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

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  • MFSA New Rules for Alternative Investment Funds

    MFSA Releases Clarifications Regarding AIFMs Transparency Reporting

    The Alternative Investment Fund Manager Directive (‘AIFMD’) introduced new rules for Alternative Investment Funds (‘AIFs’) (including hedge funds, private equity and real estate funds).   Previously these funds were regulated largely by national regimes and codes of conduct, rather than via a trans-European framework.

    The AIFMD sought to create an EU framework for AIFMs as well as setting transparency requirements which would create a level playing field for investors.  Thereby, the investors must be privy to key information regarding the fund, such as investments strategy, special arrangements re: illiquidity such as side pockets, valuation procedures, fund leverage limits etc;

    The AIFMD does not specify the medium in which the information is provided, nor the frequency of such disclosures.  Such disclosures may therefore be in the form of letters, newsletters, emails etc;  The medium and frequency of communication is a matter that is at the discretion of the AIF Manager and the AIF.  However, the disclosures must also be relayed to the national competent authorities of the AIFM.

    The AIFMS also requires the inclusion of a list of systemic risk reporting, which include:

    • the breakdown of investment strategies of AIFs;
    • the principal markets and the financial instruments in which an AIF trades;
    • total value of assets under management of each AIF managed;
    • turnover of the AIFs;
    • principal exposures and most important portfolio concentration of the AIFs.

    In the case of high-leveraged AIFs, the amount of leverage must also be disclosed.

    The aforesaid transparency disclosure signal a marked change of route – in a sphere which until recently, was subject to slight regulation, on the understanding that professional investors, did not require the same level of protection as retail investors.  The transparency rules, have set a framework for uniform standards, allowing investors, even professional investors, to make an informed and thorough decision.

  • MFSA Securitisation Cell Companies Regulations

    MFSA Releases Securitisation Cell Companies Regulations

    One of the most anticipated legislative enactments has been the Securitisation Cell Companies Regulations, enacted on the 28th November 2015, and welcomed as an important milestone in the securitization and reinsurance industry.

    At the outset, a Securitisation Cell Company (SCC) is a body corporation constituted or converted as such, with the function of segregating the cellular assets of the Company. An SCC is a single legal person, yet the cell created by an SCC, does not create, a legal person separate from the SCC. In a way the creation of a cell within an SCC, is not dissimilar to the creation of a cell in a Protected Cell Company (PCC) – also used in the insurance industry.

    However, the main thrust for an SCC is that of creating a legal framework seeking to achieve the following:

    • Enter into securitization transactions in furtherance and pursuant to the Securitisation Act – Chapter 484 of the Laws of Malta; or
    • Assume risks as a special purpose vehicle for the purpose of reinsurance, from a transferring undertaking through the ceding of reinsurance contracts.

    There are however, a series of set rules, for SCCs to abide by. At the outset:

    • SCC are limited in their scope and contractual abilities by their non-cellular assets. SCCs may not enter into any forms of securitization transaction or risk transfer arrangements beyond their non-cellular assets;
    • The Cellular assets of a cell must be held as separate and identifiable from other assets and liabilities of other cells. The cellular assets shall comprise the proceeds of a cell, share capital, attributable reserves etc;

    Effectively, this means that the assets of a cell are not available to the creditors of other cells. Creditors have no recourse to the assets of other cells, nor may they enforce their rights vis-à-vis non-cellular assets. The same principle prevails in the case of insolvency. The insolvency attributable to one cell, has no bearing, nor spill-over effect towards the solvency of other cells.

    • Since, a cell is incapable of separate legal personality from the SCC, it may only come into existence, through a board resolution of the directors of the SCC.
    • Irrespective of whether the cell shall act as a securitization vehicle, or a reinsurance SPV, the prior consent of the MFSA shall be always necessary.
  • Malta Advantageous Tax to Partnerships

    Malta Extends Advantageous Tax Regime to Partnerships

    The Budget Measures Implementation Act 2015 (published, yet whose enactment is still awaiting Parliamentary approval), shall result in a series of amendments to the Income Tax Act and Income Tax Management Act. Thereby, these measures shall bring a series of reforms to the taxation of Maltese partnerships, effectively resulting in the following:

    • Partnerships electing to be treated as companies for tax purposes;
    • The requirement for partnerships to carry out a trade or business to be deemed tax transparent; and
    • Amendments whereby it shall no longer be necessary for the obligations of the general partner (in partnerships en nom collectif and en commandite) to be unlimitedly liable for all the debts of the partnership.

    Whilst, the election for a Maltese registered entity is not a novel feature, the extension of the tax concession to include partnership, shall render the latter more palatable options, in the context of tax planning. Currently, Maltese companies are taxable at 35% corporate tax rate, albeit the immediate shareholders, are, upon a final distribution of dividends, eligible for a series of tax refunds, the default of which is set at 6/7ths of the 35% -thereby bringing the tax leakage to just 5% of taxable income.

    This election has been extended in piece-meal fashion to a series of institutes. For example, Maltese private foundations are subject by way of default to the same taxation as Maltese companies. Maltese registered trusts, may, in lieu of evoking tax transparency which would render any income percolating to the trust taxable at the beneficiary level, also elect, conditional to meeting a series of criteria, to also be treated as a company for tax purposes. The extension of such election, which shall be irrevocable once triggered, shall open a new series of opportunities for the use of Maltese partnerships in tax planning.

  • Malta Strong Interest as a Family Office Jurisdiction

    Malta Attracting Strong Interest as a Family Office Jurisdiction

    Family offices have increasingly become popular, with high net worth individuals, seeking ways and means to safeguard their accumulated wealth, preserve it within the family coffers, and seek tax efficient manners to pass it on to the future generations.

    The parameters therefore are to secure an adequate legislative framework which can accommodate the most diversified asset portfolios, yet score very highly with regard to tax optimization and more importantly confidentiality. The ability to transfer ownership in a tax-free environment, as well as having clear and unequivocal rule relating to inheritances and asset transfers are essential.

    Malta, has recently enacted a series of legislation that seeks to further complement the existing legal framework.   Malta applies no wealth taxes and applies blanket tax exemptions regarding the transfer of assets between non-residents, irrespective of their consanguinity and/or affinity. The use of discrete wealth preservation institutes such as trusts and foundations, is widely used, as well as private collective investment schemes, whose participation is limited to fifteen (15) participants such as family members, friend and acquaintances to the promoters.

    The use of trusts as an effective tool within the ambit of family offices has been given new momentum, with the proposal of allowing family trust companies. Currently, the activity of trustees within a Maltese trust (and likewise administrators within a private foundation) is the sole prerogative of licensed entities, approved by the local regulator – the Malta Financial Services Authority. Although, a system of checks and balances may be installed, via the use of protectors with supervisory and veto powers to the trustees, this may result as a hinderance to promoters of family offices, who often prefer hands-on control over assets settled in a trust or endowed in a foundation. New legislation will now allow the creation of family trust companies – whereby the trustee function can now be carried out by Maltese limited liability companies composed of a hybrid of approved resident professionals and family members.

  • Malta Fund from Citizenship by Investment Programme

    Malta Sets up Fund from Proceeds of Citizenship by Investment Programme

    The Government of Malta has set up a legal framework for the administration of proceeds of its highly successful Citizenship by Investment Programme (“MIIP”).  As of 2014, Identity Malta has received over four hundred (400) applications, with further growth set at approximately three hundred (300) applications for 2015.

    The MIIP allows investors, to accede to citizenship, conditional to a thorough and rigorous due diligence process and adherence to an investment programme.  The main applicant must commit to a contribution of EUR 650,000, with spouses and children below the age of 18 contributing a further 25,000 each.  Unmarried children aged between 18 to 26 and dependant parents over the age of 55 must contribute a further EUR 50,000.

    Furthermore, the main applicant must acquire an immovable property in Malta with a value of at least EUR 350,000 or rent a property with a lease value of EUR 16,000 per year.  In addition to such investment, the main applicant must commit to an investment in government approved bonds, stocks or debentures with a value of at least EUR 150,000 which have to be held for at least five (5) years.

    The proceeds of the MIIP shall be administered by the National Development and Social Fund Agency, an entity that has been established ad hoc by virtue of Legal Notice 2 of 2015.  The aforesaid agency has established a series of criteria for the investment of such funds, all aimed at the furtherance and development of the island’s social and economic development.  A percentage allocation system shall be in place to ensure an equitable distribution, with allocations being assured towards projects of national importance, of projects that promote and support education and justice, as well as nurturing job creation and catalysts to competitiveness.

  • Malta Reveals Steady Increase in Licensed Entities

    MFSA Reveals Steady Increase in Licensed Entities During 2014

    The Malta Financial Services Authority (MFSA) has issued statistics for the year 2014 which underline steady and organic growth.  Notwithstanding the difficult economic environment, stricter regulation and higher licensing requirements, the number of financial services licenses as of end 2014 is in excess of 800.  Seventeen (17) new Category 2 licences (asset managers and white label FX companies) were issued during 2014, whilst a total of 22 managers were issued with new or revised licences to operate in full compliance of the Alternative Invesmtment Fund Managers Directive (AIFMD).  Six new licences were issued in other categories, including the recently enacted Category 4b depositary, as prescribed under the new Investment Services Rules.  A contrario senso, and evidence of a stricter and tighter regulation, nine licences were surrendered or withdrawn.

    Notwithstanding the radical changes brought over by the aforesaid AIFMD, a total of 39 collective investment schemes (CISs) were licensed, bringing the tola number of new sub-funds up to 118, with funds approved as Professional Investor Funds (PIFs) taking the lion’s share with 106 of the aforesaid 118.

    In the banking sector, three (3) new credit institutions were licensed, whereby two others had their licences extended to widen their activities within their already acquired banking icence.  A significant growth area, was also seen in the electronic money institutions, which albeit of relatively recent enactment, has already proven to be a success story.

    In the insurance sector. 2014 saw the licensing f three new insurance undertakings, including one Protected Cell Company, bring the total number of cells within PCCs to 27.

    Retirement schemes also rose to 35 with two new retirement scheme administrators and five new asset managers.  The number of new companies is in line with the past three years, with over 5000 companies registered in 2014 alone.

    The aforesaid statistics have further cemented Malta’s reputation as a proven domicile for financial services and a mature corporate registrar.  A plethora of new legislation is expected to be enacted in 2015 allowing investors full access to an ever more sophisticated legislative base, through which to channel their investment.

  • Malta Investment Aid Tax Credits

    Malta Enterprise Launches Revised Investment Aid Tax Credits

    Malta Enterprise, the para-government arm that promotes foreign direct investment in Malta, has announced a series of fresh schemes for the period running until 2014 in a bid to promote and incentive industrial and economic development in Malta.

    The schemes apply to initial investments – be them of tangible or intangible assets.  Applicants seeking to setup a new start-up, diversify the output or an existing concern or simply change the overall production process of an existing establishment.

    The schemes apply to a series of sectors, concentrated in the industry sectors such as manufacturing and R&Ds, as well as in the service industry such as call centres, audio-visual productions and ICT.  Educational and medical services are also eligible.

    The investment aid is calculated in a sliding scale, depending on the size of the applicant, and range from a maximum of 35% for small enterprises to a minimum of 15% for large enterprises or hotels.  The aforesaid tax credits are calculated as a percentage of qualifying expenditure provided that such assets (tangible or intangible) satisfy a number of cumulative criteria, these being:

    • The assets must be first time used in Malta;
    • Have been acquired from a third party; and
    • Kept of a minimum of three (3) years for SMEs and five (5) years for large companies

    Under the new rules, wage costs are also eligible, insofar that the qualifying wage costs include the wages covering new employments created within three (3) years of the completion of the investment project and are directly connected with the economy activity.

    Applications, which may be processed on behalf of clients, shall be entertained, insofar that Malta Enterprise is satisfied that such investments positively contribute to the development of the Maltese economy.

    The aforesaid schemes, are a welcome innovation towards the cementing of Malta as an attractive hub for foreign direct investment, tied to job creation and economic development, and follow in the path of similar schemes successfully implemented and subscribed to by investors eager to espouse Malta’s attractive fiscal regime, with tangible, on-the-ground development.

  • MFSA New Rules Regarding Malta Forex Companies

    MFSA New Rules Regarding Malta Forex Companies

    The Malta Financial Services Authority (MFSA) has issued new guidelines governing the license rules for companies, seeking to operate in Forex, under the Investment Services Act. The guidelines, which have retrospective effect as of 20th October 2014, have significantly tightened the statutory criteria for applicants seeking licensing in the Forex Industry – both as a white label operator or PAMM as well as a market maker.

    Prior to the issuance of the aforesaid notification, white label licence holders (acting as a white label to licensed prime brokers) were obliged to retain a minimum own funds requirement of EUR 125,000. Under the new rules, however, there has been a marked convergence between white label licence holders and margin makers, with the two licences now sharing several common ground. The new requirements may be succinctly summarised as follows:

    • Minimum own funds for applicants wishing to act as white label FX providers has been increased to EUR 730,000 or equivalent in any other currency;
    • The shareholding structure shall, irrespective of the licence applied for, require the involvement of at least one entity holding an equity participating in the prospective licence holder, which is licensed or regulated in a reputable jurisdiction;
    • More onerous local presence requirements – with the avoidance of over-concentration of powers into one / two individuals

    The use of expert advisors (FX Bots) is not precluded – but clear policies governing their use must be provided to clients.

    Irrespective of the licence applied for (white label forex / PAMM or market maker) the licence holder is expected to retain real time access to and control over all transaction data. The MFSA shall expect that the adequacy of any proprietary online trading platform (whereby bespokely developed or otherwise) has been independently certified by an IT Auditor, and that such certification is renewed on an annual basis. However, the use of online trading platforms (e.g. MetaTrader which are industry benchmarks) shall be considered more favourably by the MFSA.

  • Malta VAT Guidelines on Aircraft Leasing

    Maltese VAT Department Issues VAT Guidelines on Aircraft Leasing

    The Maltese VAT department has recently issued guidelines regarding the VAT treatment of aircraft leasing arrangements.  The aforesaid aircraft leasing arrangements are similar in nature to the guidelines issued for the widely known yacht leasing scheme, whereby the applicable rate of VAT were determined on the basis of use and enjoyment of the vessel.  In essence, the larger the vessel, the less time the yacht would be deemed to be inside Maltese territorial waters, thereby benefitting, by means of sliding scale, to a progressively reduced VAT rate, of up to 5.4% for yachts in excess of 24 metres in length.

    The same principle has been extended to aircrafts.  Given the mobility of the crafts, and the inability to determine the actual use of the aircraft within the EU airspace, the Maltese VAT department has issued a series of parameters, whereby when completed shall yield the applicable rate of VAT.  The requested parameters for the calculation of such formula, include the following:

    • Type of aircraft;
    • Take off weight;
    • Fuel Capacity;
    • Altitude; and
    • Cruising Speed

    In a similar pattern to the yacht leasing scheme, the lessor would be a Maltese registered company, operating the aircraft as part of its economic activity.  Input VAT incurred on the purchase of the yacht may be deducted.  Based on this formula, the Maltese Commisioner of VAT would issue a letter of comfort confirming the applicable rate of VAT, during the tenure of the lease

    The applicable rate of VAT charged by the lessor to the lessee (which can be a person – physical or corporate established in Malta)  would be the one calculated on the basis of the aforesaid formula – which shall be significantly less than the standard applicable rate of 18%.  The minimum applicable VAT rate, shall depending on the specifications be of 5.4%.

    At the termination of the lease period, the lessee shall be entitled to exercise an option to acquire the aircraft.  As the actual possession of the craft would be acquired in Malta – on the last installment, the full VAT rate of 18% would apply.  The Maltese VAT Commissioner would issue a VAT Paid certificate, upon evidence being shown that the lease installments have been paid on a monthly basis, during the currency of the VAT period (the maximum length of which may of sixty months).


  • Malta – Turkey Maritime Agreement

    Malta Signs Maritime Agreement with Turkey

    January 2015

    Malta has further cemented its position as a major maritime player with a maritime agreement entered into in January 2014 between Transport Minister Joe Mizzi and his equivalent Turkish counterpart Lufti Elvan.

    Although Malta and Turkey have already concluded several memoranda of understanding in the maritime sphere, the agreement is aimed at consolidating the existing framework, by embellishing relations and cooperation in maritime trading, including but not limited to the enhancement in the safety and security measures in navigation. This maritime agreement comes in the wake of tighter ties between the two countries, following the ratification of the double tax treaties between Malta and Turkey as of June 2013. The maritime ties also complement the now excellent logistic ties between the two countries – with the daily connections between Istanbul and Malta increasing up to ten flights a week as from March 2015, thereby acting as a catalyst for Turkish businessmen to tap into the excellent fiscal incentives currently on offer on Malta.

    The maritime agreement signed with Turkey is further testament to the ongoing clout of Malta as a maritime power. Apart from the highly successful yacht leasing scheme (over 400 registered superyachts), which has allowed pleasure yacht owners to benefit from a reduced rate of VAT (as law as 5.4% for yachts in excess of 24m), this move serves to increase the ever-growing number of vessels registered under the Maltese flag. Malta is currently the largest ship registry by tonnage in Europe, surpassing the Greek registry, with double digits growth from 2010 to date. Currently the cumulative tax tonnage of ships registered in Malta is of 51.8 million gross tons.

  • Fitch Reaffirms Malta’s Credit Rating at ‘A’

    Fitch reaffirms Malta’s credit rating at ‘A’ – outlook stable

    Credit rating Fitch has endorsed the economic policy undertaken by Malta and confirmed its credit rating of ‘A’ with a stable outlook. In undertaking its assessment, Fitch noted that the island was outperforming EU Member States in terms of GDP growth and employment

    The few figures point towards a 3.2% growth of GDP throughout 2014. Inflation is on a downward trajectory at 0.6% and unemployment is currently at around 5.8% – one of the lowest rates within the E.U. The public deficit was in line with projections – at 2.7% with a progressive reduction to 2.1% being projected for 2015. Malta would continue outperforming the E.U average throughout the years 2015 and 2016.

    The aforesaid figures are testament to the country’s sound economic policies and resilience in the face of the particularly turbulent year that has hallmarked the performance of the E.U. (whereby the GDP figures point towards a contraction of negative 0.4%). The public debt as a percentage of GDP should be reduced progressively to the below 70% mark (one of the economic criterion that must be met by Member States participating in the Eurozone) by 2020.

    Other factors worth of mention in the Fitch report were the reduction in electricity tariffs (incentives to businesses) as well as reforms and restructuring within Enemalta – state energy company.

    The aforesaid report is a feather in the cap for Malta and further testament that solid economic policies may be maintained in the most dire financial scenarios, to which Malta as a Eurozone member is not immune to. The said report sheds further light to the reasons why the foreign direct investment in Malta has been increasingly progressively over the past few years, and why the number of new companies incorporated in Malta (an important indicator) has been increasing in double-digit figures over the past years.

  • Malta Fiscal Changes in the 2015 Budget

    Malta Announces series of fiscal changes in the 2015 Budget

    The Minister responsible for Finance has delivered the 2015 Budget Speech, and delivered a series of changes to the individual tax rate and taxation of property transfers. As of 1st January 2015, a final withholding tax systems shall apply to all taxpayers – irrespective of whether they are body corporates or individuals, following a transfer of property. The final withholding tax of 8% shall be levied on the property’s value (down from the previous 12% withholding tax)m subject to the following:

    • A final withholding rate of 5% on the property’s value shall apply to transfer of properties effected by individuals who do not habitually deal in property (in other words not speculators) insofar that the subject property is transferred not later than 5% from date of acquisition; and
    • A final withholding tax of 10% calculated on the property’s value shall apply to properties acquired prior to 1st January 2004.

    In terms of taxation of individuals, the trend of progressive reduction in the personal taxation has been maintained – with the final taxation for individuals earning less than EUR 60,000 annually reaching the set target of 25% (down from 35% from the 2012 rate). Dividend income remains taxable at 35%. With regard to measures targeting employers and businesses, there has been a 25% reduction in utility rates for commercial premises, and a progressive phasing down of the eco-tax on a number of products, with the eco-contribution being subject to a progressive overhaul in the third quarter of 2015. Start-ups, may depending on their size and investment, be subject to a series of tax credits- of up to EUR 250,000 per year. The following measures are aimed at improving the country’s competitiveness whilst seeking to attract foreign direct investment that can further incentivize job creation.

    To read more about Malta Tax Advantages follow this link.

  • Malta Promotes Further Consultation Regarding Family Trusts

    Malta promotes further consultation regarding Family Trusts

    The Malta Financial Services Authority has promoted a series of consultation papers leading to the enactment of a regulatory framework regulating ‘family trusts’.

    Currently, under the Trusts and Trustees Act, the role of a trustee may only be undertaken by licensed entities, approved by the regulator as ‘fit and proper’ and fully compliant with the fiduciary notions inherent in the office of trustee.

    The proposed amendments seek to soften the aforesaid stance, by dispensing the need of authorsation vis-à-vis family trusts. Family trusts are defined as trusts whereby a trust is set up by the settlor for the needs, present and future of family member or dependants, who are related to the settlor. The underlying rationale therefore is to allow a softer regime, given the strictly personal and private nature of the trust.

    The trustee function would be undertaken by a trustee company consisting of at least three (3) directors. The composition of the board of directors must be of both family members as well as independent individuals. This allows a balance between having family members overseeing the good governance of the trust, with however, the guidance of qualified individuals, fully conversant with the legal intricancies innate with the role of trustees. The latter role must be a qualified lawyer or accountant, approved by the Authority and independent of the settlor, to ensure impartiality in exercising the role. Impartiality is not confined only to consanguinity or affinity but also to professional rapports that the proposed director in the trustee company may have with the settlor.

    The private nature of the trust must be satisfied on an ongoing nature. The trustee company cannot hold trustee to the general public nor act as a trustee on a habitual and continuous basis – as this would defeat the purpose for which the trustee is set up.

    The use of family trusts will further cement Malta’s reputation as a trust jurisdiction, and allow families to retain a tighter grip on their wealth management and asset protection.

    Follow this link to read more about Malta Trusts and Escrow Services.

  • Malta Proposes Regulatory Regime for Skill Games

    December 2014

    The Lotteries and Gaming Authority has recently issued a policy document outlining guidelines regarding games of skill.

    Currently games of skill, are outside the scope of a gaming licence, which licence is confined only to games of chance (such as lottery / slot machines – the outcome of which is decided by an independent arbitrator) or games of chance of chance and skill (such as poker – whereby even if the game is a strategy based one, ultimately the sequence of the cards is mandated by a random event).

    Skill games are defined as games whose outcome hinges entirely or a major degree on intellect, knowledge, speed of execution, dexterity etc; The applicability of these skill games can include puzzle games, music games board games, action games etc; irrespective of whether the medium for play is internet or mobile applications.

    Social games, are at least for the time being, outside the scope of the aforesaid discussion, albeit the Lotteries and Gaming Authority has reserved judgment as to whether these forms of social games, shall be subject to regulation in the not so distant future.

    The main reasons for the discussion to regulate skill games has been motivated by the need to regulate transaction, in which vulnerable players, may be lured into gaming for a monetary prize. Other consideration include the possibility that such forms of gaming could be used as a pretext for the laundering of illicit proceeds of crime. There are also considerations, given the fact social games have a wider audience (in terms of age-group) than regulated games, that these be regulated to ensure protection for the most vulnerable players and an element of fairness and impartiality in the distribution of prizes.

    The said policy document therefore should be interpreted as a positive sign towards ensuring an element of certainty and formality in this wide and potentially lucrative market. Whilst the consultation process is still ongoing, and shall be subject to final changes, our directors shall be reverting back with the final legal position, as soon as skill games have been enacted into a legal framework.

  • Malta Implements Important VAT Updates

    Malta Implements Important VAT Updates Related to the Mini One-Stop Shop

    The 1st of January 2015, shall bring in sweeping changes to the Maltese VAT legislation, as the Maltese VAT Act, Chapter 406 of the Laws of Malta, shall include and implement changes regarding the place of supply rules in a number of services, including but no limited to the consumption of telecommunications, broadcasting and electronically supplied services, with the effect that as of 1st January 2015, the chargeable VAT is the one where the customer is established.

    Until the 31st December 2014, this would render necessary the registration of a supplier, providing any of the aforesaid services in each and every Member State where the provision of the services is provided. Given the bureaucratic requirement of registering in several Member States, with a tangible hindrance on cross-border trading, the European Commission has introduced a Mini One-Stop Shop (“MOSS”).

    The main scope for a MOSS is for suppliers to retain one VAT registration number, in lieu of multiple ones, with an obligation nevertheless, to report supplies made to customers established or residing in other Member States through a bespoke MOSS VAT return, to be filed electronically with the VAT authorities of the jurisdiction in which the supplier is established. The effect is therefore to have a more streamlined system, allowing small-medium sized suppliers to contain their administrative costs. The main benefit of the MOSS is that it also allows an intra-community recognised channel through which payment of all VAT due would be made directly to the Member State of registration, thereby significantly simplifying the statutory VAT payments.

    For a better understanding of the implementation of the MOSS and how the practical repercussions on your existent or potential commercial activity, please do not hesitate to contact one of our partners, for immediate, thorough and prompt assistance by sending an email to or by calling us at +356 2338 1500.

  • Malta Removed from Russian Blacklist of Offshore Jurisdictions

    Malta Removed from Russian Blacklist of Offshore Jurisdictions

    November 2014

    The Russian Finance Minister has, by formal decree, published an updated black-listed offshore jurisdictions. One of the most conspicuous amendments, is the removal of Malta, from the same blacklist, albeit a total of forty-one (41) jurisdictions remain on the blacklist.

    The decision, signals a progressively closer relationship between Malta and the Russian Federation, after several decades of lukewarm relations and diplomatic silence. The move to remove Malta from the blacklist, is a natural coronation to the execution and the coming into force of the Double Tax Treaty Provision, entered into and signed by the two countries, in May 2014, following several years of negotiations. This treaty supersedes the Malta – Russian tax treaty (2000) which has been superseded.

    The signing of the double tax treaty represents a thawing of the relationship between the two countries, and the endorsement that the Republic of Malta is not a tax-haven, but an onshore jurisdiction which albeit firmly entrenched in the EU acquis communitaire and a full member of the European Union since 2004, enjoys a holistic and unbiased view, towards other non-EU economies.

    According to the International Monetary Fund, the Russian Federation is, currently the eighth largest economy in terms of GDP, and a major player in the commodities and energy market.   This economic clout has also been underscored in the recent Memorandum of Understanding signed between the Maltese Chamber of Commerce and the Chamber of Commerce and Industry of the Russian Federation, signed in June 2014.

    The double tax treaty with the Russian Federation and the subsequent removal from the blacklist represents another major milestone for the Government of Malta, which has been progressively and steadily increasing its political and geo-economical collaboration with a series of Memoranda of Understanding and Double Tax Treaty Agreements with a number of central and South American Republics.

    To start reaping the full benefits of an onshore, low-tax, EU jurisdiction simply contact us by email on or by calling at +356 2338 1500 for bespoke advice.

  • New Investment Rules for Loan Funds in Malta

    Malta Introduces New Investment Rules for Loan Funds.

    The Malta Financial Services Authority (MFSA) has published a series of standard licence conditions applicable to collective investment schemes authorized to invest through loans.

    Until recently, collective investment schemes were precluded from investing in schemes through loans, since the financing of loans was deemed to be an activity reserved solely to entities licensed in terms of the Financial Institutions Act or Banking Act.

    Following the publication of the rules, it is possible for a loan fund to be established as a Professional Investor Fund or as an Alternative Investment Fund, insofar that the fund is a close-ended scheme and the investment through loans is limited to unlisted companies to the exclusion of financial institutions. A minimum investment of EUR 100,000 per investor is also mandatory.

    Contact one of our officers for further information regarding the licence regime applicable to loan funds.

  • Malta – Mexico Double Tax Treaty Agreement

    Malta – Mexico Double Tax Treaty Agreement in force

    The double tax treaty entered into and signed between the government of Malta and Mexico has finally come into force.

    As of 2014, Mexico is the 14th largest economy in the world, with considerable clout in the manufacturing and services industry. The finalization of this treaty, represents a consolidation of the shift towards concluding bilateral treaties with Central and Latin American jurisdictions, following the finalization of an agreement with Uruguay.

    The most salient features of the double tax treaty agreement, may be summarised as follows:

    • 0% withholding taxes on dividend income
    • Interest arising in one state and paid to the resident of the other is taxable on in the latter state. If the beneficial owner of the state where the interest arises, the tax charged shall not be in excess of:

    (i) 5% of gross amount of the interest from loans granted by a bank;
    (ii) 10% of the gross amount of the interest, in all other cases

    • Royalties to same rules as interest. Where the beneficial owner of the royalty is a resident of the other contracting state, the tax charge shall not exceed 10% of the gross amount of the royalties.

    To see the full list of Malta Double Tax Treaties as well as Summary Tables and Full Text follow this link.

  • Malta further reduces Personal Income Tax

    As part of a series of measures in traduced in the budget measures, the personal income tax rate for individuals has been further reduced from 29% to 25% (for earning up to EUR 60,000 per annum). The said reduction, which applies for all forms of tax computation – simple, married or parent rate, represents the final installment of a progressive reduction in the income tax rate which has been decreased, over the course of three (3) consecutive budgets from 35% to 25%.

    Whilst, a series of favourable personal income tax regimes, had already been enacted for high ranking officers within regulated entities, such as insurance, financial services and gaming, this further reduction, is not tied to any specific sector or regulated business. Effectively, all Maltese resident tax payers, can now benefit from the aforesaid revised tax brackets, thereby providing an added incentive for expats to establish their residence in Malta.

    To read more about the Malta Tax Advantages follow this link.

    For Malta Company Formation essential information and facts follow this link.

    For comprehensive information about the Malta Company uses by Individuals or Corporations follow this link.

  • Record number of Maltese Company Formations in 2013


    2013 has been officially recognized as a record year for the Maltese registrar of companies with over 4,500 companies incorporated.  This represents double-digit growth over the previous year and has once again confirmed Malta as one of the most exciting and up-and-coming corporate jurisdictions.  Over the past five years, whilst most of the European neighbours have been mired in recession, Malta has consistently achieved double digit growth. Continue reading “Record number of Maltese Company Formations in 2013”

  • Changes to Private Exempt Companies

    The Registrar of Companies has recently announced that the shareholding of private exempt companies has been extended to include corporate shareholders.  Prior to this amendment, private exempt companies could only have as shareholders, physical persons.  This amendment bodes well with what has been perceived by practitioners as an anachronism, albeit, it must be noted, the exemption to corporate directors, has been retained.

    Nevertheless, this is a welcome move in the right director, since the use of corporate shareholders, shall also allow beneficiaries of private exempt companies to have access to fiduciary services and holding structures which may allow access to double tax treaties.

    The amendments do not in any manner, hinder the application of Malta’s optimum tax system, where following the application of a tax refund to the shareholders, the ultimate tax leakage suffered by active trading companies can be as low as  5% and in some cases as low as 0% (on the computation of foreign taxation suffered). For full details continue reading Malta Company Tax

  • Focus Business Services Group opens new office in UAE

    The Focus Business Services Group proudly announces further expansion, via its new flagship offices in the United Arab Emirates  (Ras Al Khaimah) and is now able to assist clients with the formation of corporate structures and bank accounts, offshore OR Free Zone companies …in ALL the Free Zones of the UAE .

    Continue reading “Focus Business Services Group opens new office in UAE”


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