Citizenship in Malta for an Israeli family: how to secure the future of children in Europe

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.

Applicants for Malta citizenship are obliged to fulfil several requirements:

1. Contribute to the state fund at least €600,000.

2. Make a charitable donation of €10,000.

3. 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.

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.

Immigrant Invest is a licensed agent for government programs in the European Union and the Caribbean.