Malta is an EU Member State with an Exceptionally Advantageous Tax Regime

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  • Malta Gaming Licence Hosting Requirements

    Malta Gaming Licence Hosting Requirements

    Malta Gaming Licence Hosting Requirements

    The first Member State of the European Union to regulate online gaming was Malta. Undisputed the largest online gaming jurisdiction and the most popular location for operators that seek to license for their online gaming business.

    The New Malta Gaming licensing framework is provided in two main types of licenses in Malta. A simplified licensing process aims to encourage further growth to the sector.

    The B2C & B2B license is categorized in accordance with the game type or vertical.


    Business-to-Consumer (B2C) services
    Gaming Service License Types
    Type 1 –(casino games, lotteries with a guaranteed prize).
    Type 2 –(sportsbooks, e-sports).
    Type 3 –(poker, pool betting, lotteries, bingo, lotto, peer
    to peer games).
    Type 4 – (Skills Games)
    Business-to-Business (B2B) services
    Types 1, 2, and 3 – Gaming Supply Licence (Intended for platform providers).
    Type 4 – Gaming Supply Licence (Intended for Skill Games, Fantasy sports Platform Providers).


    For the Licence Application Form, a Personal Declaration Form must be completed and signed by the UBOs and directors. The Entity Declaration Application Form, the Gaming and Control Systems Information Form, and System Documentation Checklist are other forms that need to be compiled and submitted as part of the application process.

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    The system, Network, and Application architecture showing all hardware and virtual machines in operation, including all the geographic locations and addresses of premises where the technical infrastructure hosting is located.
    The architecture must be located in Malta, and/or any EEA member state for the hosting of critical components.
    The MGA seeks that the datacenter hosting is ISO/IEC 27001:2013 and CSPs (Cloud Service Provider) are to be guided by ISO/IEC 27002:2013 apart from that PCI DSS Level 1 is required for Payment processors for data security.
    Critical Components are considered Random Number Generators (RNGs), Jackpot servers, Player database servers, Financial database servers, Gaming database servers and any other component deemed by the MGA to be critical within the system organization of the operator.

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    Domain Registration (.com,, .com and others)
    Malta Dedicated Server Leasing
    Hosting Colocation
    Managed Hosting Services ( Server – Software – Platform)

  • Malta Favourable Patents Tax Regime

    Malta Introduces Favourable Patents Tax Regime

    Malta favourable patents tax regime

    In August 2019, Malta introduced a patent box regime via the enactment of the ‘Patent Box Regime (Deduction) Rules 2019 – (the Rules’) –  thereby setting a legislative base for allowable deductions claimable on taxable income deriving out of Intellectual Property (“Qualifying IP”) on or after 1st January 2019.

    By virtue of the Rules, patents, issued or patent, and assets over which protection rights are granted in terms of national, European or international models, including software and utility models, which are non-obvious, useful and novel shall all be eligible for tax deduction.  However, marketing-related IP assets including brands and tradenames are outside the scope of the Rules.

    In order to be eligible, the applicant must prove that the research, processing, testing, devising of the Qualifying IP has been undertaken wholly or in part by the applicant, which applicant which maintain sufficient substance.

    Provided that the applicant meets the criteria, the latter is eligible for a 95% deduction calculated as a percentage of the IP expenditure divided by income/gains derived from such qualifying IP.  Income or gains shall include royalties derived from such IP or gains arising upon a disposal thereof.

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    Even if such threshold is not met, the applicant may still claim a fiscal redress calculated as the cost of the income incurred in the production of such IP.

    Furthermore, any losses incurred in the development of the Qualifying IP may be set-off against future income or gains.

    All applications must be made to the Commissioner of Inland Revenue evidencing an application to Malta Enterprise, inclusive of the amounts and workings thereof, ensuring that such calculations are undertaken via arm’s length arrangement.

    This legislative enactment shall continue to bolster the island’s reputation as a knowledge-based hub, incentivizing the creation, development and nurturing of intangible assets, which are enjoying ever-increasing clout in today’s economy.

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  • New Companies Registered in Malta

    The number New Companies Registered in Malta continues to grow for a fourth year running.

    New Malta Companies Registration

    The average number for new companies registered every day in Malta exceeds 25.

    According to the latest data published by the Malta Business Registry (‘MBR’), the average number of new companies registered in Malta has exceeded 25 per day. This number includes both local and foreign-owned companies and continues to grow for a fourth year running.

    The growing popularity of Malta as a good place for establishing new business has lead to a situation in which the number of foreign-owned companies virtually equals the number of companies that are controlled and owned by Maltese shareholders. The steady increase in new company formations is further strengthened by a noted decrease in company liquidations.

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    The main reasons pushing this positive trend can be found in the local legislative framework that ensures a safe and competitive corporate climate. The Maltese business legislation and regulatory environment is among the most proactive and business-friendly in Europe. The current landscape means that the opening procedure for a Malta limited liability company, which is the most popular form of running a business, can be completed within two or three working days, provided that all the requirements established by the Malta’s Company Act, have been fulfilled. The process is also inexpensive. The minimum share capital for private limited liability companies is €1,165, of which only 20 per cent needs to be paid up front. The share capital can be denominated in any currency. Notably, there are no exchange control restrictions, thus encouraging the use of Maltese corporate vehicles for businesses trading internationally.

    Investors coming from the European mainland certainly find a familiar system and, a legal framework they are able to operate in. The recent forecasts published by the European Commission and credit agencies demonstrate that the optimistic and healthy momentum will be retained. The Maltese government is consistent in its business-friendly approach and its mission to propose improvements to legislation, ensuring that growth is not only sustained but also strengthened.

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  • Malta Tax Consolidation Rules

    New Malta Tax Consolidation Rules

    Malta Tax Consolidation Rules

    The recently enacted legal notice 110 of 2019 has introduced consolidated group rules to the local tax scene.

    Maltese holding-trading structures, where the parent has at least a 95% ownership in its subsidiary may opt to be treated as one fiscal unit, where one consolidated tax return is prepared. The 95% shareholding must include an equivalent right in respect of 2 of the following 3: votes, profits and assets upon winding up.

    This is sure to create simplicity as well as an important tax advantage where the fiscal unit will be able to pay the net tax charge of 5% on profits instead of the current default set-up where the subsidiary pays a 35% charge with the parent later receiving the 6/7ths refund. The new provisions apply to companies and all other structures that have elected to be treated as such, however not to foundations.

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    The consolidated group rules may be claimed and are effective for financial years ending in 2019 whilst the parent and subsidiary undertaking must have the same accounting reference period. If the structure involves minority shareholding, the latter’s approval is required for the two companies to elect to be treated as one fiscal unit. Notably, such an election may subsequently be revoked.

    The effect of this decision is that chargeable income is computed and taxed as a whole rather than as separate legal entities. The fiscal unit needs to prepare consolidated financials which must be audited and delivered to the tax department, however individual audited financial statements are still required for Malta Business Registry purposes. Any individual company may form part of only one fiscal unit, however this does not exclude the possibility of having various fiscal units within the same Malta registered group of Companies.

    Official guidance is expected to be issued shortly by the tax department and questions related to the need to declared dividends and tax payment deadlines, amongst others, are expected to be answered. Notwithstanding, the new legislation is sure to create substantial tax advantages to the Malta company formation landscape. The long waiting time for the receipt of the tax refunds will be eliminated, creating positive cash flow advantages to the tax payer.

  • Malta Money Laundering and Financial Crime

    Malta’s commitment in combat of money laundering and financial crime.

    Malta Anti Money Laundering

    The Council of Europe’s anti-money laundering body, Moneyval, has released its report on the effectiveness of Malta’s anti money laundering and countering the financing of terrorism system, on 9th September 2019. In its conclusion, it has called on the Maltese authorities to strengthen their measures for combating money laundering and financing of terrorism.  Senior Malta Government officials have promptly welcomed the report findings and committed to a strict implementation plan.

    Malta is deeply committed to helping combat money laundering and the financing of terrorism.  The Malta authorities are determined to commit more resources towards strengthening the related institutions, regulators and law enforcement agencies. Even before the Moneyval report, Malta has initiated an in-depth  National Risk Assessment and shortly after, a National Coordinating Committee (NCC) was set up, composed of senior officials from all competent government institutions. Together with other stakeholders, the committee has embarked on a multi-year Strategic Action Plan. The NCC, in collaboration with competent institutions have been tasked to prepare a detailed one-year action plan to implement the fifty-eight MONEYVAL recommendations, with each recommendation entrusted to a competent institution.  These will complement the measures listed in the Strategic Action Plan, which was being implemented at the time the Moneyval Report was issued, and which was part of a three-year action plan launched by the NCC.

    The recent findings by the Basel Institute for Governance, classified Malta as a low risk jurisdiction for money laundering and terrorist financing, hence confirms that Malta can successfully address and implement reforms to strengthen its regulatory and law-enforcement institutions. The Maltese authorities have formally committed to continue the exchanging of information and collaboration with other countries to address this cross-border challenge. These measures, together with plans to set up of a financial crime agency, look to preserve Malta’s reputation as a preferred investment hub and to further ensure that the financial services industry continues to blossom.

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  • Malta ‘S&P’ Rating

    Standard and Poor’s (‘S&P’) has recently confirmed Malta’s A-/A-2 rating, reflecting the country’s  impressive GDP growth and the government budget surplus. When asked about the S&P report, the Maltese Minister of Finance welcomed this rating and committed to further improving the economy, this, not at the expense of the country’s regulatory standards, which Malta is looking to bolster and improve following the latest MONEYVAL report.

    The report, which is also forward looking, highlighted the fact that the improvement in GDP is expected to continue at a pace that is much better than that of similar income level countries. Between 2014 and 2018 Malta’s GDP increased by 7.7% while in 2018 unemployment was the lowest recorded in two decades, standing at 3.8%. Standard and Poor’s pointed out that structured reforms in energy bill reduction and the increased percentage of female participation in the workforce is a key contributor to the country’s economic success. The increase in GDP is also expected to leave a positive impact on the government’s debt to GDP ratio.

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    Malta ‘S&P’ Rating

    The National Statistics Office (‘NSO’) echoed S&P’s positive assessment. In its report, it stated that in the second quarter of 2019, Malta recorded a surplus of 24 million euro in comparison with the same period in 2018 in the government’s funds. The NSO emphasized that this increase was due to the improvements in the income generated from the services account as well the other services, travel and transport accounts. On a negative tone, the goods account, primary income and secondary income accounts experienced a marginally negative trend. As a result, the NSO highlighted a positive net balance of 21.3 million euro in the second quarter of 2019 as opposed to the 7.3 million euro of the same period of the previous year.

    Both institutions highlighted Malta’s positive economic outlook, creating the perfect landscape for Malta company formations to continue to flourish in the coming future.

  • Malta Company and Brexit Opportunities

    Malta Company and Brexit opportunities

    As the deadline set for the UK to leave the EU fast approaches and talks between EU and UK officials drag on, Malta continues to present itself as an attractive co-location jurisdiction for UK companies wanting to keep a foothold in the European Union.

    UK based companies with interest in the European market and which currently passport their services through their UK operation are looking at opening new offices in Malta from where to be able to continue their European business. As large UK multinational companies would probably already be operating from multiple offices across the EU, Malta is undertaking several initiatives in the UK to provide information to the various medium sized players in the financial services industry in order to assist them in setting up their Malta branches. Such an arrangement allows these firms to passport their services to all other EU member states. Malta Company and Brexit opportunitiesboth the Malta Chamber of Commerce as well as the Malta Enterprise have had numerous discussions with UK-based companies involved in asset management, insurance, aviation, digital media and remote gaming amongst others, in view of promoting Malta as an ideal co-location partner.

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    Malta Company and Brexit

    Malta is especially attractive to UK based companies not only due to the long historical relationship between the two but also due to the island being one of the few English speaking European countries. The Mediterranean island already boasts a healthy financial services sector due to its highly skilled workforce, an efficient and attractive regulatory and legislative framework, a solid reputation and a stable macro-economic climate. As a result, the number of local and foreign company registrations in Malta has continued to increase, with 9,234 new incorporations in 2018 alone.

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  • Malta and the Blockchain Drive

    Malta and the Blockchain Drive

    Pursuing innovation and exploiting niche markets have shaped and fueled the Maltese economic model. It now looks as though the country is embracing the blockchain revolution and preparing itself from both a regulatory as well as from a servicing point of view.

    Blockchain is a form of decentralized ledger where data is kept in each separate node within a closed chain through where only the owner of resources can transfer their resources and where old transactions cannot be lost or manipulated. This technology is widely used in the cryptocurrency world, however its use may become much more widespread.

    Three cryptocurrency and blockchain bills – the Virtual Financial Assets Act, the Malta Digital Innovation Authority Act, and the Technology Arrangements and Services Bill – were recently passed in Parliament, making the island the first to enact a regulated environment in these fields. This was an inevitable consequence following the huge interest that the blockchain movement is generating on the island.

    Several blockchain industry leaders have already initiated operations on the island and are now working on their recruitment processes prompting the need for trained human resources. In this respect, Malta has launched a €300,000 blockchain and DLT scholarship fund, aimed at students specialising in ICT, law, finance and engineering, to further their studies in these areas. A number of university degree and master programmes run by the University of Malta in several areas including law, finance and ICT, are also being reviewed to include units covering the areas of DLT, blockchain and cryptocurrencies.

    The blockchain and cryptocurrency industry is clearly still in its infancy and some aspects remain unclear and undefined such as those areas related to Vat and income tax; clarifications are still needed in these cases. Nevertheless, Malta is placing itself as an attractive blockchain and crypto-related destination due to its efforts in setting up a smart regulatory environment as well as training its human asset resources.

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  • Malta as a Tech Start-Up Hub

    Malta as a Start-Up hub

    Malta has been recently reviewed as part of the 2017 Global Start-up Ecosystem Report. The main question the report tries to answer is that in which country a start-up has the best chance to success and become a global success. The report analysis the ecosystem of each country that is relevant for the development phase of a new company, looking at challenges and opportunities that these companies face.

    Malta scored particularly well in talent access, due to it highly educated English-speaking working population as well as due to it being very attractive to expat workers. Various initiatives have been undertaken by the government so as to incentivise fresh tech investment and the opening of new start-up companies in Malta. Currently, Malta currently boasts between 50 and 100 tech start-up companies.

    Malta has traditionally been particularly attractive in the gaming and e-gambling segments; recent initiatives aim at increasing the number of successful start-ups and their chance to succeed. Tax credits to support micro enterprises to invest and expand their business have been renewed and complement the Takeoff Business Incubator. The Incubator already hosts over 30 start-up companies which have so far, benefited from investments of over €200,000. This complements the MITA Innovation Hub a purely tech oriented concept which has provided handouts of over €250,000 to 15 Malta start-ups.

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    The former scheme aims to assist new companies engaged in engineering design and development, renewable energy resources, biotech projects and other Innovative projects. The Business Incubator provides new companies with tools that assist them during their initial phases and provides services and resource that would otherwise be difficult or expensive to obtain. These include office space, professional image consultancy, management and business running expertise, paperwork assistance and advertising and marketing assistance.

    These initiatives are aimed at nurturing the next generation of start-up companies and boost Malta’s presence on the global tech map. Once successfully launched, these companies are then able to then take it to the next level via Malta’s direct access to the European markets.

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  • Malta Enacts Legislation for Fantasy Sports

    Malta Enacts Legislation for Fantasy Sports Operators

    Malta Fantasy Sports License Overview

    With the enactment of Legal Notice 31 of 2017, Skill Games Regulations, 2017, fantasy sports operators operating from Malta are required to obtain a skill games licence in order to provide such service.

    The licence has a duration of five years and comes in the form of either a licence to engage with end-consumers and offer skill game services in the form of a business-to-customer relationship or a licence for the supply of skill games in a business-to-business capacity.

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    Licence holders must be a body corporate established in Malta or in another EU jurisdiction and have a minimum paid-up share capital of at least €40,000.

    Operators must abide by an organigram that is dictated by the Malta Gaming Authority (‘the Authority’) and segregate operational and players’ funds.

    Operators are also required to make regulatory data accessible to the Authority. As happens with other licence applications, the Authority screens persons behind the proposed operation and undertakes measures to prevent fraud and money-laundering.

    The Malta Gaming Authority retains the right to decide whether the applicant has in fact satisfied the criteria for issuing such a licence.

    Malta Fantasy Sports License Application Process

    The application fee has been set at €2,300, payable upon submission of the application. The annual licence fee, paid annually and in advance is of €8,500. Other fees, including system review and compliance review fees are applicable in line with other licences issues by the Malta Gaming Authority.

    Gaming operators will also be subject to reporting and operational requirements, including tax reports and fair and transparent games rules, among others.

    Licence holders are required to pay a gaming tax of 5% of real income, which shall be determined as total wagers less total monies paid out to players, up to a maximum of €466,000. The tax has to be paid monthly and by not later than the 20th day of the following month.

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  • Registration of Branches in Malta

    Registration of Branches in Malta – No Withholding Tax on the Malta Taxed Income

    During March 2017, new company formations in Malta totaled 471, with 10 new partnerships also registered during the same month. A small number of these new company incorporations relate to branches of foreign companies registered in Malta.

    Shareholders who already own a company that is incorporated or constituted in a foreign jurisdiction may not necessarily need to form a full Malta company but may seek to set-up a Maltese branch. A Malta branch does not constitute a separate legal personality but is considered to be an extension of the foreign company, which is usually referred to as an oversea company. The Malta branch must thus necessarily carry the name of the oversea company. The oversea company is required to register the branch within 1 month from its establishment and it is obliged to present evidence of the existence of the oversea company through certified copies of the its Memorandum and Articles, the names of the directors, its capital structure, its registered office, and the names of the Malta appointed representatives.

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    From a tax perspective a branch may offer significant advantages in that such a legal arrangement is considered to be a permanent establishment of a non-resident company and is taxed in Malta only on income that is generated in Malta and income that is physically remitted to Malta. This income may then benefit from Malta’s fully imputative tax system, whereby such income is charged at 35%, and subject to certain conditions may qualify to benefit from Malta’s tax refund mechanism. It is also worth mentioning that no withholding tax is charged on the Malta taxed income, which can also benefit from the numerous double tax treaties that Malta has in place with numerous countries.

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  • New Private Yacht Regulations in Malta

    Private  Yacht regulations in Malta extend Malta’s appeal

    Transport Malta has introduced new guidelines that allow the carraige of more than twelve guests on board private superyachts.  Until recently, private yachts were limited to the carriage of twelve guests only insofar that they were built in accordance to SOLAS and PYC and registered with a Red Ensign Flag.  With the enactment of the new regulations, superyachts may be authorised to carry more than twelve passengers, insofar that the following requirements are met:

    • Yacht has a length in excess of 24m;
    • Yacht not navigate beyond 150 nautical miles from safe haven;
    • Craft be in class and in possession of necessary stability booklet;
    • Craft be in compliance with the Maltese Commercial Yacht Code and carry all appropriate saftey equipment, as well as a qualified crew;
    • Craft must have a 100% full life raft capacity;
    • Depending on tonnage requires a safety radio licence and valid class certificate (for yachts in excess of 500 gross tonnes)

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    Although the aforesaid guidelines are intended to regulate vessels in excess of 500 gross tonnes, the aforesaid regulations, may, at the discretion of Transport Malta also be applied to crafts below the aforesaid tonnage.  In all cases, the approval in the carriage capacity, shall be dependant on a survey report undertaken by an approved surveyor that shall certify seaworthiness of the vessel and installation and/or attainment of all safety equipments and/or qualifications with the projected carriage capacity.

    The recent legislative installations are designed to widen Malta’s appeal as a strong, reputable and flexible maritime jurisdiction.  The intention is to extend the highly advantageous fiscal and reputational advantageous of registering a yacht under the Maltese flag, with a holistic, logistical and operational regulatory framework.

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  • Malta Controlled Skill Games Regulations

    Malta enacts Controlled Skill Games Regulations The Malta Gaming Authority has strengthened its stronghold on the remote gaming industry through the issuance of the recently enacted Controlled Skill Games Regulations (“the Regulations”). Previously, the only games that were subject to a licence by the MGA were games of chance, albeit this was subsequently extended to games of chance and skill, insofar that the outcome of the game required an independent arbitrator i.e the outcome of the game of the game was dependant to some extent to a chance element or a sequence of events beyond the control of the player.

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    Now, under the Regulations, games of skill shall include all games whose outcome is determined predominantly by the mental or physical dexterity of the player.  The MGA shall require an operator to apply for a licence for skill games, and ensure that the following parameters are adhered to at all times:

    • The licence holder must be a body corporate established in Malta or in any other EU/EEA member state;
    • The licence holder must be in a good standing – with a minimum paid up share capital of EUR 40,000 or equivalent in any other acceptable currency;
    • The licence holder must have an appointed Key Official (locally approved resident director) and an Information Security Officer;
    • Ensure a segregation between own funds and player’s funds; and
    • Ensure that regulatory data is accessible to and at the disposal of the MGA

    The enactment of the Regulations are intended to set a clear and unequivocal regulatory framework to what was until lately a largely opaque and unregulated environment, often devoid of any regulatory supervision and customer safeguards.  The attainment of a MGA licence shall allow a regulated licence holder to operate largely freely within the EU, since on the strength of a multilateral recognition agreement a Maltese licence issued by the MGA is recognised through the EU, with the exception of a few jurisdictions, which have adopted a protectionist view vis-a-vis fantasy sports.

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  • Maltese Economy Shows Resilience with Strong Surplus

    Maltese Economy Shows Resilience with Strong Surplus

    The National Statistics Office published data that confirms that, during 2016, Malta managed to balance its books and registered its first fiscal surplus in over three decades. The Statistics office’s data shows that the Maltese Economy grew by 5% during 2016, with unemployment remaining at record low levels. The positive trends are predicted to continue through 2017 and 2018 with positive results already being felt during 2017 in the tourism, financial services and iGaming segments.

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    The surplus has come about because of a controlled spending approach on one side and on the other, due to marked increases in economic activity particularly in the tourism, professional and information and communication industries. The government managed to reach its targets without resorting to any austerity measures but by maintaining a prudent fiscal approach and promoting growth. When measured as a percentage of GDP, the result was equivalent to a surplus of 1%, showing an important improvement from the deficit of 1.3% registered in 2015. In monetary terms, the surplus generated by the government during 2016 amounted to around €101 million, shifting from a deficit of €119.3 million recorded in 2015. The government’s total revenue for the year stood at €3,871.3 million, while its total expenditure settled at €3,770 million.

    The published results compare very positively with other EU economies with Malta recording the second highest fiscal surplus, only second to Luxembourg. The economic turnaround has been hailed as ‘miraculous’ by Prime Minister Joseph Muscat who highlighted the fact that the current legislation had started from a Euro 362 million fiscal deficit that was recorded for 2012. The government said that the results achieved will allow the government to increase its spending on infrastructure projects and to continue in its objectives for a fairer distribution of the wealth that is being generated by the Maltese economy.

    The surplus registered, together with the strong economic indicators are expected to further increase Malta’s attractiveness to foreign direct investment and company formation.

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  • Malta Family Trusts

    Malta Family Trusts have become a preferential vehicle for asset protection and asset management.

    The Trust and Trustees Act (TTA) regulates the setting up of trusts and the appointment of Trustees to administer and oversee the functioning of the trusts. The TTA also appoints the Malta Financial Services Authority (MFSA) as the regulator, authority in charge of supervision of the trustees.

    In 2014, Article 43(B) was added to the TTA, adding ‘Family Trusts’ to the picture and, defining them as trusts created to hold property settled by the settlor or settlors for the present and future needs of family members and dependants. Subsequently, the MFSA issued rules and guidelines specifically applicable to Trustees of Malta family trusts, also known as the Private Trust Company (PTC).

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    The rules issued by MFSA apply specifically to Trustees of Malta trusts which are set up in line with Article 43(B) of the TTA and whose objects and activities are limited to acting as a Trustee in relation to a specific settlor or settlors and provision of administrative services in respect of a specific family trust. Such trustees cannot provide trustee services to the public and cannot habitually act as a trustee.

    In order to be considered such, a PTC must satisfy a set of criteria at the application stage of the registration process and continuously thereafter. PTCs give settlors and family members the opportunity to be involved in its day to day management since the board of directors may be made up, amongst others, of the same family members. Such directors would be familiar with the business and can make instant decisions, something which is not always possible with a professional trust company.

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    Establishing a PTC may be initially costlier than establishing a trust with a professional trust company, however in the longer term PTCs are usually more economically viable since they do not govern percentage-based fees.

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  • Malta’s Gross Domestic Product (GDP) in 2016

    Malta GDP Growth in 2016

    The national statistics office has published the latest gross domestic product figures which show that the Maltese economy grew by 5 per cent in 2016. This growth resulted in the Maltese economy recording the highest economic growth rate in the European Union during 2016. Nominal GDP expansion was of 6.7 per cent or an increase of EUR622.2 million.

    The Maltese economy had a wide-ranging growth, a growth throughout almost all sectors of the economy. The main growth rates were recorded in the Agriculture, forestry and fishing sector with a growth rate of 12.4%, the Information and communication sector with a growth rate of 11.6% and the Professional, scientific and technical activities; administrative and support service activities with a growth rate at 11.9%. Other significant increases were also recorded in the Financial and insurance activities sector with a growth of 9.4% as well as the Arts, entertainment and recreation, repair of household goods and other services sector at 9.3% and the Real estate activities at 8.3%

    A growth of 3.4% was registered in the Wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities. A small scale growth was also recorded in the manufacturing sector at 2.1% over the year 2015.

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    Notable increases such as a EUR164 million increase in the private consumption of households, the unemployment rate at a record low of 4.8%, a rise in new private sector jobs with 7,500 new posts as at September 2016, all attest the strong growths registered.

    The performance of the Maltese Economy for 2016 reaffirms Malta’s improving Credit Rating, making it an attractive platform for the creation of new business, with company formations also hitting a high during the year.

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  • Boost of Malta Super-Yachts Registration

    Boost of Malta Super-Yachts Registration in 2016

    Malta boasts the largest maritime flag in Europe. Clearly aided by its valuable geostrategic position, Malta has prospered in the maritime industry by adding fiscal, legal and corporate benefits and possibilities to attract further interest from prospecting parties.

    Minister Joe Mizzi outlined Malta’s success story during his inaugural speech at the conference on Opportunities in Superyachts adding that it was his ministry’s ambition to further develop the super yacht segment. During 2016 the Malta flag registered an increase of 14% in the registration of superyachts over 24 metres.

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    In particular, Malta offers a favourable VAT regime for yachts and super-yachts registered under its flag and used for pleasure purposes through a leasing set-up. This involves the setting up of a Malta company which acquires the yacht and leases it to a third party. The leasing of the yacht must be undertaken through Malta meaning that the yacht must be in Malta at the beginning of the lease, however it is not strictly necessary for the yacht to be registered under the Maltese flag. The first lease payment must be equivalent to 40% of the value of the yacht with lease installments paid every month over the life of the lease agreement which must not exceed 36 months. The lessor company is expected to make a profit from the leasing agreement over and above the value of the yacht. Following the end of the lease, the yacht is sold to a third party for at least 1% of its purchase value and subject to all the relative VAT payments, a VAT paid certificate is issued by the authorities, following which the yacht may circulate freely in the EU. This type of set-up results in the following effective applicable VAT Rates:

    Vessel size Effective VAT applicable
    Sailing boats or motor boats over 24 metres 5.4%
    Sailing boats between 20.01 to 24 metres 7.2%
    Motor boats between 16.01 to 24 metres 7.2%
    Sailing boats between 10.01 to 20 metres 9%
    Motor boats between 12.01 to 16 metres 9%
    Sailing boats up to 10 metres 10.8%
    Motor boats between 7.51 to 12 metres 10.8%
    Motor boats up to 7.5 metres 16.2%

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  • Onward Supply Relief (OSR) procedure and sea vessels in Malta

    Onward Supply Relief (OSR) procedure and sea vessels in Malta

    Procedure for the VAT-Free Importation of Non-EU Goods for Onward Supply to another Member State

    The procedure allows for the exemption from VAT on the importation of goods into Malta from outside the EU VAT by a registered persons in Malta, which goods are released into free circulation in Malta and subsequently transported within 30 days to a VAT registered person in another EU Member State as an intra-community supply (triggering the requirement of including such transaction in the recapitulative statement).

    Eventually, the transaction is reported as an intra-community acquisition of goods by the final purchaser, generally under the reverse charge mechanism, effectively resulting in no requirement of cash outflow of VAT.

    The OSR – An Attractive Solution for sea vessels

    The OSR is particularly an attractive solution when yachts and pleasure crafts are being imported into the EU, relieving the immediate payment of VAT on import, whilst achieving the release of the craft into free circulation within the EU borders.

    In practice, since sea vessels travel on their own steam there is the difficulty of lack of transport documentation. The Maltese importer would be required to submit to the customs authorities, documentary evidence that the sea vessel will be sailing to another EU member state, such as the relevant berthing requests and permits for the next port of call in the member state of destination.

    The importer will also be required to submit a bank guarantee amounting to 10% of the Malta VAT due on the value of the sea vessel (capped to a maximum amount to be decided by the Customs Authorities). The guarantee will be released upon presentation of documentary evidence that VAT had been paid or accounted for in another Member State and that the yacht had proceeded to another Member State, which may not be the Member State of final destination.

    Click Here to read more about the Malta VAT

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  • Another ‘A’ Credit Rating for Malta

    Another ‘A’ Credit Rating for Malta by Fitch Ratings Inc.

    Fitch, the global leader in credit ratings and research, has affirmed Malta’s rating at ‘A’ based upon key drivers such as the high national income per head when compared with the ‘A’ median, a vigorous economic growth and a large net external creditor position. Fitch has based its positive rating in view of a downward trajectory in the ratio between public debt/GDP and an outperformance with similarly rated peers in economic growth. The only restrictive condition to the ratings were the continuous structural bottlenecks as featured by the weak World Bank Ease of Doing Business indicator.

    It is reported that the past year had a strong economic growth at 3.9% when compared with the first three quarters of 2015, boosted by robust private consumption. Fitch forecast a continuing growth in the Maltese economy at a faster pace than that of the ‘A’ median at an average of 3.3% over the years 2017/2018. Strong employment growth, rising disposable income due to continuous wage appreciation and the launch of new investment projects in the health, education and transportation sectors are all seen as prime drivers behind this growth of the Maltese economy.

    A strong export performance in the pharmaceutical, remote gaming, financial services and tourism sectors will aid in sustaining a solid current account surplus over 2017-2018.

    The rating agency also makes reference to the fall in the gross general government debt from 60.8% of GDP in 2015 to an estimate 59% of GDP at the end of 2016, mainly due to high revenues from excise duties, income tax and the International Investor Program. The report goes on to mention decreases of around 0.2% from 2016 to 2017 in the fiscal deficit, a boost in tax revenues brought by robust economic growth and additional indirect tax measures. Government-guaranteed liabilities which are amongst the highest in the EU at 14.8% of GDP are set to decrease to 11.9% of GDP at the end of 2017 when the temporary guarantee granted to ElectroGas expires.

    Click Here to read about Malta’s Investment climate, Banking System, Professional Services and a lot more.

    Contact one of our officers to initiate the incorporation of a Maltese registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction. Simply fill in the contact box below or contact us by email on or by calling at +356 2338 1500

  • New Financial Reporting Requirements in Malta

    New Financial Reporting Requirements in Malta, Introduction to the General Accounting Principles for Small and Medium-Sized Entities (GAPSME)

    The new year has brought about significant change to financial reporting requirements in Malta and the EU. The EU Single Accounting Directive 2013/34/EU, which has been transposed into Maltese law, replaced the fourth and seventh directive, bringing about a new set of financial reporting requirements and introducing, what is meant to be, a financial reporting framework that promoted comparability, simplicity and enhances the potential of SME businesses through the removal of unnecessary and disproportionate administrative costs.

    The EU directive has been transposed into Maltese law through the introduction of the General Accounting Principles for Small and Medium-Sized Entities (GAPSME), as well as through amendments to the Maltese Companies Act. GAPSME simplifies the preparation of financial statements for ‘small’ companies, defined as those companies which satisfy two of the following three thresholds:

    Malta Small and Medium-Sized Entities Threshold Small Threshold Mediuum
    Balance sheet total ≤ €4,000,000 ≤ €20,000,000
    Revenue ≤ €8,000,000 ≤ €40,000,000
    Average number of employees ≤ 50 ≤ 250

    GAPSME reduces the amount of financial information that needs to be presented by small companies in their financial statements. Such companies need only present a balance sheet, an income statement and notes to the financial statements to comply with the new presentation framework. The statement of changes in equity and statement of cash flows are now only required in the case of medium-sized entities, also defined in the new legislation. GAPSME superseded the previous GAPSE framework, widening eligibility and reducing reporting requirements in the areas of Revenue, Property Plant and equipment, Investment Property, Intangible assets other than goodwill, Impairment, Leases, Government grants and Inventories for small companies. Additional disclosures are required for medium-sized companies.

    GAPSME is applicable to financial reporting periods starting on or after 1 January 2016.

    The EU Directive also brought about amendments to the Maltese Companies Act including changes to the ‘small’ company thresholds to bring them in line with GAPSME rules, the removal of the requirement to produce a director’s report for small companies, the elimination of the financial holding consolidation exemption and the removal of the postponement of the filing deadline for companies whose activities are undertaken outside Malta.

    Follow this link to Read More about Malta Tax Law – Full Text and Facts

    More information can be provided on request. However, it must be noted that since some of the structures / issues may be technically complex, they are ideally discussed at a meeting with Focus Business Services’ Directors.  For bespoke advice, please click here to contact one of our officers or send us an email on

  • European Commission Proposes Modernization of Tax Rules

    European Commission proposes modernization of tax rules to support e-commerce and online businesses in the EU

    The European commission has recognized the need to update the current EU VAT rules following the rise in the use of the internet and a rapid increase in online sales especially cross-border sales. Online businesses and the digital economy will be encouraged to expand cross-border and eventually prosper as a result of this update.

    One of the measures announced in order to improve the VAT environment for e-commerce businesses in the EU is the introduction of an EU wide portal for online VAT Payments known as the One Stop Shop. Once introduced this measure will save businesses across the EU EUR2.3 billion a year through a significant reduction in VAT compliance expenses. By means of these new rules the commission will also make sure that VAT is paid in the Member state of the end consumer thus resulting in a fairer dissemination of tax revenues amongst EU countries. The commissions’ plan is intended to aid Member States in recuperating the current estimate of EUR5 billion lost VAT on online sales yearly.

    The key proposals include:

    • New rules allowing companies that sell goods online to deal easily with all their EU VAT obligations in one place

    At present online traders are required to register for VAT in every Member State they trade in, in many instances this is regarded as the main limitation to cross-border e-commerce and result in business expenditures of around EUR8,000 in every EU country in which they trade. The Commission is now proposing a single quarterly return made through the online VAT One Stop Shop for the VAT payable across all the Member States. This system is already in place for the sales of e-services such as mobile phone applications, and with an excess of EUR3 billion in VAT collections in 2015, making this system a proven success. This proposal will see a 95% cut on administrative costs for businesses, resulting in a global saving to EU business of EUR2.3 billion and a rise in VAT revenues for Member States by an estimated EUR7 billion.

    • Simplifying VAT rules for micro-businesses and startups selling online

    A yearly VAT threshold of EUR10,000 is being introduced to aid startups and micro-businesses. Under this threshold, cross-border sales by online businesses will be regarded as domestic sales and therefore VAT is paid to the home country tax authority. This is closely related to initiatives like the same invoicing and record keeping rules.

    Follow this link to Read More about E-Money Institutions in Malta

    View Malta Company taxation page for full understanding of corporate tax in Malta.

    Contact one of our officers to initiate the licensing process for a Maltese Electronic Money Institution and start reaping full benefits of a reputable, low-tax EU jurisdiction. Simply fill in the contact box below or contact us by email on or by calling at +356 2338 1500

  • Malta as Preferred Funds Jurisdiction

    Malta Retains Status As Preferred Funds Jurisdiction

    Malta has been a favoured fund jurisdiction since joining the European Union. The fund industry has flocked to Malta due to the introduction of favourable, simple and efficient legislation which caters for the interests of both the fund business as well as the investors. Fund managers and promoters may choose from a set of frameworks available, including SICAVs, unit trusts, investment companies with a variable share capital and Professional Investor Funds (PIFs) in order to meet their objectives.

    This, together with the fact that investment funds that are registered in Malta may be passported to any of the other twenty seven EU member states and a low cost and advantageous fiscal base have pushed the number of funds registered in Malta to well over six hundred.

    Earlier in 2016, the Malta Financial Services Authority announced its intention to consolidate and reduce the number of fund frameworks which are available to fund promoters in terms of the Investment Services Act and the applicable Investment Services Rules. This aims at streamlining fund legislation, making it simpler for fund managers and promoters to find their way amongst the sometimes overlapping laws and better explaining the rights and obligations of all the players in the industry.

    The authority is now seeking feedback from the industry on the proposals it is putting forward in an attempt to get everyone on board and make this exercise a truly collective one, ensuring that the changes are the best possible so as to take the industry forward and guaranteeing its long-term viability.

    Click Here to read more about  Malta FOREX and Funds Licensing Procedures

    Contact one of our officers NOW to get information about Malta FOREX and Funds Licensing Procedures and initiate the process for the licensing of any financial services activity in Malta. Simply fill in the contact box below or contact us by email on or by calling at +356 2338 1500


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