FIMBANK

A Global Force in
Trade Finance

A Financial Service Centre

Malta is continuing to diversify its economy to include a range of services which draw strength from its location, the education and skills of its people as well as its centuries old tradition as a hub on one of the most important trading routes of history. An important development in this regard has been the establishment of the Malta Financial Services Centre, a regulatory body aimed at ensuring that the significant advantages that Malta offers are used in a manner that both offers fiscal benefits to the foreign investor and is consistent with Malta's international obligations.

Together with the establishment of a financial services centre other measures taken include:

  • Ensuring that income originating from overseas is not subjected to double taxation, even if there is no double taxation agreement in existence. This is achieved by providing relief from double taxation on a unilateral basis and through a system of flat rate foreign tax credits and refunds to non-resident shareholders on tax paid on dividend payments from overseas;

  • Advance rulings by the Commissioner of Inland Revenue to provide certainty and clarity on international tax issues. These rulings guarantee the tax position for a minimum of five years and may be renewed for a further five year period;

  • Limiting the maximum tax liability of non-residents to Malta taxation on dividends from international business companies;

  • A taxation scheme for groups of companies allowing offset of losses between fellow subsidiaries;

  • A definition of qualifying participation in foreign holding companies;

  • A law regulating collective investment business schemes and investment services in general;

  • Amendment of existing company law incorporating, inter alia, the introduction of new concepts for Malta such as SICAVS and incorporation of a number of concepts from EU company law;

  • Professional secrecy legislation. This provides levels of protection of personal and commercial privacy comparable to other Western countries offering reassurance to foreign investors without obstructing proper supervision;

  • Money laundering regulations;

  • Ratification of The Hague Convention on recognition of Trusts and incentives for the management of unit trusts from Malta whilst still allowing such trusts to be governed by foreign trust law Insider trading rules.