Malta

Related Articles

New Developments
  • Malta has continued its drive to broaden its already vast network of double taxation treaties (DTTs) and has recently signed new DTTs with Bahrain, China, Russia, Switzerland and Uruguay. Uruguay is the first South American country with which Malta has concluded a DTT.
  • In November 2009, the UK's Her Majesty's Revenue and Customs (HMRC) confirmed that regulated retirement schemes in Malta may be eligible as QROPS (Qualifying Recognised Overseas Pension Schemes). This recognition was based on the Malta and UK legislation. HMRC approved the first Maltese QROPS in April 2010 and Malta has officially registered seven retirement schemes, most of which are recognised as QROPS by HMRC. By mid-July 2011, seven trustees had been registered as retirement scheme administrators with the Malta Financial Services Authority, and further applications are in the pipeline.
  • In June 2010, the Double Taxation Relief on Taxes on Income with the Republic Of Serbia Order came into force by virtue of Legal Notice 431 of 2010.
  • In July 2010, the Double Taxation Relief on Taxes on Income with Jersey Order came into force by virtue of Legal Notice 432 of 2010.
  • The Double Taxation Relief on Taxes on Income with the Hashemite Kingdom of Jordan Order came into force by virtue of Legal Notice 501 of 2010.
  • In November 2010, the Double Taxation Relief on Taxes on Income with the United States of America Order came into force by virtue of Legal Notice 560 of 2010.
  • Regulations have been enacted under the Companies Act to introduce a new corporate vehicle based on the concept of the incorporated cell company (ICC).These regulations are: (i) the Companies Act (SICAV Incorporated Cell Companies) Regulations (enacted by = Legal Notice 559 of 2010), regulating the creation of sub-funds in terms of investment companies; (ii) the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations (enacted by Legal Notice 243 of 2010); and (iii) the Companies Act (Incorporated Cell Companies Carrying on Business of Insurance) Regulations (enacted by Legal Notice 558 of 2010), regulating the creation of protected and incorporated cell companies in the insurance and reinsurance company sectors.
  • Legal Notice 192 of 2011 brought into effect the Highly Qualified Persons Rules, which is a scheme that aims to attract highly qualified persons to Malta by offering a flat rate of tax of 15 per cent on employment income arising in Malta.
  • The recently introduced Aircraft Registration Act (Chapter 503 of the Laws of Malta) consolidates the existing laws on aircraft registration and, among other things, caters for the possibility of registration of aircraft under construction, allows recognition of fractional ownership, and extends the powers of mortgagees in relation to the cancellation of the registration of an aircraft. Under the Aircraft Registration Act it is also possible for a mortgage to be registered and executed in favour of a security trustee.
  • In May 2011, the Financial Intelligence Analysis Unit issued the Implementing Procedures for the Prevention of Money Laundering and Funding of Terrorism Regulations, with the purpose of assisting subject persons in understanding and fulfilling their duties under the Regulations.

1. Introduction

A. History And Background

The Maltese archipelago is composed of five islands. Malta is the largest, followed by Gozo, its sister island. Throughout the centuries, many nations have availed themselves of the strategic, central position of the Maltese islands and their impressive natural harbours in the centre of the Mediterranean.

The history of the Maltese islands dates back 7,000 years. The Maltese Islands formed part of both the Roman and Byzantine empires before being subject to Arab and, later, Norman domination. In 1530, the Maltese Islands were ceded by the Holy Roman Emperor Charles V to the Order of St John and in 1798 the islands were surrendered to Napoleon. French administration ended in 1800, after which Malta was subject to British colonial rule until its independence in 1964. Malta became a Republic in 1974 and in May 2004 became a member of the European Union (EU), adopting the euro (EUR) as its official currency on 1 January 2008.

Today, Malta is a centre of commerce and investment. Maltese and English are the two official languages. Most business correspondence, commerce and trade is conducted in English, making Malta an attractive location from which to conduct international business and in which to take up residence. It is reassuring to note that on 2 April 2009, when the G20 met, Malta had the international requirements in place and therefore was on the white list of jurisdictions.

Despite the financial crisis, the Maltese market remains stable and no bailouts for banks have been necessary.

A report on regulatory developments in financial services and anti-money laundering in Malta published by the Bureau for International Narcotics and Law Enforcement Affairs of the US State Department on 1 March 2004 confirms the progress made in financial services regulation and outlines Malta's transition into a mainstream financial services jurisdiction that is today a member of the EU.

B. Legal System

Malta has a written constitution that prevails over any other law and requires two-thirds parliamentary majority to be changed. Although Maltese law is based on the civil-law system, it has been strongly influenced by other legal systems, particularly English common law and, more recently, EU legislation. Although Maltese civil law is largely based on Roman law principles, fiscal law, company law, shipping and maritime law, and most fields of commercial law are heavily influenced by English law. Financial services legislation in Malta is principally based on EU legislation.

Editorial Board
Malcolm Becker TEP
Bentley Trust (Malta) Limited, St Julians, Malta
Tonio Ellul TEP
EMD Advocates, Valletta Waterfront, Malta
Anthony Cremona TEP
Ganado & Associates, Valletta, Malta

Advert

Article Search

© 2012 Society of Trust & Estate Practitioners