Malta introduces special tax regime for Senior Employees of Family Offices

Malta has introduced a special tax regime for senior employees of family offices, back offices and treasury management operations, which offers a reduced flat rate of income tax of 15% on employment income.

Designed to attract and retain senior and specialised professionals within Malta’s family office sector, the scheme provides for lower income thresholds and a higher income cap than Malta’s existing Highly Qualified Persons Rules.

Brought into force on 17 October by Legal Notice 250 of 2025, the Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules define eligible persons, the applicable conditions and the procedure for benefitting from the reduced 15% flat rate of income tax on employment income.

Eligible roles include senior management positions such as Chief Executive Officer, General Manager, Country Head, Managing Director, Head of Back Office, Chief or Head Risk Officer, Chief or Head Compliance and Anti-Money Laundering Officer, Portfolio Manager, Chief or Head Investment Officer, Senior Trader and Senior Structuring Professional.

The eligible role must be held with a qualifying single or multi-family office that is licensed by the Malta Financial Services Authority (MFSA), as well as entities providing back office or treasury management services to them.

Under the Legal Notice, the Rules have a retrospective entry into force date of 1 January 2025 and applies from Year of Assessment 2026. The 15% tax rate applies to employment income from eligible roles up to €7 million per year. Income more than €7 million will be chargeable at the standard rate of 35%.

Qualifying beneficiaries must be employed in Malta under a contract in an eligible office and must receive annual emoluments of at least €65,000, which shall be adjusted upwards by €10,000 every five years. Qualifying income consists of emoluments under a qualifying contract of employment and excludes the annual value of any fringe benefits.

Qualifying beneficiaries are also required to possess relevant professional qualifications or a minimum of five years of comparable professional experience. Other conditions include having sufficient stable resources, living in suitable accommodation in Malta, holding valid travel documents, maintaining private medical insurance covering beneficiaries and their family, and not being domiciled in Malta.

Applications are to be submitted between 1 January 2025 and 31 December 2034 and are expected to be processed within 90 days of the submission of all the relevant documentation. Beneficiaries are eligible to benefit from the Rules for a period of five years, with the option of two further extensions of five years each, subject to conditions. The benefits under the Rules will not therefore apply beyond 31 December 2040 unless they are extended in the future.

“Having identified SFOs as a key asset in its national financial services armoury, the Malta Financial Services Authority (MFSA) has been updating its regulatory framework to facilitate the setting up of Single-Family Offices in Malta, in particular the Trustees of Family Trusts Rulebook in respect of Private Trust Companies (PTCs) to reflect modern family dynamics,” said Stephen Griffiths, Managing Director of Sovereign Trust (Malta).

The definition of ‘family member’ has been extended to ‘family clients’, which may comprise former family members, key employees of a family office, former key employees and non-profit or charitable organisations funded exclusively by one or more family member, dependant or family client.

The Investment Services Rules for Notified Professional Investor Funds were also amended to allow them to be managed by a family office vehicle that invests the private wealth of investors without raising external capital.

“Sovereign can work with family offices by setting up PTCs, or family trusts as they are generally known in Malta, as well as the underlying investment holding company. We then partner with local providers for the fund and investment management aspect,” said Griffiths.

“This new special tax regime for senior employees of family offices is therefore very timely. Malta continues to innovate in line with its strategic vision for financial services, and the family office legislation and incentives ensure that Malta remains competitive and attractive to highly qualified professionals and family offices.”