Advantages of Maltese citizenship: reasons to move to the country

The benefits of investing in overseas commercial property have long been a driver of personal and corporate capital growth. The segment not only offers high yields, but also creates a sustainable platform for asset protection, risk diversification and strategic currency gains.

Unlike traditional investment instruments, investments in foreign commercial property provide control over real assets in economically stable areas. Long-term property price growth, stable rental flows and inflation protection are the main arguments in favour of such a move.

Advantages of investing in commercial property abroad: what to consider

Before you start, it is important to understand where the benefits of investing in commercial property overseas are strongest. The key success factors are:

1. Market liquidity.

2. Stability of rental demand.

3. Transparency of legal procedures.

4. Tax optimisation opportunities.

5. Asset Value Growth.

The benefits of investing in overseas commercial property are multiplied when the object is chosen based on real macroeconomic indicators rather than on emotion.

Passive income from real estate: the mechanics of stable profits

Passive income from real estate is generated by two main streams: regular rents and growth in the market value of the asset. This dual model creates financial stability even in unstable economic conditions. Average rates of return on commercial properties abroad range from 5% to 12% per annum. The choice of country, property type and location directly affects the bottom line. For example, in Thailand, mini-hotels in tourist areas yield 7-9%, while office space in Bangkok yields about 6-7%.

The “buy and hold” strategy remains the basic model. An investor buys a property, leases it out on a long-term or short-term basis and simultaneously captures the growth in value. After a few years, there is an opportunity for profitable resale with a capital gain of 30-50%. Hedging currency risks enhances the effectiveness of the tactic. The use of fixed exchange rate contracts or diversification of the currency portfolio allows you to maintain profitability even with fluctuations in the forex market.

In addition to rent, income is generated by additional services: advertising space, car parks, rental of conference halls, franchising on the territory of the facility. Passive income from property abroad turns into a complex cash flow, where each component strengthens the stability of the overall model.

Diversification: the main benefit of investing in overseas commercial property

Diversification of investments through the purchase of commercial property in different countries reduces the level of risk and increases the stability of the portfolio. Proper asset allocation across geographic regions, market segments and currencies creates a “financial cushion” effect that can mitigate any crisis.

Professional diversification includes:

1. Different countries: e.g. an office in Dubai, a hotel in Phuket, a shopping plaza in Cyprus.

2. Different segments: a mix of office, retail, hotel and warehouse properties.

3. Different currencies: hire in USD, EUR, Baht or Dirham to minimise currency risks.

Such a portfolio withstands localised economic downturns. If one market temporarily loses profitability, other markets compensate for the losses. As a result, the average return of the portfolio remains at the target level. The allocation of investments also provides flexibility. If conditions in one market change, you can quickly sell some assets and reallocate capital to more promising regions without critical losses.

Capital protection through foreign assets: how security works in practice

Capital protection is key to investing in overseas commercial property, especially in an era of global instability.

Legal protection of property rights

Most countries targeting foreign investors enshrine property protection in legislation. For example, in Thailand, when purchasing commercial property, legal control is exercised through a long-term lease with registration in state registries, which eliminates the risk of expropriation. International investment protection agreements further strengthen the rights of owners. They guarantee compensation for losses in the event of force majeure, changes in legislation or political risks.

Financial protection through insurance

Commercial property is insured against most risks – fire, natural disasters, tenants’ civil liability. Rent insurance protects the investor even if the tenant temporarily stops paying. This gives a stable cash flow regardless of circumstances and allows you to plan long-term financial strategies.

Strategic defence through the ownership structure

The use of international trusts, companies in tax transparent jurisdictions and special investment funds enhances asset protection. This structure minimises tax liabilities and facilitates inheritance without complex legal procedures. In addition, ownership through corporate structures allows for flexible asset management – selling, transferring, changing lease terms without unnecessary costs and bureaucracy.

Where the benefits of investing in overseas commercial property are maximised

The choice of jurisdiction becomes the starting point on the way to high returns and reliable capital protection. Below is a detailed list of countries where the benefits of investing in commercial property abroad are particularly pronounced:

1. Malta: stable economic growth of 4% per annum, high demand for office and hotel rentals, minimal barriers for foreign investors.

2. Cyprus: investments from 300,000 euros entitle to permanent residence, tax benefits, high demand for commercial rentals in tourist and business districts.

3. Greece: Golden Visa programme, rental yields of 5-7% p.a., market recovery after the crisis, especially in Athens and the islands.

4. Spain: stable demand for retail space, offices and hotels, favourable tax system for non-residents.

5. UAE (Dubai): no tax on rental income, fast-growing market, ample opportunities for short-term rentals and capital gains.

Why Malta is now becoming a centre of attraction for investors

The pros of investing in overseas commercial property are evident especially in Malta. The country has combined the best conditions for owners of commercial assets:

1. Economic growth and rental demand. Continuous increase in tourist flow and development of the financial sector stimulate demand for office space, hotel complexes, shopping arcades.
2. Rental yields on commercial premises in Malta are consistently at 5-6 per cent per annum, with relatively low capital investment compared to Western Europe.
3. Favourable tax regimes. Taxation in Malta is characterised by high loyalty to foreign investors. Tax rates on rental income are significantly lower than in other EU countries, and the system of international treaties allows to minimise double taxation.
4. Transparency of transactions and asset protection. The procedure of buying commercial property in Malta takes on average 3-4 months. The legislation guarantees property protection, the right to resell and transfer assets by inheritance without unnecessary bureaucracy.

Conclusion

A professionally constructed strategy for investing in properties abroad allows:

• to increase capital annually through rental streams and value growth;

• reduce risks through asset diversification;

• protect investments from economic and political shocks;

• optimise taxation and increase net profitability;

• access additional benefits ranging from residency rights to citizenship in some countries.

The benefits of investing in foreign commercial property become obvious not at presentations, but in real practice, when the asset begins to work for the capital, and not vice versa.

The real estate market is traditionally considered a “safe haven” for capital. However, alongside this, a solid layer of misconceptions has formed, hindering investors from making rational decisions. Myths about real estate investments have taken root in the minds of novice players, distorting their perception of risks, profitability, and the very mechanism of working with properties.

Passive income — a common myth about real estate investments

A prevalent myth among many investors is that real estate provides stable passive income without effort. Such a scenario can only work in the case of an ideal combination of circumstances, which are practically non-existent in practice. Managing a rental property requires regular attention: monitoring payments, solving household problems, maintaining the technical condition, and communicating with tenants.

For properties rented out on a daily basis (for example, through “Yandex.Travel” or Sutochno.ru), the volume of tasks increases significantly. With an occupancy rate of 70–80% and an average rate of 4,000 ₽ per night in St. Petersburg, a property can generate around 90,000 ₽ per month but will require 15–20 hours of work monthly: communication, cleaning, updating listings, and monitoring competition. Passive income in this segment is only possible when using a property management company, which reduces the margin by 15–30%. The investor pays for delegation, losing a portion of the profit but gaining in time.

Real estate prices always rise: the illusion of perpetual growth

One of the most dangerous myths about real estate investments is the belief that any property appreciates over time. Statistics indicate the opposite. In Moscow in 2023, over 22% of properties on the secondary market were sold for less than the purchase price in 2019–2020. The reasons include changes in macroeconomic conditions, an increase in the key rate, a decrease in demand, and building depreciation.

Looking at new developments, the dependence on the construction stage can be observed. Buying at the excavation stage is often seen as a guarantee of price appreciation. However, after receiving the keys, the price growth slows down or even reverses. A flat in the “Seligor City” residential complex, purchased in 2021 for 12.4 million ₽, may lose up to 8% in value by mid-2024 due to high competition and the launch of new phases at a discount. Price appreciation is a variable factor depending on location, market conditions, macroeconomics, and the developer’s policies. There is no automatic price increase.

Any apartment is suitable for investment: the myth of real estate universality

One typical myth about real estate investments is the belief that any apartment can generate income if rented out. This mistaken belief leads to the purchase of inefficient properties: either too expensive for tenants or impractical in terms of operation. Real case studies show that studios ranging from 24 to 28 m² with finishes and easy access to the metro provide the best returns.

For example, a studio in the “Mikhailova, 31” residential complex (Moscow), purchased for 7.5 million ₽, generates 48,000 ₽ per month with long-term leasing, resulting in a 6.8% annual return. In comparison, a three-bedroom apartment in the same area priced at 14.2 million ₽ yields only 65,000 ₽ in rent — a 5.5% annual return. Universality does not exist. Each property requires a precise calculation of profitability, assessment of infrastructure, tenant profile, and maintenance costs.

The larger the area, the higher the income: unreliable logic

A common misconception links the area of a property to its income. In reality, the yield coefficient often decreases with an increase in the property’s size. For a one-bedroom apartment in Yekaterinburg (40 m², 5.8 million ₽), the average rental rate is 22,000 ₽. A 25 m² studio for 3.9 million ₽ generates 19,000 ₽. The annual return is 4.5% compared to 5.8%. The reason lies in lower taxes, maintenance, furniture, and the liquidity of smaller formats. Additionally, larger properties are harder to sell or rent out quickly, especially during seasonal demand declines. Smaller formats offer more flexibility and are easier to sell on the secondary market.

New construction is always more profitable than resale: a common investment mistake at the start

Novices often opt for new developments only, believing in their “investment purity.” However, in some cases, the secondary market offers better returns. For instance, apartments in Soviet-era buildings near the “Novokosino” metro station. A resale property for 6.2 million ₽ generates 38,000 ₽ per month, while a new apartment in the “Reut” residential complex for 7.4 million ₽ yields only 35,000 ₽.

Reasons include the lack of waiting time for delivery in the secondary market, the ability to enter the market instantly, and avoiding the marketing markups of developers. Moreover, the secondary market is easier to evaluate in terms of property management company fees, utilities payments, and future major repairs.

Real estate profitability exceeds deposits and bonds: the illusion of profit

Myths about real estate investments are often based on outdated comparisons. As of July 2025, deposits in the top 5 banks offer up to 13.2% annual returns with capitalization. Federal bond yields are at 11.9%. Meanwhile, the average long-term rental yield in new developments in major cities ranges from 5.2% to 6.5%.

The actual profitability is lower when considering:

1. Depreciation and repairs — around 45,000 ₽ per year.
2. Vacant months — on average 1.5 months per year.
3. Property management company commission — 10–25% depending on the format.

Thus, the final yield can decrease to 3.5–4.2% — below inflation. Only with a smart choice of property and active management can one approach the target of 7–8%.

Key Considerations Before Buying

Prior to investing in real estate, a comprehensive assessment of the property is essential, including:

1. The current rental rate in the area (data from CIAN, DomClick).
2. The building’s completion timeline and status under the shared construction participation agreement (if it’s a new development).
3. Potential expenses for repairs, furniture, appliances.
4. Neighborhood infrastructure: schools, metro, transportation, parks.
5. Monthly maintenance costs and utility expenses.
6. Income tax rate (13% personal income tax) and cadastral valuation.
7. Possibility of re-planning and its legalization.
8. Rental market demand: trends, competition, seasonality.
9. Legal clarity of the transaction, encumbrances, arrests.

Conclusion

Myths about real estate investments create a distorted picture, fostering the illusion of easy profitability, ignoring variables, and underestimating risks. Treating the asset as a strategic project is the only way to achieve stable income. Real analysis, calculations, evaluation of neighborhood prospects, ownership format, and property oversight determine success. Only by dispelling myths can a sustainable investment model be formed, independent of market sentiments.