Why Moshe decided to obtain Malta citizenship
Moshe is an entrepreneur from Israel and a father of three daughters. He was worried about his children’s destiny as he believes Israel is not safe to build the future. Moshe and his wife Tamar want their daughters to enter European universities when they grow up and stay in Europe after graduation.
As Israeli citizens, Moshe’s children did not need a visa to enter Schengen, but they could not stay there for unlimited time. The entrepreneur decided to obtain EU citizenship for his family so that his daughters got the right to live, study and work in Europe.
Moshe came to us for a consultation and asked whether there was a European country where he could get citizenship without prior relocation. We suggested two such options:
- Malta citizenship by naturalisation for exceptional services by direct investment;
- Portugal citizenship through the Golden Visa.
In Malta, one can apply for citizenship after 1 or 3 years of holding a residence permit. In Portugal, this term is set at 5 years. Both countries do not require living in them while waiting for citizenship.
The route to Portuguese citizenship is longer, but it requires fewer expenses: a minimum of €250,000 against €690,000 in Malta. Another difference is that Portugal demands passport applicants to have a language test, while Malta does not.
Considering the options, Moshe consulted his tax advisor. He wanted to know if a second passport might help him reduce the tax burden, personal or corporate.
As for the tax on personal income, Moshe could cut it only if he moved to the country of his second citizenship, as one needs to spend 183 days a year in the country to change tax residence.
As for the tax on the company’s profit, the investor learned he could optimise it by opening a branch of his company in Malta and transferring its turnover to the country. Maltese standard corporate income tax rate is 35%, but most companies are subject to significant tax refunds, reducing the effective tax rate to 0—10%. In comparison, the rate is set at 23% in Israel and 21% in Portugal.
The opportunity to cut taxes and a shorter time to citizenship persuaded the investor to choose a Malta passport over the Portuguese.
What conditions the investor needed to meet to get Malta citizenship
Applicants for Malta citizenship are obliged to fulfil several requirements:
- Contribute to the state fund at least €600,000.
- Make a charitable donation of €10,000.
- Purchase real estate for €700,000 or rent it for 5 years for €16,000 a year.
All the conditions are mandatory, but there are two things at the choice of the investor.
Investors can choose the timeframe for obtaining citizenship: 1 or 3 years. The shorter path requires €150,000 more of the contribution. And adding each family member to the application demands an additional €50,000.
In Moshe’s family’s case, the investor was to contribute €800,000 and get citizenship in 3 years or €950,000 and obtain passports in a year. Moshe decided to choose the more costly but less time-consuming path.
Applicants can also opt for renting or purchasing property in Malta. Moshe decided to rent an apartment as he was not sure any of his family would choose Malta for living. Immigrant Invest real estate experts helped Moshe and Tamar find a suitable apartment.
How the family obtained Malta citizenship by spending €1,053,500 and 16 months
Besides €1,053,500 that Moshe spent to meet the requirements, he paid about €10,000 for insurance and the translation and certification of documents. Already after receiving the second passport, he will also spend another €64,000 on property rent to comply with the terms.
Our Compliance AML Officer checked Moshe’s family’s eligibility for Malta citizenship. He and his wife had no criminal record or visa denials, were not subject to sanctions and earned legal income; thus, they could qualify for Malta citizenship.
After the check, Moshe signed an Engagement Letter, and we started to work.
We applied for Moshe’s family to obtain Police Clearance. The Maltese police checked the investor, his wife and their two daughters over 12 against the Interpol and Europol databases, found no issues and granted certificates.
At this stage, Moshe and Tamar came to Malta to complete several tasks:
- The spouses viewed several apartments from our property database. When they made a decision, we prepared a lease agreement, and Moshe paid the rent of €16,000 for a year ahead.
- The investor took out a family insurance policy with the minimum amount of coverage being €50,000 per person.
- The couple visited our office to sign government application forms. They also had their identification documents copied and notarised with the Maltese notary.
- The Immigrant Invest lawyer accompanied Moshe and Tamar to the Community Malta Agency to give biometrics and apply for residence permits.
- Moshe paid the following fees: €6,000 for residence permit cards, €3,000 as an administration fee and €10,000 towards the contribution to the fund.
Residence permit cards were issued 2 weeks after submitting biometrics and sent to Moshe and Tamar in Israel. As their daughters were under 18, they were not required to obtain residence permits.
We helped Moshe collect all necessary documents, notarise and translate them into English. Malta has strict requirements: the investor had to file not only identification documents and bank statements but lists of all assets and affiliated companies and a description of his work, business and any other sources of income from the moment he received his education to the present day.
Our lawyers also filled out government forms on the investor’s behalf and sent them to him to sign. When we got the signed forms back, everything was ready to apply for the main Due Diligence check for Malta citizenship.
We submitted the package of Moshe’s family documents to the Community Malte Agency to consider. Moshe paid €45,000 for carrying out the Eligibility Test and another €5,000 as an administration fee.
The check was conducted within 4 months, and Moshe’s application was then forwarded to the Minister. He preliminary approved the investor’s candidacy.
After a year of holding Maltese residency, the investor became eligible to apply for citizenship. We filed an application on his behalf.
The spouses’ residence permit cards were renewed so that they stayed Maltese residents until they got their passports.
The Malta Community Agency and the Minister responsible for matters relating to Malta citizenship granted their final approvals.
Moshe fulfilled the investment conditions: contributed €940,000 to the fund, donated €10,000 to charity and paid €16,000 rent for another year. The administration fee was €2,500.
Our lawyers collected proof of investment and submitted it to the Agency.
The Agency invited Moshe’s family to submit biometrics and take an oath of allegiance. This time all the family came to Malta to do this.
After the oath, the family received naturalisation certificates.
The investor’s family received their new passports in person. After that, they applied for a Maltese ID card, which they received 2 weeks later by mail.
What opportunities Malta citizenship provided to Moshe’s family
With Malta citizenship, Moshe is confident about the well-being of his family. When Moshe’s eldest daughter finishes school in a couple of years, she will be able to enter any European university on an equal basis with other EU citizens.
The investor has already registered a company in Malta and started the process of transferring the revenue to the country. This will allow him to reduce the business’s tax burden by 13% or even more.
On a Malta passport, Moshe’s family can now travel to the USA without visas. This was not Moshe’s task, but it turned out to be a pleasant addition.
Before and after obtaining Malta citizenship, Moshe and his family:
- Could live only in Israel → Can choose where to live: in Israel, Malta or any other EU and Schengen country.
- Have to get visas to visit the USA → Can enter the States visa-free, with an electronic travel authorisation.
- Had no opportunity to reduce the company’s tax burden → Can change corporate tax residence and cut taxes.