15 March 2016

Private jet industry growth in Malta

Earlier in the month I was in Malta, speaking at a business aviation industry conference. And while I was there, I took the opportunity to meet with clients and industry contacts on the island.

It’s a beautiful place, and a popular tourist destination with European holidaymakers. But it’s also growing in popularity with investors, due to its attractive tax system.

One of our clients has recently relocated to Malta from Asia. As he explained to me, since becoming part of the EU in May 2004, Malta has become increasingly popular with mobile high net worths, due to its highly attractive, residential tax-based incentive schemes. With Maltese and English both official languages, it’s also a practical choice.

These incentives are not limited to EU citizens – they can be taken up by any non-Maltese nationals.

Malta’s tax incentive schemes

The tax incentives include citizenship (Malta/EU passport), by way of an Individual Investment Programme.

The Ordinary Residence scheme requires a minimum 183 days annual residency in Malta, (with graded tax rates, to a maximum of 35%).

Other schemes don’t have a minimum residency requirement, but state that you cannot reside in any other single jurisdiction for a period greater than 183 days in the year.

In addition, subject to some conditions, most of the schemes are taxable on a remittance based income to Malta, only. That tax exposure can be as low as 15%, subject to a minimum annual payment of €15,000.

And a feature that proves particularly attractive to many is the option to remit capital gains earned outside of Malta, tax free.

There are no Wealth Taxes, Inheritance Taxes, Gift Taxes or Capital Gains Taxes (CGT) other than CGT on gains in Malta. The sale of a private residence, after 3 years occupation in Malta, within 12 months of vacating the property, is also CGT exempt.

The Citizenship, or Passport Scheme, is very attractive to non EU nationals (and their families), across the world, but there are high up front capital costs involved, so this is specifically targeted at high net worth investors.

Private jet charter to Malta

Of course, taxation is a complex area, and these incentive schemes may not prove beneficial for everyone. So we would obviously recommend seeking some expert financial advice. But it’s not difficult to see why Malta is seeing increasing attention from high net worths.

And as more become aware of the advantages of basing themselves in Malta for part of the year, this is translating into increased demand for private jet travel to the island. Private jets can use the Executive Aviation FBO at Malta (Luqa) International Airport in Valletta – a stunning island landing that was recently shortlisted by the judges in our Scenic Airports poll 2016.

Here are some example prices for popular private jet charter routes to Malta.

London Luton – Malta (one way)

Aircraft: Citation XLS

Flight time: 2 hours 56 mins

Price: €23 700