding moving to and living in Switzerland, or have any other questions about this jurisdiction, please contact Christine Breitler or Thierry Groppi at the Dixcart office in Switzerlandadvice.switzerland@dixcart.com.

Portugal 1

Friendly, Relaxed and Sunny Lisbon – Plus Other Advantages to Life in Portugal 2021

What do Expats Think of Portugal – Lisbon in Particular?

Lisbon has been voted third in the Expat City Ranking 2020.

Expats in the Portuguese capital give it top grades for the ease of getting settled (3rd in the respective index) and the local quality of life (4th).

Portugal – a Wonderful Country: Climate and Leisure

Close to nine in ten expats living in Lisbon (89%) say they are happy with the local leisure options (compared to 71% globally), the majority (54%) are in fact are very happy (compared to 31% globally).

An even larger share (96%) are satisfied with the local climate and weather, which is hardly a surprise, considering Lisbon enjoys approximately 300 days of sunshine a year, with the mean temperature in double digits, even during the coldest months.

According to one Irish respondent, Portugal in general is “a weirdly wonderful country, with plenty of idiosyncrasies but the people are kind, life is relaxed, the food and drink are excellent, and the weather is generally great.

Safety, Work Life Balance and Finances

Expats, enjoy more about life in Lisbon than just the sun and the sea: not one single respondent had anything negative to say about their personal safety, and close to nine in ten (87%), rate the urban environment positively (compared to 65% globally).

Around four in five respondents are generally satisfied with their job (79%) and work-life balance (83%).

Housing is perceived as expensive in Lisbon, but expats living there do not struggle with their personal finance. Nearly two in three (66%) are satisfied with their financial situation, ranking the city tenth in the world for this factor.

Financial Considerations: Moving to Portugal to Live and Work

So how easy is it to turn thoughts of moving to Portugal – into actual reality?

The popular Golden Visa (GV) and Non Habitual Residents (NHR) schemes can be combined and offer a route for individuals to move to Portugal and to enjoy tax advantages once they re-locate there.

EU Citizens

EU citizens already have a right to live in Portugal, without formal immigration or investment being required.

The motivator for EU citizens is therefore the NHR.

  • It is possible, with careful structuring, for NHRs to not be taxable on income, other than Portuguese-source income, for the 10 year NHR designated term (must not have been resident in Portugal within the last five Portuguese tax years).

Combination of GV and NHR

Certain non-EU individuals and families apply for GV status as an insurance, to enable them to move to Portugal, in case of difficulty within their home country. Whilst many individuals seek to move to Portugal immediately, a number do not wish to actually move to Portugal unless they need to.

It might however, be valuable for these individuals to now apply for NHR, to be able to enjoy the benefits that it offers, in case they do relocate to Portugal in the future.

To apply for NHR, a fiscal representative such as Dixcart, needs to be appointed in Portugal and the individual must have a place to live in Portugal, this could be rental of a modest apartment.

Additional Information

If you require additional information regarding moving to Portugal, please contact Catarina Sardinha at the Dixcart office in Portugal: advice.portugal@dixcart.com.