Cyprus, Malta, and Portugal – Three of the Best Southern European Countries to Live in

  • Publication 13 October 2021

  • | Reference IN767

There are many reasons why individuals and their families choose to take up residence in another country. They may wish to start a new life elsewhere in a more attractive and relaxing environment, or they may find the greater political and economic stability that another country offers, of appeal. Whatever the reason is, it is crucial to research and plan ahead, as much as possible.

Residence routes vary in what they offer and, depending on the country, there are differences regarding how to apply, the time period that residence is valid for, what the benefits are, tax obligations, and how to apply for citizenship.

For individuals considering an alternative country of residence, the most important decision is where they and their family would like to live. It is critical that clients consider the long-term objectives for themselves, and their families, before applying for a particular residence route, to help ensure that the decision is right for now, and in the future.

The main question is: where would you and your family most like to live? The second, and almost equally important question is – what are you hoping to achieve?

CYPRUS

Cyprus has rapidly become one of Europe’s top hotspots for expatriates. If you are considering relocating, and are a bit of a sun-chaser, Cyprus should be top of your list. The island offers a warm climate, good infrastructure, convenient geographic location, membership of the EU, tax advantages for companies, and incentives for individuals. Cyprus also offers an excellent private healthcare sector, a high quality of education, a peaceful and friendly community, and a low cost of living.

On top of that, individuals are drawn to the island due to its advantageous non-domicile tax regime, whereby Cypriot non-domiciliaries benefit from a zero rate of tax on interest and dividends. These zero tax benefits are enjoyed even if the income has a Cyprus source or is remitted to Cyprus. There are several other tax advantages, including a low rate of tax on foreign pensions, and there are no wealth or inheritance taxes in Cyprus.

Individuals wishing to move to Cyprus can apply for a Permanent Residence Permit. Applicants can make an investment of at least €300,000 in one of the investment categories required, and prove they have an annual income of at least €30,000 (which can be from pensions, overseas employment, interest on fixed deposits, or rental income from abroad) in order to apply for permanent residence.

Alternatively, a temporary residence permit can be obtained by establishing a foreign investment company (FIC). This kind of international company can obtain work permits for relevant employees and residence permits for family members.

Find out more: Benefits, Financial Obligations, and Additional Criteria of the Cyprus Permanent Residence Permit

MALTA

Located in the Mediterranean, just south of Sicily, Malta offers all of the advantage of being a full member of the EU and Schengen Member States, has English as one of its two official languages, and a climate many chase all year round. Malta is also very well connected with most of the international airlines, which makes travel to and from Malta seamless.

Malta is unique in that it offers a variety of residency routes to meet different individual circumstances. Some are appropriate for non-EU individuals while others provide an incentive for EU residents to move to Malta. From the Malta Permanent Residence Programme, to the Digital Nomad Residence Permit, the Highly Qualified Person’s Programme, targeted towards attracting professional individuals earning over a certain amount each year offering a flat tax of 15%, to Malta’s Retirement Programme. It should be noted that none of the Malta residency routes have any language test requirements.

  1. Malta Permanent Residence Programme – open to all third country, non-EEA, and non-Swiss nationals with a stable income and sufficient financial resources.
  2. Malta Residence Programme – available to EU, EEA, and Swiss nationals and offers a special Malta tax status, through a minimum investment in property in Malta and an annual minimum tax of €15,000
  3. Malta Global Residence Programme – available to non-EU nationals offers a special Malta tax status, through a minimum investment in property in Malta and an annual minimum tax of €15,000
  4. Malta Key Employee Initiative – is a fast track work permit application programme, applicable to managerial and/or highly-technical professionals with relevant qualifications or adequate experience relating to a specific job.
  5. The Malta Highly Qualified Persons Programme – available to EU nationals for five years (may be renewed up to 2 times, 15 years in total) and non-EU nationals for four years (may be renewed up to 2 times, 12 years in total). This route is targeted at professional individuals earning more than €86,938 in 2021, and seeking to work in Malta in certain industries
  6. The Qualifying Employment in Innovation & Creativity Scheme – targeted towards professional individuals earning over €52,000 per annum and employed in Malta on a contractual basis at a qualifying employer.
  7. Digital Nomad Residence Permit – targeted at individuals who wish to maintain their current job in another country, but legally reside in Malta and work remotely.
  8. Malta Retirement Programme – available to individuals whose main source of income is their pensions, paying an annual minimum tax of €7,500

To make life even more enjoyable Malta offers tax benefits to expatriates and the attractive Remittance Basis of Taxation, whereby a resident non-domiciled individual is only taxed on foreign income, if this income is remitted to Malta or is earned or arises in Malta.

Find out more: A Snapshot of Malta’s Extensive Residence Programmes

PORTUGAL

Portugal, as a destination to relocate to, has been top of the list for several years now, with individuals attracted by the lifestyle, the Non-Habitual Resident Tax Regime, and Golden Visa. Despite not being on the Mediterranean, it is partially considered a member state of the Mediterranean region (along with France, Italy and Spain), with a Mediterranean climate of hot, dry summers and humid, cool winters, and a generally hilly landscape.

Portugal’s Golden Visa is the perfect route to Portugal’s golden shores. Due to its flexibility and numerous benefits, this visa has proven to be one of the most popular in Europe – providing the perfect solution for non-EU citizens, investors, and families looking for Portugal residency, plus the option to apply for citizenship after 6 years if that is the long-term objective.

With changes soon approaching at the end of 2021, there has been a rapid uptake of more applicants in the last few months. Forthcoming changes include Golden Visa investors not being able to purchase properties in high-density areas such as Lisbon, Oporto, and the Algarve, which opens up greater opportunities for investors in Portugal. Alternatively, there are very attractive advantages in any one of the other non-real estate routes (more information can be found here).

Portugal also offers a Non-Habitual Residents regime to individuals who become tax resident in Portugal. This allows them to enjoy a special personal tax exemption on almost all foreign source income, and a 20% tax rate for employment and/or self-employment income, sourced from Portugal, over a 10-year period.

The Golden Visa may seem less important for EU citizens, as they already have a right to live in Portugal without formal immigration or investment being required, but the NHR has proved to be a major motivator for both EU and non-EU citizens looking to relocate.

Find out more: From Portugal’s Golden Visa to the Non-Habitual Residents Regime

Summary

Moving Abroad? What to think about!

If you require additional information regarding moving to Cyprus, Malta, or Portugal, or would like to speak to an adviser to find out which route and/or country best suits you and your family’s needs, we have staff located in each jurisdiction, to answer your questions:

Dixcart Management Malta Limited Licence Number: AKM-DIXC

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