Ordinary Residence - ramifications from new HNWI scheme

Hi! I certainly have no insider information and your questions are rather inquisitive I'm rather wary of the various opinions posted on this blog  as some dangerous comments have been posted by know-it-alls so do expect some negative replies.

I am sure that no impositions would come from Brussels.
The  PR residency has worked for me and given the new criteria I would have still opted for it.

"given the new criteria I would have still opted for it" - I believe you are a european citizen - if you weren't, would you be happy to pay the 500,000 deposit ? Not being awkward, just asking :-)

Yep, the PR scheme seems quite unattractive, and that is likely the point. Reading between the lines in the Times article, the old system was being abused by not-at-all-rich people. There is little reason to attract those, so I can see why the PR scheme was revised. I don't think it was used much by EU citizens anyway, because the OR scheme is, as you note, much better.

I have no inside info, but my feeling is that the OR scheme is next in line for a makeover, if only for a major increase in the sums of money involved. But as long as it stands it's worth taking advantage of, I think.

Coronator wrote:

I have no inside info, but my feeling is that the OR scheme is next in line for a makeover, if only for a major increase in the sums of money involved. But as long as it stands it's worth taking advantage of, I think.

It can only be tweaked for EU citizens - they cannot demand EU citizens have a higher standard of living than Maltese

The Maltese minimum wage is about €6000 per annum - that is all Malta is allowed to expect an OR person to live on, as they cannot discriminate between Maltese and other EU citizens in this respect

GeorgeinGozo, yes I am an EU resident.
In all fairness though it seems that there was heavy abuse by non EU residents. Taking on non EU residents is a hefty risk on the country so frankly I think the distinction EU and non EU is very fair.

Possibly the figures quoted are on the high side though.

The Maltese pay up to 35% tax , so if anything we benefit far more at 15%.

sunshinemalta wrote:

The Maltese pay up to 35% tax , so if anything we benefit far more at 15%.

true, but there is a 20,000 minimum tax bill for EU (and 25,000 for non EU) - for a Maltese to pay 20,000 tax, they would need to earn about 75,000, which is more than the Prime Minister earns

The new system is attractive to EU citizens (compared to OR) who have an income that they bring into Malta of atleast 75,000, and are prepared to buy a house for 400K, or rent at 20K pa. Thats probably only a few percent of all the EU foreigners in Malta.

For non-EU citizens, Malta has priced itself out of the market - if that's their intention, then fine, its their country, just as long as they don't think they will be inundated with foreigners willing to pay 500,000 to live in Malta - I suspect it will be maybe 10 a year

georgeingozo wrote:

The Maltese minimum wage is about €6000 per annum - that is all Malta is allowed to expect an OR person to live on, as they cannot discriminate between Maltese and other EU citizens in this respect

Good point. That makes sense. Then the only thing they may tighten is the clause about no tax on foreign income, which is very attractive. Let's hope they keep it as it is.

Hi George,

I agree with you on this. Although I pay 1000€/month rent  here in Sliema  (about the Maltese average monthly income +/-) I would fail the 'desirability test' although I would go through with the income. I'm an EU citizen so it's better to go with Ordinary Residence anyway as sadly I don't fall into the million € category needing to save taxes:(

I have contact with many non-EU's that are economically very interesting for Malta but have no interest in forking out that kind of money under the new HNWI scheme.

10 per year could be a good house number! And not everybody with a lot of money might be 'desirable' for Malta either but could pass the 'test'.

Cheers
Ricky

ricky wrote:

And not everybody with a lot of money might be 'desirable' for Malta either but could pass the 'test'.

just to name a couple of neighbours - Berlusconi, Ghadaffi...

Hey George,

can you read my thoughts ?

How about adding Assad and Adoboli?

Cheers and a nice weekend !
Ricky

sunshinemalta wrote:

GeorgeinGozo, yes I am an EU resident.
In all fairness though it seems that there was heavy abuse by non EU residents. Taking on non EU residents is a hefty risk on the country ....

wasn't the guy on whom Malta spent €500,000 for healthcare and I guess the main object of all the outrage..hmm..British?

I see that a healthy conversation broke out on the topic. Whether we consider HNWI as too demanding (Monaco-style, almost), or irrelevant to majority of EU citizens, at least it is out and non-EU's can start making their decisions. I think it was very irresponsible to keep people in the dark for so long.

Back to the original question, OR is not likely to get terminated, it is EU directive to provide for free movement of people. But the taxation part of the permit can change in the future. I do not think it is conspiracy theory to think that EU is uneasy about having tax havens within the continent. If it were up to the goverments entirely, I believe they would rather not have Andorra, Monaco or Malta at all in relation to their tax regimes. And I bet that before Malta released HNWI, they asked EU whether "it looks acceptable."

I have some other questions about OR that have not been discussed on this forum before, but will open separate topic in order to preserve clarity of discussions.

Petr

Myrkur wrote:

sunshinemalta wrote:

GeorgeinGozo, yes I am an EU resident.
In all fairness though it seems that there was heavy abuse by non EU residents. Taking on non EU residents is a hefty risk on the country ....

wasn't the guy on whom Malta spent €500,000 for healthcare and I guess the main object of all the outrage..hmm..British?

he was an EU citizen, not sure if British

the british guy was within the rules and satisfied the conditions - so whats the problem....

As EU, he would have qualified for treatment anyway, so this change wouldn't impact him, or any other EU citizens living in Malta under OR - as it happens, I've heard on good authority that his bill was nothing like 500,000

Just shows again, Malta using sledgehammer to crack a nut - 5% of foreigners living in Malta are under PR - the other 95% under OR. If there is "abuse" of the health system, this change only impacts 5% of the potential "abusers", and that was covered by already insisting on fully comprehensive health insurance for PR.

Q...is there really any abuse of the health system? if so who by? and is it really any different to any other states.

Can't trust the newspapers anywhere can you!