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

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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.

    If You Wish to Take Advantage of Malta Fantasy Sports Operator License, Contact Us Now to Start the Process

  • 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.

    If You Wish to Take Advantage of Malta Branch Registration, Contact Us Now to Start the Process

  • 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.

    We can Help you Registering your Private Yacht in Malta – Click Here to Start the Registration Process 

  • 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.

    FBS TRUST LIMITED is an authorised trustee company licensed by the MFSA.

  • 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%

    Click Here to read more about Malta Yacht Registration Scheme

    Contact one of our officers for bespoke VAT Advice and start reaping the full benefits of an onshore, low-tax, reputable, EU jurisdiction. Simply fill in the contact box below or contact us by email on or by calling at +356 2338 1500

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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.

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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.

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    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.

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  • Pharmaceutical Companies Registered in Malta and Growth of the Industry

    Pharmaceutical Companies Registered in Malta and Growth of the Pharmaceutical Industry in Malta

    The Pharmaceutical industry in Malta has developed and grown significantly in recent years, becoming a strong contributor to the local economy. This dynamic industry has taken advantage of the many positives that Malta has to offer. Apart from the obvious geographical advantages which provide for the development and manufacturing of medicines with the quick opportunity to infiltrate markets such as south Europe and North Africa, Malta offers linguistic skills with the promotion of multilingualism throughout the Maltese educational system, individuals with academic degrees in chemistry and skilled work labour force in the use of high-precision machinery.

    Malta’s legal framework offers significant advantages to such organisations. It allows pharmaceutical companies to undertake all the preparatory work, including clinical trials and testing, for the purposes of obtaining regulatory approval or other commercial purposes prior to the expiration of the lifetime of an existent patent. Subsequently, once the patent expires, the Malta based generic pharmaceutical company may immediately put its newly developed product on the market without undue delay and before any of its competitors.

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    Medicinal products which have been placed on the Maltese or EU market need to have a marketing authorisation as per the medicines act and the medicines regulations. Being a full member of the European Union, Malta employs the Mutual Recognition Procedure whereby once any one member state has been granted marketing authorisation by any local EU competent authority, this shall be held in common with other member states. Pharmaceutical companies established in Malta and looking to trade with the rest of the EU, are thus not required to attain further authorisations from any other competent EU authority as they benefit from the mutual recognition of marketing authorisations.

    Pharmaceutical companies registered in Malta may also take advantage of the various tax refunds available to such companies, ultimately resulting in an ultimate tax leakage of just 5%.

    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

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  • Malta Registered Securitisation Vehicles VAT clearance

    Malta registered Securitisation Vehicles obtain important VAT clearance

    Following the publishing of Legal Notice No. 383 of 2016, Securitisation Vehicles will now also fall under the exemptions of investment scheme management services as provided by item 3(6), Part Two of the Fifth Schedule of the Malta VAT Act. This will mean that securitisation vehicles established or operating from within Malta will not need to be registered for VAT purposes and will not be charging any VAT on their services.

    As defined under Chapter 484, Securitisation Vehicles may take the form of a company, a trust created by a written instrument or any other allowed legal structure. The term securitisation is defined by the same chapter as a transaction where assets are acquired, risks are assumed or secured loans are granted whereby these are financed through the issue of financial instruments/securities. Any type of asset may be securitised, be it moveable or immoveable, tangible or intangible, current or future. Securitisation brings about a number of advantages namely the closing in of financial and capital markets by converting financial assets into capital market commodities. Securitization allows for the reduction of funding costs, risks as well as the changing of illiquid portfolios into liquid stocks, which can be sold to many individual investors.

    Securitisation Vehicles are generally not licensable in Malta, however there is the need for registration with the Malta Financial Services Authority. Such a vehicle is still subject to the provisions of Chapter 484 Securitisation Act. Public securitisation vehicles, i.e. securitisation vehicles which issue or plan to issue financial instruments to the public on a continuous basis, do however need to apply for a licence before commencing any activities.

    The change in the VAT treatment will mean that, going forward, Securitisation Vehicles will benefit from a reduction in irrecoverable VAT costs associated with the function they provide.

  • Malta Passport and Citizenship by Investment Program

    Malta Passport and Citizenship by Investment Program (Malta Individual Investor Programmegrants successful applicants EU citizenship and Visa-Free travel to more than 160 countries.

    According to the Passport Index 2016, Malta ranks ninth in the ‘Global Passport Power Rank 2016’ together with Iceland.

    The index is based on the total Visa-Free score, which includes visa-free and visa on arrival privileges. The higher the Visa-Free score, the better global mobility its passport bearer enjoys.

    Malta has been given a Visa-Free score of 150 (Visa-Free travel to more than 160 countries), sharing the 9th place with Iceland.  In fact, there are 27 other countries with a better ranking spread over the top 8 spots, headed by Germany with a score of 158.  This positive ranking attracts foreign individuals to make the Maltese passport and citizenship their preferred choice.

    In 2014, Malta introduced the Individual Investor Programme (IIP) which grants citizenship to worldwide high net worth individuals (and their dependents) who contribute to the economic and social development of Malta, a respected EU Member State.  The program has been the first of its kind to be recognized by the European Commission.

    Contact us Now to get a free quote and to start the application process.

    The IIP program grants successful applicants EU citizenship by investment, nevertheless, to be considered eligible for the scheme, the main applicant must be at least 18 years of age and subject to a rigorous vetting and diligence process, including comprehensive background checks.  The applicant must provide proof of residence in Malta for at least 12 months preceding the application.

    Applicants must be covered by an international health insurance policy for the main applicant and each of the dependents.

    The investment requirements include the acquisition of real estate with a minimum value of €350,000 to be held for at least 5 years or lease a residential immovable property in Malta for a period of 5 years at an annual rent of at least €16,000, an investment in a government approved financial instrument (stocks, bonds or special purpose vehicles) for a minimum value of €150,000 to be held for a minimum period of 5 years and making a contribution to the National Development and Social Fund as follows:

    Malta National Development and Social Fund Contributions for IPP Contribution Amount
    Main Passport Applicant €650,000
    Spouse Passport €25,000
    Dependent Children Passport €25,000 each
    Children Aged 18-26 €50,000 each
    Dependents Aged 55 and Above €50,000 each

    Over the past two years, Malta has received over 800 applications from over than 40 countries with almost 700 passports issued to high net worth individuals.

    The IIP program is capped at 1,800 participants, so we encourage you to act fast.  The process of the IIP application is carried out by Accredited Persons or Approved Agents, including FBS Trust Limited.

    Contact one of our officers to initiate the Maltese Passport and Citizenship Application procedure 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 Aircraft Registration Tax Incentives

    Malta Aircraft Registration Tax Incentives. Malta Aviation – setting new highs.

    In recent years, Malta has managed to put in place a well-defined strategy to become a reputable aviation centre by attracting and making available comprehensive airline services, comprising of aircraft and engine maintenance, repairs, overhaul, aircraft management, aircraft maintenance training and other ancillary support services.  Subsequently this has been attracting enterprises involved within the industry to set up base in Malta with the Malta Aviation Registry registering continuous growth. As of September 2016, the aviation registry boasted the registration of 232 aircrafts, an increase of 13 aircrafts in just 5 months.

    The attracting factors contributing to the aforesaid growth is Malta’s status as an EU Member State,  an appealing corporate tax regime, the adoption of the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol (“the Convention”) into the Maltese legislation.  The latter also maximises flexibility, integrating important provisions such as the adoption of the Recognition of Fractional Ownership (allowing an aircraft to be owned my multiple persons in specified fractions or percentages, with each part allowed to be consequently given as a security), the possibility of registering aircrafts under construction, the specific tax treatment for finance leases, no withholding tax on lease payments to non-tax resident lessor and reasonable depreciation period on aircraft/engine.

    Registration of an aircraft in Malta is restricted to “qualified persons” which can be an individual or a company resident in any part of the world, meeting the criteria set.

    In terms of taxation, a company incorporated outside Malta and managed and controlled in Malta deriving income from the ownership, leasing or operation of aircraft or aircraft engines is deemed as resident in Malta for tax purposes.

    Income derived from the ownership, leasing or operation of aircraft or aircraft engines engaged in the international transport of passengers or goods is deemed to arise outside Malta for Maltese income tax purposes, irrespective of the country of registration of the aircraft/engines and whether the aircraft calls at or operates from Malta.

    In terms of Malta’s remittance basis of taxation, foreign source income is not taxable in Malta unless it is remitted to Malta. The remittance basis of taxation applies to persons (individuals or incorporated entities) which are either resident or domiciled but not both.

    Moreover other jurisdictions would not be able to tax such income since in terms of the double tax treaties signed by Malta, based on the OECD Model Convention, profits derived from the operation of an aircraft in international traffic are taxable only in the Contracting State in which the place of effective management of the enterprise is situated. Thus if the effective management of the company is situated in Malta, such profits are in terms of the tax treaty only subject to tax in Malta, which in any case would be exempt from tax unless received in Malta.

  • Malta Budget Measures

    Malta Budget Measures for 2017

    The Maltese finance minister, Edward Scicluna on the 17th of October presented the budget plans for the year 2017, with special focus on the areas of social justice and investment.

    Budget Minister Scicluna reiterated his absolute and unequivocal support for the financial services sector and his reliability on Malta’s tax system declaring that the Maltese tax system is expected to be introducing numerous structures which include group tax consolidation and notional interest reduction. In order to ensure Malta’s competitiveness and compliance in an international landscape with fast evolvement, the government emphasized that is firmly committed to the advanced progress of its statutory framework.

    A snippet of the key measures broadcasted:

    • Tax credits for private pension schemes; companies which offer private pensions to their employees may now start considering their contribution to the scheme as a non-taxable expense. This measure aims at encouraging employers to make contributions to such schemes. Moreover, this measure will entitle employers to a tax credit of 15% for every EUR 1,000 contributed to the scheme. This new measure not only benefits the employer but also the employee who upon investment in the scheme is allowed a maximum tax reduction of EUR150 against his income, such reduction is dependent on the amount contributed.
    • Group tax consolidation; the government will be looking at issuing regulations aimed at giving companies that form part of a group the option to work out their profits and losses jointly. The aforementioned comes as a recent enchantment to the Maltese tax system.
    • Encouraging startups; startup companies whose turnover does not exceed EUR80,000 per annum now have the option of either benefiting from being exempted from having their financial statements audited for the first two years of their operation or choose to have the financial statements audited and then claim a tax deduction which amounts to a maximum of EUR700 per annum or 120% of the audit fee
  • Malta Credit Rating Upgrade by S&P

    Credit Agencies Upgrade Malta’s Rating

    Malta Credit Rating Upgrade by S&P. The US based credit-rating agency Standard & Poor’s has recently revised its long term rating for Malta, raising it from BBB+ to A-. The improved rating is driven by consistent GDP growth which is expected to average 3% during 2016 to 2019, increases in the productive labour supply as well as growths in both exports and investment. The improvement economic performance will also have a knock-on effect on the Country’s fiscal performance with general deficit below 1% for the 2016 – 2019 period, sustainable current account surpluses that will average 1.9% of FDP and a general improvement in Malta’s balance of payments and external accounts.

    In its report, S&P also singled out the effect of large-scale projects in education, healthcare, tourism, and transport industries, as well as energy projects, including the conversion of power stations to cheaper energy sources and the gradual integration of Malta’s power system into the European grid as other contributing factors. The credit-rating agency stated that the country is in the forefront of a strong medium-term economic expansion in the Eurozone, having had the second-highest average GDP growth rate between 2010 to 2015 and the third-highest expected real GDP growth in the 2016 – 2019 period. The stable outlook reflects S&P’s view that the upside potential of Malta’s economic and fiscal performance is counterbalanced by downside risks related to Brexit, external flows, and the structure of the financial sector, particularly the size of its banking sector. It must be however said that the latter’s significance to the local economy is, to say the least, very contained.

    Malta’s economy has transformed itself over the past twenty years with the emergence of new economic sectors. Malta is today a highly industrialised, service based economy. Its strengths are derived from its strategic location, its fully developed open market economy, a multilingual population, a productive labour force, low corporate taxes and well developed finance and ICT clusters.

  • Malta Development Bank

    Malta to Have its First Development Bank

    Malta is expected to have its first Development Bank after the government’s proposals have been given the green light by the European Commission. The proposals will be presented and voted upon in the Maltese Parliament where it is expected to be formally approved and implemented. The country will thus have another important tool in achieving its desired economic and social targets.

    The Malta Development Bank will contribute to economic growth by funding sectors and projects that are not catered for by commercial banks. The Bank will be able to grant loans for specific national or regional projects to private or public bodies or may operate in conjunction with other financial institutions. This will result in the strengthening of the local financial base and a diversification of financing possibilities for local entrepreneurs and other economic operators. The Development Bank will also be particularly interesting for SMEs due to the difficulties that these face when trying to access funds. The bank will serve as the ideal platform to facilitate small businesses’ access to available funding as well as other projects related to strengthening the Maltese economy.

    It will be within the bank’s remit to provide attractive wholesale financing and risk sharing facilities. The proposals include the possibility for the bank to be able to raise money by issuing bonds in order to finance projects. This would eventually attract wealth funds who are not interested in investing in projects to buy such bonds. This will be a powerful tool to bring to realisation more economically feasible projects.

    The government-owned bank will have an authorised share capital of €200 million. This will allow it to eventually leverage this to around €1 billion in loans. The initial issued and paid-up share capital is expected to be around €30 million, with further allotments being made to accommodate the bank’s increasing needs.

  • Malta EU Presidency Under Spotlight

    Malta EU Presidency Under the Spotlight

    Eyeballs will be on Malta in a few months’ time when it takes over the six-month presidency of the EU Council on 1 January 2017 for the first time. Reports suggest that Malta is well prepared to cope with the unprecedented administrative workload the EU presidency demands.

    Over the last 12 years Malta has managed to capitalize on its EU membership, with significant growth in its general economy, including the vibrant financial sector, which is going from strength to strength. In 2015 Malta’s economy registered the second fastest growth within the EU, with the European Commission forecasting Malta’s GDP growth in 2016 and 2017 well above the forecasted figures for the EU as a block.

    Malta adopts an EU-compliant regulatory framework, valuable for financial services firms and other organisations to be able to set up their base in Malta and conduct their business within EU and beyond. Complimenting this, other several factors attract such firms, such as the pool of talent and skilled labour, a sound legal system, an advanced financial environment, an adequately capitalised and healthy banking sector, tax incentives to attract foreign professionals, tax credits and favourable corporate and income tax rates.

    Consequently, Malta’s unemployment rate dropped to 5.4% in 2015, well below the EU average of 9.4%. The reports for first quarter of 2016 show a further drop to less than 5%.

    The increased demand on human capital has pushed the Maltese government to resort to measures to increase the country’s labour force. This includes measures aimed at increasing female participation into the work force. This demand has resulted also in a considerable increase of foreign workers in Malta.

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