17 Mar 5 Reasons To Move To Malta

Why Malta Could Be The Perfect Place To Call Home

In our previous immigration article we covered Japan and reasons why South African expats may consider this country as their next home.

This month we’re travelling 10 113 kilometres to the west from Japan to Malta to show you why this archipelago may be the perfect destination to call home.

Malta may not be top of mind when you consider your immigration options, but it’s become increasingly popular with expats the world over, including South Africans. In fact, Rand Rescue recently opened offices in Malta due to the popularity of the destination.

5 Reasons to move to Malta

Malta is not only a beautiful country with awe-inspiring architecture, beautiful beaches and people who welcome foreigners to their shores, they also have attractive perks and great appeal for the South African expat market in particular.

The Power of the Passport

As South Africans, travelling can be a hassle. Not only do we have to travel vast distances, but we generally need to lug around a backpack filled with documentation and our passports don’t get us around visa-free.

Should you decide to move to Malta, however, you’ll be able to travel relatively unimpeded. Not only is the Maltese passport ranked fifth in the world (compared to South Africa’s spot at no. 43), but as a citizen of Malta you may also be eligible for your Schengen visa which will allow you to travel through Europe without a hitch.

Malta’s passport ranking has a visa-free ranking of 163, which means you can travel to 163 countries around the globe without a visa. The South African passport only allows for visa-free travel to 98 countries as of 2019.

Of course many expats don’t necessarily want to give up their South African citizenship, but since both countries allow dual-citizenship, this shouldn’t be a problem. Just bear in mind that the South African High Commission requires that individuals who wish to apply for dual-citizenship must be granted permission to retain their South African citizenship before applying for citizenship elsewhere else you may forfeit your citizenship.

Financial Freedom

There are several ways in which Malta offers financial freedom to its citizens.

Firstly, although the archipelago is relatively small, there are a range of entry-level jobs as  well as more specialised positions. The former is due to the tourism boom in the region, while the latter is due to so many foreign companies opening offices on the islands.

You may wonder why foreign companies would choose Malta as home base, and this is where we come to the second part of “financial  freedom”. Malta offers the lowest effective corporate taxes in the entire European Union and at €1 165 (R19 030,34), the share capital cost (start-up capital) is one of the lowest required across the world and you only need to hold 20% of this fee in a bank account.

Furthermore, its tax system is a bit different to other countries. Your earnings place you in tax “bands”:

1. €0 – €9 100: 0%
2. €9 101 – €14 500: 15%
3. €14 501 – €60 000: 25%
4. €60 001+ : 35%

Let’s do a simplified calculation of an income tax scenario — bear in mind that actual tax calculations will differ as there are different tax statuses (single, married, individual, expatriate, resident, non-resident, etc.) as well as tax relief for certain individuals.

Mr. Jones is a single native resident of Malta who earns a salary of €27 550 per year (R450 030,77). This would essentially place him in Malta’s third tax band (25%). In a different country this could see him pay €6 887,50 (R112 507,69) in taxes as the tax may be levied on his total salary. In Malta, however, he only pays the higher percentage tax on the portion of his income which falls within the higher band.

He would therefore pay 0% tax on his income up to €9 100, 15% tax on his income between €9 101 and €14 500 (€5 999) and 25% tax on his income between €14 501 and €60 000 (€13 049).

His band 1 income tax will therefore be €0, his band 2 income tax will be €809,85 and his band 3 income tax will be €3 262,25 which is a total of €4 072,10 (R66 517,98). This means he really only cedes 14,78% of his €27 550 earnings to tax. So although the taxes may seem steep at first, it’s clear that it’s not really that high in practice.

Malta offers foreigners even more benefits when it comes to tax treatment. Should you become a resident of Malta you could qualify for the special residence taxation scheme. This means you will only be liable for taxes on two types of income:

1. Maltese sourced income and capital gains.
2. Tax on foreign sourced income only if that income is remitted to Malta.

The second point is quite interesting. As South Africans we’re also taxed on our worldwide income, but unlike SARS, the Maltese revenue service has no interest in taxing income earned outside their borders if the funds are not held in a Maltese account. To top this all, foreigners pay zero tax on foreign sourced capital gains, even if they do transfer those gains to a Maltese bank account. You’ll also pay no gift, inheritance or wealth tax and a mere 5% stamp duty on real estate or 2% on certain share transfers.

How much more rosy can it get? Well, Malta also offers tax rebates and relief for certain individuals. Married couples pay less tax than single individuals and parents pay even less! Furthermore, you may also be liable for tax credits under certain circumstances. Tax credits or partial relief is applicable for:

• Women who have children under the age of 16 and have returned to work
• Business owners who have incurred costs for making the workplace more accessible
• Business owners who have incurred costs for providing childcare facilities at the workplace
• Individuals/families who are hosts for foreign students (and have registered with the Maltese Tourism board)
• Part-time employees
• Registered football players
• Individuals or businesses who qualify for MicroInvest (self employed or micro enterprises)
• Creative enterprises
• Individuals qualifying for the Highly Qualified Persons Incentive
• Businesses who have incurred expenses for the implementation of the Pharmacy Of Your Choice scheme.
• Individuals or businesses who make donations to the University Research, Innovation & Development Trust
• Businesses which accommodate apprentices and mature  (and previously unemployed) workers
• Married women returning to work

Of course, if you’re not a resident of Malta or don’t want to apply for financial emigration, there is a silver lining for you too. South Africa and Malta have a double taxation agreement in place which will give you relief on your income tax.

Article 22 of the Double Taxation Treaty between South Africa and Malta states that

South African tax on income earned from a source within South Africa will be allowed as a credit against relative Malta tax payable thereon, and where South African tax is paid in South Africa and such income is taxable in Malta, the relevant Malta tax on such income is deducted from South African tax.

It is a bit more complicated than this, but the gist of the DTA is to protect you from double taxation. Remember that you will need to apply for the relevant tax directive every year in order to qualify for tax relief under a DTA.

For those who do want to make Malta their permanent residence, financial emigration is also on the cards. Rand Rescue can assist you with this process and offer competitive rates and swift service to get your financial assets to your new home.

There is a downside to living in Malta as the cost of living is a bit steeper than you’ll find in South Africa, but compared to other European nations it’s still far cheaper!

Mediterranean weather

Malta truly is the epitome of smooth sailing and sunny skies. Unlike other place in the Mediterranean though, you will not scorch to death in the sun, as the weather is quite mild.

In fact, Malta’s climate quite closely resembles parts of SA. In 2016 InterNations’ annual Expat Insider survey had placed both Malta and South Africa in the top 10 countries with the best climate.

But unlike South Africa which has six climatic zones (as recognised by the South African National Standard) or twenty-six (as surveyed by the Council for Scientific and Industrial Research), Malta’s climate is recognised as mediterranean through-and-through.

Malta has an average temperature of 18,7°C (compared to South Africa’s 17°C) and a mean precipitation average of 557.5 mm per annum (compared to South Africa’s 669.9 mm per annum).

Malta most closely resembles Cape Town if one is to compare regions, with both regions having hot and dry summers and wet winters:

Unlike Cape Town, however, the temperatures during winter generally doesn’t drop below 15 degrees Celsius and you don’t have to take on the dreaded Suidooster wind. Keep in mind that the average wind speed in Cape Town is 25 km/h whereas you can easily navigate the 4 km/h average wind speed in Malta.

This sunny paradise offers its residents a chance to experience an eternal holiday, and should you wish to escape the sun, the rest of Europe is close by.

The Ease of Living

Immigrants to Malta have noted how living on the islands has improved their work-life balance and strengthened their familial bonds. Users on the Expat.com forum have noted how it’s easy to fit in lunch or soccer practice with the kids during your lunch break as everything is close by.

Moreover, you are never far from the sea or other islands in the archipelago. The main island, Malta, is 246 square kilometres, while the entire archipelago covers 316 square kilometres. The distance between Cirkewwa (Malta) and Mgarr (Gozo) is 6 kilometres and there’s a ferry which connects the two islands. If you want to visit Blue Lagoon in Comino, it’s a mere 3.2 kilometres from Cirkewwa and a 18 minute ferry trip will get you there.

Traveling on the mainland with public transport (bus) will cost you a mere €0,75 (R12,25) per trip if you have a Tallinja Card.

Malta has a laid-back atmosphere and with near half of the population being expats it offers the best of both worlds — a metropolitan society in an island environment. One gets the feeling that you are at once immersed in an ancient wonderland while having easy access to modern amenities and western culture. In fact, many expats state that one has a sense of spending all your days on a perpetual holiday.

What more could one want from an expat destination?

Superb healthcare

Malta has ranked no.5 in the world for healthcare for decades and it’s also maintained its second place rank in Europe for many a year (with France at top spot).

In fact, Malta was one of the first countries to offer publicly funded healthcare — dating back to 1372. One of the first projects of the Knights of St. John (who’d arrived in the 16th century) was to build hospitals.

The success of its healthcare is ascribed to the nation not only focusing on curative care, but preventative and rehabilitative care as well. The country offers free healthcare to all citizens and European Union Residents.

They also offer both private and public healthcare services, much like South Africa, but unlike our mother country, the public healthcare system is quite on point, and most practitioners who serve private healthcare clients also serve at public healthcare institutions.

Finding a doctor is also relatively easy as nearly all pharmacies have GP’s available and on call during certain hours. At a cost of €12 (R196,83) for these “private consultations” it is also more affordable than consultancy fees in South Africa. 

Though expats don’t qualify for free healthcare, the World Health Organisation (WHO) announced in January that migrants require better healthcare in Europe — and it specifically mentioned Malta which has a migrant population of 45%. Additionally, you could apply for E-121 healthcare clearance provided you have been in Malta for more than three months.

 The E-121 certificate entitles you to healthcare if you don’t live in the country where you are insured.

Many Maltese residents opt for paying their medical expenses out-of-pocket, but this could be problematic should you have pre-existing conditions requiring a lot of care. Nevertheless, if you’re planning on making a permanent move, you’re sure to be in good hands in Malta.

Want to make a move? 

Looking to emigrate from South Africa? Remember that Rand Rescue can take care of all your cross-border financial needs. Simply leave your details below and we’ll get back to you!