Malta’s Nomad Residence Permit: Income Tax Insights for Remote Workers and Advisors

Malta’s Nomad Residence Permit is an increasingly popular option for remote workers and self-employed individuals who wish to reside in Malta whilst continuing to earn income from overseas activities. The benefits of the permit are two-fold, in that it provides permission to live in Malta whilst also providing tax benefits.

The applicable tax framework is set out in the Nomad Residence Permits (Income Tax) Rules (S.L. 123.210), issued by the Malta Tax & Customs Administration. These rules establish a dedicated tax treatment for qualifying permit holders and operate alongside Malta’s general income tax legislation.

Who qualifies under the regime

The regime applies to third-country nationals (excludes individuals from the European Union, EEA and Switzerland) who hold a valid Nomad Residence Permit and who carry out what the rules define as “authorised work”. In broad terms, authorised work refers to services performed remotely using telecommunications technology, either:

• under a contract of employment with an employer established outside Malta; or
• in a self-employed capacity, provided that services are supplied exclusively to clients established outside Malta.

A key condition is that the individual must not carry on business in Malta through a fixed place of business. In the case of employed nomads, the foreign employer must not be resident in Malta and must not operate through a permanent establishment in Malta. For self-employed nomads, services must be rendered solely to non-Maltese clients and delivered remotely. These requirements are central to the approval of the scheme.

Tax registration and status

Once a Nomad Residence Permit is issued, the individual is automatically registered for income tax purposes with the Malta Tax & Customs Administration. However, the registered person would not qualify as tax resident in Malta. 

Income that would fall under authorised work will be subject to a tax rate of 10%. Any other income earned by the individual which includes but is not limited to investment income, rental income, or income that does not meet the authorised work criteria, is taxed in Malta in accordance with the standard provisions of the Income Tax Act, subject to the individual’s residence status and any applicable reliefs. The other income would be treated as the last part of the individual’s chargeable income for the year. 

The regime should therefore be viewed as a specific charging mechanism applicable to qualifying income, rather than a blanket exemption from Malta’s wider income tax system.

The Malta Nomad Residence Permit provides other benefits apart from beneficial tax rates. Holders of a valid Malta Nomad Residence Permit can travel freely within the Schengen Area for up to 90 days in any 180-day period without needing additional visas, provided the permit remains valid.