High net worth individuals scheme

Interesting discussion. Add that the European mess is not an island of disaster in a happy world. Japan is in a much worse shape, will go down in this decade, and you can imagine the tsunami reaching our shores. America is not really stronger, and American banks have loaned mountains of money to the European banks that one day will collapse, and have also exhanged credit default swaps with God knows whom, because the swaps are unregulated and you cannot guess who is on the other side of the deal: a strong institution (if they still exist) or a hedge fund next to bankrupcy. China? Europe is its main client, followed by US, and cannot survive without massive exports, and if exports fall its 1 billion 700 hundred million chinamen will simply go mad.
It's going to be fun. The best housing solution in Malta: a house with a garden, where you tear away the flowers and plant tomatoes and potatoes and breed chickens...

Oh, I forgot these fresh data from the Bank of International Settlement: just four big US banks have a totale exposure to the murky over the counter derivatives at around 235 trillion $. And - here is the fun part - their totale assets are a little more than $ 5 trillion. A leverage of 47 to 1, meaning that if only a little portion of the bets goes sour they are toast (but yes, they will be saved with the money of the public, provided they don't fall in the black hole at the same time: the citizens are there to be milked, right?). Globally the exposure to OTC derivatives is the lump sum of 600 trillion $ (and many experts say the real figure is more than twice that amount). We are sitting on nuclear bombs

Coming back to our topic. The HNWI is not yet launched. The process of applications is not yet open, as they wait "for the legislation as well as the list of authorized mandatories to be published", I was told. How longer it will take, does anyone have an idea?

"list of authorized mandatories" which list will be longer, that list, or the list of people actually applying ?

nothing on the website http://ird.gov.mt/regulations/hnwi.aspx

however, does say "Any further queries not covered by these notes can be sent by email to itu.mfei[at]gov.mt " so maybe send them an email

I think its been launched (in fact I think it officially was back dated to the start of the year, in an Orwellian revision of history so there was never a gap between the two schemes), its just there are no people authorized to process the documents !

Yes, that was the answer from MFEI. They don't know when legislation and list will be published.
Yes, the Act was backdated, and its provisions corresponded with those in the Guidance doc published earlier on the IRS website, but later the Guidance doc was modified and differs with the Act on the point that one is not forced to buy/rent property before approval of the application. And now they are waiting for more legislation, maybe a correction of the Act in the sense of the Guidance doc... or something else and new?
Yes, I guess there will be more mandatories than applicants

I stumbled on these figures for the Irish real estate bubble. Ireland, with a population of 4.5 million, built an excess of 300,000 homes. The bubble poppped a few years ago and now property prices are down 65%.
For Malta, with a population of less than one tenth,the equivalent excess of homes built would be about 30,000. But I see that the excess is estimated to "70,000 units", "one quarter of flats", and I even read "90,000". I am baffled. A mega bubble? How much should prices go down to clear the market?

Some time ago I asked: What if Southern Europe leaves the Euro Zone? The question seemed far fetched. Well, here are some lines from a Reuters dispatch:

German and French officials have discussed plans for a radical overhaul of the European Union that would involve setting up a more integrated and potentially smaller euro zone, EU sources say.
French President Nicolas Sarkozy gave some flavor of his thinking during an address to students in Strasbourg on Tuesday, when he said a two-speed Europe was the only model for the future.
The discussions among senior policymakers in Paris, Berlin and Brussels raised the possibility of countries leaving the euro zone while the remaining core pushes on toward deeper economic integration.
One senior German government official said it was a case of pruning the euro zone to make it stronger. "You'll still call it the euro, but it will be fewer countries," he said, without identifying those that would have to drop out.
EU officials have told Reuters treaty change will be formally discussed at a summit in Brussels on December 9, with an intergovernmental conference, the process required to make alterations, potentially being convened in the new year, although multiple obstacles remain before such a step is taken.

Hi rferra,

this is an interesting topic and will keep us busy posting in the near and middle-term future.

I would suggest that we start a new topic as this really has nothing to do with the High-Networth-Scheme in Malta.

I'll start a new topic. Maybe you want to repost your comment.

At the moment my question is : Who is going to leave the Euro-Zone first: Greece,Italy or Germany?

What do you think about what is going on in your country?


Where is the new topic?

Still I see a link with the HNWI scheme (that, announced in September is still not open for applications, they are waiting for a law on the 6,000 application fee - My God aren't they slow? In the current situation some pepole would be interested in moving to Malta, there is a window of opportuniy that will not last for ever). The minimum tax and minimum price/rent for flats are expressed in euro: Norther euro? Southern euro? What about the conversion rate to Maltese lire?

For the euro,the French-German-Northern countries at the moment seem interested in keeping the euro for them, letting out the nations not up to standards, one by one, IF they cannot be saved. The first one will be Greece? I don't know, anyway once the door has been opened others will follow.

A Northern euro would be much better than Germany going back to DM and France to Fr, because that would bring Europe back to wars (commercial, economic, financial... or worse). The problem here is that France is not so strong, it has huge debts, huge unfunded social programs, very weak banks that could need public support, ballooning the debt.

Another possibility is that Germany in the end accepts money printing (on a gigantic scale) in order to devalue all the debts. The euro would sink, the cost of life would skyrocket, the middle classes would become proletarians, social crises would ravage the continent. Historically the final result in those situations has always been war.

On Italy: the endless operetta side of our politics obscures the fact that Italy is always two steps in front. Who introduced fascism first in the Twenties? Who perfected media-politics and variety show-politics with Berlusconi? Who is putting into question the stability of the euro and of the EU? Not little Greece.

Hi rferra,

I started this new topic on the future of the €.



We are a couple that invested into an apartment in Sliema, before the new rules were announced. Effectively this disqualifies us from permanent residency, as very few people can afford or be willing to pay nearly a million Euros just to stay in a country (it adds up if you have dependants).

Euro citizens also do not need the scheme, as they have full access to member countries.

This extremely high barrier to entry will have negative consequences for Malta, as it discourages investment. This while the average property occupation vacancy in the urban areas is approximately 30%.

Being non-European citizens from South Africa, we have arranged for extended schengen visa that allow us to stay in any of the countries for a period of 90 days at a time. This is more than sufficient time, as we plan to alternate between the 2 countries anyway.

We sincerely hope the Chamber of Commerce is successful in suspending this impractical Residency scheme, as they indicated to object to.

Hi melindam,

I'm sorry to hear that you got stuck between the old scheme and the new HNMS . I'm not even sure if the new scheme is accepting applications yet as no Authorised Mandatories have been named on the ird website.

Feel free to contact me when you are in Sliema so we can get together.



I snooped for info in the net and found that one of the missing pieces, the legal approval of the (expensive) 6,000 application fee, is now there, with a legal notice of November 4th. Funny that on November 20 the info is still nowhere to be seen. Second: one of the probable mandatories told me they are on the approved list (list that is nowhere to be seen) and that the application process is now open (even if the info is nowhere to be seen).

It seems the Maltese are not very quick in spreading information. So I am the first to announce that THE HNWI PROGRAM IS LAUNCHED, folks.

I’ll meet you with pleasure in Sliema. Regards

Hi rferra,

thanks for the update !

As you have to apply through a 'Mandatory' who can somebody know who to contact for the application?

The first person to show me this list will be the one I quote whenever I get the question on our different forums-)))

Just to put a little bit of pressure on the 'system'-)))


PS I'm half-german - I mean what I say. The first 'Mandatory person' to prove his qualifation will be the one I will quote in the future-)))

Malta is not a 5 star country. All the rich people will never live on this island. The government and its corruption have to be cleaned first. When I read this scheme, what a joke. Many people come to benefit from a few tax advantages but after one year, two years, many prefer to pay more taxes somewhere else and leave this country. Please Queen, come back here lol

Pas très encourageant, mon ami…

I see you post a middle Canadian flag. I had fancied moving to Montreal, that I love (plus no income tax to be paid for five years), but, well, too cold, too far away.

I agree with you that Malta is dreaming when targeting the “rich” foreigners. They go to Montecarlo, Andorra, the Caribbean islands… luxury, top services, zero income tax.
A few decades ago Malta was a jewel to be polished and modernized, could become the Montecarlo of the south. Unfortunately the choice made was to fatten the real estate builders, and they covered with cement the island. The villas and traditional houses on the waterfront were replaced by massive and ugly buildings. Of course it happened also in Italy and on the Cote d’Azur. Myopic mistakes are made everywhere.

We have been discussing the financial and economic crisis in the euro zone. What do you guys living in Malta think of the local situation? I understand that the two breasts of the economy are tourism and real estate. Tourism could be hit by the coming recession or depression. For the real estate I found different figures for unoccupied properties, from 54.000 to 70.000 units. And prices are unreasonably high. If this bubble popped (as it has in Ireland, where prices are down 65% and banks that extended the money are under water)  would you have a banking crisis as well?

Hi John,

so true ! The rocks belongs to a few believers and ' grandmasters' and not to forget , the hunters ! Just two news clips from today ( and you find them everyday) -))) :

http://www.timesofmalta.com/articles/vi … man.394691

http://www.timesofmalta.com/articles/vi … ear.394696

As quoted, if you ask a question about these incredible happenings, you get a stupid answer like ....what , we don't know what you are talking about. It was all completely different ....

Another episode in ....welcome to Mickey Mouse country , only in Malta ! -)))

And another one from today:

http://www.maltatoday.com.mt/en/newsdet … tory-fares

I wouldn't be surprised if Arriva just backs out of the contract with Malta soon. It seems it is just not worth it to constantly take the blame for crap that has been produced by others with certain eye colours.


Why did our former ambassador resign (Doug Kmiec)?  You've actually got feet on the ground there and I've got bankster propaganda: the golden rule.


Hi Duffy,

an update on my last post:

http://www.timesofmalta.com/articles/vi … gns.395000

So after 10 ! days of persuasion by the Prime Minister one of the ' blue-eyed boys'  was 'forced' into resignation. But not really , I wouldn't be surprised when he shows up anytime sooner or later with another government job , for example 'CCCO' of AirMalta (Chief-Customer-Care-Officer).

The Chairman offered no excuse but the explanation that he was only caring about service to the customers as the ferry had left early and therefore he had to order it back to harbour. But his company was running exactly on the new schedule as it is supposed too -.))) A big blunder ....

Your former Ambassador was 'forced' to resign because he was also a 'blue-eyed' boy - just from across the ocean. He made the mistake that he was praying too often and not caring enough about his job at the embassy (and maybe because he killed a Catholic nun and a priest after driving into a ditch in California). I'm not saying alcohol was involved but he obviously didn't have the right guidance from 'above' -)))

Now they have engaged a professional diplomat to do the job in one of the biggest US embassies in one of the smallest countries in the world. I wish her the best in her new position in Malta and hope that they care more about the Americans living in Malta. Ilene never received anykind of invitation from the embassy .

We on the forum are doing a lot of work that I would expect US embassy diplomats in Malta to do. Give advice on visas,residency and work permits. But they usually don't.

I hope that gets better with the new ambassador as their main goal is not to shift hundreds of illegal immigrants to the US which is really very nice but their own citizens would also like a bit of support-)))


From the Times of Malta, November 21

http://www.timesofmalta.com/articles/vi … als.394758

“The Maltese government has said it is looking at different schemes in addition to the new HNWI one. A scheme for the retirees who are not necessarily wealthy could rejuvenate Malta as a destination”.

Apart that the “new one” is still in the clouds, and that the retirees will not “rejuvenate” Malta, are they going to introduce more schemes and when?

Apparently they are realizing that the HNWI does not attract crowds of applicants.

So confusing, and becoming more confusing.

Ricky - thank you.  I had always thought that our fearless leader only sent Mr Kmiec there to curry favor with the Catholic voting bloc for our elections next year.  But not a lot of news about his return. I thought he resigned voluntarily, but it's been a long year for me and I missed it. Thx again.

RF - The new scheme has changed my mind although I am still waiting to see if Malta comes to its senses. I'd like to work there a few years or more.  Even vacation sounds good now though.  I was supposed to go out tonight and am trapped at home with 50 mph wind gusts from the south. A foot of snow has melted in one day and it's supposed to refreeze in a day or so. At least Malta has a good climate. Summers in Alaska are heaven, winters are not.

So I think Malta will still get tourists, in fact I wish I were there right now.  But as far as rejuvenating the country with retirees -- have they lost their minds?  Don't you have to produce something to rejuvenate a country?  Even McDonalds has mastered that concept.  (Not that the US has a lot of room to talk . . . no offense intended).  But if I were an ultra rich retiree who was willing to have my assets taxed and plundered, Malta is not where I would retire, as much as I want to be there for a while.


In Italian we say: Meglio tardi che mai, Better late than never…

The IRS website has finally published the List of authorized mandatories and a new Guidance notes document.

Meaning, I suppose, that the application process for the HNWI scheme has been opened.

At the same time I hear confirmations that a different scheme, less expensive, is on the drawing board for retirees.

Do you have any info?

Hi rferra,

no , I have no information about a cheaper scheme for retirees . To be honest , why should they ? That would be back to where they came from.

Retirees from the EU can come to Malta anyway, with or without the new scheme. And other retirees with a lot of money can go anywhere they want.

If some one really doesn't want to pay taxes, Malta as part of the EU is probably not the right place anyway.



maybe they understood that the new scheme is too much expensive, does not attract the middle class, while the real high net worth people (living on capital revenues, not salaries or pensions) are more attracted by Montecarlo, Andorra, the Caribbean, where they get top services and pay NO tax at all (while of course they pay a lot of money for property and services).

As they could not say, ok we were dreaming, let ‘us go back to the old scheme after we cancelled it, and lose face, they had to finally launch this one. The meager flow of applications will confirm what I suspect, and they will take out of their sleeve a scheme for retirees, more expensive than the old one but less than the HNWI.

Middle class retirees are the main market for this kind of schemes – see for example the retirado schemes in Latin America, the No Tax scheme for pensioners in Australia, the 50% tax discount for pensioners in Germany and so on.

True, European retirees can move to Malta as they like, paying the ordinary tax. But a little calculation: on a 15% basis, the 20,000 minimum tax corresponds to a pension (or two pensions for a couple) of about 130,000 euro. The ordinary tax of 35% would be 45,500. 20,000 minimum tax plus 20,000 minimum rent equals 40.000. I suppose they did this calculation, while targeting the upper middle class segment.

On the other side, at the ordinary rate, a tax of 20,000 corresponds to a couple’s revenue of about 80,000. Up to that level you don’t bother with the HNWI. From a revenue of 130,000 up you are interested in the HNWI. In between, the tax you pay moves from 15% to 35%, and the more it approaches 35% the more it approaches the level paid in the home countries.

So the HNWI does not really attract people with pensions (husband or husband + wife) between 80,000 and 130,000, that are a much greater number than pensions from 130,000 up.

I guess the retirees scheme will cover this ground and fill the gap. Malta will get less money from the few wealthy retirees (that will switch to the new scheme) but will have a wider base of applicants.

As for the final HNWI rules now announced, the main change is that the “90 day minimum residence in Malta in any one year” has been removed, and some help has been offered to people who applied for the old scheme before it was suspended.

Hi rferra,

the 50 % tax discount for pensioners in Germany only applies to German State pensions as it has to do with the way pension contributions have been taxed in the past.

You can get 50 % of your contributions back when you leave Germany but you give up your pension entitlement. The other half stays in the system.

By 2040 100 % of a new state pension in Germany will be taxed at the usual rate that increases with the pension sum. At the moment 60 % of a new German state pension are taxable. 100 % of other or corporate pensions are taxable.

Even if a foreign pension is taxed at source (UK for example) the pension will increase the tax on any other income that is taxable in Germany(Progressionsvorbehalt).

At least in Germany the highest possible state pension is about 30.000 €/ year. If you add on corporate pensions and income from average investment amounts and property you are still a far distance from the amounts in your calculation. And the usual pension is between 1000 and 1500 € /month.

So you are really talking about very few people to who any kind of scheme would appear interesting. Not really what I would refer to as Middle Class but definitly high Upper Class.

I would also expect the taxation on all income in other EU countries to be harmonized over the next years due to the increasing financing problems and problems with sovereign debt.

So moving to another EU country to save taxes could turn out to be a short term gain only.


Hi Ricky,

thanks for the infos on the German system.

Pensions in Germany are lower, but also the contributions paid by employers and employees in the course of the working life are lower. In Britain I don’t know. French pensions are higher. Italian definitely higher. Our gov just introduced a “solidarity tax” on pensions higher than 200,000 (managers, professionals and rich people).

The choice made in Malta when the old scheme was cancelled was to have a lower number of applicants paying more taxes and spending more for property and living expenses. We all said from the start that the result would be dismal, and probably the gov is realizing it is. So, without basically changing the approach, they could lower a little bit the thresholds for minimum tax and property, for the retirees. On the living expenses they already cancelled the rule of the minimum three months in Malta.

I think the results in terms of tax flow and property market propping will be limited anyway. And could be nil if in the meantime the euro crisis forces some countries to introduce exchange and capital controls, trapping the applicants. The gov should have acted with more speed. One year to change the scheme is really a long time.

As for the fiscal harmonization, the Brussels summit decided to start with the corporate taxes and the financial Tobin Tax. Will they be approved by all 26 countries? Malta signed the summit project but is disputing both points. I think Malta is right, protecting its interests. And, more generally, fiscal competition is a good thing, forcing the govs to be more efficient. Harmonization is just a means for raising taxes all together, draining money from consumers and the private sector to transfer it to the less efficient public sector.

Besides, from now to the next summit in March anything can happen.

Will they harmonize? And later the income taxes as well? I’m afraid we are not living in times of harmony, cooperation and concord, but in times of increasing fractures, disputes and financial/economic wars. Moving out of Europe would be a good idea, and not only for fiscal reasons, but Panama or Australia or Thailand are far away…


The number of Authorized mandatories registered to collect the HNWI applications is 36.

Question: How many will be the applications?

Make your guess

rferra :

The number of Authorized mandatories registered to collect the HNWI applications is 36.

Question: How many will be the applications?

Make your guess

according to my accountant (John Huber) - 7 applications, 2 accepted !

You mean 7 registered agents out of which 2 are accepted to take applications or you actually mean HNWI applicants this year?

7 people applied for HNWI, and 2 were accepted !

this year? or all the time it is existing.

I believe since its introduction, but possibly this year

You have replied to posts from 2011,you need to start a new topic.

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