# Zeta Corporate & Management Services — Full Article Archive > Complete text of every news article and structuring guide published on zeta-financial.com. Each article block starts with a metadata header (title, date, category, canonical URL) followed by the full body. Source: https://zeta-financial.com (regenerated on every deploy) --- ## Trust and Trustees Act (Register of Beneficial Owners) (Amendment) Regulations 2026 **Date:** 2026-09-30 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/trust-and-trustees-act-register-of-beneficial-owners-amendment-regulations-2026 #### **Introduction**  The Trust and Trustees Act (Register of Beneficial Owners)(Amendment) Regulations 2026 (the ‘**Amendments**’) were published on the 22nd of September 2026 by means of Legal Notice 252 of 2026, amending the Trusts and Trustees Act (Register of Beneficial Owners) Regulations (the ‘**Regulations**’) to transpose certain provisions of the Sixth Anti-Money Laundering Directive (AMLD6) in so far as they relate to trusts and trustees.  #### **Updated Definitions**  ##### **Minor Update to the Definition of Beneficial Owner**  The Amendments implement a slight update to the definition of ‘beneficial owner’ for the purposes of the Regulations without any significant material change.  #### **Access to Beneficial Owner Information**  ##### **Rights of Access**   The Amendments introduce a comprehensive overhaul of the process by which competent authorities, obliged entities, and third parties with legitimate interest may be granted access to a company's register of beneficial owners.  ##### **Registration Requirements and Fees**  All parties (competent authorities, obliged entities and third parties) are required to register online in order to be able to request access to beneficial owner information held by the Authority, unless otherwise provided.   Obliged entities and third parties may also be subject to the payment of a fee for every access request.  ##### ***Competent Authorities – Immediate, Unrestricted Access***  The Amendments require access to the beneficial owner register to be made available to competent authorities (including AMLA, EU Member State tax authorities, the European Public Prosecutor’s Office, European Anti-Fraud Office and others) immediately, unfiltered, without any restriction and without alerting the beneficial owner concerned.  ##### ***Obliged Entities – Timely Manner with Potential Refusal in Exceptional Circumstances***  Obliged entities (previously ‘subject persons’) continue to benefit from a right to access information in a timely manner. The Amendments, however, reserve the right for the Authority to refuse access to the information requested in exceptional circumstances where the Authority considers that granting access to the information would expose the beneficial owner to risk, or where the beneficial owner is a minor or otherwise legally incapable.  ##### ***Third Parties with Legitimate Interest with Potential Refusal in Exceptional Circumstances***  Third parties with legitimate interest in the prevention of money laundering and/or the financing of terrorism can request access to information held by the Authority.  The request shall be verified by the Authority on a case-by-case basis, and the Authority may request information from the applicant, including:   (a) identification details, supported by certified identification documents;  (b) details on function or occupation;  (c) any other information the Authority may deem necessary.  ##### What Constitutes Legitimate Interest?  The Amendments provide that legitimate interest shall be satisfactorily demonstrated where the person requesting access is able to show that:  (i) the interest relates specifically to, and contributes to, the prevention and combating of money laundering and/or terrorist financing; and  (ii) the request is justified on the basis of previous activities and a proven track record of actions in that field, evidenced by documentary proof.  #### Parties Deemed to Hold Legitimate Interest  The Amendments then set out a list of persons deemed to hold a legitimate interest in accessing beneficial ownership information, including (but not limited to):  (a) journalists, civil society organisations and NGOs where their activity is connected with the prevention of money laundering or terrorist financing;  (b) persons likely to enter into a transaction with a trust, intending to prevent any link between the transaction and money laundering;  (c) persons subject to AML/CFT requirements that demonstrate the need to access the beneficial ownership information to perform customer due diligence;  (d) providers of AML/CFT products, provided that products are only offered to customers that are obliged entities or competent authorities.   #### **Refusals & Appeals**  Where the Authority exercises its discretion to refuse access, it must inform the applicant of the refusal, provide reasons, and notify the applicant of the right to redress.   #### **Registrar Obligations: Verifying Identity and Recording Access**   The Amendments now require the Authority to:  (a) verify the identity of applicants whenever they access the register; and  (b) maintain records of the persons accessing the beneficial ownership information.   #### **The Right of Beneficial Owners to Access Records of Persons Accessing Beneficial Information**  The Authority must also ensure that it is capable of disclosing the relevant information to a beneficial owner who files a data subject request under the General Data Protection Regulation (GDPR). However, no information shall be disclosed to the beneficial owner where such disclosure may lead to the identification of any person accessing the register for the purposes of journalism, or of any civil society organisation. In such cases, only the occupation or function of the person consulting the register will be disclosed.  #### **Conclusion**  The Amendments significantly tighten Malta's beneficial ownership regime in line with AMLD6.  #### **Contact Us Today**  Obliged entities should review their position against the amended Regulations without delay. For assistance in assessing conformity or navigating the new access procedures, please contact us today.  For more information on how zeta. can assist you, please contact us at:   [***bd@zeta-financial.com*** ](mailto:bd@zeta-financial.com) *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Ongoing Compliance and Tax Obligations for Companies Incorporated in Malta **Date:** 2026-08-28 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/ongoing-compliance-and-tax-obligations-for-companies-incorporated-in-malta **Ongoing Compliance and Tax Obligations for Companies Incorporated in Malta**    **Background**  Malta has established itself as an attractive European jurisdiction for international businesses seeking an EU base from which to operate, invest and grow.  Its EU membership, English-speaking business environment, extensive network of double taxation agreements and established financial and professional services sectors make Malta an appealing destination for companies across a wide range of industries.  However, incorporating a company is only the beginning.  Once established, a company incorporated in Malta must meet a range of ongoing accounting, tax, corporate and governance obligations. Understanding these requirements and managing them properly is important in order to maintain a successful and credible business in Malta.    **Accounting Requirements**  **Annual Accounts and Deadlines**  Companies incorporated in Malta are required to prepare annual financial statements for each financial year. These financial statements must be approved by the Board of Directors within 10 months of the financial year-end and subsequently filed with the Malta Business Registry (MBR).  For a company with a 31 December year-end, this means that the financial statements must be approved by 31 October of the following year and submitted to the MBR by 12 December. Companies should therefore ensure that sufficient time is allowed for the preparation, approval and filing of their annual accounts within these statutory deadlines.      **Audit Requirements**  As a general rule, companies incorporated in Malta are required to have their annual financial statements audited by a warranted auditor. The auditor's report must then be attached to the financial statements when they are filed with the MBR.  There is, however, an audit exemption available to qualifying small private companies. A company may benefit from the exemption where, in the relevant financial year, it does not exceed any of the following three thresholds:  * Balance sheet total: €46,600  * Turnover: €93,000  * Average number of employees: 2  Where these conditions are satisfied, the company may file abridged accounts without an audit report.  However, companies operating in regulated sectors may be subject to additional requirements. For example, companies operating in sectors such as financial services, gaming and aviation are typically required to maintain a statutory audit irrespective of their size, as a result of sector-specific legislation.    **Tax Returns**  Every company incorporated in Malta is required to file an income tax return, or self-assessment, within 9 months of the end of its financial year. The return must be based on the company's approved audited financial statements or, where the company qualifies for an audit exemption, its approved financial statements.  The financial statements and tax return should therefore be prepared and approved in sufficient time to meet the applicable filing deadline.      Tax Payment Deadlines  The deadline for payment of any outstanding tax liability is generally 9 months from the end of the company's financial year.  An exception may apply where a company with predominantly non-resident shareholders and business interests outside Malta has obtained a DDT10 determination. Where a DDT10 determination is active, the tax payment deadline is extended to 18 months after the financial year-end.    **VAT Obligations**  The VAT obligations of a company incorporated in Malta depend on the type of VAT registration applicable to its activities and turnover.  Standard Registration – Article 10  Businesses whose annual turnover exceeds the applicable threshold of €35,000 for goods and services, or which voluntarily opt to register, may be required to register under Article 10. Article 10 registrants charge VAT on taxable supplies and are entitled to recover input VAT. They are issued an MT-prefixed VAT number, which can also be used as an EORI number.   Article 10 businesses generally file VAT returns on a quarterly basis, with each VAT return due within 6 weeks of the end of the relevant three-month VAT period.  Small Undertakings - Article 11  Businesses whose turnover falls below the exemption threshold may instead qualify for Article 11 registration as a small undertaking. Article 11 registrants do not charge VAT on their supplies and cannot recover input VAT.   Rather than filing quarterly VAT returns, they file an annual VAT declaration by 15 March of the following year.         **Corporate Requirements**  Companies incorporated in Malta are subject to a number of ongoing corporate requirements designed to ensure that the company remains properly managed and its statutory records are kept up to date.  **Annual General Meetings**  Every company must hold an Annual General Meeting (AGM) at least once in every calendar year to approve the annual accounts and address any other statutory business.  The first AGM must be held within 18 months of incorporation, while subsequent AGMs must not be separated by more than 15 months.   For private companies, the AGM may be held by written resolution of all shareholders instead of a physical meeting, provided that the company's Memorandum and Articles of Association permit this.  **Maintaining Corporate Registers**  Companies must maintain accurate and up-to-date corporate records, including information relating to their members, directors and Ultimate Beneficial Owners (UBOs).  **Reporting Company Changes**  Companies must also keep the MBR informed of changes to their corporate details. Changes to issued share capital, directors, the Company Secretary or the registered office must generally be notified to the MBR within 14 days of the change taking effect.  **UBO Reporting**  The UBO requirements are particularly important. Companies are required to identify and verify their Ultimate Beneficial Owners, being any natural person who ultimately owns or controls more than 25% of the shares or voting rights, or who otherwise exercises ultimate effective control.  UBO information must be filed with the MBR at incorporation. Any change in beneficial ownership must generally be notified to the MBR within 14 days of the change being recorded at company level. Companies must also file a Beneficial Ownership Annual Confirmation on each anniversary of registration, confirming that no changes have occurred or recording any updates.    **Payroll Requirements**  Where a company has employees, it will also have ongoing payroll obligations. These include the preparation of monthly payslips and FS5s, together with the preparation of FS3s and FS7s on an annual basis.    **Maintaining Strong Corporate Governance and Local Substance**  Strong corporate governance is important not only for ensuring that a company complies with its statutory obligations, but also for demonstrating that its management and control are genuinely exercised in Malta.  **1.**  **Preventing Permanent Establishment Risk**  For Malta tax purposes, a company is generally considered tax resident in Malta, and therefore subject to tax in Malta, if it is incorporated in Malta or, where incorporated outside Malta, managed and controlled in Malta.  Other jurisdictions may likewise treat a company incorporated outside their borders as tax resident where its effective management and control is exercised from that jurisdiction. This can create the risk of cross-border tax challenges and competing residence claims.  For companies incorporated in Malta, it is therefore important that effective management and control is demonstrably exercised in Malta.  Maintaining Strong Local Substance  A number of practical measures can support the exercise of effective management and control in Malta.  The majority of the company's board should consist of individuals resident in Malta who actively participate in the management of the company. Board meetings should also be convened and held in Malta on a quarterly basis, with minutes evidencing that strategic decisions were taken in Malta.  Crucial decisions relating to business strategy, investments, financing and key operational matters should demonstrably be made at board level in Malta. Significant contracts, including commercial agreements, financing arrangements and intercompany agreements, should also be negotiated and executed in Malta.  Together, these measures help demonstrate that the company's management and control are genuinely exercised in Malta and support a clear and well-documented governance structure.  **2.** **Supporting Future Mergers and Exits**  Strong corporate governance is also particularly important when a company is preparing for a future merger or exit. A company with clear, complete and accurate corporate records can demonstrate a well-managed corporate history and provide evidence of how key decisions were made.  Good corporate governance should therefore include properly documenting important corporate decisions through resolutions, maintaining accurate minutes of AGMs and Board meetings, and ensuring that the company's statutory registers are complete and up to date.  Keeping these records consistently throughout the life of the company is preferable to attempting to reconstruct the company's corporate history when a merger, investment or exit is already being considered.  **The Importance of a Professional Company Secretary**  A professional Company Secretary plays an important role in maintaining strong corporate governance and ensuring that a company continues to meet its statutory obligations.  The Company Secretary's responsibilities include maintaining the company's statutory registers, filing documents with the MBR, organising Board and general meetings and ensuring ongoing regulatory compliance.        **Conclusion**  Good compliance is not simply about meeting statutory deadlines. It contributes to sound corporate governance, supports the company's reputation and can become particularly important when a business is seeking investment, restructuring its operations or preparing for a future merger or exit.  The ongoing nature of these obligations also means that compliance should be treated as an integral part of running the company, rather than as a series of isolated annual requirements. Proper corporate governance and timely compliance can help provide clarity, continuity and confidence throughout the company's lifecycle.    **Contact Us Today**  A Company Service Provider (CSP) such as Zeta can help take the complexity out of ongoing corporate compliance in Malta. From managing statutory filings and maintaining corporate records to coordinating corporate meetings and resolutions, Zeta provides practical support to help companies stay organised, compliant and focused on their business.  With professional support throughout the company's lifecycle, Zeta can help ensure that important corporate and compliance obligations are managed efficiently, giving business owners greater confidence that their company remains in good standing as it grows and evolves. --- ## Why Incorporate a Company in Malta? Key Advantages for International Entrepreneurs **Date:** 2026-08-26 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/why-incorporate-a-company-in-malta-key-advantages-for-international-entrepreneurs Malta offers a unique combination of strategic, commercial and regulatory advantages that have made it one of Europe's leading jurisdictions for international business. While its central Mediterranean location has long been one of its greatest strengths, today Malta's appeal extends far beyond geography.  **EU Member State**   As a member of the European Union, Malta provides businesses with unrestricted access to the EU Single Market, enabling the free movement of goods, services, capital and people across all Member States. For companies looking to establish a European presence, incorporating in Malta offers both market access and the credibility of operating from a well-regulated EU jurisdiction.  **Strategic Location and Time Zone**  Located at the crossroads of Europe, North Africa and the Middle East, Malta is ideally positioned for businesses with international operations. Its central time zone also allows companies to communicate efficiently with partners and clients across Europe, the Gulf region and much of Asia within the same business day.  **English-Speaking Business Environment**  English is an official language of Malta and is widely used in business, legislation, contracts and financial reporting. This makes it easy for international entrepreneurs to establish and manage their businesses while reducing administrative complexity.  **Stability and Trusted Professional Services**  Malta offers a stable political and economic environment supported by a modern legal framework and a mature professional services sector. Businesses benefit from access to experienced accountants, lawyers, auditors, tax advisors and corporate service providers who regularly assist international clients with company formation, compliance and cross-border operations.  **Competitive Cost Base**  Compared to many other Western European jurisdictions, Malta offers relatively competitive operating costs without compromising on professional standards or regulatory quality. This makes it an attractive location for businesses seeking an efficient and cost-effective base for regional or international operations.  **Malta’s Corporate Tax Framework**  Malta's highly advantageous corporate tax framework is one of the reasons the jurisdiction attracts international investment, but it is important to understand it as part of a broader, transparent system rather than simply a low-tax regime.  The standard corporate income tax rate is 35%. However, Malta operates a shareholder refund mechanism that may allow eligible shareholders to recover part of the tax paid by the company following the distribution of profits. Depending on the nature of the income, this can significantly reduce the effective tax burden, essentially lowering the effective tax rate to among the lowest in the EU at just 5%.  Malta also operates a full imputation system, ensuring that company profits are not taxed twice when distributed to shareholders. This system of dividend taxation prevents company profits from being taxed at both corporate level (corporate tax on company profits) and personal level (income tax on dividends), since any tax paid by a company is imputed in full as a credit against the tax due by the shareholder on the dividend received.  Other key features of Malta's tax framework include:  * the participation exemption for qualifying shareholdings;  * shareholder tax refund mechanisms;  * group relief provisions;  * an extensive network of double taxation treaties; and  * unilateral double tax relief in appropriate circumstances.  For a detailed explanation of Malta’s Corporate Tax system, read our dedicated guide on corporate taxation in Malta.   **Sector Specific Advantages**   Different businesses benefit from different aspects of Malta’s legislative framework.  **Holding Companies: Malta’s Participation Exemption and Extensive Double Taz Relief Mechanism**  Malta is widely recognised as an attractive jurisdiction for international holding companies, largely due to its participation exemption regime and its extensive double tax relief mechanisms,  **The Participation Exemption**   Broadly speaking, the participation exemption allows a Maltese company to receive qualifying dividend income and realise capital gains from the disposal of qualifying shareholdings without incurring Maltese tax, provided the statutory conditions are satisfied.  What Is a Participating Holding?  A company is generally considered to have a participating holding where it holds a qualifying investment in another company. The most common example is where the Maltese company directly owns at least 5% of the equity shares of another company and that holding carries at least two of the following rights:  * the right to vote;  * the right to receive profits available for distribution; and  * the right to receive assets on a winding up.  However, the participation exemption is not limited to a simple 5% shareholding. A participating holding may also arise in several other circumstances, including where the shareholder has significant strategic rights, such as the right to appoint a director, acquire the remaining shares, or where it has made a substantial long-term investment. It may also apply where the shareholding is held as part of the company's business rather than as trading stock.  When Does the Exemption Apply?  Where a Maltese company derives capital gains from the disposal of a participating holding, those gains may qualify for the participation exemption.  Similarly, dividend income received from a participating holding may also be exempt from Maltese tax, provided certain additional anti-abuse conditions are met. In broad terms, these conditions are intended to ensure that the exemption applies to genuine business investments rather than passive or low-taxed structures. For example, the exemption may apply where the subsidiary is resident in an EU Member State, is subject to an appropriate level of foreign taxation, or satisfies other conditions set out in the Income Tax Act.  Given the technical nature of these rules, it is important to assess each investment individually to determine whether the participation exemption is available.  For international groups and investors, the participation exemption can make Malta an attractive location for establishing a holding company, combining tax efficiency with the certainty and credibility of an EU jurisdiction.  **Extensive Double Tax Relief Mechanisms**  Malta offers a broad range of mechanisms designed to mitigate the risk of the same income being taxed both in Malta and in another jurisdiction. This is particularly relevant for Maltese holding companies that receive income from foreign subsidiaries or investments.  Malta has an extensive network of double taxation treaties with jurisdictions across Europe and internationally. These treaties generally allocate taxing rights between Malta and the relevant treaty partner and provide mechanisms for eliminating double taxation. Depending on the applicable treaty and the nature of the income, foreign tax suffered may generally be credited against the Maltese tax payable on the same income. Malta’s treaty network also contains provisions dealing with matters such as dividends, interest and royalties, and may reduce withholding taxes imposed in the foreign jurisdiction.   Where no applicable treaty exists, Malta’s domestic legislation also provides unilateral double tax relief in appropriate circumstances. Broadly, this can allow qualifying foreign tax suffered on foreign-source income to be credited against the Maltese tax attributable to that income, subject to the applicable statutory conditions and limitations.  Malta also provides Commonwealth relief in certain circumstances where foreign income has been subject to tax in a Commonwealth jurisdiction and treaty relief is unavailable. Together, these mechanisms mean that the absence of a double taxation treaty does not necessarily result in the same income being fully taxed twice.  For an international holding company, the practical benefit is that Malta's tax framework can provide several layers of protection against international double taxation. The appropriate relief mechanism will depend on the jurisdiction in which the underlying income arises, the type of income concerned, the applicable treaty provisions and the specific structure of the investment. Accordingly, these rules should be considered when determining where a group's holding company should be established and how its foreign investments should be structured**.**    **Trading Companies: The Shareholder Refund System**   International trading businesses often establish Maltese companies to centralise their European operations. The factor most attractive to trading businesses is that which was mentioned earlier and labelled as the six-sevenths refund.   What is the Shareholder Refund System?  Malta offers an attractive corporate tax framework for international trading companies through its shareholder refund system. While companies are generally subject to the standard 35% corporate tax rate, qualifying shareholders may claim a refund of six-sevenths (6/7ths) of the Maltese tax paid once trading profits are distributed, subject to the applicable statutory conditions.   This mechanism can significantly reduce the effective tax rate while operating within Malta's fully EU-compliant and internationally recognised tax system. Combined with transparent legislation, predictable rules, and a stable regulatory environment, Malta provides trading businesses with a competitive and reputable jurisdiction for establishing long-term European operations.  **Digital Services and Intellectual Property and Businesses: The Patent Box Regime**   Malta has established itself as a leading European jurisdiction for digital businesses and innovation-driven enterprises by combining a modern regulatory framework with attractive intellectual property incentives. As an EU Member State, Malta offers technology companies, SaaS providers, fintech firms, software developers, and other digital businesses a stable legal environment, access to the European Single Market, and a regulatory framework aligned with the latest EU digital legislation.  The Parent Box Regime  Alongside its regulatory framework, Malta offers one of the European Union's most competitive tax regimes for intellectual property through its Patent Box Regime. Designed to encourage innovation, the regime allows eligible companies to claim a deduction of up to 95% of qualifying intellectual property income, resulting in an effective corporate tax rate of approximately 1.75% on qualifying profits.  Unlike many European IP regimes that focus solely on patents, Malta's Patent Box also extends to copyright-protected software, making it particularly attractive for software developers, technology companies, AI businesses, fintech platforms, and other digital enterprises. Qualifying assets generally include patents, utility models, and eligible software, while marketing-related assets such as trademarks and brands are excluded.  The regime follows the OECD's modified nexus approach, meaning that the level of tax benefit is linked to the research, development, enhancement, maintenance, protection, and exploitation (DEMPE) activities carried out by the company. This ensures the regime complies with international tax standards while rewarding businesses that undertake genuine innovation.  Other Incentives  Beyond the Patent Box Regime, Malta also offers accelerated amortisation for qualifying intellectual property, allowing eligible expenditure on acquired or developed IP to be deducted more quickly for tax purposes.   Innovation-led businesses may also benefit from a range of Malta Enterprise incentives, including research and development tax credits and support for highly skilled employees working in STEM and technology sector.  **The Importance of Good Governance: Avoiding Permanent Establishment Risk**  What is Permanent Establishment (PE) Risk?  For Malta tax purposes, a company is generally considered tax resident in Malta where it is incorporated in Malta or, where incorporated outside Malta, where its management and control are exercised from Malta. However, other jurisdictions may also seek to claim tax residence where they consider that a company's effective management and control takes place within their territory.  The Importance of Good Governance  To minimise the risk of competing residence claims and ensure the company’s tax position is properly supported, effective management and control should be clearly demonstrated through strong governance practices. The company's decision-making processes should reflect genuine oversight and direction from Malta rather than merely administrative activities.  How to Ensure Good Governance?  Key measures that support effective governance include:  * Malta-based board leadership: The majority of directors should be Malta-resident individuals who actively participate in the management and strategic oversight of the company.  * Board meetings held in Malta: Regular board meetings should take place in Malta, with detailed minutes recording discussions, decisions, and the rationale behind key actions.  * Strategic decisions made in Malta: Important matters, including business strategy, investments, financing arrangements, and significant operational decisions, should be considered and approved by the board in Malta.  * Execution of significant agreements in Malta: Material commercial contracts, financing arrangements, and intercompany agreements should be negotiated, approved, and executed through the company's Maltese governance structure.  Strong governance is not only important for supporting tax residency but also demonstrates that the company operates with proper oversight, accountability, and commercial substance. A well-managed company with clear decision-making processes is better positioned to meet regulatory expectations and maintain its intended tax treatment.  **Use Case 1: Gaming Group Holding Company**  An international gaming group establishes a Maltese holding company to own the shares of its operating subsidiaries across multiple jurisdictions. The holding company serves as the parent entity for the group, overseeing strategic investments, corporate governance, acquisitions, and the ownership of the group's operating companies.  As the business expands into new regulated markets, the Maltese holding company may acquire additional subsidiaries or dispose of existing investments as part of the group's growth strategy. Where the shareholdings constitute participating holdings under Maltese tax law, dividends received from qualifying subsidiaries and capital gains realised on their disposal may benefit from Malta's participation exemption and will not be subject to tax in Malta, provided the relevant statutory conditions are satisfied  Where the group's subsidiaries are located in jurisdictions with which Malta has a double taxation treaty, the relevant treaty may further reduce withholding taxes on dividends and other payments made to the Maltese holding company, while providing mechanisms to relieve any foreign tax suffered. This can help minimise tax leakage as profits are distributed through the group structure, subject to the specific provisions of the applicable treaty  **Use Case 2:  EU – Wide Trading Company**  An international trading business establishes a Maltese company as its principal European trading entity, purchasing goods from suppliers and selling them to customers across multiple EU Member States. The company centralises procurement, customer contracts, invoicing, and logistics, while coordinating commercial operations for the wider group.  The Maltese company is generally subject to the standard corporate income tax rate of 35% on its trading profits. Where those profits are distributed, however, qualifying shareholders may be entitled to claim a refund of six-sevenths (6/7ths) of the Maltese tax paid, provided the relevant statutory conditions are satisfied. The refund is available at shareholder level following a distribution of profits and can significantly reduce the effective tax burden on qualifying trading income.  **Use Case 3: IP Start-Up**  A technology start-up develops proprietary software and establishes a Maltese company to own and commercialise its intellectual property as the business expands internationally. The company holds the rights to its software, enters into licensing arrangements with group companies or third parties, and generates revenue from the exploitation of its technology.  As the start-up moves from development into commercialisation, the Maltese IP company may benefit from the Patent Box Regime where the relevant conditions are satisfied. The regime allows eligible companies to claim a deduction of up to 95% of qualifying IP income, potentially resulting in an effective corporate tax rate of approximately 1.75% on qualifying profits.  The structure is particularly suited to software-based businesses, as qualifying IP can include copyright-protected software, alongside patents and utility models. This allows the company to centralise ownership of its technology assets while continuing to license or exploit the software across different markets.  To maintain eligibility, the company must ensure that its IP activities reflect genuine development and commercial functions. The Patent Box Regime follows the OECD's modified nexus approach, linking the available benefit to the research, development, enhancement, maintenance, protection, and exploitation activities undertaken in relation to the IP.  As the business grows, the IP company may continue to manage licensing arrangements, oversee further development of the software, and support expansion into new markets. The structure should be supported by appropriate governance, documentation, and commercial substance consistent with the company's actual activities.  **Contact Us**   Malta provides entrepreneurs and international groups with a flexible framework for establishing and operating companies across a range of sectors, from holding structures and trading businesses to technology and intellectual property ventures. The suitability of a Maltese structure will depend on the specific objectives, activities, and circumstances of each business.  **Zeta Corporate & Management Services Limited** can assist with company incorporation, ongoing company administration, and registrations with tax and other competent authorities, providing support throughout the lifecycle of your Maltese company. --- ## Issuance of Fiscal Cash Register as an Article 11 Exempt **Date:** 2026-08-24 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/issuance-of-fiscal-cash-register-as-an-article-11-exempt **Article 11 VAT registration in Malta — what small businesses need to know**  If your business trades in Malta and your domestic turnover stays within €35,000 in a calendar year, you may register for VAT under Article 11 as a small undertaking.   What Article 11 registration means in practice  * Your VAT number — you are given an 8-digit domestic VAT number. Because it is domestic only, it cannot be validated on VIES and should not be used for intra-Community transactions.  * How your supplies are treated — exempt without credit. You do not charge VAT on what you sell, and you cannot recover the VAT you pay on your own purchases; that VAT stays with you as a cost.  * When you must change registration — once your turnover exceeds the domestic annual threshold, you are required to move to an Article 10 registration. Turnover therefore needs to be monitored throughout the year, not only at year end.  **New guidance on fiscal receipts**  The Malta Tax and Customs Administration has issued updated guidelines on how Article 11 businesses should issue fiscal receipts through a fiscal cash register. In summary:  * A fiscal receipt must still be issued, and it must clearly identify the goods or services supplied.  * Each supply should be marked with the letter "E" (or "Exempt").  * The receipt must state clearly that no VAT is charged or payable.  * Where a fiscal cash register is used, the prefix "EXP" must appear immediately before the VAT registration number.   Businesses operating under Article 11 should review their cash register settings and receipt templates to confirm they meet these requirements. --- ## Step-By Step Plan to Company Incorporation in Malta **Date:** 2026-08-24 **Category:** Company Formation **URL:** https://zeta-financial.com/news/step-by-step-plan-to-company-incorporation-in-malta **Background**  Establishing a company in Malta is a relatively straightforward process, provided that all statutory requirements under the Companies Act (Chapter 386 Laws of Malta) as well as the requirements of the Malta Business Registry (MBR) are fulfilled.  **Choosing and Reserving a Company Name**  A starting point for any entity intending on incorporating a Company in Malta would be selecting an appropriate name.  Article 69 requires the Memorandum of Association to state the company's name, making it one of the company's essential constitutional particulars. The chosen name forms part of the company's legal identity and will appear on the Certificate of Registration issued by the Malta Business Registry.  Article 70 sets out the rules governing company names. A private company must end its name with the words "Private Limited Company", "Limited", or the abbreviation "Ltd.", thereby indicating its limited liability status.  The Registrar will refuse to register a name that is identical or confusingly similar to that of an existing commercial partnership, has already been reserved by another applicant, or is considered offensive or otherwise undesirable.  Additionally, certain regulated terms, such as "fiduciary", "nominee", and "trustee", may only be used where the company is appropriately authorised under Maltese law or permitted by the relevant competent authority.  **Drafting the Memorandum and Articles of Association**  The constitutional documents of a Maltese company consist of the Memorandum of Association and the Articles of Association.  **The Memorandum of Association**  Article 69 of the Companies Act prescribes the information which must be included in the Memorandum of Association, including:  * whether the company is being incorporated as a private company or a public company;  * the name and residence of each subscriber to the shareholder;  * the company name;  * the registered office address;  * email address of the company;  * the objects for which the company is being incorporated;  * company’s share capital;  * the number of directors, the names and residences of the first director(s)   * the name and residence of the first company secretary  * the duration of the company, where it is established for a fixed period.  The Memorandum must be signed by each shareholder or an authorised person.   **The Articles of Association**  The Articles of Association regulate the internal management and governance of the company. In regard to the manner in which articles are to be adopted the choice given to the shareholders are threefold.  The founders may either choose to:  1. Adopt in toto those Articles provided in the First Schedule of the Companies Act.  2. Adopt those Articles provided for in the First Schedule of the Companies Act whilst including provisions customized to the company's requirements and the shareholder's wishes.  3. Adopt Articles which are of a completely ad hoc and of a separate nature of those provided by the Companies Act.  Whilst the model Articles are often suitable for straightforward incorporations, bespoke Articles may be preferable where the shareholders wish to regulate matters such as share transfers, pre-emption rights, drag-along rights, decision-making procedures or other shareholder rights.  For single member companies, the Companies Act imposes additional statutory requirements. Article 212 expressly provides that in order for a company to be composed of a single member, it must possess the status of an exempt company.  This  means that said company must meet the requirements posed in Article 211(2), being:  1. that the number of debenture holders does not exceed fifty; and  2. that no body corporate acts as a director of the company, nor may the company or any of its directors enter into an arrangement under which the company's policy or management may be determined by persons other than its directors, members or debenture holders.  **Preparing Other Statutory Documentation**  Alongside the constitutional documents mentioned above, several statutory forms and supporting documents must be prepared. Chief among them is the Form K1, a document in which the proposed director would, in line with Article 139, consent to being appointed as director to the soon to be incorporated company.  The Form BO1,  is submitted to declare the beneficial ownership of the company.   **Preparing Proof of Share Capital and the Registered Office Documentation**  **Proof of Share Capital**  Prior to incorporation it is mandatory for the shareholders to ensure that the statutory minimum share capital requirements are satisfied. In the case of private limited liability companies, the minimum authorised share capital is set at €1,164.69 with at least 20% (€232.04 euro) paid up upon incorporation.  The Malta Business Registry requires satisfactory evidence that the paid-up share capital is readily available. This is typically demonstrated through a bank account opened in the company's name (where available) or by confirmation from the Corporate Service Provider holding the funds pending incorporation.  **Registered Office Consent Letter**  The company must also maintain a registered office in Malta. Where the premises are owned by a third party, a consent letter confirming that the company may use the address as its registered office is generally required.  **Preparing the Know Your Customer (KYC) Documentation**  Before a company may be incorporated, customer due diligence measures must be completed in accordance with Malta's anti-money laundering and counter-terrorist financing legislation. The documentation required will vary depending on whether the proposed shareholder, director or beneficial owner is an individual or a legal entity.  **Individual Shareholders**  For individuals, the required KYC documentation will generally include:  * a certified copy of a valid passport or other acceptable photographic identification document, with the certification carried out by an EU certifier;  * proof of their residential address by means of a recent utility bill (excluding mobile service bills), a bank statement or another acceptable document evidencing their residential address. Utility bills and bank statements must not be more than six months old; and  * where the individual is a non-EU national, a certified reference letter attesting to the individual's character, with such certification likewise being carried out by an EU certifier.    **Corporate Shareholders**  For corporate entities, no additional constitutional documentation is generally required where the entity is incorporated in Malta, as the relevant information is available through the Malta Business Registry.  However, where the shareholder or beneficial owner is a foreign corporate entity, a certified copy of the entity's Certificate of Incorporation together with either a certificate confirming its registered office or an official extract from the relevant company registry must be provided.  **Submission to the Malta Business Registry**  Once all incorporation documents have been prepared and executed, they are submitted electronically to the Malta Business Registry together with payment of the applicable registration fee.  **The Registration Fee**  The registration fee is calculated on a sliding scale based on the company's authorised share capital as stated in the Memorandum of Association.  At present, the fee ranges from €100 for companies with an authorised share capital of up to €1,500 to a maximum of €1,900 for companies with an authorised share capital exceeding €2.5 million.  **Malta Business Registry Review**  Upon receipt of the application, the Malta Business Registry reviews the documentation to ensure compliance with the Companies Act before proceeding with the registration of the company.  **Certificate of Registration**  Upon registration, the Malta Business Registry issues a Certificate of Registration/Incorporation. From the date appearing on the certificate, the company comes into legal existence as a body corporate separate from its shareholders. The company is allocated a unique registration number and may commence business, subject to obtaining any licences or regulatory approvals required for its intended activities.  **Post-Registration Matters**  Following incorporation, several practical and regulatory steps should be completed before the company commences operations.  **Registering with Tax Authorities**  Following incorporation, the Company must register with the relevant Tax Authorities in order to obtain a Tax Identification Number (TIN).  Where the Company intends to supply goods or services, it generally requires registration with the VAT Department within 30 days from the date on which it first supplies goods or services.  **Corporate Governance**  Following registration, the Company must ensure ongoing compliance with its statutory obligations in order to remain in good standing. This includes the preparation and maintenance of the relevant statutory registers and the issuance of share certificates to all shareholders. The Company Secretary is also responsible for notifying the Malta Business Registry of any changes affecting the organisation and structure of the Company.  **Financial Reporting**  The Company must maintain proper accounting records and prepare annual financial statements in accordance with applicable legal requirements.  These financial statements must undergo an audit, provided the company does not qualify for an audit exemption under the Audit Exemption Rules, prior to submission to the Malta Business Registry within the applicable statutory deadlines.  **Other Procedures (Where Applicable)**  **Registering with Employment Authorities**  Companies intending to employ individuals in Malta must register with Jobsplus and obtain a PE Number in order to comply with applicable employment registration requirements.  **Registering with Regulatory Authorities**  Certain business activities, including air operations, investment services, banking and other regulated activities, require prior licensing, registration or authorisation from the relevant competent regulatory authorities before the Company may commence such activities.  **Next Step: Start the Process Today!**  Malta provides an efficient and well-established framework for individuals and businesses seeking to incorporate a company. A Maltese company structure offers the benefits of limited liability protection, a clear legal framework and a straightforward incorporation process, provided that all statutory requirements are satisfied.  Whether establishing a new business or expanding existing operations, persons wishing to incorporate a company in Malta can benefit from professional guidance to ensure that the necessary documentation is properly prepared and that all ongoing corporate, tax and regulatory obligations are met.  **Contact Us**  **Zeta Corporate & Management Services Limited** can assist in incorporating your company, maintaining your company and registering with tax and other competent authorities. --- ## Broader Scope, Tighter Access: Malta's 2026 Beneficial Ownership Reforms **Date:** 2026-08-07 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/broader-scope-tighter-access-maltas-2026-beneficial-ownership-reforms **Background**  On the 10th of July 2026, Malta published the Companies Act (Register of Beneficial Owners) (Amendment) Regulations, 2026 (the "***Amendments***") by means of Legal Notice 184 of 2026, revising certain provisions of the Companies Act (Register of Beneficial Owners) Regulations to transpose the Sixth Anti-Money Laundering Directive (AMLD6) into Maltese law.   The Amendments broaden the scope of the Regulations, expand the information companies must maintain, and overhaul the framework governing access to beneficial ownership information.    **New Definitions**  The Amendments introduce a number of new definitions into the Regulations. In particular, an "obliged entity" is defined as having the same meaning assigned to it under the Anti-Money Laundering Regulation (AMLR).  The definition goes a step further, expressly including "subject persons" within the meaning of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR) and the Prevention of Money Laundering Act.    **Updated Scope**  ***Exclusion of Listed Companies*** Prior to the Amendments, companies listed on a regulated market subject to disclosure requirements ensuring adequate transparency fell outside the scope of the Regulations. The Amendments extend this exclusion, providing that the Regulations shall also not apply to companies which are indirectly wholly owned by a company that is so listed and subject to such disclosure requirements.  ***Companies with Solely Natural Person Shareholders No Longer Exempt*** Prior to the Amendments, companies having solely natural person shareholders were excluded from the scope of the Regulations, provided none was acting as a trustee or in a fiduciary capacity. The Amendments remove this exclusion. Accordingly, the Regulations now also encompass companies having solely natural person shareholders, subject to the narrower exemption discussed below.    **Declarations Upon Incorporation**  ***Clarification: Applicable to SMOs*** The Amendments clarify that the Form BO1, to be submitted together with the Memorandum of Association upon incorporation, must also be submitted where any natural person holds the position of senior managing official (SMO).  ***Additional Information to be Reported*** The Amendments add to the list of information to be reported in the declaration. In addition to the information already required, the following must now be reported:  (i) the place of birth; and  (ii) the name of any person holding shares as nominee, including a reference to such nominee status.    **Beneficial Owner Register**  ***Information to be Maintained*** The Amendments update the information to be reported and maintained by a company in its Beneficial Owner Register to also include:  (i) the place of birth of each beneficial owner; and  (ii) the name of any persons holding shares as nominee, including reference to their status as nominee shareholder.  ***Exemption for Companies Having Solely Natural Person Shareholders*** The Amendments provide an exemption for companies which have solely natural person shareholders, provided that:  (i)  no natural person is acting as trustee or in a fiduciary capacity; and  (ii) no other natural person (other than registered shareholders) ultimately owns and controls more than 25% of the voting rights, ownership interests or otherwise exercises control; and  (iii) no natural person holds the position of senior managing official.  Where these conditions are satisfied, the company's register of members shall be deemed to constitute the company's beneficial owners register.      **Assessing Conformity & Form BO4 Deadline**  All companies have until the 10th of January 2027 to assess whether the exemption set out above applies to them. Where the exemption does not apply, the company must take all steps necessary to ensure conformity with the amended Regulations, including:  (i) maintaining a register of beneficial owners;  (ii) delivering a Form BO4 to the Registrar for registration; and  (iii) delivering annual notices and declarations of changes to beneficial owners and senior managing officials, or their details, to the Registrar.  Failure to comply, including failure to deliver the Form BO4, by the 10th of January 2027 will result in a penalty of up to EUR 10,000, together with an additional penalty of EUR 500 per day.    **Updated BO Forms**  The Amendments also introduce a set of updated beneficial owner forms.    **Access to Beneficial Owner Information**  ***Rights of Access*** The Amendments introduce a comprehensive overhaul of the process by which competent authorities, obliged entities, and third parties with legitimate interest may be granted access to a company's register of beneficial owners.  #### Competent Authorities – Immediate, Unrestricted Access The Amendments require access to the beneficial owner register to be made available to competent authorities immediately, unfiltered, without any restriction and without alerting the company concerned.  #### Obliged Entities – Timely Manner with Potential Supporting Documentation Requirement Obliged entities (previously ‘subject persons’) continue to benefit from a right to access information in a timely manner. The Amendments, however, reserve the right for the Registrar to require an obliged entity to submit documentation in support of a request for information.      #### Third Parties with Legitimate Interest Third parties with legitimate interest in the prevention of money laundering and/or the financing of terrorism are now required to submit a written request to the Registrar.  The request shall include:  (a)  a declaration as to the legal basis of their request;  (b) the function or occupation of the applicant;   (c) identifying documentation and other information as may be requested by the Registrar; and where applicable:  (d) the connection with the specific company whose information is being sought.    ##### What Constitutes Legitimate Interest? The Amendments provide that legitimate interest shall be satisfactorily demonstrated where the person requesting access is able to show that:  (i)  the interest relates specifically to, and contributes to, the prevention and combating of money laundering and/or terrorist financing; and  (ii) the request is justified on the basis of previous activities and a proven track record of actions in that field, evidenced by documentary proof.  ##### Parties Deemed to Hold Legitimate Interest The Amendments then set out a list of persons deemed to hold a legitimate interest in accessing beneficial ownership information, including:  (a) journalists, civil society organisations and NGOs where their activity is connected with the prevention of money laundering or terrorist financing;  (b) persons likely to enter into a transaction intending to prevent any link between the transaction and money laundering;  (c) persons subject to AML/CFT requirements that demonstrate the need to access the beneficial ownership information to perform customer due diligence;  (d) providers of AML/CFT products, provided that products are only offered to customers that are obliged entities or competent authorities.         ***Refusals & Appeals*** Where the Registrar exercises its discretion to refuse access, it must inform the applicant of the refusal, provide reasons, and notify the applicant of the right to redress. A person aggrieved by a refusal may appeal to the Administrative Review Tribunal.    ***Registrar Obligations: Verifying Identity and Recording Access*** The Amendments now require the Registrar to:  (a) verify the identity of applicants whenever they access the register; and  (b) maintain records of the persons accessing the beneficial ownership information.     ***The Right of Beneficial Owners to Access Records of Persons Accessing Beneficial Information*** The Registrar must also ensure that it is capable of disclosing the relevant information to a beneficial owner who files a data subject request under the General Data Protection Regulation (GDPR). However, no information shall be disclosed to the beneficial owner of a company where such disclosure may lead to the identification of any person accessing the register for the purposes of journalism, or of any civil society organisation. In such cases, only the occupation or function of the person consulting the register will be disclosed.    **Conclusion**  The Amendments significantly tighten Malta's beneficial ownership regime in line with AMLD6, broadening both the entities within scope and the information companies must maintain. Notably, companies held solely by natural person shareholders are no longer automatically excluded. A narrower exemption remains, but the shareholding structure alone no longer takes a company outside the Regulations.    The immediate priority is the assessment deadline of the 10th of January 2027. Every company should determine whether the exemption applies and, where it does not, ensure conformity by maintaining a register of beneficial owners, delivering a Form BO4, and keeping annual notices and declarations up to date. With penalties of up to EUR 10,000 plus a further EUR 500 per day, early review is strongly advisable.    **Contact Us Today**  Companies and obliged entities should review their position against the amended Regulations without delay. For assistance in assessing the exemption, updating registers, preparing the revised BO forms, or navigating the new access procedures, the team at zeta. is available to advise.    For more information on how zeta. can assist you, please contact us at:  ***bd@zeta-financial.com***  *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## The Companies (Amendment) Bill 2026: Nexus Test, Digital Share Registers and Wider Reform **Date:** 2026-08-06 **Category:** Company Formation **URL:** https://zeta-financial.com/news/the-companies-amendment-bill-2026-a-new-nexus-test-digital-share-registers-and-wider-reform-of-maltas-companies-act **Background**  The Companies (Amendment) Bill (the '**Bill**') was tabled before the Maltese Parliament as Bill No. 7 of the Fifteenth Legislature and debated at its first reading on 20 July 2026. The Bill would amend a wide range of provisions of the Companies Act (the '**Act**'), including:  (i) the introduction of a nexus requirement;  (ii) decentralised share registers;  (iii) corporate directors on single member companies;  (iv) extension of the simplified merger procedure to new case scenarios;  (v) simplified share buyback requirements for private companies;  (vi) relaxation of capital maintenance requirements for private companies;  (vii) stronger creditor protection against pre-dissolution fraudulent acts;  (viii) a revision of the preventative restructuring provisions;  (ix) an update to certain accounting rules, including the introduction of a methodology to value non-cash distributions to shareholders;   (x) the introduction of a new residential address register;  (xi) the introduction of written resolutions in lieu of general meetings for public companies; and  (xii) other minor changes.    **A New Requirement: Nexus to Malta**  ***The Rule*** The Bill would require every company to satisfy at least one of the following conditions, both on incorporation and throughout its existence:  * at least one director is resident in an EU Member State;  * the company secretary is a licensed CSP;  * a Maltese warranted auditor is appointed to audit the company's financial statements;  * the company is incorporated and serviced by a licensed CSP;  * twenty-five per cent or more of the shares in the company are held by a fiduciary or mandatary authorised under the Trusts and Trustees Act;  * the company holds a bank account with a credit, payment or financial institution licensed by the MFSA;  * at least half of the beneficial owners are resident in Malta;  * the company holds a licence issued by a regulatory authority in Malta; or  * the company is a subsidiary or holding company of another company that satisfies the conditions set out above.  Most companies serviced from Malta will already meet at least one of them. The practical exposure lies with companies administered entirely from outside Malta, which will need to review their arrangements against the list.  ***Two Points Requiring Clarification*** #### The Appointment of a Maltese Warranted Auditor The timing of the auditor condition is unclear. It should be confirmed whether a company may be incorporated on the basis that it will appoint a Maltese warranted auditor as its first auditor, or whether the appointment must be in place before incorporation. If the latter is intended, the Bill should explain how that appointment is to be effected in practice, given that the company would not yet exist.  #### Reliance on a Subsidiary or Holding Company The subsidiary and holding company limb is also ambiguous. It should be confirmed whether the related company must satisfy all of the preceding conditions or only one of them. If only one is required, the wording should be amended to refer to another company that satisfies 'any of' the conditions.  ***Transitional Arrangements*** Companies already in existence when the Bill comes into force would be given six months to comply. A company that fails to do so within that period would be deemed not to be in operation, and the Registrar would strike its name off the register. Given that consequence, existing structures should be reviewed well before the six-month window closes rather than at the end of it.  **Decentralised Share Registers: Bullet-Proofing the Oracle**  ***Removal of the Register and Certificate Requirements*** The Bill proposes to remove the obligation to maintain and update a share register and to issue share certificates where the shares concerned are held in book-entry form.   Book-entry form is defined as the recording of ownership and transfers of shares by way of entries in an electronic record maintained either by a central securities depository or by a distributed ledger.  ***What is a Distributed Ledger?*** A distributed ledger is a shared record maintained simultaneously by a network of participants rather than by a single custodian. Entries are grouped and added sequentially, and each new entry is cryptographically linked to those before it, so the history cannot be altered without the change being apparent. Since every participant holds a synchronised copy, there is no single master version to be lost, mislaid or quietly rewritten. A blockchain is the best-known example of a distributed ledger.  ***A Welcome Development*** The introduction of the distributed ledger register is a positive step.   The first benefit is administrative. Transfers are reflected in the register as they are executed, which removes a layer of manual updating and the discrepancies that follow from it.  The second, and more important, benefit is legal certainty. A share register is only as good as the confidence one can place in it. Where the register is maintained on a distributed ledger, the sequence of entries is fixed and verifiable, so the question of who owned what, and when, becomes a matter of record rather than reconstruction. That reduces the scope for disputes over title and simplifies the due diligence that precedes any transaction in the shares.  The advantages are most obvious for public companies, where ownership changes frequently and where the identity of the holder at a particular moment carries direct financial consequences. On a dividend record date, for example, an accurate real-time register makes it materially easier to establish who is entitled to payment and to avoid double payment.  Looking further ahead, the same infrastructure opens the door to the tokenisation of shares, where the entitlement itself is represented on the ledger.     **Corporate Directors and Single-Member Companies**  ***Body Corporate Directors of Exempt Companies*** The Bill proposes amending the additional qualifying conditions for exempt companies, including single-member companies, to remove the restriction preventing a body corporate from acting as director. If the Bill passes, corporate entities will be eligible to sit on the boards of exempt and single-member companies.  ***Single-Member Companies: Greater Flexibility, Fewer Obligations*** Three proposed changes work in the same direction.   First, the single-member form would no longer be limited to private exempt companies: all private companies, whether exempt or not, could have a sole shareholder.  Second, the requirement to notify the Registrar on becoming a single-member company would be removed.   Third, single-member companies would no longer be confined to natural person directors.    **Merger Provisions Update**  ***Cells Treated as Separate Companies for Mergers*** For the purposes of amalgamations, each cell of a cell company, and the non-cellular part in which non-cellular assets are held, would be deemed a separate company with its own legal personality.  This is a significant clarification, because it confirms that two cells may amalgamate directly. At present, combining cells requires a transfer of cellular assets or a reorganisation or winding up of the cells concerned.  ***Wider Access to the Simplified Merger Procedure*** The simplified merger procedure is currently available only where the acquiring company holds all the shares and all the securities carrying voting rights in the companies being acquired. The Bill would extend it to two further situations:  (a) Common Ultimate Beneficial Owner: where one person holds, directly or indirectly, all the shares and voting securities in both the acquiring company and the companies being acquired; and  (b) Identical Shareholdings: where the issued share capital of the acquiring company and of the companies being acquired is held by the same members in the same proportions.    **Share Buyback Provisions Update**  ***Removal of Net-Asset Test for Private Companies*** Article 106 of the Act governs share buybacks. Sub-article (1) permits a company to acquire its own shares, otherwise than by subscription, only where:  * the memorandum and articles allow it;  * the shareholders have authorised the acquisition, and its terms, by resolution;  * the nominal value of the shares acquired and held by the company does not exceed 50% of the issued share capital;  * the buyback would not reduce the company's net assets below the aggregate of the issued share capital and undistributable reserves;  * the buyback is financed out of the proceeds of a fresh issue of shares or out of profits available for distribution;  * the shares acquired are fully paid up; and  * the buyback does not leave the company as the only holder of the ordinary shares.  The Bill proposed to confine the net-asset condition to public companies. Private companies would therefore no longer be required to test a buyback against the aggregate of issued share capital and undistributable reserves.  ***Shares Acquired for Distribution to Employees*** The Act already exempts a company from the shareholder-authorisation condition where shares are acquired for distribution to employees, provided they are distributed within one year of acquisition.   The Bill proposes to clarify that where such shares are not distributed within one (1) year of their acquisition, the should be cancelled within six (6) months from the lapse of one (1) year by extraordinary resolution  **Capital Maintenance Provisions Update**  ***Additional Flexibility in Acquiring Shares in Parent Company for Employees*** Currently, Article 110 prohibits a company from holding shares in its parent company and from providing financial assistance to any person for the acquisition of shares in the company or in its parent.   Sub-article (2) provides an exception to this rule where:  (i)   the transaction is effected with a view to acquire shares for the company’s employees; and   (ii) the transaction will not reduce the net assets below the issued share capital plus undistributable reserves of the company.  The Bill proposes to restrict the application of the second requirement to public companies only.  ***Reducing Restrictions on Private Companies Taking on Own Shares as Security*** Article 111 currently provides that where a company accept its own shares by way of security, that security shall be treated as an acquisition by the company of its own shares and the relevant rules and restrictions are to apply.  The Bill proposes to restrict the application of Article 111 to public companies, effectively removing private companies from its scope and thus, reducing the restrictions on private companies accepting their own shares as security in transactions.  This relaxation deserves scrutiny. The net-asset and security-related conditions exist to protect creditors, and confining them to public companies leaves private company creditors relying on the general duties of directors and on the insolvency clawback provisions.   **Dissolution**  The Bill makes a number of amendments to the dissolution provisions. Two are of particular practical significance, and both strengthen creditor protection.  ***Longer Clawback for Transactions with Related Parties*** Currently, the Act deems any transaction at an undervalue, or any preference given by a company within six months before the date of dissolution, to be a fraudulent preference and void, unless the beneficiary proves that they did not know the company was likely to be dissolved by reason of insolvency.   The Bill proposes extending that period to twenty-four months where the transaction or preference is in favour of a related person or related entity.  ***Removal of the Twelve-Month Limit on Officer Liability in Case of Fraudulent Transactions*** Where an officer or adviser of the company has been party to fraudulent transactions within the twelve months preceding dissolution, the Act makes them liable on conviction to a fine of up to EUR 232,937, to imprisonment of up to five years, or to both.   The Bill proposes removing the twelve-month limitation, so that involvement in fraudulent transactions of the company could be prosecuted without reference to how long before dissolution it occurred.  ***Removal of the Company Recovery Procedure*** The Bill also considers removing the Company Recovery Procedure under Article 329B of the Act from insolvency law. Preventive restructuring would instead follow the procedures set out in the Pre-Insolvency Act.  **Accounting Rules Update**  ***Updated Definitions*** The Bill would amend the definitions of 'distribution', 'liabilities' and 'realised loss' so that they are interpreted in line with generally accepted accounting principles and practice, rather than by reference to the Third Schedule to the Act as at present.  ***Valuing Non-Cash Distributions*** A new article would set out how the value of a distribution of a non-cash asset is to be determined. The methodology turns on the 'book value' of the asset, defined as the amount stated in the relevant accounts or, where no amount is stated, zero.  Where the company receives consideration for the transfer that is equal to or greater than book value, the deemed distribution is nil, and the company's profits available for distribution are instead increased by the excess.   Where the consideration is less than book value, or where no consideration is received, the deemed distribution is the amount by which book value exceeds the consideration.  ***Capitalisation of Undistributable Deserves*** The Bill would allow a company to apply undistributable reserves in paying up unissued shares, to be allotted to shareholders as fully paid bonus shares.    **Other Minor Changes**  ***Maintaining Electronic Documentation*** The Bill would introduce a general provision allowing any document that must currently be created and retained in physical form to be created and retained electronically instead.  ***A New Register: The Residential Addresses Register*** The Bill proposes the introduction of a new register, requiring companies to keep a register of the residential addresses of its officers and shareholders, including their names, usual residential address and email address. Any change would have to be notified to the Registrar within fourteen days by submitting an updated copy of the register.   Importantly, the Bill clarifies that the Registrar shall store the register for regulatory purposes only and that it shall not be open to public inspection.     ***Public Companies: Written Resolutions in Lieu of General Meetings*** For private companies, the Act already allows a unanimous written resolution to take effect as if it had been passed at a general meeting, including in the case of the annual general meeting. Where that route is used, the auditor's right to attend and be heard at the meeting does not apply.  The Bill proposes extending the same facility to public companies, subject to two safeguards. A written resolution could not be used to remove a director or auditor before the expiry of their term, nor where it would deprive the auditor of the right to attend and be heard on any business concerning them as auditor.  ***Transfer of Shares Causa Mortis on Listed Companies*** The Companies Act requires companies to deliver notice of transfer causa mortis to the Registrar within fourteen (14) days from the date when the transfer is registered with the company. It then extends this deadline to ninety (90) days in the case of publicly listed companies.   The Bill proposes to completely exclude the requirement of publicly listed companies to notify the Registrar of any transfer causa mortis.  ***Change in Permitted Company Name Abbreviation*** The Bill would change the permitted abbreviation from 'ltd.' to 'ltd', dropping the full stop.  ***Notification of an Auditor's Resignation*** At present only the company may notify the Registrar that an auditor has resigned. The Bill would allow the auditor to give that notification directly, which removes the auditor's dependence on the company to place the resignation on the record.  ***Investigative Powers*** Finally, the Bill proposes a number of amendments to the powers of investigation relating to the affairs of companies and to commercial partnerships.  **Next Steps**  The Bill has so far only had its first reading, and the two points flagged above, the timing of the auditor condition and the scope of the subsidiary or holding company limb, are the kind of drafting ambiguities typically addressed as a bill moves through the next stage.   Companies and their advisers should nonetheless begin reviewing existing structures against the nexus conditions now, given the consequence of removal from the register for those that fail to comply within the transitional period.    *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## The Individual Tax Programme Rules 2026: Malta Consolidates its Special Tax Status Framework **Date:** 2026-08-06 **Category:** Residency **URL:** https://zeta-financial.com/news/the-individual-tax-programme-rules-2026-malta-consolidates-its-special-tax-status-framework **Introduction**  ***Background*** On the 14th of July 2026, the Individual Tax Programme Rules 2026 (the "***Rules***") were published by means of Legal Notice 195 of 2026, consolidating the special tax status programmes currently in force into one framework, set to come into force with effect from the 1st of January 2027,  The Rules harmonise the special tax status programmes currently in force, the Global Residence Programme, the Malta Residence Programme, the Malta Retirement Programme, and the United Nations Pensions Programme, into a single, unified framework.  By replacing four separate sets of rules with one, the reform is intended to simplify how special tax status is applied for and administered, while carrying forward the core features that have long distinguished each programme.    ***The Four Categories of Special Tax Status*** The Rules establish four categories of Special Tax Status, each replacing an existing programme:  * Global Resident Status: replaces the Special Tax Status previously granted under the Global Residence Programme.  * EU, EEA, Swiss Resident Status: replaces the Special Tax Status previously granted under the Malta Residence Programme.  * Retired Pensioner Status: replaces the Special Tax Status previously granted under the Malta Retirement Programme.  * UN Pensioner Status: replaces the Special Tax Status previously granted under the United Nations Pensions Programme.  **Eligibility**  To be eligible, an applicant must  (a) Hold a qualifying property in Malta;  (b) Meet the general eligibility criteria for all Special Tax Status categories; and   (c) Meet the category-specific eligibility criteria for their particular Special Tax Status category.    ***Qualifying Property in Malta*** A Qualifying Property is defined as either:  (a) a Qualifying Owned Property; or  (b) a Qualifying Rented Property;  which is occupied by the Beneficiary as his primary residence.    #### Qualifying Owned Property A Qualifying Owned Property is defined as an immoveable property purchased for at least EUR700,000.  #### Qualifying Rented Property A Qualifying Rented Property is defined as an immoveable property taken on lease of not less than EUR14,000 per year.  #### Restriction on Sub-Letting Only the Beneficiary, his dependents or household staff may reside in the Qualifying Property.   ***General Eligibility Criteria*** Across all categories, the applicant must:    (i) Be in receipt of stable and regular resources sufficient to maintain himself and his dependents in Malta without recourse to the social assistance system;  (iii) Hold a valid travel document;  (iv) Hold sickness insurance in respect of all risks across the whole of the EU normally covered for Maltese nationals, for himself and his dependents;  (v) Not be domiciled in Malta and does not intend, within 5 years from the date of application, to establish his domicile in Malta;  (vi) Adequately communicate in English or Maltese;  (vii) Be a fit and proper person; and  (viii) Not benefit under any other special tax status in Malta;  (ix) Not reside in any other jurisdiction for more than 183 days in a calendar year.  ***Category-Specific Eligibility Criteria*** #### Global Resident Status The applicant must also:  (a) be a third-country national (not an EU, EEA or Swiss resident).  (b) not hold, or have applied for, long-term resident status in Malta.  #### EU, EEA, Swiss Resident Status The applicant must also:  (a) be an EU, EEA or Swiss resident;  (b) not be a Maltese national or permanent resident of Malta.  #### Retired Pensioner Status The applicant must also:  (a) not be a Maltese national, long-term resident or permanent resident of Malta.  (b) be in receipt of a pension, all of which is received in Malta and such pension constitutes at least 75% of his chargeable income.  #### UN Pensioner Status The applicant must also:  (a) not be a Maltese national, long-term resident or permanent resident of Malta.  (b) be in receipt of a UN Pension, Widow’s Benefit or Widower’s Benefit, of which at least 40% is received in Malta.  **Special Tax Status**   Applicants granted Special Tax Status (hereinafter the ‘***Beneficiary***’) shall be subject to tax as follows:  ***Income Arising Outside Malta and Received in Malta*** A flat rate of 15% applies to income arising outside Malta which is received in Malta by the Beneficiary, the Beneficiary's spouse, minor children, and children unable to maintain themselves due to illness or disability.   This is subject to a minimum annual tax of:   (a) EUR35,000 for Global Residence Status;  (b) EUR35,000 for EU, EEA or Swiss Residence Status;  (c) EUR15,000 for Retired Pensioner Status.  (d) EUR20,000 for UN Pensioner Status.  #### UN Pensioner Status: Exemption on UN Pension A UN Pensioner is exempt from income tax on their UN pension, Widow's Benefit, or Widower's Benefit. All other income arising outside Malta and received in Malta remains subject to the flat 15% rate, subject to the minimum annual tax specified above.  ***Income Arising in Malta*** Income arising in Malta shall be subject to income tax at a flat rate of 35%.    **Dependents**  ***Definition*** The Rules define a dependent as any of the following persons who reside with the Beneficiary in the Qualifying Property:  * The Beneficiary's spouse, or a person with whom the Beneficiary is in a stable and durable relationship;  * Minor children, including children in the care and custody of the Beneficiary or spouse;  * Children under the age of 25, provided they are not economically active; and  * Children who are not minors but who, because of illness or disability of serious gravity, are unable to maintain themselves.    ***Transfer of Special Tax Status on Death of Beneficiary*** Upon the death of the Beneficiary, Special Tax Status may be granted to a dependent who:  * inherits the property listed as the primary residence of the deceased Beneficiary; and/or  * immediately rents a Qualifying Rented Property following the Beneficiary's death,  provided that the dependent meets the general eligibility requirements.    **Applications**  ***Requirement of an Authorised Registered Mandatory*** Applications for special tax status under the Rules must be made through an authorised registered mandatory.  ***The Application Fee*** Each application must be accompanied by a non-refundable administration fee of EUR 8,500.    **Duration & Renewals**  ***Annual Renewals: Minimum Tax Payment & Compliance Returns*** The minimum tax must be paid by the 30th of April of each year. Proof of payment must be submitted to the Commissioner, together with a Return confirming continued compliance with the eligibility criteria.  ***Five-Year Term & Renewals*** The Special Tax Status shall apply for a term of five (5) years, provided the annual renewals are filed.  A Beneficiary may then apply to renew for further periods of five years against a non-refundable administrative fee of EUR 2,500. The Rules provide that a renewal application may not be unreasonably withheld.    **Ongoing Obligations**  ***Annual Returns*** An annual Return confirming compliance with the eligibility criteria is to be submitted.  ***Annual Confirmations re-Long-Term/Permanent Residents*** Each year, the authorised registered mandatory must enquire and obtain information as to whether the Beneficiary or any of his dependents have obtained long-term or permanent resident status in Malta.  * If so, the Commissioner must be notified by 30 April.  * If the information cannot be obtained, the Commissioner must be notified by 30 April, evidencing at least two attempts at enquiry.  Failure to comply results in a penalty of EUR 10,000.  ***Change in Special Tax Status*** Where an individual no longer meets the eligibility criteria and consequently loses his Special Tax Status, he must notify the Commissioner through his authorised registered mandatory within four weeks. Failure to do so results in a penalty of EUR 5,000. The Minister retains the discretion to pardon a failure where it was due to unforeseen circumstances, where the individual notifies the Minister of the failure, or where the individual exercises his best efforts to remedy it.  ***Change in Dependents*** Beneficiaries, through their authorised registered mandatory, must notify the Commissioner of any change in dependents within four weeks of the date of change. Failure to do so results in a penalty of EUR 5,000.    **Previously Acquired Special Tax Status**  Persons who acquired Special Tax Status prior to the 1st of January 2027, as well as any persons who filed an application for Special Tax Status prior to that date, shall continue to benefit from such status until the 31st of December 2031.  **Conclusion**  The Individual Tax Programme Rules 2026 represent a significant step in the ongoing modernisation of Malta's approach to special tax status. By consolidating four established programmes into a single, coherent framework, the Rules aim to simplify the application process and provide greater clarity for internationally mobile individuals and retirees considering Malta as their base, while preserving the distinct eligibility conditions and tax treatment that characterise each category.    With the Rules coming into force on 1 January 2027, and a transitional window running to 31 December 2031 for those already holding or applying for status under the outgoing programmes, individuals and their advisers should begin assessing their position now. Whether an application is best pursued under the existing programmes ahead of the transition, or under the new framework, will depend on the individual's residence profile, income sources, and long-term plans. Given the strict eligibility criteria, ongoing compliance obligations, and the requirement to apply through an authorised registered mandatory, professional guidance is essential to navigating the regime effectively.    **Contact Us Today**  ***zeta.*** is an authorised registered mandatory and can assist individuals and families in assessing their eligibility for Special Tax Status, preparing and submitting applications, and managing the annual compliance obligations that follow.   To discuss how the Individual Tax Programme Rules 2026 may affect your position, or to explore whether one of the four categories fits your profile, speak to our team:  Telephone: +356 20119700  Email: info@zeta-financial.com --- ## Prediction Markets: Can Malta Regulate Europe’s Fastest-Growing Industry? **Date:** 2026-07-21 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/prediction-markets-can-malta-regulate-europe’s-fasting-growing-industry **What are Prediction Markets?**  Political elections, football matches, the setting of interest rates and the weather all share one defining characteristic: uncertainty. Until these events actually occur, no predictive method, regardless of its sophistication, can determine their outcome with complete certainty.   Prediction markets seek to monetise that uncertainty by allowing participants to trade contacts based on the outcome of future events. Unlike a traditional bookmaker, a prediction market operates as an online marketplace where participants buy and sell contracts linked to specific questions. These may range from whether a political party will win an election, whether the European Central Bank will increase interest rates, or whether a football club will win the UEFA Champions League.   If the predicted event occurs, the contract pays a predetermined amount; if it does not, it expires worthless. As contracts are traded, their prices fluctuate to reflect the market's collective assessment of the probability of the event occurring. For example, where a contract paying €1 is trading at €0.70, the market is effectively pricing the event as having a 70% chance of happening.    **The Rising Popularity of Prediction Markets**  The concept is simple, but its growth has been remarkable. According to *Forbes*, monthly trading volume increased from less than USD 5 billion in September to approximately USD 24 billion by April 2026. Some industry observers now predict that annual trading volumes could eventually exceed USD 1 trillion  Part of their appeal lies in the sheer diversity of events of markets available. Politics, sport, economics, entertainment and even global news events have all become subjects of prediction market trading. Supporters argue that prediction markets do more than facilitate speculation: by aggregating dispersed information, they may produce forecasts that outperform opinion polls or expert predictions.  Despite this remarkable growth, however, one fundamental question has continued to cast uncertainty over the industry's future: how should they be regulated?      **The Regulatory Question: Gambling or Financial Services?**  Success often attracts regulators, and prediction markets are no exception. As prediction markets have grown into platforms facilitating billions of dollars in transactions, regulators have struggled to determine where they belong. Are these contracts gambling products? Financial derivatives? Or do they represent an entirely new category requiring a bespoke regulatory framework?  The United States illustrates this uncertainty particularly well. At the federal level, qualifying event contracts are generally regulated by the Commodity Futures Trading Commission (CFTC) as financial derivatives. Yet several states have argued that certain prediction market products fall within their gambling laws and consumer protection regimes. The result is a fragmented regulatory landscape where the boundary between gambling and financial regulation continues to be tested.  Despite this fragmentation, the underlying objective remains the same: to accommodate prediction markets within a coherent legal framework that balances innovation, market integrity, consumer protection and the economic opportunities these markets may generate.  **Europe Has Already Drawn a Line**  At first glance, the European position appears different.  Unlike financial services, gambling has not been harmonised across the European Union. Responsibility for regulating gaming remains with the Member States, each of which determines its own licensing, operational and advertising requirements. It might therefore appear that prediction markets also fall entirely within national competence, leaving Malta free to develop its own regulatory regime.   Malta’s Opening Position  That was, in fact, the direction Malta initially appeared to be taking. Before ESMA's intervention, the Malta Gaming Authority (MGA) publicly stated that its existing gaming framework was sufficiently technology-neutral to accommodate prediction market products. Depending on their structure, such products could potentially fall within either a Type 2 fixed-odds betting licence or a Type 3 betting exchange licence. At the same time, however, the Authority recognised that certain prediction market features might require a differentiated regulatory approach and confirmed that it was reviewing whether additional guidance or regulatory amendments would be necessary.   That approach reflected the assumption that prediction markets could, at least in principle, be regulated as gaming products under national law. That conclusion, however, is now only partly correct.    ESMA’s Intervention  The legal landscape changed significantly earlier this month when the European Securities and Markets Authority (ESMA) clarified that many prediction market products are already captured by existing EU financial services legislation. Rather than introducing new rules, ESMA confirmed that an existing legal prohibition on unregulated services already applies to many of these contracts.  The key principle is straightforward. A product is classified according to its economic substance rather than its commercial branding. Whether described as an event contract, prediction share or forecast token, a binary contract linked to matters falling within Annex I of MiFID II constitutes a financial instrument in the form of a derivative.   Accordingly, contracts referencing interest rates, inflation, commodity prices, weather or freight fall within MiFID II regardless of the terminology adopted by their issuer or under national law.  The consequence is significant. The prohibition on unregulated marketing, distribution and sale of binary options to retail clients, introduced in 2018, already applies to many prediction market products. ESMA did not expand the law; it clarified that the existing legal framework already captures them.  For Member States, including Malta, this means that contracts falling within MiFID II cannot simply be reclassified through domestic legislation.    **Malta Has Been Here Before**  For Malta, the debate feels familiar.  Over the past three decades, the country has established itself as one of Europe's leading financial services jurisdictions. Through a combination of regulatory innovation, specialist expertise and a business-friendly environment, it has attracted investment firms, insurers, fintech businesses and digital asset operators while remaining aligned with the evolving European regulatory framework.  Its next challenge may well be prediction markets.  Malta encountered a remarkably similar classification problem in 2018. Crypto-assets occupied an uncertain legal space and were left in the regulatory gorge between electronic money and financial instruments. Rather than forcing them into existing legal categories, Malta enacted the Virtual Financial Assets Act, creating a bespoke framework for assets that fell outside traditional financial services legislation.  The approach earned Malta international attention and helped establish its reputation as "Blockchain Island." It was an ambitious attempt to regulate an emerging industry before much of Europe had reached a consensus.  Ultimately, European harmonisation overtook national experimentation. The Markets in Crypto-Assets Regulation (MiCA) established a single regulatory framework across the European Union, and Malta ceased accepting new applications under the Virtual Financial Assets Act as firms transitioned to the directly applicable European regime. Nevertheless, the experience proved valuable. The MFSA developed considerable expertise in supervising innovative financial products, positioning Malta as an attractive jurisdiction for firms seeking authorisation under MiCA.    **Why Prediction Markets Are Different**  Prediction markets may appear to present another opportunity for regulatory innovation, but the legal landscape has changed.  Unlike crypto-assets in 2018, a substantial category of prediction market contracts has already been brought within the scope of EU financial services legislation. ESMA's recent clarification means that Malta cannot create a separate domestic category for contracts that already qualify as financial instruments under MiFID II.  Any uniquely Maltese framework would therefore be limited to contracts falling outside financial services legislation, such as those linked to elections, sporting events or entertainment.  Even then, another obstacle remains.  Unlike firms authorised under MiFID II, a purely domestic prediction market licence would not benefit from passporting rights across the European Union. Other Member States would remain free to classify such products under their own gambling or financial services legislation, exposing operators to inconsistent treatment and enforcement.  This is no longer a hypothetical concern. Several European gambling regulators have already taken enforcement action against unlicensed prediction market platforms, demonstrating that national authorities remain prepared to intervene where products are considered to fall within domestic gambling laws.    **Malta’s Opportunity Ahead: Certainty, Not Speed**  None of this means Malta should step back from the industry.   If anything, prediction markets represent another opportunity for Malta to do what it has done successfully for decades: provide regulatory certainty in sectors where innovation is moving faster than legislation.  The lesson from crypto is not that Malta should attempt to outpace European law once again. Rather, it is that expertise matters. Jurisdictions capable of combining legal certainty, efficient supervision and a sophisticated understanding of emerging technologies will remain attractive destinations for investment, even within a harmonised European framework.  Prediction markets are no longer a niche phenomenon. They have become a global industry attracting billions of dollars in trading volume, substantial venture capital investment and increasing institutional attention. Jurisdictions around the world have begun to recognise this shift. Gibraltar, for example, is in the process of becoming the first jurisdiction to introduce a dedicated regulatory framework designed specifically for prediction market operators. Rather than focusing on labels, its approach emphasises effective supervision, market integrity, participant protection and financial crime prevention, while recognising the increasing role of digital assets within the sector.  Malta cannot simply replicate Gibraltar's approach. As a Member State of the European Union, it is bound by the limits imposed by MiFID II and the wider EU regulatory framework. Nevertheless, this should not discourage Malta from acting decisively. Where Gibraltar has identified prediction markets as an emerging strategic industry, Malta should likewise position itself at the forefront of the European debate. By engaging proactively with regulators, developing supervisory expertise and providing a clear regulatory environment for those activities that remain within national competence, Malta can establish itself as the jurisdiction of choice for compliant prediction market businesses seeking access to the European market.  Prediction markets are unlikely to remain a regulatory grey area forever. Europe will eventually determine where they belong. The question is whether Malta intends to wait for that framework to emerge or whether it will help shape it. Given its track record in financial services, fintech and digital assets, Malta is uniquely placed not merely to participate in the industry's development, but to become its European centre of excellence.    *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Choosing the Right Mediterranean Residency: Malta vs Gibraltar vs Greece **Date:** 2026-07-15 **Category:** Residency **URL:** https://zeta-financial.com/news/choosing-the-right-mediterranean-residency-malta-vs-gibraltar-vs-greece **Background**    Over the past two decades, Mediterranean jurisdictions such as Malta, Gibraltar and Greece have developed tailored residency programmes aimed at attracting high-net-worth individuals and internationally mobile families.    Yet, while these programmes share a common objective, they differ in structure and intent, reflecting distinct policy priorities and target demographics. Certain routes, such as Malta’s Permanent Residence Programme (MPRP) and Greece’s Golden Visa, focus on securing longer-term residency rights. Others, including Malta’s Special Tax Programmes* and Gibraltar’s Category 2 Status, are designed primarily to offer favourable tax treatment.    This article provides a comparative overview of the principal programmes available in Malta, Gibraltar and Greece, analysing key considerations such as duration, wealth thresholds, costs, physical presence obligations, tax treatment, mobility rights, scope of eligible dependants and overall lifestyle offering.    *\*Malta’s Special Tax Programmes include the Malta/Global Residence Programme (TRP/GRP), the Malta Retirement Programme (MRP) and the United Nations Pensions Programme (UNPP).*    **Residency Duration and Stability**    The Malta Permanent Residence Programme    Malta’s Permanent Residence Programmes (MPRP) ranks highest in terms of long-term security. Under this programme, successful applicants are initially granted a five-year residence permit, subject to continued fulfilment of programme requirements.    Following this period, applicants may apply for permanent residence. Once permanent residence is obtained, this status allows the individual to reside in Malta indefinitely without any ongoing eligibility conditions.    In addition,  applicants may become eligible for Maltese citizenship by naturalisation, provided they meet the relevant criteria, including a minimum of five years of residence and genuine links to Malta.                  The Greek Golden Visa    Greece’s Golden Visa offers a comparable starting point, granting a five-year residence permit to successful applicants.    However, unlike the MPRP, the programme does not lead to permanent residence. Instead, the permit is renewable indefinitely in five-year increments, provided the underlying investment is maintained.    Applicants may also qualify for Greek citizenship through naturalisation, subject to meeting the applicable requirements, including at least seven years of residence in Greece.    Gibraltar’s Category 2 Status and Malta’s Special Tax Programmes    Gibraltar’s Category 2 Status and Malta’s Special Tax Programmes rank lower in terms of permanency.    Both frameworks operate on the basis of one-year residence permits, renewable annually. As such, they are better suited to individuals seeking flexibility and tax optimisation rather than long-term settlement.    It is also worth noting that Malta’s Special Tax Programmes are not available to individuals intending to establish domicile in Malta, further reinforcing their temporary and tax-focused nature.    **Entry Requirements and Wealth Thresholds**    Malta’s Special Tax Programmes    Malta’s Special Tax Programmes are the most accessible in this category, with relatively low entry thresholds and flexible criteria.    Key requirements include:    * Self-sufficiency: No minimum net worth is prescribed; applicants must demonstrate sufficient assets and income to support themselves without reliance on Maltese public services.  * Health insurance: Coverage across the EU with a minimum value of EUR100,000.  * Property holding: Either the purchase of qualifying property (EUR220,000–275,000 depending on location) or a rental agreement of at least EUR9,600 per annum.    Applicants remain, however, subject to a robust due diligence process, including fit and proper assessments and the submission of police conduct certificates.        Greece’s Golden Visa    Greece’s Golden Visa does not impose a formal minimum net worth requirement. However, the mandatory investment component effectively sets a financial threshold.    Applicants must undertake one of the following:    * Real estate investment: EUR250,000 (for property conversion into residential use) or EUR400,000–800,000 for direct property acquisition, depending on location.  * Alternative investments: Including a minimum 10-year lease or timeshare arrangement, or investment in qualifying Greek financial instruments (typically ranging from EUR350,000 to EUR800,000 depending on the route).    The Malta Permanent Residence Programme    The MPRP introduces a more defined financial threshold, positioning it between accessibility and exclusivity.    Applicants must demonstrate either:    * Assets of at least EUR500,000, including a minimum of EUR150,000 in liquid assets; or  * Assets of at least EUR650,000, including a minimum of EUR75,000 in liquid assets.    Gibraltar’s Category 2 Status    Gibraltar’s Category 2 Status is the most exclusive of the programmes considered.    Applicants are required to demonstrate a net worth exceeding £5 million, effectively limiting eligibility to high-net-worth individuals.    **Financial Commitment**    Malta’s Special Tax Programmes    Malta’s Special Tax Programmes are the most cost-efficient entry point among the options considered.    Applicants are required to hold qualifying property, either through:  * Purchase of property valued at EUR220,000–275,000 (depending on location); or  * Rental of property at a minimum of EUR9,600 per annum.    Application fees are relatively modest, ranging between EUR2,500 and EUR6,000 depending on the specific programme. Notably, there are no ongoing renewal fees, aside from minimal administrative costs for residence card issuance.    The programmes also impose a minimum annual tax, ranging from EUR7,500 (Malta Retirement Programme) to EUR15,000 (Global/Residence Programme), making them particularly attractive from a cost-to-benefit perspective.    Gibraltar’s Category 2 Status    Gibraltar’s Category 2 Status involves a relatively low application fee of £5,000. However, this is offset by a higher minimum annual tax liability of £37,000.    Applicants are also required to occupy an approved residential property in Gibraltar, where market prices are typically at a premium, further increasing the overall cost of entry and maintenance.    Greece’s Golden Visa    Greece’s Golden Visa is characterised by low administrative costs but requires a substantial upfront investment.    Applicants must complete a qualifying investment, which ranges from EUR250,000 to EUR800,000 depending on the route and location. Alternatively, a long-term lease or time-share agreement (minimum 10 years) may be used to satisfy the requirement.    MPRP    The MPRP combines moderate property requirements with comparatively higher government fees.    From a property perspective, the programme may be more accessible than Greece in certain cases:  * Flat property purchase threshold of EUR375,000, irrespective of location; or  * Lease agreement maintained for a duration of five years (shorter than Greece’s typical 10-year requirement).    However, this is balanced by significant upfront costs, including:  * A non-refundable administration fee starting from EUR60,000;  * A government contribution of EUR37,000;  * A donation of EUR2,000.    As such, while the MPRP offers strong long-term benefits, it requires a higher initial financial commitment compared to other programmes.        **Physical Presence Requirements**    Across the programmes considered, physical presence requirements are generally minimal, offering a high degree of flexibility for internationally mobile individuals.    Overall, these programmes are designed to accommodate flexible living arrangements, although certain structures, particularly those linked to tax residency, require careful monitoring of time spent across jurisdictions.    Malta Permanent Residence Programme & Greece Golden Visa    Both Malta’s Permanent Residence Programme (MPRP) and Greece’s Golden Visa do not impose any minimum stay requirements, allowing beneficiaries to retain their residence status without the need to spend a prescribed amount of time in the jurisdiction.    Gibraltar Category 2 Status    Gibraltar’s Category 2 Status adopts a slightly different approach. While there is no strict minimum stay requirement, individuals must ensure that they do not spend more than 183 days in any other single jurisdiction, effectively anchoring their tax residency position in Gibraltar.    Malta’s Special Tax Programmes    Similarly, Malta’s Special Tax Programmes do not impose a strict minimum number of days in Malta, but they do require that the beneficiary does not spend more than 183 days in any other jurisdiction in a given year. In addition, specific programmes such as the Malta Retirement Programme require beneficiaries to reside in Malta for an average of 90 days per year over a five-year period.      **Taxation**    From a tax perspective, Malta and Gibraltar offer the most attractive frameworks, albeit catering to different profiles, while Greece generally presents a less competitive position unless specific regimes are utilised.    Malta’s Special Tax Programmes    Malta’s Special Tax Programmes operate on a remittance basis of taxation. Under this system, beneficiaries are taxed on income and capital gains arising in Malta at standard rates, as well as on foreign-source income only to the extent that it is remitted to Malta. Foreign-source capital gains, even if remitted, are not subject to tax.      This regime is coupled with a favourable flat tax rate of 15% on remitted foreign income, subject to a minimum annual tax ranging between EUR7,500 and EUR15,000 depending on the specific programme. As a result, these programmes are particularly well-suited to individuals with international income streams who can control the timing and level of remittances, or where remittances primarily consist of capital gains.    Gibraltar’s Category 2 Status    Gibraltar’s Category 2 Status adopts a different approach, offering certainty through a capped tax liability. While beneficiaries are subject to a minimum annual tax of £37,000, their total tax exposure is capped at £44,740, regardless of income levels. This makes the regime especially attractive for high earners or individuals expecting significant remittances, as their effective tax rate decreases as income rises.    Malta’s Permanent Residence Programme     Malta’s Permanent Residence Programme (MPRP) also applies the remittance basis of taxation to non-domiciled residents. Under this framework, individuals are taxed on income and capital gains arising in Malta, as well as foreign-source income remitted to Malta, while foreign-source capital gains remain outside the scope of Maltese tax even if remitted.    However, unlike the Special Tax Programmes, the MPRP does not benefit from a flat preferential rate. Instead, beneficiaries are subject to Malta’s standard progressive tax rates, which may be advantageous where only limited foreign income is remitted or where remittances primarily consist of capital gains.    Greece’s Golden Visa    Greece’s Golden Visa allows applicants to choose between a flat tax regime or its progressive tax regime.     Applicants opting for the progressive tax regime are taxed under the standard Greek system on their worldwide income, which is subject to progressive tax rates reaching up to 44%.    Applicants electing to be taxed under Greece’s non-dom (flat tax) regime, are subject to an annual tax of EUR100,000 on all foreign-source income, irrespective of the amount. This regime may be extended to family members at an additional cost of EUR20,000 per person per annum. Furthermore, all local-source income remains subject to the progressive tax bands.    While this may be suitable for ultra-high-net-worth individuals seeking simplicity, it is generally less competitive when compared to Malta’s remittance-based regimes or Gibraltar’s capped tax structure.      **Mobility Rights**    Mobility remains a key consideration for applicants seeking ease of travel across Europe, and in this respect, Malta and Greece currently offer a clear advantage (for now).    Malta and Greece’s Programmes    Both Malta and Greece are part of the Schengen Area, allowing beneficiaries of their respective programmes to travel freely across Schengen Member States for short stays without the need for additional visas. This provides a significant benefit for individuals who require seamless access across multiple European jurisdictions for business or personal purposes.    Gibraltar’s Category 2 Status    Gibraltar, by contrast, is not presently part of the Schengen Area. As such, holders of Gibraltar’s Category 2 Status do not automatically benefit from Schengen mobility rights and must comply with standard visa requirements when travelling within the Schengen Zone, depending on their nationality.    However, this position may evolve. A post-Brexit agreement between the United Kingdom and the European Union in relation to Gibraltar is expected to extend Schengen-style mobility rights to Gibraltar residents, with formal ratification anticipated in the near term. Should this materialise, Gibraltar’s position in this category would become significantly more competitive.    **Eligible Dependents**    The scope of eligible dependants varies significantly across the programmes, with Malta offering the most extensive and flexible definitions of family members.    Malta’s programmes, particularly the Malta Permanent Residence Programme (MPRP) and the Special Tax Programmes, stand out for their broad inclusion criteria.    The Malta Permanent Residence Programme    Under the MPRP, applicants may include:  * A spouse or equivalent partner;  * Children under 18;  * Adult children aged 18–29 who are principally dependent on the main applicant;  * Adult children with a certified disability;  * Parents and grandparents of both the main applicant and their spouse, provided they are principally dependent.        Malta’s Special Tax Programme    Malta’s Special Tax Programmes adopt an even wider approach. In addition to spouses or partners (including those in stable and durable relationships) and children, these programmes may also extend to:  * Children aged 18–25 who are not economically active;  * Adult children unable to maintain themselves due to illness or disability;  * Dependent siblings of the main applicant or their partner;  * Dependent parents and grandparents of both the applicant and their partner.    Greece’s Golden Visa    Greece’s Golden Visa provides a more standardised family reunification framework. Eligible dependants include:  * A legally married spouse;  * Children under the age of 21;  * Parents of the main applicant;  * Parents of the spouse.    While this is sufficient for many family structures, it is notably more limited when compared to Malta’s broader approach, particularly in relation to adult children and extended family members.    Gibraltar’s Category 2 Status    Gibraltar’s Category 2 Status offers the most restrictive definition of dependants among the programmes considered. Generally, only spouses and children (under 18 or in full-time education) may be included under the same certificate as the principal applicant.    **Lifestyle Considerations**    From a lifestyle perspective, Malta, Greece and Gibraltar each offer distinct advantages, with the optimal choice largely dependent on personal preferences and day-to-day priorities.    Ultimately, all three jurisdictions deliver a high quality of life, but the right choice will depend on whether the applicant values scale and variety, convenience and climate, or cross-border accessibility.    Greece    Greece stands out for its diversity of living environments, ranging from vibrant metropolitan centres such as Athens to a wide selection of islands offering a more relaxed and seasonal lifestyle. This variety allows applicants to tailor their living experience, whether they prioritise cultural depth, natural scenery or a slower pace of life.    Malta    Malta offers a compact yet highly practical environment, combining a warm climate, English-speaking population and well-developed infrastructure. Its relatively mild winters and coastal lifestyle make it particularly attractive for individuals seeking year-round liveability within a small and accessible jurisdiction.    Gibraltar    Gibraltar, while smaller in scale, provides a unique blend of British and Mediterranean influences. Although it experiences a cooler climate relative to Malta, its proximity to Spain may soon offer immediate access to a broader lifestyle ecosystem, including larger cities, diverse dining options and expanded leisure opportunities across the border.    **Conclusion**    Ultimately, there is no one-size-fits-all solution when it comes to Mediterranean residency.    Malta’s Permanent Residence Programme stands out for applicants seeking long-term stability and a clear pathway to permanent residence, particularly where flexibility on physical presence is important. Greece’s Golden Visa offers a competitive alternative with lower upfront thresholds in certain cases, although without the same permanency advantages.    For applicants prioritising tax efficiency, Malta’s Special Tax Programmes and Gibraltar’s Category 2 Status remain the most compelling. Malta’s regimes are generally more accessible and flexible, whereas Gibraltar caters to ultra-high-net-worth individuals seeking predictability through a capped tax exposure.    In practice, the ‘best’ programme depends less on the headline features and more on the applicant’s profile, including lifestyle preferences, expected remittance levels, family structure, and long-term intentions within Europe.    A tailored assessment is therefore essential before making any commitment.                          **Get in Touch**    At **zeta.**, we specialise in advising internationally mobile individuals and families on residence and tax structuring across Malta, Gibraltar and other key jurisdictions.    We provide end-to-end support, from programme selection and eligibility assessment through to application handling and ongoing tax planning, ensuring that each structure is aligned with both your personal and financial objectives.    If you are considering relocating or restructuring your residency position, we would be pleased to assist you in identifying the most suitable route.    *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*    *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*    *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Gibraltar’s Comeback: What the New EU-UK Deal Means for Private Wealth **Date:** 2026-07-15 **Category:** Residency **URL:** https://zeta-financial.com/news/gibraltar’s-comeback-what-the-new-eu-uk-deal-means-for-private-wealth **Executive Summary**  The forthcoming EU–UK Agreement on Gibraltar is set to materially improve cross-border mobility, market access, and connectivity, addressing key post-Brexit constraints.   Against this backdrop, Gibraltar is strengthening its position as a viable jurisdiction for high-net-worth individuals. Its Category 2 Programme remains a core offering, combining a favourable and predictable tax regime with a stable legal framework, strong lifestyle appeal, and expected access to Schengen mobility.  **The EU-UK Agreement on Gibraltar**  On the 11th of June 2025, a political agreement was reached on the core elements of a treaty governing Gibraltar’s post-Brexit relationship with the European Union   The draft treaty was finalised in December 2025 and is currently pending formal approval by the European Council and Parliament. Approval and provisional application are expected to commence on 15 July 2026.  Why the Agreement Matters  Gibraltar was excluded from the EU–UK Trade and Cooperation Agreement (TCA), largely due to Spain’s position during negotiations. This omission created practical and economic challenges for Gibraltar:  * Cross-border movement became constrained, particularly affecting Gibraltar’s workforce, over half of whom reside in Spain and commute daily.  * These frictions were expected to intensify further with the introduction of the EU’s Entry/Exit System (EES).  * Gibraltar’s limited access to the EU single market also impacted key sectors, notably professional and financial services.  **Key Developments under the Agreement**  The new framework introduces several important changes.  Persons and Goods  A central pillar of the agreement is the removal of all physical barriers, checks, and controls on the movement of persons and goods at the Gibraltar-Spain border. This measure is intended to facilitate seamless cross-border transit for residents, workers, and commercial operators, marking a significant shift in the post-Brexit landscape.  Air Travel  Further, the agreement makes provision for the enhancement of air connectivity between Gibraltar and EU Member States. This will facilitate more direct air travel to and from the European continent, strengthening Gibraltar’s accessibility for both tourism and business.  **Gibraltar’s Category 2 Programme**  **Background**  Gibraltar’s Category 2 Programme offers a well-established route for high-net-worth individuals seeking residency combined with a predictable tax position.  **Eligibility**  Applicants must meet two principal criteria:  * Demonstrate a net worth exceeding £2 million, including property and/or shareholdings.  * Secure approved residential accommodation in Gibraltar for their exclusive use.  **Tax Treatment**  The programme offers a capped tax regime, with a minimum liability of £37,000 and a maximum of £44,740, depending on remittances.  Furthermore, Gibraltar has no capital gains tax, inheritance tax, or tax on investment income.  **Lifestyle**  Beyond its tax advantages, Gibraltar offers a well-rounded and highly attractive lifestyle proposition. Situated in the Mediterranean at the southern tip of Spain, it combines a favourable climate with the familiarity of a British legal system and an English-speaking environment. This blend of Mediterranean living and institutional stability continues to appeal to internationally mobile families.  Gibraltar also benefits from a strong education framework based on the English system, with clear pathways to UK universities. The jurisdiction is widely regarded as safe and stable, making it particularly suitable for family relocation. In addition, its immediate proximity to southern Spain allows easy access to destinations such as Marbella, Seville, the Sierra Nevada, and the Cádiz coastline, offering a diverse range of leisure and lifestyle opportunities.  **Mobility Within Europe**  Under the forthcoming EU–UK framework, holders of a Gibraltar Residence Card are expected to benefit from visa-free travel within the Schengen Area for up to 90 days in any rolling 180-day period. This further enhances Gibraltar’s attractiveness as a base for internationally mobile individuals.  **Conclusion**   The anticipated EU–UK Agreement marks a significant step forward for Gibraltar, addressing longstanding post-Brexit challenges around mobility, market access, and economic integration. With the removal of border friction, improved connectivity, and greater certainty, Gibraltar is increasingly positioned as a practical and strategic base within Europe.  Against this evolving backdrop, the Category 2 Programme continues to offer a compelling proposition for high-net-worth individuals seeking a stable, tax-efficient, and well-regulated jurisdiction, complemented by strong lifestyle and family considerations.  **Get in Touch**  If you are considering relocating to Gibraltar, get in touch to learn how zeta. can assist with the Category 2 Programme. We support clients throughout the process, from initial assessment through to successful relocation.  *Disclaimer*  *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Greece’s Golden Visa: A Strategic Gateway to EU Residency **Date:** 2026-07-15 **Category:** Residency **URL:** https://zeta-financial.com/news/greece’s-golden-visa-a-strategic-gateway-to-eu-residency **Background**    Greece’s Golden Visa Programme, introduced in 2013, remains one of Europe’s most established residency-by-investment schemes. Designed for third-country nationals, it offers long-term residence rights in exchange for qualifying investments, while maintaining a high degree of flexibility across multiple asset classes.    **Eligibility Routes: Qualifying Investments**    Applicants may qualify under two primary routes: the Real Estate Investment Route and the Alternative Investment Route.    **The Real Estate Investment Route**    Under this route, applicants must complete a qualifying real estate investment. The applicable thresholds now vary depending on location:    * EUR 250,000 for properties located within designated specialised real estate investment zones.  * EUR 800,000 for properties in Athens, Thessaloniki, or islands with a population exceeding 3,100 residents.  * EUR 400,000 for properties in all other regions of Greece.    This tiered structure reflects increased demand in prime areas while preserving accessibility in emerging locations.    **The Alternative Investment Route**    For investors seeking diversification beyond property, Greece offers several financial and capital market options.    Long-Term Lease or Time-Share     Applicants may enter into a lease or time-share agreement subject to:  * A minimum duration of 10 years.  * The property qualifying as hotel accommodation or furnished tourist residences.  * A minimum value of EUR 400,000 or EUR 800,000 depending on location.      Fixed-Term Deposit    A fixed-term deposit of at least EUR 500,000 in a Greek credit institution qualifies under this route, offering a lower-risk alternative to market-linked investments.      Greek Government Bonds     Applicants may opt to invest a minimum of EUR 500,000 in Greek government bonds, provided:  * The bonds have a remaining maturity of at least three years.  * The investment is executed through a Greek financial institution.    Corporate and Fund Investments    Eligible options include:  * A minimum EUR 500,000 contribution to a Greek real estate investment company, investing solely in Greece;  * Investment in closed-end funds or mutual funds established in Greece.  * Capital contribution or bond subscription in Greek companies listed on local markets.    Listed Securities    Applicants may invest at least EUR 800,000 in shares or bonds listed on Greek exchanges, including government and corporate instruments.    Greek-Focused Investment Vehicles    A reduced threshold of EUR 350,000 applies for:  * Mutual funds investing exclusively in Greek regulated markets.  * EU-based alternative investment funds dedicated to Greece.    **Tax Considerations**    Greece offers two distinct tax regimes for Golden Visa Holders.    The Progressive Tax Regime    Applicants opting for standard taxation are subject to Greece’s progressive income tax rates on worldwide income, ranging from 9%-44% depending on income levels.    Flat Tax Regime (Non-Dom Regime)    Alternatively, individuals may elect a flat annual tax of EUR 100,000 on foreign-sourced income, regardless of amount. This can be extended to additional family members for EUR 20,000 per person annually.    Locally sourced income remains taxed under standard rates in both cases.          **Validity and Renewal**    Residence permits are initially granted for five years and are renewable for further periods of five (5) years, provided the qualifying investment is maintained.    **Dependents**    Greece’s Golden Visa Programme allows for the main applicant to include dependents in his application, including:    * A married spouse;  * Children under 21 years old;  * Parents of the Main Applicant;  * Parents for married spouse.    **Key Benefits**    Visa-Free Travel within Schengen    Successful applicants will be able to freely travel within the Schengen area for a period of up to 90 days within any 180-day period.    Potential to Apply for Citizenship    After seven (7) years of residence, applicants (and their family members) may become eligible to apply for citizenship in Greece, subject to demonstrating:    * Genuine close connecting ties with Greece;  * Successful integration into Greek society;  * Adequate knowledge of the Greek language.    **How zeta. Can Assist – Get in Touch**    At ***zeta.,*** we support clients in evaluating and structuring residency strategies aligned with their broader financial and lifestyle objectives. From selecting appropriate investment routes to coordinating the full application process, our approach ensures clarity, efficiency, and continuity at every stage.    For further information on Greece’s Golden Visa Programme or alternative residency solutions, please contact us at info@zeta-financial.com.    *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*   *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*   *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Malta CASP Licence: What VASPs Must Do Before 1 July 2026 **Date:** 2026-06-11 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/malta-casp-licence-what-vasps-must-do-before-1-july-2026 **Malta’s Early Lead in Crypto Regulation**  Malta established itself as an early mover in crypto regulation with the introduction of the Virtual Financial Assets Act (the ‘***VFA Act’***) in 2018, creating one of the first dedicated legal frameworks for crypto-assets and related service providers.   Under the VFA Act, a licence was required for a range of regulated services, including reception and transmission of orders, execution of orders, dealing on own account, portfolio management, custody or nominee services, investment advice, placing of virtual financial assets, and operating a VFA exchange.  The VFA framework helped position Malta as a leading jurisdiction for digital asset businesses seeking regulatory clarity and supervisory oversight.    **MiCA: Changing the Rules**  The Markets in Crypto-Assets Regulation (MiCA) entered into force in June 2023, introducing a harmonized framework for crypto-asset markets across the European Union. Malta has implemented MiCA through the Markets in Crypto-Assets Act (the ‘MiCA Act’) and related subsidiary legislation, reshaping how crypto-asset service providers are regulated at both EU and domestic level.    **Regulation of Crypto-Asset Service Providers under MiCA**  Under MiCA, any person provides crypto-asset services (such as providing custody and administration of crypto-assets, operating a trading platform, exchanging crypto-assets for funds or for other crypto-assets, executing orders, placing crypto-assets, receiving and transmitting orders, providing advice, portfolio management, and transfer services on behalf of clients) requires a Crypto-Asset Service Provider (‘**CASP**’) authorisation, unless it falls within a specific category of already regulated institution permitted to offer those services under MiCA.    **Transitioning to MiCA CASP Authorisation**  Although the MiCA CASP regime has applied since 30th December 2024, MiCA allows a transitional period for firms that were already providing services in accordance with national law before that date.   In Malta, this means existing VFA-licensed providers may continue operating under the legacy framework only until the 1st of July 2026. After the 1st of July 2026, that transitional window closes and any firm carrying on in-scope crypto-asset services without the required MiCA authorisation risks operating in breach of the applicable legal framework.    **How To Transition: An Application to MFSA & Simplified Procedure for Legacy VFA Providers**  A Malta MiCA CASP application must include detailed information on the applicant, its legal structure, programme of operations, prudential safeguards, governance arrangements, management body, qualifying shareholders, internal controls, ICT systems, and service-specific documentation where relevant.  However, the MiCA Act provides for a simplified procedure for legacy VFA providers, exempting them from re-submitting information already provided to the MFSA when applying for their VFA licence, provided that such information remains complete and up to date.  This can significantly reduce the administrative burden for firms transitioning from a VFA licence to a CASP authorisation.  Application Fees: Lower for Legacy VFA Providers  Application fees in Malta depend on the class of crypto-asset services to be provided: €10,000 for Class 1, €20,000 for Class 2 and €25,000 for Class 3.   For firms that already held a VFA licence before 30 December 2024 and apply under the legacy route, reduced fees apply: €5,000, €10,000 and €12,500 respectively. This differential recognises the prior regulatory engagement and authorisation work carried out under the VFA framework.    **Why The Transition Matters**  Moving from a Malta VFA licence to a MiCA CASP authorisation is more than a box-ticking exercise. A MiCA authorisation allows a firm to passport its services across the EU under a single regulatory framework, replacing the more limited Malta-only legacy regime and potentially unlocking access to a wider client base. At the same time, timely transition planning helps mitigate the risk of business interruption, regulatory breaches and supervisory scrutiny once the transitional period expires.      **Contact Us**   If your firm is currently operating under a Malta VFA licence, now is the time to assess its MiCA readiness and authorisation strategy ahead of 1 July 2026. The zeta. team can assist with licence transition planning, regulatory gap analysis, application support, governance documentation and ongoing compliance structuring.  Contact us today at info@zeta-financial.com or get in touch via our website to speak with one of our specialists.  *Disclaimer*  *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## AI Usage Under Scrutiny: MFSA Sets Clear Governance and Risk Expectations for Licence Holders **Date:** 2026-06-09 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/ai-usage-under-scrutiny-mfsa-sets-clear-governance-and-risk-expectations-for-licence-holders **Background**  On the 4th of June 2026, the Malta Financial Services Authority issued a Dear CEO Letter, titled ‘Artificial Intelligence (AI): Governance, Risk and Prudential Expectations) (the ‘***Letter***’).  The Letter sets out a number of observation and supervisory expectations to ensure that the adoption of AI within the financial sector develops in a manner that is consistent with sound prudential principles, effective governance and the overarching objectives of financial regulation.    **MFSA Expectations**  Recognising AI as Risk Area  The Letter makes it clear that licence holders are expected to recognise AI as a prudentially relevant risk area. As a result, they are expected to:  (i)  assess how AI may impact their risk profile, decision-making processes and overall resilience;  (ii) ensure that such considerations are embedded within existing governance and management structures.    Internal Assessment: Evaluate, Identify Gaps and Take Remedial Action    The Letter also makes it clear that licence holders are expected to critically evaluate their current and anticipated use of AI, identity any gaps in governance, oversight or controls, and take appropriate remedial action where necessary.    Utilising AI to Enhance Financial Stability, Market Integrity and Consumer Protection    The MFSA expects that AI is deployed in a manner that enhances, rather than undermines, financial stability, market integrity, and consumer protection. Firms that fail to adequately address the risks associated with AI may be subject to increased supervisory scrutiny and, where necessary, further supervisory intervention.              Clear Governance Arrangements    The MFSA expects licence holders to ensure that AI adoption is supported by clear  governance arrangements, including that:  (i) Boards and senior management must retain effective oversight of AI systems and remain accountable for their use, including where such systems are provided by third parties;  (ii) Responsibility for AI systems should be clearly assigned;  (iii) Sufficient expertise exists to provide effective challenge and oversight of AI systems.    Outsourcing    Licence holders are expected to treat AI-related outsourcing in line with existing outsourcing and third-party risk management frameworks, including:    (i) ensuring that they retain sufficient control, oversight, and understanding of any externally provided AI systems; and   (ii) assessing concentration risk and avoiding excessive reliance on a limited number of providers, especially where such dependencies may impact critical operations.    Validation and Testing of AI Systems    The MFSA notes that certain AI systems, particularly generative AI systems, may hallucinate.    Licence holders are thus expected to ensure that AI systems are subject to appropriate validation, testing, and ongoing monitoring, including:    (i) identifying of potential model limitations;  (ii) implementing controls to detect model drift; and  (iii) establishing clear escalation mechanisms where issues arise.                  Understanding AI Systems & Redesigning when Unable to Explain System Behaviour    The Authority expects that firms are able to understand, explain, and evidence how AI systems operate, particularly where outputs influence financial or customer outcomes, including:    (i)  ensuring that sufficient documentation, audit trails, and model governance artefacts are maintained to support effective internal challenge and supervisory review.    Where firms are unable to adequately explain or evidence system behaviour, consideration should be given to restricting or redesigning the use of such systems, particularly in higher-risk contexts.    Data Governance: Ensuring Data Relied Upon (by AI Systems) is Accurate    Licence holders are expected to implement robust data governance frameworks supporting AI use, including:    (i) ensuring that data is accurate, relevant, and appropriately validated, and that data flows and usage are clearly understood and documented;  (ii) ensuring that data used in AI systems is consistent with applicable regulatory  requirements and internal policies.    Preventing Operational & Systematic Risk    Licence holds are expected to take a forward-looking approach to AI risk, considering not only firm level impacts but also potential system-wide implications, including:    (i)  assessing dependencies, identifying potential single points of failure, and ensuring that contingency measures are in place.                      **The Self-Assessment Framework**    In order to support licence holders in assessing their exposure to AI-related risks, the MFSA has developed a structured self-assessment framework designed to provide firms with a practical tool to:    (i) identify AI use cases across their operations;  (ii) map dependencies, including third-party providers;  (iii) assess governance, accountability, and oversight arrangements; and   (iv) evaluate the adequacy of existing risk management and control frameworks.    Licence holders are expected to complete this assessment in a comprehensive and  critical manner, ensuring that it reflects both current use of AI and anticipated future  developments.    At this stage, firms are not required to submit the results of this exercise to the MFSA but should be in a position to demonstrate that:    (i) the assessment has been performed;  (ii) its outcomes have been considered at Board and senior management level; and  (ii) any identified gaps are being addressed through appropriate remedial actions.    **Conclusion**    The MFSA’s Dear CEO Letter marks a clear shift in regulatory focus, positioning AI not merely as an innovation tool but as a core prudential concern requiring structured oversight and accountability.    Licence holders must move beyond passive adoption and take a proactive, risk-based approach to AI, embedding it within governance frameworks, strengthening internal expertise, and ensuring transparency in how systems operate and influence outcomes. The emphasis on explainability, validation, and data integrity highlights the Authority’s expectation that firms remain fully in control of their technological deployments.    Ultimately, firms that treat AI with the same rigour as other material risk areas will be better placed to enhance resilience, maintain regulatory trust, and leverage AI responsibly. Those that do not may face increased scrutiny and intervention.    **Contact Us**    zeta. assists firms in aligning AI strategies with regulatory expectations, including governance design, risk assessments, and implementation of control frameworks.    To discuss how these developments may impact your organisation, contact us at: info@zeta-financial.com  *This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the information and reflects our interpretation of the information as at the date of publication.*  *The application and impact of the information may vary depending on individual circumstances, and the information is subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.*  *Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.* --- ## Equal Pay Transparency in Malta: What Employers Need to Do Now **Date:** 2026-06-08 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/equal-pay-transparency-in-malta-what-employers-need-to-do-now **Background**  The Equal Pay (Transparency and Reporting Regulations), 2026’ (the ‘***[Regulations](https://legislation.mt/eli/ln/2026/173/eng)***’) were published on the 5th of June 2026, transposing the EU Equal Pay Transparency Directive into Maltese law. These Regulations introduce a significant shift in the regulation of pay equality in Malta, placing enhanced obligations on employers while strengthening the rights and remedies available to workers.  **Summary**  At the core of the new framework are enhanced transparency and enforcement mechanisms. In particular, employers meeting certain workforce thresholds are required to prepare and submit periodic Pay Gap Reports, disclosing gender-based pay disparities within their organisation. Where such reports reveal unjustified differences of 5% or more, employers may be required to undertake a Joint Pay Assessment in collaboration with employee representatives, with a view to identifying, addressing, and preventing discriminatory pay practices.  Alongside these structural obligations, the Regulations significantly strengthen individual rights. Most notably, workers who suffer pay discrimination are entitled to full recovery of lost pay, together with compensation, so as to place them in the position they would have been in had the breach not occurred.  These measures are complemented by additional transparency obligations, including requirements relating to pay-setting criteria, access to pay information, and pre-employment disclosures, all of which serve to reinforce the principle of equal pay for equal work or work of equal value.    **New Obligations for Employers**  **Pay Structure and Equal Pay**  Under the Regulations, employers are required to establish pay structures that ensure equal pay for equal work or work of equal value.  However, the Regulations do not prevent employers from paying workers differently for the same work or work of equal value, provided that such differences are based on objective, gender-neutral, and bias-free criteria, including (but not limited to) performance and competence.      **Written Pay Policies and Criteria**  Employers must adopt and maintain written policies or criteria setting out the objective and gender-neutral factors used to determine pay, pay levels, and pay progression. These must be accessible to workers at all times.  Exemptions  Employers with fewer than 25 employees are exempt from maintaining policies relating to pay progression.  Employers with 25–49 employees must document the relevant criteria internally but are not required to make such policies continuously accessible to workers.  **Gender-Neutral Job Titles and Vacancies**  Employers must ensure that job titles and job vacancy notices are gender-neutral.  **The Pay Gap Report**  Employers with 100 or more employees are required to prepare a Pay Gap Report containing information on the gender pay gap and related data.  This obligation is introduced gradually:  * Employers with 250+ employees must submit their first report by 7 June 2027 (covering 2026) and annually thereafter.  * Employers with 150–249 employees must submit their first report by 7 June 2027 (covering 2026) and every three years thereafter.  * Employers with 100–149 employees must submit their first report by 7 June 2031 (covering 2030) and every three years thereafter.  Subsequent reports (other than the first) must be submitted to the Monitoring Body within 14 working days from the end of the relevant reporting period.  Employers with fewer than 100 employees may submit reports voluntarily.  **The Joint Pay Assessment**  Where:  (i) The Pay Gap Report reveals a difference of 5% or more in average pay between male and female workers within any category of work;  (ii) the employer cannot justify the difference based on objective and gender-neutral criteria; and  (iii) the difference is not remedied within six months from submission of the report:  then the employer must carry out a Joint Pay Assessment together with employee representatives.  This assessment must (amongst others):  (a) identify and address unjustified pay differences;  (b) include measures to remedy such differences; and  (c) evaluate the effectiveness of measures taken in previous assessments.    **New Rights for Workers**  **Right to Compensation and Recovery of Lost Pay**  Any person who suffers loss of pay due to a breach of the principle of equal pay is entitled to full recovery of lost pay, together with compensation.  The compensation must place the worker in the position they would have been in had the breach not occurred.  **Pre-Employment Pay Transparency**  Job applicants have the right to receive information pm:  (a) the initial pay or salary range for the role;  (b) any relevant provisions of a collective agreements applicable to the role.  **Right to Information During Employment**  Workers may request and receive, in writing:  (i) their individual pay level; and  (ii) average pay levels, broken down by sex, for workers performing the same work or work of equal value.  **Prohibition on Salary History Questions**  Employers are prohibited from asking job applicants about their salary history, whether in current or previous employment.    **Conclusion**  The Equal Pay (Transparency and Reporting) Regulations mark a step change in how pay equality is regulated and enforced in Malta. For employers, early preparation, from data readiness and policy updates to communication with workers and representatives, will be key to managing both legal exposure and employee expectations.  By investing in robust, gender‑neutral pay structures and clear internal processes now, organisations can not only meet their new obligations, but also strengthen trust, retention, and their overall employer brand in an increasingly transparent labour market.  **Contact us**  If you would like to understand how these new Regulations impact your organisation, or need support in reviewing your pay structures, reporting processes, and documentation, our zeta. team is here to assist.  You can reach us on info@zeta-financial.com or get in touch via our website to speak with one of our specialists about implementing a compliant, practical pay transparency framework tailored to your business.  *This note is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It is not intended to be relied upon as a substitute for specific advice tailored to your circumstances.*  *While every effort has been made to ensure the accuracy of the information at the time of publication, no representation or warranty (express or implied) is given as to its completeness, accuracy, or reliability, and zeta. accepts no responsibility or liability for any loss or damage arising from reliance on this publication or its contents.*  *Readers should not act, or refrain from acting, on the basis of this information without obtaining appropriate professional advice.* --- ## Malta Expands Film Incentives to XR: A New Era for Immersive Productions **Date:** 2026-05-25 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/malta-expands-film-incentives-to-xr-a-new-era-for-immersive-productions **Background**    The Malta Film Commission Act (Amendment of Schedule) Regulations, 2026 (the ‘***[Regulations](https://legislation.mt/eli/ln/2026/159/eng)**’)* published on the 22nd of May 2026, introduce a significant update to Malta’s framework for audiovisual incentives. The amendments expand the definition of ‘Qualifying Production’ for the purposes of the Malta Film Commission Act, to reflect evolving technologies and emerging forms of storytelling within the global film and media industry.    **What is the Malta Film Commission Act and What is Qualifying Production?**    The Malta Film Commission Act (the ‘***Act’**)*, enacted in 2005, established the Malta Film Commission and provides the legal basis for granting fiscal and other support measures to ‘Qualifying Companies’ and ‘Qualifying Production’s.    Central to the Act is the concept of a ‘Qualifying Production’, being an audiovisual production which:    (i) satisfies the conditions set out in the schedule to the Act (the ‘***Schedule***’); and  (ii) is formally certified as Qualifying Productions in line with the Act.    In summary, the conditions set out in the Schedule are that:    (a)  the Audiovisual Production must be carried out in Malta (partially or wholly);  (b) the Audiovisual Production must be processed to commercial release standards;  (c) the Audiovisual Production must make a valid contribution to the expression of creativity and culture; and  (d) the Audiovisual Production must qualify under one of the eligible categories.    The Eligible Categories    Prior to the amendment, the Schedule to the Act recognised the following eligible categories for qualifying audivisual productions:    (i) Feature Films;  (ii) Television, Video on Demand or Subscription on Demand Productions;  (iii) Creative Documentaries;  (iv) Reality Programmes;  (v) Game or Competition Shows; and  (vi) Short Films.    **What’s New?**    The Regulation introduce a new seventh eligible category:    (vii) Innovative Audiovisual Content    This addition reflects the increasing importance of emerging technologies in the audiovisual sector.    ‘Innovative Audiovisual Content’ is defined as content falling under the umbrella term Extended Reality (XR), encompassing immersive technologies, such as virtual reality (VR), augmented reality (AR) and mixed reality (MR), all of which are reshaping how audicences engage with content.    To qualify under this new category, the productions must be designed to deliver interactive narrative storytelling and immersive experiences intended for production and global commercial exploitation.   Importantly, the Regulations clarify that qualifying productions must retain a narrative focus. While the experience may be interactive and immersive, it must centre on storytelling. As such, purely game-based content is excluded. In addition, the narrative must be integrated throughout the experience. It cannot be limited to isolated elements, such as an introductory sequence or a concluding segment, but should instead unfold continuously within the immersive environment.    **Conclusion**  The 2026 amendments mark an important development in Malta’s audiovisual regulatory framework by extending the scope of eligible productions to include Innovative Audiovisual Content, specifically XR-based experiences such as VR, AR and MR. In doing so, the Regulations align Malta’s incentive regime more closely with technological developments and evolving forms of commercial storytelling within the global screen industry.  For production companies, investors and other industry participants, this change signals a broader and more future-oriented approach to qualifying audiovisual activity in Malta. It also reinforces Malta’s position as a jurisdiction seeking to accommodate innovation while retaining a clear focus on narrative-driven and commercially exploitable productions.    **Get In Touch**  For businesses operating in the media, entertainment and creative sectors, regulatory changes of this nature may create new opportunities for structuring productions and assessing eligibility for available incentives.   For further information on how these amendments may affect your business or production model, contact us today.   *This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the information and reflects our interpretation of the information as at the date of publication.*     *The application and impact of the information may vary depending on individual circumstances, and the information is subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.*     *Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.* --- ## Malta Increases Protected Salary Threshold for Garnishee Orders **Date:** 2026-05-25 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/malta-increases-protected-salary-threshold-for-garnishee-orders **Background**  The Salaries or Wages (Exemption from Attachment) Order 2026 (the ‘***Order***’), published on the 22nd of May 2026, makes a modest but important update to the minimum salary or wages that remain protected from attachment by a garnishee order for debt enforcement purposes.  **What is a Garnishee Order?**  A garnishee order, known in Maltese as a mandat ta’ sekwestru, is a court warrant used to enforce a debt against funds held by a third party, such as a bank or employer. In practice, it temporarily restricts access to money owed to the debtor, up to the amount claimed by the creditor.  Wages or Salaries Exempt from Garnishee Order Attachment  Under Maltese law, salaries and wages are generally exempt from attachment. However, this protection is not absolute.     Where a salary or wage exceeds a statutory minimum threshold (being €1233 per month or such other amount as established by the Minister from time to time), the amount above that threshold may be subject to a garnishee order (subject to certain exceptions).    **What’s New?**  The Salaries or Wages (Exemption from Attachment) Order 2026 increases the protected minimum threshold to €1,350 per month.  This means that as from 22nd of May 2026, any portion of a salary or wage exceeding €1,350 may, in principle, be subject to attachment through a garnishee order, subject to the same legal exceptions and safeguards previously applicable.  **Get in Touch**   If you require guidance on the practical implications of this change, including debt enforcement, payroll exposure, or compliance considerations, our team can assist.  At Zeta, we support clients with a range of corporate and regulatory advisory services, helping businesses and individuals navigate legal and operational changes with confidence.  For further information or tailored advice, please get in touch through our website at zeta-financial.com.  *This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the information and reflects our interpretation of the information as at the date of publication.*     *The application and impact of the information may vary depending on individual circumstances, and the information is subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.*     *Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.* --- ## Malta’s UN Pension Programme in 2026: Retirement Lifestyle Meets Strategic Tax Planning **Date:** 2026-05-25 **Category:** Residency **URL:** https://zeta-financial.com/news/revisiting-malta’s-un-pension-programme-in-2026-where-retirement-lifestyle-meets-strategic-tax-planning **Background**  Malta has long positioned itself as a jurisdiction of choice for internationally mobile retirees. This is not only because of its tax system, but also because of the lifestyle proposition which the Island continues to offer: a Mediterranean climate, proximity to the sea, a rich historical and cultural fabric, and the practical comfort of living in an English-speaking jurisdiction.  For former United Nations officials, this proposition is further strengthened by the United Nations Pensions Programme (“***UNPP***”), a special tax status framework designed for non-Maltese persons in receipt of a United Nations pension or widow’s/widower’s benefit.    **Malta as a Retirement Base**  For many retirees, Malta’s appeal starts well before the tax analysis.  Malta offers the characteristics which many internationally mobile retirees look for when selecting a European base: clear Mediterranean waters, strong dining and leisure options, diving and coastal activities, an English-speaking environment, and a rich cultural and historical setting spanning Valletta, Mdina, the Three Cities, Gozo and its coastal villages.   For this reason, the UNPP should not be viewed purely as a tax programme, but as a residence and retirement planning framework whose strength lies in the combination of lifestyle, location and favourable tax treatment.    **UNPP Eligibility & Ongoing Conditions – In Brief**  The United Nations Pensions Programme is regulated by the United Nations Pensions Programme Rules, introduced in 2015. The programme is intended for non-Maltese nationals in receipt of a United Nations pension or a widow’s/widower’s benefit.        The core requirement is that the applicant must receive at least 40% of the United Nations pension or widow’s/widower’s benefit in Malta. The applicant must also satisfy a number of residence, property, insurance, fit and proper, and procedural conditions.   These include holding qualifying immovable property in Malta or Gozo, or alternatively leasing qualifying property, and applying through an Authorised Registered Mandatary.  **The Key Feature: Complete Maltese Tax Exemption on the UN Pension**  The most important feature of the UNPP remains the complete Maltese income tax exemption on the United Nations pension or widow’s/widower’s benefit received in Malta.  Under many retirement programmes, the pension itself forms part of the taxable base and is then taxed at a favourable rate, or partially sheltered through deductions, rebates, or treaty relief. The UNPP is different. The UN pension or widow’s/widower’s benefit is itself exempt from income tax in Malta.    **The Remittance Basis: Foreign Income Taxed Only When Brought to Malta**  The second major feature is Malta’s remittance basis of taxation.  Broadly, non-domiciled residents under the UNPP are only taxed in Malta on:  (a)  income and capital gains arising in Malta (at a flat rate of 35%); and   (b)  on foreign income, but only to the extent that such foreign income is remitted to Malta (at a flat rate of 15%, subject to a minimum annual tax of €10,000 or €15,000 where both spouses are in receipt of a UN pension).   Foreign income which is not remitted to Malta is generally outside the Maltese tax net. Foreign capital gains, whether remitted to Malta or not, also fall outside Malta’s tax remit.  Effectively, this means that the programme can be attractive not only for the exemption on the UN pension, but also for the flexibility it offers in managing foreign income.              **Foreign Capital Gains: A Powerful but Often Misunderstood Planning Tool**  The treatment of foreign capital gains is one of the most important aspects of Malta’s resident non-domiciled tax framework.  Non-domiciled residents are generally not taxable in Malta on capital gains arising outside Malta, regardless of whether those gains are received in Malta or otherwise.  In practical terms, this can be highly relevant for retirees who hold assets outside Malta, such as securities portfolios, immovable property, private company shares, fund interests, or other capital assets.  Where properly structured and correctly analysed, Malta residence may therefore form part of an exit planning strategy for individuals who anticipate future disposals of foreign assets.     **Why the UNPP Still Deserves Attention in 2026**  In 2026, the UNPP remains a niche but highly relevant programme since it offers eligible applicants all of the following: a Maltese tax exemption (0%) on the UN pension, a flat 15% rate on other remitted foreign income, and non-taxation (0%) of foreign capital gains even when remitted.    The programme is particularly interesting for retirees who:  (a) intend to make Malta their genuine retirement base;  (b) receive a substantial United Nations pension;  (c) have foreign income streams which can be managed through careful remittance planning;  (d) hold foreign capital assets which may be realised during retirement;  (e) require an English-speaking European jurisdiction; and  (f) value lifestyle, climate, history, and professional infrastructure alongside tax efficiency.    The best use of the UNPP is therefore not simply to obtain a tax status. It is to integrate that status into a wider retirement, residence, and wealth planning strategy.      **Practical Takeaways**  The UNPP should be approached with three practical points in mind.  First, the UN pension exemption is the centrepiece. If the conditions are met, the relevant UN pension or widow’s/widower’s benefit received in Malta is not subject to Maltese income tax.  Secondly, the remittance basis requires discipline. Foreign income should be identified, classified, and monitored before funds are moved to Malta. Remittance planning should be deliberate, documented, and aligned with the individual’s annual spending needs.  Thirdly, foreign capital gains can be extremely significant. The Maltese treatment of such gains may be favourable, but it should be analysed together with the laws of the relevant asset jurisdiction, the individual’s prior residence jurisdiction, and any applicable treaty or exit tax considerations.  In short, the UNPP is not only a retirement residence programme. For the right applicant, it is a platform for structured international retirement planning.    **Get In Touch**  At Zeta, we assist private clients, retirees, and internationally mobile individuals with the assessment, structuring, and implementation of Maltese residence and tax planning solutions.  In the context of the UNPP, this includes assessing eligibility, reviewing income and asset profiles, coordinating with tax advisors in other jurisdictions, assisting with the application process as your Authorised Registered Mandatory, and supporting ongoing compliance after approval.    *This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the information and reflects our interpretation of the information as at the date of publication.*  *The application and impact of the information may vary depending on individual circumstances, and the information is subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.*  *Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.* --- ## Heads-Up for Employers: Malta Introduces Key Changes to Leave and Wage Rules **Date:** 2026-05-05 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/heads-up-for-employers-malta-introduces-key-changes-to-leave-and-wage-rules #### Changes to the Special Leave Regime **Background** ##### On the 30th of April 2026, Malta published the Minimum Special Leave Entitlement (Amendment) Regulations 2025. The Regulations will enter into force as from the 30th of June 2026 (and effectively, the second half of 2026). **Update to Bereavement Leave Regime** The Regulations increase Bereavement Leave entitlement to three (3) working days \[previously one (1) working day]. **Update to Marriage Leave Regime** The Regulations also increase Marriage Leave entitlement to three (3) working days \[previously two (2) working days].  **Update to Conditions of Work Regulation Orders** ***General*** Malta also published thirty-two Regulation Orders, each superseding (and effectively repealing) the current Wage Regulation Orders (each applicable to a separate industry/category of workers). The Regulation Orders re-establish minimum weekly wages, as well as overtime compensation for certain categories of employees. The Regulation Orders will also come into effect as from the 30th of June 2026 (and effectively, from the second half of 2026).  #### Get in Touch At Zeta, we provide comprehensive payroll solutions and employment contract drafting services, enabling you to focus on growing your business while we ensure full compliance with evolving employment regulations. Get in touch with us today to learn how our solutions can support your operations and add value to your organisation. --- ## The Limits of Settlor Control: Reserved Powers in Maltese and Italian Trust Law **Date:** 2026-05-05 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/the-limits-of-settlor-control-a-comparative-analysis-of-reserved-powers-in-maltese-and-italian-trust-law **Background**     When establishing a trust, the person creating the trust (the ‘***Settlor***’)  transfers legal ownership of selected assets to a ***Trustee***. The Trustee becomes the legal owner of those assets, subject to a fiduciary obligation to hold and administer them in the interests of the designated persons or classes of persons (the ‘***Beneficiaries***’).    This transfer of ownership is often perceived as a significant barrier in estate and succession planning. In practice, Settlors are frequently reluctant to relinquish full control over their assets and instead seek to retain a degree of influence over how the trust property is managed or distributed.    Common Law vs Civil Law Legal Systems    The extent to which such control may be retained without undermining the validity of the trust varies considerably across legal systems.     Common law jurisdictions generally recognise the concept of ‘***Reserved Powers’***, allowing settlors to retain certain rights without necessarily invalidating the trust or exposing it to recharacterization as a sham.    By contrast, civil law jurisdictions have traditionally adopted a more restrictive approach. The retention of powers by the settlor may be viewed as incompatible with the fundamental principle that the trustee exercises independent control, thereby increasing the risk that the trust is disregarded or deemed non-existent.    **The Italian Position: Settlor Control Undermining the Trust**    Italian law adopts a notably restrictive approach to settlor reserved powers. While Italy recognises trusts primarily through the Hague Convention, the domestic legal and tax framework places strong emphasis on the genuine transfer of control to the trustee.    In this context, a trust may be regarded as *‘interposto’* (effectively non-existent) where the settlor retains, whether directly or indirectly, a level of control that undermines the trustee’s independence in administering and disposing of the trust property. The focus is not merely on formal ownership, but on the substantive allocation of powers within the structure.    This position has been reinforced in practice by the Italian Tax Authorities. In a notable ruling issued in March 2023, the Italian Revenue Agency clarified that a trust may be disregarded for tax purposes where governance arrangements indicate that effective control remains with the Settlor.      In particular, the ruling identified risk factors including:    (i)  The Trustee acting in accordance with directions issued by a Guardian (functionally equivalent to a protector); and  (ii)  The Settlor retaining the power to appoint and remove such Guardian, even where the exercise of that power is subject to the consent of the Beneficiaries.    These elements, when combined, were considered sufficient to demonstrate that the Settlor had not truly divested themselves of control, thereby undermining the validity and recognition of the trust for Italian tax purposes.    **The Maltese Position: Flexibility Through Reserved Powers**    Whilst Maltese trust law equally recognises the importance of preserving the trustee's independent role and ensuring that any reserved powers do not undermine the substance of the trust, the Trusts and Trustees Act (Chapter 331 of the Laws of Malta) expressly recognises that certain powers may be reserved without affecting the validity of the trust, provided that the structure remains genuine and the trustee continues to discharge fiduciary duties independently.    This reflects Malta’s common law influence, where the existence of Reserved Powers does not, in and of itself, invalidate a trust, provided that the trust is not a sham and the Trustee retains sufficient independent authority to discharge their fiduciary duties.    In particular, the Trust and Trustees Act expressly permits a settlor to:    (i)  Retain a beneficial interest in the trust property, including being designated as a Beneficiary;  (ii)  Reserve powers to appoint, add or remove Trustees, Protectors, or Beneficiaries;  (iii)  Reserve powers relating to the investment and management of the trust assets, including the appointment of an investment advisor or investment manager.    From a cross-border planning perspective, this framework allows Maltese trusts to be structured in a way that accommodates legitimate settlor involvement while still respecting the core requirement, central also to the Italian tax analysis, that effective control must not remain with the settlor.    **Why Malta Stands Out**    For clients with civil law jurisdiction (including Italian) connections, the key point is not that Malta permits broader powers in the abstract, but that Maltese trust structures can be designed to align with the same substantive concern highlighted by the Italian tax authorities: the need for a real transfer of decision-making authority to an independent trustee.    Accordingly, when properly structured, a Maltese trust can match the governance expectations reflected in the Italian tax approach while benefiting from the statutory clarity provided by Maltese law on the treatment of Reserved Powers.    **Get in Touch**    Our subsidiary, **Premier Fiduciary and Trusts Limited (C54929)**, is a licensed trustee regulated by the Malta Financial Services Authority in terms of the Trust and Trustees Act.    We support clients in designing and implementing tailored estate planning solutions, with particular expertise in cross-border structures and regulatory compliance.    If you are considering the use of Maltese trusts or would like to explore how these structures may support your planning objectives, we invite you to get in touch for an initial complementary consultation. --- ## Short-Lets Under the Spotlight: Key Changes in Malta’s 2026 Tourism Accommodation Regulations **Date:** 2026-04-17 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/short-lets-under-the-spotlight-key-changes-in-maltas-2026-tourism-accommodation ## Background On the 15th of April 2026, Malta published the Tourism Accommodation Regulations 2026 (L.N.92.2026) (hereinafter the ‘Regulations’), establishing a new operating licence regime which will enter into force on 15 June 2026. The regime introduces specific eligibility and operating criteria for hotels, tourist villages, guest houses and hostels, as well as for establishments seeking special labels such as boutique and luxury boutique hotels. Short‑let rented accommodation is also brought squarely within the new regime, introducing long‑awaited controls over this segment. In particular, the Regulations require a Waste Management Collection Plan, impose minimum standards for private rented accommodation (including floor area, sanitary facilities and visible waste‑collection schedules), and allow the Malta Tourism Authority to suspend or revoke licences in cases of non‑compliance with noise, waste management, health and safety and related obligations. These reforms aim to address the black garbage bag crisis and recurring noise issues reported by residents in touristic localities such as Buġibba, Swieqi, St Julians, Sliema, Ta’ Xbiex and Gżira during recent summer seasons. ## Operating Licence Requirement for Tourism Activities ## Background The Regulations identify six categories of tourism activities which require an Operating Licence (hereinafter the ‘Listed Activities’): (a) Operating a Hotel (b) Operating a Tourist Village (c) Operating a Guest House (d) Operating a Hostel (e) Operating Short-Let Rented Accommodation for Tourists (f) Operating as a Resident Host Accommodation ## Step 1: Obtaining a Tourism Policy Compliance Certificate The Requirement Trigger: Applications for an Operating Licence The Regulations provide that a Tourism Policy Compliance Certificate (hereinafter the ‘Compliance Certificate’) shall be obtained prior to any application for an Operating Licence. The Application Process The application for a Compliance Certificate must be made on the form issued by the Malta Tourism Authority and submitted together with the applicable fee. The Malta Tourism Authority shall then acknowledge receipt of the application without undue delay. The Authority is to take a decision within sixty (60) days from acknowledging receipt of a complete application pack. Where additional documentation is requested, the sixty‑day period is suspended until the requested information is provided. ## Validity The Compliance Certificate remains valid for three (3) years from the date of issue. ## Step 2: Application for an Operating License Once a Compliance Certificate has been obtained, the applicant may submit an application for an Operating Licence in respect of any Listed Activity. ## The Application Process The application for an Operating Licence must be made on the form issued by the Malta Tourism Authority, with the form and requirements varying according to the operating activity (the type of accommodation). If you require a breakdown of the specific requirements for a particular activity or accommodation type, you may get in touch with us for tailored guidance. Once complete, the application is to be submitted to the Malta Tourism Authority together with the applicable application fee. The application must be accompanied by: (i) proof that the applicant is a fit and proper person to operate a tourism activity; and (ii) valid police conduct certificate. The Malta Tourism Authority will acknowledge receipt of a complete application without undue delay. The Authority is to take a decision within sixty (60) days from acknowledging receipt of the full application pack. Where additional documentation is requested, the sixty‑day period is suspended until the requested information is provided. ## Validity An Operating Licence remains valid for the determinate period specified in the licence and is subject to renewal by the Malta Tourism Authority. ## General Obligations If an Operating Licence is granted, the licensee must inform the Malta Tourism Authority of any changes or alterations affecting the operation of the establishment. Where any alteration would prejudice the classification assigned to the establishment, the licensee must obtain the Malta Tourism Authority’s prior approval. ## Step 3: Obtaining a Special Label (where applicable) ## What are Special Labels? The Regulations introduce a series of special labels which formally recognise accommodation establishments that meet additional standards and criteria set out in the Regulations. These labels include, among others, “Bed and Breakfast”, “Heritage”, “Diffuso”, “Agro‑Tourism”, “Spa & Wellness”, “Boutique” and “Luxury Boutique”. ## The Application Process An application for the assignment of a special label must be made on the form issued by the Malta Tourism Authority. Once complete, the application is to be submitted to the Authority. The Malta Tourism Authority will acknowledge receipt of the complete application without undue delay. The Authority is to take a decision within sixty (60) days from acknowledging receipt of the full application pack. Where additional documentation is requested, the sixty‑day period is suspended until the requested information is provided. A special label will be assigned where, in the Authority’s opinion, the label accurately reflects the unique characteristics of the establishment and the criteria laid down in the Regulations are satisfied. ## Validity and Renewals A special label remains valid for the period determined by the Malta Tourism Authority in accordance with the Regulations. Where a licensee intends to renew a special label without interruption, an application for renewal must be submitted at least two (2) months prior to its expiry. ## Ongoing Obligations A licensee that has been assigned a special label must display and reference that label in all advertising, marketing and promotional material relating to the establishment. The licensee must also inform the Malta Tourism Authority of any changes or alterations affecting the operation of the establishment and, where such alterations would prejudice the classification assigned, obtain the Authority’s prior approval. ## Category-Specific Regimes: A Focus on Rental Accommodations ## Licensing Requirement As aforementioned, a person may not (i) operate Short‑Let Rented Accommodation for Tourists, or (ii) operate as Resident Host Accommodation, without holding a valid Operating Licence in respect of the relevant activity. ## Short-Let Rented Accommodation Operating Licence ## Who may Apply? Only the proprietor in title of the property (owner, lessee, usufructuary or emphyteuta) may apply for this type of Operating Licence. ## What Properties Qualify? The Malta Tourism Authority may refuse to consider an application if the property has not been finished to a high standard. Bedrooms located at underground or basement level are generally ineligible. ## Occupancy Restrictions The Regulations also impose occupancy restrictions of: (a) a maximum of two (2) persons per bedroom. (b) a maximum of ten (10) persons per unit, unless the unit has independent access from a road. ## Application Contents The application for an operating licence shall include: (a) Complete and accurate information regarding both the Licencee and the Operator; (b) Proof of possession of a valid development permission; (c) Certification that the premises are in conformity with the approved development planning permission; (d) Valid proof of insurance covering the common parts (where applicable); (e) Evidence of compliance with the private rented accommodation standards set out in the Regulations, including: minimum floor area of 9 square metres for a single‑occupancy bedroom and 13 square metres for a double‑occupancy bedroom, at least one bath/shower per four (4) persons, and a schedule of waste collection affixed in a visible place. (f) The identification of a Designated Person (name, surname and contact number) who shall be available on a 24-hour basis to receive complaints and address any problems that arise; (g) A waste collection management plan. The Regulations also allow the Malta Tourism Authority to impose specific licensing criteria for particular localities, where objective considerations justify their imposition. ## Additional Obligations Upon issuance of the licence, the Licensee must notify the residential block administrator in writing (where applicable) and submit a copy of this notification to the Malta Tourism Authority. ## Withdrawal of Licence The Malta Tourism Authority may suspend or withdraw a licence in the event of breaches of regulations relating to noise, waste management, health or other related criteria. ## Consequences of Non-Conformity: Three-Year Disqualification Any person found operating without a valid licence will be disqualified from applying for such a licence for a period of three (3) years, without prejudice to any other penalties prescribed by law. During the same three‑year period, the dwelling will be ineligible for the issue of any short‑let rental licence, whether the application is made by the same person or by another person. ## Resident Host Accommodation Operating Licence ## What Properties Qualify? As with short‑lets, bedrooms located at underground or basement level are generally ineligible. ## Occupancy Restrictions Each unit is subject to a maximum of four (4) guests. ## Application Contents The application for an operating licence shall include: (a) Complete and accurate information regarding the applicant (being the resident host); (b) Proof of possession of a valid development permission; (c) Certification that the premises are in conformity with the approved development planning permission; (d) Valid proof of insurance; (e) Evidence of compliance with the resident host accommodation standards set out in the Regulations, including:, a minimum floor area of 9 square metres for a single‑occupancy bedroom and 13 square metres for a double‑occupancy bedroom; (f) Proof of good character of resident host and other members of the household; (g) Documented evidence of formal allocation agreement with licenced school or educational institution (where applicable). ## Additional Obligations when Accommodating Minors Where the resident host accommodates minors, the resident host is bound to exercise a heightened duty of care, ensure continuous access to the premises for regulatory and welfare inspections, provide age‑appropriate meals and maintain a household environment conducive to the well‑being of minors. ## Obligations for Travel Operations and Schools Arranging Guest Accommodation Travel operators, schools and other persons entrusted with arranging guest accommodation must ensure that: * guests are only accommodated with duly licensed resident hosts; and * where the guest is following a course of study, the resident host is formally contracted with the relevant school. ## Conclusion and Practical Takeaways The Tourism Accommodation Regulations 2026 introduce a unified, licence‑based framework for all key tourism accommodation activities in Malta, from hotels and guest houses to short‑let rentals and resident host arrangements. They tighten eligibility, raise baseline standards, and link ongoing compliance with waste management, noise, health and safety, and proper classification to the continued validity of an Operating Licence. In practice, operators and property owners now need to think in terms of a clear sequence: obtain a Tourism Policy Compliance Certificate, secure the appropriate Operating Licence for the relevant activity, and, where applicable, apply for a special label to reflect the character and positioning of their establishment. For short‑let and resident host accommodation in particular, the Regulations mark a shift from lightly regulated activity to a structured, rule‑bound regime with concrete occupancy limits, minimum physical standards, 24‑hour contact obligations and locality‑sensitive criteria. The three‑year disqualification from licensing in cases of unlicensed operation significantly raises the stakes for compliance and due diligence. Against this backdrop, early alignment of planning permissions, ownership/possession titles, insurance cover, and internal procedures (especially around waste and noise) will be critical for a smooth transition before the new regime fully applies. ## How We Can Assist We act as a licensed corporate services provider and advisory firm, supporting clients across the full lifecycle of tourism accommodation projects and operations. We can assist with: * Structuring and documenting ownership and operating models for hotels, guest houses, short‑lets and resident host arrangements. * Preparing and reviewing application packs for Tourism Policy Compliance Certificates and Operating Licences, including fit‑and‑proper documentation, development permission alignment and insurance. * Assessing eligibility for, and preparing applications to obtain, special labels such as Boutique, Luxury Boutique, Heritage, Agro‑Tourism and similar. * Drafting internal policies and procedures to address waste management, noise control, guest management, and host obligations (including when minors are accommodated). * Providing ongoing compliance support, including advice on change scenarios (alterations, reclassifications, changes in use) and responding to queries or enforcement actions by the Malta Tourism Authority. If you operate, invest in, or are planning a tourism accommodation project in Malta and would like tailored guidance on how these Regulations affect your plans, you are welcome to contact us. --- ## What the New Guidelines Mean for Malta’s Highly Skilled Individuals Tax Rules **Date:** 2026-04-17 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/what-the-new-guidelines-mean-for-maltas-highly-skilled-individuals-tax-rules ## Background Following the introduction of the Treatment of Highly Skilled Individual Rules 2026, the Malta Tax & Customs Administration (MTCA) has published its ‘[Guidelines in Relation to the Tax Treatment of Highly Skilled Individuals Rules](https://mtca.gov.mt/docs/default-source/documents/personal-tax/legal-and-technical/guidelines/hqpr-new-amalgamated-rules---guidelines---branded-06-04-%28002%29.pdf?sfvrsn=b605473e_1)’ (hereinafter the ‘Guidelines’) to clarify certain aspects of the regime, issue the official application form template, designate Malta Enterprise as a Competent Authority and provide detailed descriptions of eligible offices. The Guidelines aim to enhance legal certainty for employers, highly skilled individuals and other stakeholders by aligning the practical application of the Rules with the underlying policy intent. ## Clarifications Regarding Certain Rules The Guidelines clarify the application of several key provisions of the Tax Treatment of Highly Skilled Individuals Rules, 2026. ## Rule 3: Minimum Income Requirement and Adjustments The Guidelines confirm that the minimum annual income requirement under Rule 3 is: * Basis Years 2026-2030: €65,000 (subject to any lower minimum thresholds that may apply under earlier rules); * Basis Years 2031-2035: €75,000; * Basis Years 2036-2040: €85,000. These thresholds are intended to increase in line with the phased structure of the regime, reflecting the planned five‑year steps of the Rules. ## Rule 5(5): Determination of the Application Under Rule 5(5), as clarified by the Guidelines, the relevant Competent Authority shall inform the Commissioner for Revenue of its determination to either approve or refuse an application. The Commissioner for Revenue shall then endorse that determination. Once endorsed, the Competent Authority is required to notify the applicant of the final decision. ## The Official Application Form and Guidelines The Guidelines set out the official application form template to be submitted for a formal determination of eligibility under the Rules. This template is intended to align applications with the requirements of Rule 5(1) and Rule 7(2), ensuring that all necessary information is provided at the outset. The application must include the following information and supporting documents: * General Particulars of Employee (name, address, phone number, email, date of birth, etc). * Employer’s Details (name of entity, type of sub-sector, personal details of employer, designation, PE number, etc); * Employment Details (position held, date of commencement, FS4, annual salary, duration, description of main activities) * Declaration by Employee (regarding work permit authorisation for TCNs (where applicable), sufficient accommodation and others) * Accompanying Documents (lease agreement, purchase agreement, medical insurance, contract of employment, FS4, passport/ID card, residence card, proof of residence). ## Malta Enterprise as a Competent Authority The Guidelines clarify that Malta Enterprise shall act as the Competent Authority for all entities involved in manufacturing, software development, certain industrial services and other innovative activities that do not fall under any other Competent Authority listed in the Rules. This broadens the practical scope of the regime by bringing additional types of innovative and industry‑focused roles within a clearly defined approval framework, thereby extending the reach of the highly skilled individuals tax regime beyond its original remit. ## Eligible Office Specifications The Schedules to the Guidelines provide detailed descriptions of the eligible offices that are regulated, licensed or otherwise recognised by the Competent Authorities referred to in the Rules. While the Rules themselves list the eligible offices in a high‑level manner, the Guidelines supplement this by specifying the functions and responsibilities associated with each office, thereby enhancing legal certainty for investors, employers and employees considering applications. ## Outlook The Guidelines are a welcome development, as they provide practical clarity on the operation of the Tax Treatment of Highly Skilled Individuals Rules, 2026, particularly in relation to eligibility criteria, application requirements and the role of Malta Enterprise. By setting out a structured application‑form template and clarifying the responsibilities of the Competent Authorities and the Commissioner for Revenue, the regime is now easier to navigate for both employers and prospective beneficiaries. The expanded scope for eligible offices and the more detailed descriptions in the Schedules also enhance legal certainty, making it easier for investors and businesses to assess whether specific roles fall within the regime. Overall, the Guidelines signal an intention to administer the highly skilled individuals tax framework in a more consistent and transparent manner, while leaving room for further refinements as the regime matures. ## Contact Us For further information on the Tax Treatment of Highly Skilled Individuals Rules, 2026 and their practical impact on employers and employees, please contact us. Our team can assist with eligibility assessments, application preparation and compliance under the new regime. --- ## Malta’s Sports Private Limited Liability Company: A New Framework for Club Governance **Date:** 2026-04-13 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/introducing-maltas-sports-private-limited-liability-company-a-new-framework-for-club-governance-and-investment ## Background On the 10th of April 2026, the Maltese Government published the ‘Sports Private Limited Liability Companies Regulations 2026’ (L.N.91.2026), introducing a new legal entity known as a Sports Private Limited Liability Company (hereinafter referred to as a ‘Sports Company’). These Regulations establish a formal legal vehicle through which sports clubs in Malta may operate as commercial entities while maintaining the oversight, governance, and integrity standards required within Maltese sport. A Sports Company may only carry out activities directly related to the management and operation of a club and must maintain a balanced shareholding structure between a commercial shareholder and a voluntary sporting organisation. By formalising the structure of sporting enterprises, the framework aims to encourage responsible investment in local sport, enhance transparency, and strengthen accountability within club administration and financial management. This is the second new company form introduced in 2026, following the Companies Act (Youth Enterprise) Regulations 2026. Together, these reforms demonstrate Malta’s ongoing effort to modernise its corporate landscape and facilitate sustainable growth in both youth and sports sectors. ## Key Features of a Sport Company The Regulations set clear parameters for the activities, governance, and permissible operations of a Sports Company. These restrictions ensure that the company’s business remains focused on genuine sporting objectives while maintaining accountability and financial integrity. ## Sports Company Activities The economic activities of a Sports Company are limited to the management, administration, and operation of a Club, as well as any activities directly related to these functions. ## Other Permitted Activities In addition to its primary sporting operations, a Sports Company may also: (a) acquire and hold shares/interests in entities whose activities are directly related to the sporting operations; (b) borrow, raise or secure the payment of money in connection with the company’s business; (c) acquire property and rights over property necessary to carry on the company’s business; (d) receive dividends and capital gains from assets held by the company; (e) undertake any other activities ancillary/related to the proper execution of the company’s activities. ## Prohibited Activities To safeguard integrity and ensure focus on sport, the Regulations expressly prohibit a Sports Company from: (a) owning shares of another Sports Company registered with the same association, other than one which it is primarily engaged; (b) engaging in any gaming or gambling activities; (c) operating as a holding company for entities with unrelated business; and (d) granting loans, security, guarantees or any other form of financial assistance. ## Governance and Shareholder Structure The governance framework of a Sports Company is designed to balance commercial investment with the interests of the sporting community, ensuring that decision‑making remains transparent, fair, and aligned with the principles of integrity in sport. ## Shareholding A Sports Company must have a minimum of two shareholders and not more than fifty (50). Shareholders may be either natural persons or legal entities. The shareholding composition must include: (a) At least one Class A Shareholder, which may be a commercial partnership (including a company) or a natural person; and (b) One Class B Shareholder, which must be a non‑profit organisation, such as an association or foundation, registered as a voluntary organisation. ## Ownership Balance Class A Shareholders may hold up to ninety percent (90%) of the share capital, voting rights, and the right to appoint directors to the Board. Class B Shareholders must hold at least ten percent (10%) of these rights, ensuring that community‑driven sporting bodies maintain meaningful influence within the governance structure. This dual ownership model encourages both sustainable investment and responsible representation of the sport’s social dimension. ## Management and Substance Requirements Every Sports Company must appoint at least one Maltese resident director and establish a local bank account within one year of registration. These substance requirements provide a tangible local presence and ensure accountability for contractual and financial obligations, including player salaries and operational expenses. ## Conflicts of Interest To protect sporting integrity, shareholders of a Sports Company are restricted from holding interests in another club or Sports Company participating in the same sport under the same association, where such interest could create or appear to create a conflict of interest. ## Fit and Proper Persons All shareholders, directors, ultimate beneficial owners (UBOs), and any person exerting significant influence over the Sports Company must meet the fit and proper person standards established under the Code of Good Governance issued by the Authority for Integrity in Maltese Sport. ## Restriction on Freedom of Contract in Memorandum and Articles of Association The Regulations impose limits on contractual flexibility, requiring that certain actions be approved unanimously by shareholders. These include: (a) Amendments to the Memorandum and Articles of Association; (b) Modifications to voting rights or decision‑making procedures; (c) Changes to shareholder obligations (unless otherwise provided); (d) Alterations affecting intellectual property rights of the club; (e) Authorisations for pledging shares; and (f) Withdrawal of the club’s affiliation from a national association. This requirement ensures that major corporate decisions reflect the joint consent of both commercial and voluntary stakeholders, safeguarding the balance between investment control and sporting heritage. Overall, the governance framework embeds accountability at every level, combining commercial viability with ethical oversight to strengthen Malta’s sporting ecosystem. ## Registration and Conversion Process The Regulations establish a structured registration framework to ensure that every Sports Company is properly vetted by both sporting and corporate authorities before commencing operations. ## Name and Documentation Every Sports Company must include the expression “Sports Private Limited Liability Company” or the abbreviation “SPLLC” in its name. Upon application for registration, the applicant must submit, together with the Memorandum and Articles of Association, the following supporting documentation: (a) a Registration Certificate (or Approval in Principal) issued by the Authority for Integrity in Maltese Sport; (b) a Registration Certificate (or Approval in Principal) issued by the recognised National Association in Malta (if applicable). ## Conversion of Existing Clubs Existing clubs wishing to transform into a Sports Company must undergo a formal conversion process and provide: (a) a fresh Registration Certificate issued by the Authority for Integrity in Maltese Sports; (b) a certificate of enrolment issued by the Commissioner for Voluntary Organisations. ## Provisional Registration and Final Registration Process Once the application and documentation are submitted, the Registrar of Companies will issue a Provisional Registration Certificate and publish a corresponding notice in the Government Gazette or a local newspaper. After a three‑month period from the date of publication, provided no objections are raised, the Registrar will issue a Certificate of Registration, thereby granting the company full legal status as a Sports Company. This two‑phase process allows for public transparency and provides an opportunity for interested parties, such as sporting associations or creditors, to raise legitimate concerns before final registration. ## Benefits and Policy Objectives The introduction of the Sports Company represents a major step toward formalising and regulating the business of sports club management in Malta. The framework offers a number of structural, financial, and governance benefits designed to enhance confidence among both investors and stakeholders in the local sporting community. ## Investment Security and Legal Certainty By creating a defined legal entity responsible for contractual and financial obligations, including player salaries and club debts, the Regulations provide greater certainty for all parties engaged in sporting operations. Clubs operating as Sports Companies can therefore attract investment under a transparent and accountable corporate structure. ## Improved Decision‑Making and Governance The mandatory inclusion of both commercial and voluntary stakeholders in the shareholding structure ensures that decision‑making reflects a balanced perspective between business interests and sporting values. Unanimous voting on certain matters further safeguards against unilateral changes that might compromise the integrity or identity of the club. ## Enhanced Compliance and Local Substance The requirement for Maltese resident directors and local bank accounts gives tangible substance to the entity and supports enforcement of financial obligations. These measures ensure that those responsible for management decisions can be held directly accountable for wrongful or fraudulent trading, while providing a clear avenue for players and employees to enforce salary or payment claims. ## Encouraging Responsible Investment in Sport Overall, the Regulations are designed to build investor confidence in Malta’s sporting ecosystem by combining professional corporate governance with integrity standards unique to organised sport. Through this framework, Malta positions itself as a jurisdiction that welcomes financial participation in sport while safeguarding fairness, transparency, and community representation. ## How Can We Assist? Establishing a Sports Private Limited Liability Company requires careful drafting of the Memorandum and Articles of Association and close alignment with regulatory approvals from both the Authority for Integrity in Maltese Sport and the relevant National Association. Our team provides end‑to‑end assistance, including: * Structuring and drafting compliant constitutional documents tailored to the club’s governance model. * Advising on shareholding and director eligibility requirements, including fit‑and‑proper assessments. * Liaising with authorities to obtain the necessary registration and conversion approvals. * Implementing compliance monitoring frameworks that ensure ongoing conformity with the Regulations. With deep experience at the intersection of corporate law and professional sport, we support clients in building robust, transparent, and investment‑ready structures that foster integrity and sustainability in Maltese sport. --- ## A New Fiscal Era for Malta’s Gaming Sector: Lower Tax Burden, Greater Clarity **Date:** 2026-04-04 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/a-new-fiscal-era-for-maltas-gaming-sector-lower-tax-burden-greater-clarity ## A New Chapter for Malta’s Gaming Framework On the 1st of April 2026, Malta published two landmark regulations reshaping its gaming tax and VAT landscape: (i) The Gaming Tax (Amendment) Regulations 2026 (L.N.84.2026) (ii) The Value Added Tax Act (Amendment of Fifth Schedule) (Amendment No. 2) Regulations 2026 (L.N.86.2026). Both regimes are set to come into force as from the 1st of October 2026. These updates were accompanied by: (i) the Malta Gaming Authority’s publication “Enhancements to Malta’s VAT and Gaming Tax Frameworks for the Gaming Sector”, signalling a coordinated effort to modernize and streamline the fiscal framework governing gaming activities on the island; (ii) the MTCA’s ‘Guidelines on Item 9 of Part Two of the Fifth Schedule to the Value Added Tax ## Overview of Key Changes The Gaming Tax (Amendment) Regulations consolidate Malta’s dual gaming tax and gaming device levy regimes into a single, less complex and less intensive tax structure. Meanwhile, the VAT (Amendment of Fifth Schedule) Regulations refine the scope of VAT exemptions for gambling-related supplies. ## The Gaming Tax (Amendment) Regulations 2026 ## What are the Gaming Tax Regulations? The Gaming Tax Malta’s Gaming Tax Regulations (S.L.583.10) were first introduced in 2018, imposing a 5% tax on gaming revenue generated from gaming services derives to players physically present in Malta. Where services are provided solely by means of distance communications (remotely), the gaming tax applies when the player is established, has his permanent address and/or usually resides in Malta (irrespective of whether the player is physically present in Malta or not). The Levy on Gaming Devices The Gaming Tax Regulations also impose a levy on gaming devices deployed in gaming premises for the provision or conduct of any qualifying activity (being any activity which consists of providing/carrying out a gaming service from Malta or to any person in Malta). The regulations set out a computational method to determine the levy payable, summarised as follows: * Thirty per cent (30%) of the gaming revenue from Type 1 and Type 2 gaming services; * Twelve point five per cent (12.5%) of the gaming revenue from Type 3 and Type 4 gaming services. Gaming devices deployed within controlled gaming premises benefit from a standardised levy set at a rate of fifteen per cent (15%) of the gaming revenue. Gaming services lawfully classified as junkets benefit from an even further reduced levy of just two point five per cent (2.5%). The same applies to Type 3 gaming services when defined as ‘junket events’. Studio Broadcasting Levy The Gaming Tax Regulations also impose a fixed levy of five hundred euro (€500) on any authorised person using a premises as a studio to film and/or broadcast a gaming service or critical gaming supply. However, persons paying the levy on gaming devices are exempt from this levy. ## The Updated Regime: Effective 1st October 2026 Broader Definition of ‘Qualifying Activity’ The current definition of qualifying activity expressly includes persons operating: (i) controlled skilled games; and/or (ii) under a recognition notice, recognising an authorisation issued by another Member State deemed to have equivalent safeguards by the Malta Gaming Authority. The current definition also expressly excludes those persons operating: (i) exempt games; (ii) skill games; (iii) low risk games; (iv) cruise casinos; and (v) amusement machines. The new regime will likewise expressly include persons operating controlled skilled games and/or under a recognition licence, but will extend coverage to expressly include persons granted a concession by the Minister to operate a casino or the National Lottery games under Article 11(3) of the Gaming Act. Consolidated Tax and Levy Regime As from the 1st of October 2026, the separate and distinct fixed (5%) gaming tax regime and tiered levy (12.5-30%) system will merge into a single unified regime, payable as follows: * Fifteen percent (15%) of gaming revenue from Type 1 gaming services; * Ten per cent (10%) of gaming revenue from Type 2, Type 3 and Type 4 gaming services. Furthermore, where the gaming revenue is generated within a controlled gaming premises or lawfully classified as a junket (or junket event), the new consolidated gaming tax shall be of just five percent (5%). This reform significantly simplifies compliance while rebalancing the effective tax burden across gaming activities. ## Summary of Current Regime vs New Regime The Updated Studio Broadcasting Levy The Studio Broadcasting Levy will rise from five hundred euro (€500) to three thousand euro (€3,000). ## The Value Added Tax (Amendment of Fifth Schedule) (Amendment No. 2) Regulations 2026 ## Overview Article 9 of the Value Added Tax (VAT) Act provides that any supplies to which Part One or Part Two of the Fifth Schedule to the VAT Act applies. The new regulations, effective 1st of October 2026, updated Item 9 of the Fifth Schedule. ## The Updated Regime Currently, Item 9 to the Fifth Schedule exempts government lotto and lotteries, the supply of agency services related thereto, and other such supplies related to gambling as may be approved by the Minister from Value Added Tax. The Regulations will update Item 9 to exempt “betting, lotteries and other forms of gambling, as may be approved by the Minister”. ## The MTCA’s Guidelines on Item 9 The Malta Tax and Customs Administration (MTCA) has issued detailed supporting guidelines on the 6th of April 2026 to provide guidance on the manner of application of the VAT exemption contained in item 9 of Part Two to the VAT Act, and in particular, establishing which forms of betting, lotteries and other forms of gambling have been approved by the Minister for the purposes of the exemption. Types of Supplies of Betting, Lotteries and Gambling Qualifying for the Exemption The Guidelines provide that the following forms of supplies shall be exempt (without credit) for the purposes of Item 9: (i) Low-Risk Games; (ii) Junket Events held on an occasional basis (i.e. when they are not organised on a route basis, and which due to their scale/natura, require specific planning and organisational arrangements); and (iii) The provision of any facilities for gambling on the outcome of a real-life event, (which facilities can only be physically accessed at the place where the event physically takes place, including the services of book makers, betting exchanges and any equivalent facilities. The term ‘event’ shall mean a sporting event or competition. ## Talk to Our Team At Zeta, we help gaming operators thrive in Malta’s evolving regulatory landscape. As a Corporate Service Provider (CSP) offering comprehensive tax and VAT advisory and compliance services, we assist clients with gaming licence applications, regulatory structuring, and fiscal optimisation under Malta’s new gaming tax regime. Our team combines technical expertise with practical insight to ensure your business remains compliant, efficient, and ready to capture new opportunities. Get in touch today to discuss how the 2026 reforms may impact your operations and how we can support your transition. --- ## Leveraging the EU-India FTA: Why Malta Works for Indian Group Structures **Date:** 2026-03-25 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/leveraging-the-eu-india-fta-why-malta-works-for-indian-group-structures ## Background The EU–India trade agreement, concluded on 27th January 2026, is reshaping how goods and services will move between two of the world’s largest markets. It aims to remove most tariffs on both sides, streamline customs procedures and reduce non‑tariff barriers, especially for sectors like manufacturing, technology, pharma, logistics and professional services. Beyond tariffs, it widens market access for services and investment, and offers more predictable rules on standards, digital trade and dispute settlement, giving businesses on both sides the confidence to plan long‑term EU‑India strategies. For Indian businesses, this agreement effectively opens a more seamless corridor into the entire EU Single Market, not just individual member states. As supply chains realign along the India–Europe axis, a key strategic question becomes: Where should Indian groups base their EU operations, treasury and holding structures to make best use of the new framework? ## Malta on the India–Europe Trade Route Malta sits directly on the India–Suez–Mediterranean–Northern Europe shipping and aviation corridor, making it a natural waypoint between the subcontinent and mainland Europe. Its deep‑water ports, trans‑shipment facilities and maritime services ecosystem allow Indian exporters and logistics operators to consolidate, value‑add and redistribute cargo efficiently into the wider EU. For Indian groups looking to blend physical trade with regional management, Malta offers the advantage of combining a strategic harbour with an EU‑based corporate platform. ## Tax Efficiency: Corporate Refunds and Fiscal-Unit Election From a corporate tax perspective, Malta offers a full imputation system that can lead to a highly competitive effective tax rate for international groups. Structures using trading companies in Malta may benefit from significant tax refunds upon distribution of profits, while remaining fully aligned with EU and OECD standards. This can be particularly attractive for Indian multinationals routing EU‑bound profits or regional headquarters functions through Malta as they scale up under the FTA. The fiscal‑unit election adds another layer of planning efficiency. By consolidating eligible Maltese entities into a single tax unit, groups can offset profits and losses within the unit, simplify compliance and improve cash‑flow management. For Indian conglomerates with multiple operating, IP or holding vehicles in the EU, centralising key components of the structure in Malta can make group‑wide taxation more predictable and efficient as trade volumes grow under the new agreement. ## People and Talent: Anchoring Operations in Malta A further advantage of using Malta as an EU base is the ability to build long-term operations through people. Malta offers streamlined work and residence routes for non‑EU nationals in senior or specialist roles, making it feasible for Indian groups to relocate key management, finance and technical staff. In parallel, preferential flat‑rate tax regimes for qualifying highly skilled individuals, together with an English‑speaking workforce and a growing pool of local professionals, make the island an attractive location for both expatriate and locally recruited employees. This combination allows Indian businesses to establish genuine decision‑making capacity in Malta in line with evolving EU substance expectations, while remaining competitive in terms of cost and talent attraction. ## Next Steps for Indian Groups Considering Malta Taken together, the EU–India FTA, Malta’s strategic position on the India–Europe route, and its corporate and personal tax frameworks create a compelling platform for Indian groups planning their next phase of EU growth. For boards and promoters now evaluating how best to structure EU‑facing operations, this is the right moment to reassess where key entities, decision‑makers and trading functions are located. As a Malta‑based corporate services provider, we assist Indian groups with structuring, incorporation, tax and ongoing compliance in this context. If you are considering how the new agreement could impact your group structure, or exploring whether Malta might be an appropriate base for your EU activities, we would be pleased to discuss this further. Feel free to reach out to explore practical options tailored to your organisation’s sector, footprint and growth plans. --- ## Raising the Bar: Updated Small and Medium Company Thresholds Now in Force in Malta **Date:** 2026-03-24 **Category:** Company Formation **URL:** https://zeta-financial.com/news/raising-the-bar-updated-thresholds-redefine-small-and-medium-companies-under-maltese-law-now-in-force ## Understanding the Latest Corporate Sustainability and Company Definition Changes ## Introduction On 26 February 2026, the ‘Various Laws relating to Corporate Sustainability Reporting (Amendment) Act, 2026’ were published to complement the new Corporate Sustainability Reporting Regulations (L.N. 39 of 2026). Read our article on the new Regulations here: news/the-corporate-sustainability-reporting-regulations-2026.html. The Act has now been partially brought into force by Legal Notice 61 of 2026, which officially updates the definitions of Large, Medium-Sized, and Small Undertakings under the Companies Act as from 20 March 2026. ## Redefining the Scale: What Qualifies as a Large Undertaking? Previously, a Large Undertaking was any entity exceeding at least two of the following criteria on its balance sheet date: * Balance sheet total: EUR 20,000,000 * Net turnover: EUR 40,000,000 * Average number of employees: 250 Effective 20 March 2026, these thresholds have been raised to reflect economic growth and inflation: * Balance sheet total: EUR 25,000,000 * Net turnover: EUR 50,000,000 * Average number of employees: 250 This adjustment widens the scope for businesses that may now fall just below the new Large Undertaking threshold. ## The Updated Definition of a Medium-Sized Undertaking A Medium-Sized Undertaking refers to entities that are not classified as small but do not exceed at least two of the following limits. The updated criteria from 20 March 2026 are: * Balance sheet total: EUR 25,000,000 * Net turnover: EUR 50,000,000 * Average number of employees: 250 This mirrors the upper range of the Large Undertaking criteria, ensuring clearer differentiation while aligning with contemporary financial realities. ## Small Undertakings: A More Inclusive Threshold Previously, a Small Undertaking was one that did not exceed at least two of the following three limits: * Balance sheet total: EUR 4,000,000 * Net turnover: EUR 8,000,000 * Average number of employees: 50 From 20 March 2026, the revised definition makes room for growth within the small-business category: * Balance sheet total: EUR 5,000,000 * Net turnover: EUR 10,000,000 * Average number of employees: 50 This update provides flexibility for smaller companies, easing administrative burdens and reflecting today’s business environment. ## Looking Ahead: Practical Implications and Pending Updates These amendments appropriately account for inflation and general economic expansion, modernising the Companies Act to better reflect current market conditions. They strike a balance between keeping standards aligned with EU norms and supporting smaller enterprises. However, it is worth noting that the Malta Business Registry (MBR) has not yet updated its Director Declaration Forms to reflect the new definitions. Swift action from the MBR would help ensure full compliance and enhance legal certainty for companies and auditors alike. ## Get Expert Guidance on Your Next Steps If you wish to understand how these new thresholds and sustainability reporting obligations apply to your company or group—or need assistance with sustainability reporting, group structuring, assurance readiness, or implementation—our team is ready to assist. Contact us today to navigate these important legal updates with confidence. --- ## The Companies Act (Youth Enterprise) Regulations 2026: Empowering Young Entrepreneurs **Date:** 2026-03-17 **Category:** Company Formation **URL:** https://zeta-financial.com/news/youth-enterprise-malta-2026 ## A New Beginning for Young Innovators The Companies Act (Youth Enterprise) Regulations, 2026 (the “Regulations”) were published on 12 March 2026 through S.L. 56.2026. These Regulations introduce the concept of the ‘Youth Enterprise’, a new company structure designed specifically for young people eager to turn their ideas into reality by providing them with a practical and structured way to engage in business while maintaining appropriate safeguards and mentorship. ## Setting Up a Youth Enterprise ## Who Can Start One? A Youth Enterprise can only be set up by individuals who meet all of the following criteria: · Natural persons (not companies or partnerships) · Aged 16 or 17 · Resident in Malta · Acting in their own name ## Step 1: Drafting the Memorandum of Association The Youth Enterprise must begin with a Memorandum of Association, following the model found in Annex I of the Regulations. ## (a) The Name The name must include either the words “Youth Enterprise” or the abbreviation “YE”. ## (b) The Registered Office and Email Address The registered office address is the Youth Enterprise’s official address for receiving correspondence and notices. It’s essential that the company has real and reliable access to this address since official notifications, opportunities, and regulatory correspondence will be sent here. Missing important letters could lead to unnecessary complications, but maintaining access ensures smooth communication and compliance. Likewise, the electronic mail address serves as the company’s official email for all digital correspondence. It should be regularly monitored since official communications or filing reminders may be sent electronically by the Malta Business Registry (MBR) or other authorities. ## (c) The Objects of the Enterprise This outlines the purpose and intended business activity, such as, for example, producing or selling a product, offering a service, or importing goods. Youth Enterprises cannot be established as holding companies, meaning they may not exist solely to hold assets or investments. ## (d) The Share Capital One major benefit is the reduced capital requirement. The minimum share capital is just €100, compared to €1,165 for a standard private company. The Memorandum must also outline the division of shares, their nominal value, and allocation to each member as specified below. ## (e) The Members The names of all founding members must be included in the Memorandum. ## (f) The Mentor Each Youth Enterprise must appoint a mentor whose details are listed in the Memorandum. To qualify as a mentor, a person must: · Be at least 25 years old · Reside in Malta · Have a minimum of five years’ experience in a commercial area (such as finance, sales, corporate, management, or legal work) · Not be listed in the register under the Protection of Minors (Registration) Act; and · Be approved by the MBR and registered in the official register of mentors. ## Step 2: Submitting the Memorandum To incorporate, the following documents must be submitted to the MBR: · The signed Memorandum of Association · Proof of paid-up share capital · A parental declaration of consent for each minor member · The mentor’s appointment form · A return listing member and mentor details · Proof of residence for members and guardians · A declaration by members confirming they are not involved in any other competing company or Youth Enterprise ## Step 3: Registration and Certification Once the MBR reviews and registers the documentation, it will issue a Certificate of Registration, officially bringing the Youth Enterprise into existence. ## Key Benefits ## Reduced Share Capital Requirement: Ensuring Minimum Risk for Youths Youth Enterprises benefit from a significantly reduced minimum share-capital requirement. Whilst the Companies Act mandates a minimum share capital of €1165 for standard private limited liability companies, the Regulations provide for a minimum share capital of just €100. ## What does this Mean? ‘Limited liability’ means each member is only responsible for the company’s debts up to the amount they invested (here, up to €100). This creates a safe environment for young founders to learn entrepreneurship without significant personal financial risk. (Note: This protection can be lifted only in extreme cases, such as fraud or wrongful trading, where the ‘corporate veil’ may be pierced.) ## Maximum Share Capital The maximum authorised share capital for a Youth Enterprises is capped at €20,000. ## Simpler Account Procedures Youth Enterprises enjoy simplified annual reporting obligations. Instead of preparing full statutory accounts, founders will be required to submit ‘basic accounts’ annually, following clear guidance from the MBR (which are yet to be published). ## Lighter VAT Obligations Youth Enterprises qualify as Small Enterprises under Article 11 of the VAT Act. This means they do not charge VAT on sales, but they also cannot reclaim VAT paid on purchases. Importantly, these enterprises submit one simplified annual declaration instead of quarterly VAT returns, easing the administrative burden. ## Registration Fee Exemptions Registration and annual fees are waived unless the Youth Enterprise’s authorised share capital exceeds €1,000, making incorporation affordable. ## The Mentor: Guidance without Control Every Youth Enterprise must have a mentor who serves as a guide and advisor. The mentor provides (a) Counsel on the strategic planning and operational execution of the business; (b) Practical knowledge regarding fundamental business concepts; (c) Assistance with the development of entrepreneurial and leadership skills; (d) Monitoring of progress against business goals, plans and projections; (e) Feedback on financial analysis and reporting; (f) Advice on compliance with applicable laws and regulations; (g) Assistance with identifying and resolving significant operational challenges; (h) Motivation, construction criticism and ethical role modelling. While the mentor provides important oversight, they do not take part in daily management, decision-making, or voting, except when needed to resolve a deadlock. Furthermore, the mentor is restricted from taking part in the equity of the Youth Enterprise by the model Memorandum of Association. If a mentor steps down, the MBR must be notified within three (3) working days, either by the Youth Enterprise or, failing that, by the mentor themselves. ## Duties and Restrictions ## Mandatory Training Each member involved in the Youth Enterprise must attend a minimum of twenty (20) hours of training per year on business, compliance or financial literacy. The training may be held physically or virtually. ## The Training Return The members must submit a Training Return every six (6) months to the Malta Business Registry. ## Employment Restrictions Youth Enterprises may not employ staff directly. This keeps the focus on learning and teamwork among founders. ## Dividend Distribution The Youth Enterprise may only distribute dividends following a recommendation by the mentor. ## Conversion Upon Turning 18 Once all members reach 18, they must apply to convert the Youth Enterprise into a standard company or other commercial partnership regulated by the Companies Act. If they fail to do so, the Registrar may inquire whether the business is still active. Continued inactivity or failure to respond could lead to the Youth Enterprise being struck off the register, with its assets reverting to the Government of Malta. ## Shares and Governance ## Voting Rights: Ensuring Teamwork and Inclusion Unlike in standard private limited liability companies where voting rights are normally attached to the number of shares (with voting rights) held, each member in the Youth Enterprise has one equal vote, regardless of how many shares they hold. This ensures all voices are valued equally and encourages collaboration, a key principle of the Youth Enterprise framework. ## Dividends and Other Rights While voting rights are equal, other entitlements like dividends may still be determined based on the number of shares held or as agreed in the company’s Memorandum and Articles of Association. ## Future Legal Considerations The Regulations do not yet detail how the transition to an adult company will occur, or whether share allocations upon conversion should follow a pro-rata structure. Future guidelines may clarify these aspects. ## How Zeta Can Help At Zeta, we’re passionate about fostering the next generation of Maltese entrepreneurs. We offer free consultations to mentors and young founders of Youth Enterprises, helping them draft their documents, choose a business structure, and understand their legal obligations. If you’re ready to launch your Youth Enterprise, reach out to us today for expert support and guidance. --- ## The Corporate Sustainability Reporting Regulations 2026 **Date:** 2026-02-27 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/the-corporate-sustainability-reporting-regulations-2026 ## Introduction The Corporate Sustainability Reporting Regulations, 2026 (L.N. 39 of 2026) (the ‘Regulations’) were published on 13 February 2026, transposing the EU’s Corporate Sustainability Reporting Directive (the ‘CSRD’) into Maltese law and introducing mandatory sustainability reporting for certain companies in Malta. The Regulations have also been supplemented by the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026’, published on the 26 February 2026, but has not yet come into force. ## Background – What is the CSRD About? The Corporate Sustainability Reporting Directive forms part of the EU Green Deal framework. The Directive imposes a ‘Double Materiality’ reporting obligation, requiring companies falling under its scope to: (i) identify and disclose information on what they see as the risks and opportunities arising from social and environmental issues; and (ii) identify and disclose information on the impact of their activities on people and the environment. It also requires companies falling under its scope to disclose how it manages the risk identified under the double materiality reporting obligation. These disclosures allow investors civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies. ## The Corporate Sustainability Reporting Regulations 2026 (the ‘Regulations’) ## Who do the Regulations Apply To? The Regulations apply to: (a) Large Undertakings; and (b) Medium-Sized Undertakings and Small Undertakings that are Listed Public-Interest Entities. What is a Large Undertaking? Currently, Large Undertaking are those which on their balance sheet dates exceed at least two of the three following criteria: * balance sheet total: EUR 20 000 000; * net turnover: EUR 40 000 000; * average number of employees during the financial year: 250. Once the ‘Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026’ comes into force, these thresholds will increase to: * balance sheet total: EUR25,000,000; * net turnover: EUR50,000,000; * average number of employees during the accounting period: 250. What is a Medium-Sized Undertaking? Currently, Medium-Sized Undertakings are those which do not qualify as ‘small companies’ and on their balance sheet dates do not exceed the limits of at least two of the following three criteria: * balance sheet total: EUR 20 000 000; * net turnover: EUR 40 000 000; * average number of employees during the financial year: 250. Once the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 comes into force, these thresholds will increase to: * balance sheet total: EUR25,000,000; * net turnover: EUR50,000,000; * average number of employees during the accounting period: 250. What is a Small Undertaking? Currently, Small Undertakings (and likewise ‘small companies’) are those which on their balance sheet dates do not exceed the limits of at least two of the three following criteria: * balance sheet total: EUR4,000,000; * net turnover: EUR8,000,000; * average number of employees during the accounting period: 50. Once the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 comes into force, these thresholds will increase to: • balance sheet total: EUR5,000,000; • net turnover: EUR10,000,000; • average number of employees during the accounting period: 50. What are Listed Public-Interest Entities? Medium-Sized and Small Undertakings qualify as Listed Public-Interest Entities if they are governed by the law of a Member State and their transferable securities are admitted to trading on a regulated market of any Member State. Exceptions Certain entities are excluded from the Regulations, even if they seem to fall within the scope set out above, such as: (i) the Central Bank of Malta; (ii) the Malta Development Bank; (iii) an Alternative Investment Fund; (iv) an undertaking for collective investment in transferable securities; and (v) Very-small undertakings, being undertakings which on their balance sheet dates do not exceed the limits of at least two (2) of the three (3) following criteria: * balance sheet total: EUR450,000; * net turnover: EUR900,000; and * average number of employees during the financial year: 10. ## When do the Rules Start Applying: The Phased Approach Generally, the Regulations apply in phases: (i) From financial years starting on or after 1 January 2026: the largest undertakings and groups. (ii) From 1 January 2027: other large undertakings and groups. (iii) From 1 January 2028: listed medium and small undertakings and captive insurance undertakings. ## What do Undertakings Falling within the Scope of the Regulations Have to Do? 1. Include Corporate Sustainability Report within the Directors’ Report Undertakings falling with the Regulations’ scope must include a clearly identifiable dedicated section in the Directors’ Report, which is to be delivered to the Malta Business Registry, setting out the: (i) information necessary to understand the undertaking’s impacts on sustainability matters; (ii) information on the key intangible resources; and (iii) information necessary to understand how sustainability matters affect the undertaking’s development, performance and position. 2. Follow Detailed Reporting Requirements The Regulations set out detailed information requirements, aligned with EU Sustainability Reporting Standards. However, some entities (such as Small and Medium-Sized Undertakings, Captive Insurance/Re-Insurance Undertakings and Small and Non-Complex Institutions) may benefit from lighter reporting requirements. Small and Medium-Sized Undertakings may also temporarily choose not to report. However, in such cases, they must briefly report the basis on which the sustainability reporting was not provided. 3. Explain the Reporting Process Undertakings must also report the process carried out to identify the information included in the Directors’ Report. 4. Report on the Value Chain The Report shall include (where applicable) information about the Undertaking’s own operators and about its value chain, including its products and services, its business relationships and its supply chain. Where Undertakings are unable to obtain the required information on their value chain, an exemption applies for the first three years of application in the form of a ‘Comply of Explain’ rule. Under the said rule, Undertakings that make use of the exemption must explain: (i) the efforts made to obtain the necessary information on their value-chain; (ii) the reasons for which they could not obtain all necessary information; and (iii) how they plan to obtain the necessary information going forward. 5. Meet The Sustainability Reporting Standards The information included in the Report must be reported in accordance with the Sustainability Reporting Standards. 6. Engage with the Workers’ Representatives The board of directors of the undertaking shall inform the workers’ representatives at the appropriate level and discuss with them the relevant information and the means of obtaining and verifying sustainability information. Where applicable, the workers’ representatives’ opinion shall be communicated to the board of directors. ## Exemption for Commercially Sensitive Information The Regulations allow for the omittance of certain information relating to impending developments or matters in the course of negotiation in exceptional cases where, in the duly justified opinion of the directors, the disclosure of such information would be seriously prejudicial to the commercial position of the Undertaking. ## Group Reporting The Regulations provide for group-level sustainability reporting. A subsidiary undertaking may be exempt from preparing its own sustainability report where it and its subsidiaries are included in the consolidated directors’ report of a parent undertaking, provided certain conditions are satisfied. This exemption also applies where the parent undertaking is established in a third country, provided that the consolidated sustainability reporting is prepared in accordance with sustainability reporting standards or standards deemed equivalent under EU rules. Where the exemption is relied upon, the subsidiary must disclose specific information in its directors’ report, including details of the parent undertaking and where the consolidated report can be accessed. At the same time, parent undertakings of a large group are required to include, within their consolidated directors’ report, a clearly identifiable dedicated section containing the group’s sustainability information. ## The Assurance Report on Sustainability Although not yet in force, the Various Laws relating to Corporate Sustainability Reporting (Amendment) Act 2026 will amend the Companies Act to require an Assurance Report on Sustainability Reporting. This means the company’s sustainability report must be independently reviewed. Sustainability Auditor vs Statutory Accounts Auditor Undertakings may appoint an auditor or an audit firm other than the one or ones carrying out the statutory audit of the annual accounts in order to prepare the assurance report on sustainability reporting. Final Requirements The assurance report must be: * Filed with the Malta Business Registry together with the annual accounts and auditors’ report; and * Made available on the company’s website (or via the Registry if the company does not have one). ## Final Thoughts The Corporate Sustainability Reporting Regulations 2026 introduce significant new compliance obligations for many Maltese companies, particularly larger and listed entities. Early preparation, especially around data collection, internal controls and governance, will be essential to ensure smooth implementation and to avoid last-minute compliance pressures. ## Contact Us Today If you would like to understand how these Regulations apply to your company or group, or require assistance with implementation, sustainability reporting, group structuring, or assurance readiness, please feel free to contact us. We would be pleased to support you in navigating these new requirements efficiently and confidently. --- ## Malta's Next Move for Family Offices: A New Residency Scheme on the Horizon **Date:** 2026-02-19 **Category:** Residency **URL:** https://zeta-financial.com/news/maltas-next-move-for-family-offices-a-new-residency-scheme-on-the-horizon ## Overview On the 3rd of December 2025, the Malta Financial Services Authority (MFSA) and Residency Malta issued a joint communication announcing a forthcoming Residency Scheme for Family Offices. The scheme is intended to facilitate residence in Malta for key individuals involved in licensed family office structures and marks a further step in Malta’s strategy to attract high-value international families and talent. ## Eligibility Under the Joint Communication, the scheme may apply to Ultimate Beneficial Owners (UBOs) and Senior Employees of entities which form part of a family office structure, and are duly authorised by the MFSA. ## Who Qualifies as a Senior Employee? For the purposes of the scheme, Senior Employees are individuals holding an eligible office in terms of the Senior Employees of Family Offices, Back Offices and Treasury Management Tax Regulations (hereinafter the ‘Senior Employees of Family Offices Regulations’). According to these Regulations, eligible roles include senior positions with qualifying companies and undertakings, such as: · Head of Back Office, Chief Executive Officer (CEO), General Manager, Country Head, Managing Director or equivalent designation; · Chief/Head Rick Officer; · Chief/Head Compliance and Anti-Money Laundering Officer; · Chief/Head Risk Officer, including Fraud and Investigations Officer; · Portfolio Manager; · Chief/Head Investment Officer; · Senior Trader; · Senior Structuring Professional. ## Application Process According to the Joint Communication, residence permits under the scheme will be issued directly by Residency Malta. Further procedural details are expected to be issued once the formal legislative framework is published. ## Tax Considerations for Senior Employees Historically, Senior Employees could benefit from a preferential tax rate under the Senior Employees of Family Offices Tax Regulations. As from the 1st of January 2026, the preferential treatment is instead governed by The Tax Treatment of Highly Skilled Individual Rules. Under these rules, qualifying individuals may benefit from a flat 15% tax rate on qualifying employment income of up to €7,000,000 per annum. ## Key Takeaways and Next Steps At this stage, the residency scheme has been announced via the Joint Communication but formal legislation and detailed guidelines have not yet been published. Once enacted, the scheme is expected to enhance Malta’s attractiveness as a jurisdiction for family offices and senior professionals seeking residence within the EU. ## 📌 We will be monitoring developments closely. Keep an eye on our website and LinkedIn page for further updates as more information becomes available. --- ## Malta's New 15% Tax Regime for Highly Skilled Individuals: What the 2026 Rules Mean **Date:** 2026-01-24 **Category:** Residency **URL:** https://zeta-financial.com/news/maltas-new-15-tax-regime-for-highly-skilled-individuals ## Overview of the New Regime The Treatment of Highly Skilled Individuals Rules 2026 introduce a single, consolidated special tax programme for highly skilled employees working in Malta. Under these Rules, qualifying individuals may benefit from a flat tax rate of 15% on qualifying employment income of up to €7,000,000 per annum. At the same time, the Rules initiate the phasing out of a number of existing special tax programmes, replacing them with one harmonised regime. ## Who Can Benefit from the 15% Tax Rate? ## What Income Qualifies? Employment income qualifies for the beneficial tax treatment where all of the following conditions are met: (i) The income is received by a beneficiary; (ii) It constitutes income subject to tax as a gain or profit from an employment or office; (iii) The income amounts to at least €65,000 per annum, excluding the annual value of any fringe benefits; (iv) The employment activity is carried out in an eligible office; (v) The €65,000 threshold consists solely of emoluments derived from that eligible office. ## Who Qualifies as a Beneficiary? A beneficiary is an individual who satisfies all of the following conditions: (i) He derives qualifying employment income in respect of work carried out in Malta (or periods spent outside Malta that relate to that work, including leave); (ii) He is protected as an employee under Maltese law and performs genuine and effective work for another person; (iii) He is remunerated for that work; (iv) He possesses adequate and specific competence, to the satisfaction of the competent authority; (v) He holds recognised professional qualifications (or, by way of derogation, has at least five years’ professional experience at a level comparable to such qualifications and relevant to the profession); (vi) He has not previously benefited from the Investment Services and Insurance Expatriates regime under Article 6 of the Income Tax Act; (vii) He fully discloses all emoluments received from the qualifying contract of employment; (viii) He fully discloses any emoluments received from a person related to his employer where the activity is substantively derived from the qualifying employment; (ix) He performs activities falling within an eligible office; (x) He has sufficient resources to maintain himself and his family in Malta; (xi) He resides in accommodation regarded as normal for himself and his family in Malta; (xii) He holds a valid travel document; (xiii) He holds private medical insurance covering all risks normally covered for Maltese nationals; and (xiv) He is not domiciled in Malta. ## What is an Eligible Office? An eligible office is an employment or office which is regulated, licensed or recognised by one of the following competent authorities: (i) the Malta Financial Services Authority (MFSA); (ii) the Malta Gaming Authority; (iii) the Authority for Transport in Malta in relation to certain undertakings; (iv) the Office of the Chief Medical Officer to Government; and (v) Malta Enterprise. The Rules provide detailed schedules specifying which employments and offices are considered regulated, licensed or recognised by each authority. ## How to Apply: The Approval Process Applications for the 15% special tax treatment must be submitted to the relevant competent authority. The competent authority must issue a formal determination or refusal within 90 days of receiving the application. Within the same 90-day period, the authority must inform the Commissioner for Revenue of its decision. The Commissioner then endorses the determination or refusal and notifies the applicant accordingly. ## The 15% Flat Tax Rate Explained Where an application is approved: * Employment income is taxed at a flat rate of 15%; * A minimum tax liability of €9,750 applies (being 15% of the €65,000 minimum qualifying income); * The 15% rate applies without the possibility of claiming any reliefs, deductions, credits or set-offs (except for deductions relating to tax paid at source); * The maximum amount of income that may benefit from the special rate is €7,000,000 per annum. The special tax treatment is exercised by means of a declaration signed by the beneficiary and endorsed by the competent authority. ## How Long Does the Benefit Last? The beneficial tax rate applies for a five-year period, commencing from the year in which the formal determination is issued. A beneficiary may apply for up to two further extensions, each lasting five years. ## Moving from Existing Tax Incentive Programmes Individuals who are already beneficiaries under any of the following programmes may apply to switch to the new Rules: (a) Highly Qualified Persons Rules; (b) Qualifying Employment in Innovation and Creativity (Personal Tax) Rules; (c) Qualifying Employment in Aviation (Personal Tax); (d) Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities(Personal Tax) Rules; or (e) Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules; The competent authority must issue a determination within 60 days of receiving a switching application and notify the Commissioner accordingly. ## Transitional Minimum Tax Rules Where the minimum income threshold under the original programme is below €65,000, the following transitional minimum tax rules apply: * In the first year, the minimum income remains that specified under the original programme; * In the second year, that amount is increased by €10,000; * From the third year onwards, the minimum income threshold is set at €65,000. ## Special Protection for Highly Qualified Persons Beneficiaries previously applying the Highly Qualified Persons Rules will continue to benefit from the tax exemption on employment income exceeding €5,000,000 for income earned in the year in which the application to switch is made. ## Phasing Out of Existing Tax Regimes It is no longer possible to apply for determinations under the following programmes: * Highly Qualified Persons Rules; * Qualifying Employment in Innovation and Creativity (Personal Tax) Rules; * Qualifying Employment in Aviation (Personal Tax) Rules; * Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules; or * Senior Employees of Family Offices, Back Offices and Treasury Management Operations Tax Rules. In addition, no benefits under these programmes may be availed of after the year of assessment 2030. ## Final Thoughts and Professional Support The Treatment of Highly Skilled Individuals Rules 2026 represent a significant shift in Malta’s approach to attracting and retaining highly skilled professionals, consolidating multiple incentive regimes into a single, streamlined framework. While the Rules offer a generous and competitive tax rate, eligibility is subject to detailed conditions and a formal application process involving the relevant competent authority and the Commissioner for Revenue. Given the technical nature of the Rules and the interaction with previous special tax programmes, professional advice is strongly recommended before applying or switching regimes. We can assist with assessing eligibility, liaising with the competent authorities, and preparing and filing the application, ensuring full compliance with the applicable requirements. Should you require assistance or further clarification, please do not hesitate to contact us. --- ## A New Corporate Vehicle for Agri-Business **Date:** 2026-01-03 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/a-new-corporate-vehicle-for-agri-business ## Introduction On the 26th of December 2025, Malta introduced a brand-new corporate structure tailored specifically to the agricultural sector through the Companies Act (Agricultural Companies) Regulations, 2025 (L.N. 307 of 2025). This development represents an important step in modernising the legal framework for farming and agri-business, offering farmers and agricultural operators a more suitable company structure. ## What is an Agricultural Company? The Regulations define an Agricultural Company as a private limited liability company which carries out an agricultural activity. Agricultural activities are then defined as “the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in goof agricultural and environmental condition.” ## Eligibility To qualify as an Agricultural Company, the following conditions must satisfied: (i) Revenue Threshold: at least fifty-one percent (51%) of the company’s revenue must be derived from agricultural activity, with the remaining generated from ancillary agricultural activity; (ii) Limited Objects: the company’s objects must be limited to one or more agricultural activities \[but may also include ancillary agricultural activities]; (iii) Prior Authorisation: the company must receive prior authorisation from the Agricultural Directorate \[see below]; (iv) Shareholding Requirement: at least fifty-one percent (51%) of the issued shares carrying voting rights shall be held by individuals registered as farmers with the Agricultural Directorate; (v) Board Composition: at least one director shall be an individual registered as a farmer with the Agricultural Directorate. ## Agricultural Directorate Approval Prior to incorporation, the proposed shareholders must submit a written request for authorisation to the Agricultural Directorate. The request shall be accompanied by a five-year business plan, detailing: (a) the agricultural activities that are proposed to be carried out by the company; (b) the parcels of land and the list of the identification number of the livestock, as may be applicable, that the company shall be using for the agricultural activity; (c) the premises from which such agricultural activities shall be carried out; (d) financial forecasts for the first two (2) years of operation, ensuring that the turnover classifies the company in accordance with regulation 3(3)(b) of the Categorisation of Farmers Regulations; (e) the number of employees, if any, proposed to be employed by the company. The Directorate shall then review the request and issue its approval or otherwise within two months from receipt of the application. ## Key Benefit: Lower Initial Paid-Up Capital One of the most attractive features of this new structure is the reduced minimum paid-up share capital, set at just 15%, making incorporation more accessible for agricultural operators. ## Additional Ongoing Compliance Obligation: Income Declaration Agricultural Companies must submit, together with their annual accounts, a declaration confirming that at least 51% of the company’s income is generated from agricultural activity and the remaining income arises from ancillary agricultural activities.. ## Conversion of Existing Companies Companies in existence which meet the eligibility requirements may elect to be registered as Agricultural Companies and governed by the regulations by filing the relevant notice by the 26th of March 2026. ## Contact Us Today If you are considering setting up an Agricultural Company, or converting an existing structure, Zeta can guide you through every step of the process — from eligibility assessment to regulatory approval and incorporation. Contact us today to explore how we can support your agricultural venture. --- ## The Companies (Amendment) Act, 2025: Key Changes for Maltese Companies **Date:** 2025-12-17 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-companies-amendment-act-2025-key-changes-for-maltese-companies ## Introduction The Companies (Amendment) Act 2025, published on the 11th of July 2025 seeks to update the Companies Act (Chapter 386 of the Laws of Malta) to (i) introduce a new simplified dissolution procedure, (ii) enforce a number of new duties for both directors and company secretaries, (iii) exempt de minimis non-cash consideration issuances from the independent valuation report requirement, (iv) replace the term ‘exempt company’, and (v) simplify certain procedural matters relating to the transfer of interests or increase in partner contributions in partnerships. ## STATUS: PARTIALLY IN FORCE In line with Article 1(2), the provisions of the Companies (Amendment) Act 2025 are set to come into force on such date as the Minister responsible for the registration of commercial partnerships may by notice in the Gazette establish and different dates may be so established for different provisions and, or purposes of the Act. To date, the Act remains partially in force. Most of the main amendments described in this article have now been placed into force. Each section below indicates the current status of the relevant amendment. ## The New Simplified Dissolution Procedure Article 214A introduces a new simplified dissolution procedure which does not require the appointment of a liquidator, aiming to reduce administrative burdens and related costs. ## Eligibility A company is not eligible to undergo the simplified dissolution procedure if: (i) It has not been validly registered for a period of at least six (6) months; (ii) It is a Regulated Company (under any applicable law in Malta); (iii) It is a Public Company; (iv) It has carried out any change in its name during the preceding six months; (v) It has traded or otherwise carried on business during the preceding six months; (vi) It is not in good-standing or has not been in good-standing at any point during the preceding six months; (vii) It has employed employees other than any person who is a director or company secretary of the company at any point during the preceding six months; (viii) It has or has had any of its shares pledged at any point during the preceding six months. ## Step 1: Shareholders’ Resolution If the above conditions have been met, the shareholders of the Company may opt, by means of a shareholders’ resolution, to adopt the simplified voluntary dissolution procedure. ## Step 2: Application and Declarations In order to proceed, the directors of the Company will be required to submit an application by means of a statutory form, together with a signed declaration confirming that: (i) the company is not a regulated entity; (ii) the company has discharged all liabilities to creditors, other than: a. liabilities due to any of the company’s current officers or corporate service providers; b. loans payable to any of its shareholders. (iii) the company has no pending court proceedings; (iv) the company does not have assets in excess of five thousand euro (€5000); (v) the company has not entered into any deeds/contracts in the previous six months (other than with service providers); (vi) the company has no outstanding amounts due to any government authority or body; (vii) a shareholders’ resolution has been passed to approve the simplified voluntary dissolution; (viii) all company bank accounts have been closed; (ix) an application has been filed for the company to be de-registered for VAT purposes in Malta; (x) no persons are employed in the company (other than its officers); (xi) the directors will be retaining the beneficial owner details and financial records as mandated by law. The directors and company secretary will retain all powers and duties until the company is struck off from the register. ## Step 3: Notice & Waiting Period Once satisfied that all conditions have been met, the Registrar will proceed to publish a notice that, at the expiration of three (3) months from publication, the company’s name will be struck off from the register. ## Step 4: Strike-Off The company’s name will be struck off the register upon expiration of the three-month publication period. ## IN FORCE The Simplified Dissolution Procedure has entered into force with effect from the 16th of December 2025 by means of S.L.286.2025. ## Changes to Director & Company Secretary Duties ## New Director Power Company boards are now empowered to change the e-mail address of the Company by way of a Board Resolution. ## New Duties for Directors and Company Secretaries A new duty has been imposed on Directors and Company Secretaries to regularly monitor the company’s registered email address such that any emails sent to the company are brought to the attention of the Company’s officers. Furthermore, Directors and Company Secretaries are now obliged to deliver a copy of the Board Resolution to change the company’s e-mail address within fourteen days of the change in e-mail address, together with a copy of the updated Memorandum & Articles of Association (M&AA) reflecting the change. ## IN FORCE These new powers and duties have entered into force with effect from the 16th of December 2025 by means of S.L.286.2025. ## De Minimis Non-Cash Consideration Exemption Prior to the amendments, any share issuance for non-cash consideration required an independent valuation report to be prepared and approved by the Registrar. Under the amended law, where the non-cash consideration does not exceed fifty thousand euro (€50,000), the Company may choose to register a director’s declaration on the valuation of the non-cash consideration instead. ## IN FORCE The new De-Minimis Exemption entered into force in August 2025 by means of the S.L.175.2025. ## Terminology Update: ‘Exempt Company’ Replaced The definition of exempt company has been removed and any reference to the former ‘exempt company’ has now been replaced by reference to a ‘company in terms of Article 211’ (the former ‘exempt company’ provision). ## NOT YET IN FORCE The updated terminology not yet entered into force and will come into effect on such date as the Minister responsible for the registration of commercial partnerships may by notice in the Gazette establish. ## Partnership Law Simplifications ## No Need to Amend Deed for New Contributions Partnerships are no longer required to amend and register the partnership deed when a partner increases their contribution, or a new partner contributes capital. Instead, the partnership will only be required to register a resolution of the partners confirming the contributions received within three (3) months from the end of the calendar year in which the contributions are affected. However, where any interest in the partnership is to be assigned during the same calendar year, the resolution must be registered prior to any such assignment. ## Consent Not Required for Inheritance Transfers Prior to the amendments, any transfer of interest in the partnership, including a transfer causa mortis (by way of inheritance) required the consent of all partners by default (i.e. unless expressly provided otherwise by the partnership deed). Following the amendments, any transfers causa mortis no longer require the consent of all partners (unless the partnership deed provides otherwise). ## IN FORCE The simplifications have entered into force with effect from the 16th of December 2025 by means of S.L.286.2025. ## Zeta At Zeta, we help businesses stay ahead of regulatory changes in Malta. Whether you’re planning a company dissolution, updating your corporate governance structure, or setting up a new entity, our experienced team provides tailored CSP solutions that ensure compliance, efficiency, and peace of mind. Reach out today to find out how we can support your business every step of the way. --- ## Unlocking Savings: Malta's New 2025 Audit Exemption Rules for Startups and Small Businesses **Date:** 2025-10-05 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/maltas-new-2025-audit-exemption-rules-for-startups-and-small-businesses ## Introduction The Audit Exemption Rules 2025 (L.N.139.2025) introduce important changes aimed at alleviating compliance costs for start-ups and small companies operating in Malta. ## The Usual Audit Requirements in Malta ## Audit Obligations under the Companies Act The Maltese Companies Act generally requires companies to appoint an auditor to prepare an auditor’s report, which is then submitted to the Malta Business Registry (MBR). ## Audit Obligations under the Income Tax Management Act Additionally, the Income Tax Management Act mandates that companies maintain proper financial accounts accompanied by a Certified Public Auditor’s report. ## First Two Years in Business: Special Audit Exemptions & Tax Relief ## Exemption from Audit under the Companies Act Private companies that do not exceed at least two of the following thresholds at the balance sheet date are exempt from the requirement to appoint an Auditor, as well as to submit an Audited Report to the MBR: (i) Balance-Sheet Total: EUR46,000 (ii) Net Turnover: EUR93,000 (iii) Average No. of Employees: 2 ## Waivers under Income Tax Management Act Newly incorporated companies can also benefit from a waiver of the Auditor’s Report requirement for their first two account periods if all the following conditions are met: (i) its sole shareholders are individuals; (ii) the shareholders hold educational qualifications at Malta Qualifications Framework (MQF) Level 3 or higher; (iii) the company was set-up within three years of those qualifications being obtained; (iv) the company’s annual turnover does not exceed 80,000 euro (or pro-rata if the relevant accounting period is other than twelve months). ## Tax Deduction as an Alternative Alternatively, companies eligible for the waiver may elect not to use it and instead claim a tax deduction of 120% of the cost incurred for obtaining an auditor’s report, capped at 700 euro per accounting period. ## Beyond the First-Two Years: Ongoing Audit Exemptions ## Ongoing Exemption from Companies Act Obligations Private companies which do not exceed two of the three following criteria are exempt from the requirement to appoint an Auditor, and the requirement to prepare and deliver an Auditor’s Report to the MBR: (i) Balance-Sheet Total: EUR46,000 (ii) Net Turnover: EUR93,000 (iii) Average No. of Employees: 2 ## Simplified Review or Full Exemption under the Income Tax Management Act Furthermore, for companies meeting two of the above criteria, the Income Tax Management Act permits submission of a less extensive Review Report (prepared under the ISRE 2400 standards) in place of a full Audit Report. Companies meeting all three criteria are exempt from submitting either report. ## How Zeta Can Support Your Business At Zeta, we guide startups and small business through Malta’s evolving compliance landscape. Whether you’re exploring eligibility for the new audit exemptions or ensuring your accounts remain fully compliant, we’re here to help. We combine technical expertise with practical solutions, so you can focus on growing your business while we take care of the regulatory complexities. Contact us today to discover how Zeta can support your business to scale with confidence. The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While every effort has been made to ensure that the content is accurate and up to date as of the date of publication, errors, omissions, or misinterpretations of the law may occur. Laws and regulations may change, and their application can vary based on specific circumstances. --- ## A New Chapter: Gibraltar's Future Relationship with the European Union **Date:** 2025-07-31 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/a-new-chapter-gibraltars-future-relationship-with-the-european-union ## Historical Political Agreement Reached in Brussels On 11 June 2025, a high-level meeting took place in Brussels between the European Union (represented by Commissioner Maros Sefcovic), Spain (represented by Minister for Foreign Affairs Jose Manuel Albares), the United Kingdom (represented by UK Foreign Secretary David Lammy) and Gibraltar (represented by Chief Minister of Gibraltar, Fabian Picardo). The meeting marked the culmination of extended negotiations that had intensified throughout 2024, concluding with a political agreement on the core elements of a forthcoming treaty, laying the groundwork for Gibraltar’s new relationship with the EU post-Brexit. ## Key Provisions of the Agreement A central pillar of the agreement is the removal of all physical barriers, checks, and controls on the movement of persons and goods at the Gibraltar-Spain border. This measure is intended to facilitate seamless cross-border transit for residents, workers, and commercial operators, marking a significant shift in the post-Brexit landscape. To preserve the integrity of the Schengen area while maintaining Gibraltar’s jurisdictional autonomy, the agreement introduces a dual-border control system at Gibraltar’s airport and port. Under this model, Spanish authorities will carry out Schengen-compliant checks on individuals entering the EU, whereas Gibraltar will retain full control over its own immigration and law enforcement functions, including the authority to refuse entry in accordance with its domestic laws. In the area of trade, the agreement establishes a bespoke framework akin to a customs union between Gibraltar and the EU. This framework sets out key principles governing the movement of goods and customs cooperation, aiming to eliminate border friction and enhance compliance. The arrangement ensures effective collaboration between Gibraltar’s and the EU’s customs authorities, thereby streamlining cross-border commercial activity. Further, the agreement makes provision for the enhancement of air connectivity between Gibraltar and EU Member States. This will facilitate more direct air travel to and from the European continent, strengthening Gibraltar’s accessibility for both tourism and business. ## Broader Cooperation Framework Beyond these headline provisions, the agreement also lays the foundation for sustained cooperation in a range of legal and regulatory areas. These include taxation, where commitments to transparency and alignment are expected; environmental protection, with an emphasis on shared goals for sustainability; and labour rights, aimed at protecting cross-border workers and ensuring fair conditions. Additionally, the agreement outlines cooperation in law enforcement and anti-money laundering efforts, contributing to mutual security and financial integrity. ## Next Steps and Legal Outlook The drafting of the final treaty text is currently underway, with formal ratification expected by early Autumn 2025. Once enacted, the treaty will provide legal certainty and a stable framework for Gibraltar’s future interactions with the EU. It is anticipated that this agreement will reinforce Gibraltar’s role as a strategic economic and legal bridge between the United Kingdom and the European Union, unlocking opportunities --- ## Major Updates to Malta's Permanent Residence Programme **Date:** 2025-07-31 **Category:** Residency **URL:** https://zeta-financial.com/news/major-updates-to-maltas-permanent-residence-programme ## Introduction The Malta Permanent Residence Programme (MPRP) offers a pathway to third-country nationals (TCNs) to obtain permanent residence in Malta. On the 22nd of July 2025, the Maltese Government introduced a number of key amendments to the MPRP Regulations through Legal Notice 146 of 2025. These changes aim to enhance the programme’s efficiency, flexibility and clarity for applicants. ## Temporary Residence Now Granted at Application Stage Applicants and their dependents may now apply for a one-year temporary residence permit upon submission of their MPRP application. This temporary permit is renewable for a further year, provided all required documents and information are submitted to the Agency within six months of the application date. ## Flexibility in Property Use During Temporary Absences A new provision empowers the Agency to issue guidelines concerning the use of qualifying property when MPRP beneficiaries are temporarily absent from Malta. Under the guidelines, beneficiaries may now lease out their qualifying property to third parties during such temporary absences. ## Revisions to Non-Refundable Administration Fees Increased Main Applicant Fee The non-refundable administrative fee for the main applicant has been increased from forty-five thousand euro (EUR45,000) to sixty thousand euro (EUR60,000), to be paid as follows: - Fifteen thousand euro (EUR15,000) within one-month of submission of the application. - Forty-five thousand euro (EUR45,000) within two-months from the issuance of the Letter of Approval in Principle. No Additional Fees for Spouses and Minor Children (Dependents) The additional fee will now only apply to (i) children over the age of 18; and (ii) parents and/or grandparents. This fee has also been raised from five thousand euro (EUR5,000) to seven thousand, five hundred euro (EUR7,500) for the above categories of dependents. On the other hand, spouses and minor children are now exempt from any additional administration fee. ## Updates to Government Contribution Requirements Standardised Contribution for All Routes A fixed government contribution of thirty-seven thousand euro (EUR37,000) will now apply to both the property purchase and rental options under the MPRP. This represents an increase of seven thousand euro (EUR7,000) for the property purchase option and a reduction of twenty-three thousand euro (EUR23,000) for the rental option. Removal of Dependent Contribution The additional five-thousand-euro contribution (EUR5,000) per dependent has been abolished. ## New Limitation on Eligibility of Parents and Grandparents While parents and grandparents of the main applicant or spouse that are dependent on the main applicant may still be included as dependents, a minor restriction has been introduced: they must not be in full-time employment in order to qualify. --- ## Special Limited Partnership Funds: A New Investment Framework in Malta **Date:** 2025-03-11 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/special-limited-partnership-funds-a-new-investment-framework-in-malta ## A Game-Changer for Collective Investment Schemes The Investment Services Act (Special Limited Partnership Funds) Regulations 2025 were published in February 2025, establishing a new structure by which a collective investment scheme may be set up. This new structure provides greater flexibility to investors, fund managers and other entrepreneurs seeking to establish a fund in Malta. ## Legal Structure, No Separate Legal Personality, Yet Distinct Patrimony ## No Separate Legal Personality Special Limited Partnership Funds do not benefit from separate legal personality. As a result: (i) it is not capable of being the subject of rights and obligations; (ii) it is not capable of owning and holding property under any title; (iii) it is not capable of suing of being sued in its own name. ## Distinct Patrimony However, the assets attributable to the Special Limited Partnership Fund are deemed to constitute a distinct patrimony from those of the general partner/s or limited partner/s. As a result, creditors of any general or limited partner has no recourse against the assets attributable to the Special Limited Partnership Fund. ## Setting Up A Special Limited Partnership Fund: Key Requirements ## Partnership Agreement A Special Limited Partnership Fund is a partnership formed by means of a Partnership Agreement, between two or more partners. The Partnership Agreement must state: (i) the name of the Special Limited Partnership Fund; (ii) that the Special Limited Partnership Fund is constituted in accordance with the Regulations; (iii) the law governing the Partnership Agreement (not limited to Maltese law) (iv) the principal office in Malta of the Special Limited Partnership Fund; (v) the period, if any, for the duration of the Special Limited Partnership Fund; (vi) the objectives for which it is being set up; (vii) the method of valuation of contributions other than cash; (viii) the investment policy of the Special Limited Partnership Fund; (ix) the distribution policy of the Special Limited Partnership Fund; (x) the date of closing of the accounts of the Special Limited Partnership Fund; (xi) the generally accepted accounting principles adopted by the Special Limited Partnership Fund; (xii) the accounting currency of the Special Limited Partnership Fund; (xiii) the procedures in relation to the appointment, removal and resignation of the auditor; (xiv) the mode of dissolution of the Special Limited Partnership Fund; (xv) the procedure for the issue of units to participants; (xvi) the procedure for redemption of units; (xvii) the method of valuation of the Special Limited Partnership Fund’s assets; (xviii) the name and residence/registered office of the general partners; (xix) where a partner acts as a partner in more than one Special Limited Partnership Fund, a description of how the patrimonies are being kept distinct. A copy of the Partnership Agreement will need to be submitted to the MFSA as part of the authorisation process. ## General and Limited Partners At least one of the partners must be a general partner and at least one partners must be a limited partner. ## The General Partners At least one of the general partners shall be a commercial partnership registered in Malta and formed in accordance with the Companies Act. The general partners will be jointly and severally liable for all debts attributable to the Special Limited Partnership Fund without limitation. The general partners must satisfy the eligibility criteria set out in the Investment Services Act, the Investment Services Rules, any other regulations as well as in the Partnership Agreement. ## The Limited Partners The limited partners must agree to contribute to the capital of the Special Limited Partnership Fund in accordance with the Partnership Agreement. The limited partners’ liability is capped, in the sense that they shall not be held liable for any debts attributable to the Special Limited Partnership Fund beyond the amount which they have agreed to contribute in accordance with the Partnership Agreement. The limited partners must satisfy the eligibility criteria set out in the Investment Services Act, the Investment Services Rules, any other regulations as well as in the Partnership Agreement. ## Who Runs the Show? Governance & Management ## Administration and Representation The administration and representation is vested in the General Partners severally unless the Partnership Agreement provides otherwise. ## Representation in Legal Proceedings Legal proceedings by or against a Special Limited Partnership Fund are to be instituted by or against the general partners vested with the administration and representation of the Special Limited Partnership Fund. ## How can Zeta Assist? At Zeta, our experienced team is well-versed in the regulatory framework and particularities of establishing Special Limited Partnership Funds (SLPFs) in Malta. From drafting the Partnership Agreement to ensuring compliance with the Investment Services Act and MFSA requirements, we provide tailored guidance every step of the way. Whether you are an investor, fund manager, or entrepreneur looking to leverage the flexibility of an SLPF, our expertise ensures a smooth and efficient setup process. Get in touch with us to explore how we can support your investment goals. --- ## Navigating MiCA: Malta's Integration of EU Crypto Regulations **Date:** 2025-02-11 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/navigating-mica-maltas-integration-of-eu-crypto-regulations ## Background The Markets in Crypto-Assets Regulation (MiCA) was published in June 2023 and came into full force in December 2024, introducing a harmonized framework for crypto-assets across the EU. It establishes rules for transparency, disclosure, authorisation and supervision of transactions. As an EU Regulation, MiCA’s provisions apply directly across all Member States, including Malta. However, certain areas of the regime allow for national discretion. On the 18th of November 2024, the Malta Financial Services Authority announced that MiCA will be implemented into Maltese law through three key legislative instruments: - The Markets in Crypto-Assets Act (i.e. the MiCA Act); - The Markets in Crypto-Assets Act (Fees) Regulations; and - The Virtual Financial Assets (Amendment No.2) Regulations. ## The Markets in Crypto-Assets Act The Markets in Crypto-Assets Act integrates EU MiCA provisions while incorporating Malta-specific rules for great legal clarity. Crypto-Assets other than Asset Referenced Tokens and E-Money Tokens Any person intending to make an offer to the public or seeking admission to trade such crypto-assets is required, at least 20 working days prior to publication of the crypto-asset white paper, to: - notify their crypto-asset white-paper to the MFSA; - provide the MFSA with a list of the Member States in which they intend to offer their crypto-assets or intend to seek admission to trading; - inform the MFSA of the starting date of their intended offer or intended admission to trading; - provide the MFSA with an explanation as to why the crypto-asset is not one which is excluded from the MiCA Regulation, an e-money token or asset-referenced token. However, such person need not receive any prior approval prior to proceeding. ## Asset-Referenced Tokens In order to offer an Asset-Referenced Token to the public, or to seek the admission of trading of an Asset-Referenced Token in Malta, the person must: - be the Issuer of the Asset-Referenced Token; AND - be either: - a legal person or other undertaking established in the EU and authorised in accordance with Article 21 of the MiCA Regulation; or - a credit institution that complies with Article 17 of the MiCA Regulation. If the person is not the issuer, they require: - consent of the Issuer of the Asset-Referenced Token; and - must comply with Articles 27, 29 and 40 of the MiCA Regulation and Article 16 of the MiCA Act. There is an exception to the above rules where: - over a one-year period, the average outstanding value of the Asset-Referenced Token never exceeds EUR5 million; and - the issuer is not linked to a network of other exempt issuers; OR - the offer to the public is addressed solely to the qualified investors and the token can only be held by such qualified investors. ## E-Money Tokens Only persons which are licenced as a credit institution under the Banking Act, or as financial institution authorised to issue electronic money under the Financial Institutions Act shall qualify as an issuer of e-money tokens. Any such person seeking to offer e-money tokens to the public or seeking their admission to trading shall notify the MFSA at least 40 working days before the day on which they intend to do so. They must also notify the MFSA of their crypto-asset white paper, as well as the information listed in Article 109(4) of the MiCA Regulation, at least 20 working days prior to its publication. However, such persons need not receive any prior approval of their crypto-asset white papers prior to proceeding. ## Crypto-Asset Service Providers Crypto-Asset Service Providers are persons which provide one or more of the following crypto-asset services: - providing custody and administration of crypto-assets on behalf of clients; - operation of a trading platform for crypto-assets; - exchange of crypto-assets for funds; - exchange of crypto-assets for other crypto-assets; - execution of orders for crypto-assets on behalf of clients; - placing of crypto-assets; - reception and transmission of orders for crypto-assets on behalf of clients; - providing advice on crypto-assets; - providing portfolio management on crypto-assets; - providing transfer services for crypto-assets on behalf of clients. In order to provide crypto-asset services, a person shall be either: - a legal person or other undertaking authorised to act as crypto-asset service providers in accordance with Article 63 of the MiCA Regulation; or - a credit institution, central securities depository, investment firm, market operator, electronic money institution, UCITS management company, or an alternative investment fund manger that is allowed to provide crypto-asset services in accordance with Article 60 of the MiCA Regulation. ## The Markets in Crypto-Assets (Fees) Regulations Crypto-Assets under than Asset-Referenced Tokens or E-Money Tokens Any person offering such assets, seeking admission to trading such assets or operating a trading platform for such assets, shall pay the MFSA a notification fee of EUR2,500 upon submission of the notification of the crypto-asset white paper. E-Money Tokens An issuer of e-money tokens shall pay the MFSA a notification fee of EUR3,000 upon submission of the notification of the crypto-asset white paper. ## Asset-Referenced Tokens Credit institutions shall pay the MFSA a fee of EUR3,000 upon submission of its crypto-asset white paper for approval. Legal persons or other undertakings seeking authorisation in respect of an Asset-Referenced Token shall pay the MFSA an application fee of EUR8,000 in respect of their first application for authorisation. All subsequent applications following initial authorisation require an application fee of EUR3,000. Furthermore, all issuers shall pay an annual supervisory fee which amounts to 0.01% of the average outstanding value of the Asset-Referenced Tokens, subject to a minimum fee of EUR2,000 and a maximum fee of EUR250,000. ## Crypto-Asset Service Providers Persons submitting an application to become a crypto-asset service provider must pay the MFSA an application fee ranging between EUR10,000-25,000, depending on the Class of crypto-asset services they intend to provide. However, any person previously licenced as a Virtual Financial Assets service provider as at 30th December 2024 which submits an application by 1st July 2026 shall pay an application fee ranging between EUR5,000-12,500. Furthermore, all authorised crypto-asset service providers are required to pay an annual supervisory fee. ## The Virtual Financial Assets (Amendment No. 2) Regulations The Regulations amend the Virtual Financial Assets Act (VFA Act) in order to exclude those matters now regulated by the MiCA Act, ensuring a smooth transition. ## How Can Zeta Assist? Zeta’s team of legal and regulatory experts specializes in crypto and blockchain legislation. We offer tailored guidance on MiCA compliance, licensing and regulatory strategy. Contact Zeta today to ensure a smooth transition under Malta’s evolving crypto framework. --- ## Fortify your Future: A Comprehensive Guide to Asset Protection Strategies **Date:** 2025-01-03 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/fortify-your-future-a-comprehensive-guide-to-asset-protection-strategies ## Introduction In today’s volatile world, safeguarding wealth has become more crucial than ever. From economic complexities to climate change and political instability, a myriad of risks threaten both businesses and family estates. Asset protection offers a robust framework of strategies designed to shield assets from liabilities, mitigate potential losses, and ensure long-term financial security and peace of mind. ## Corporate Asset Protection Large businesses employ corporate asset protection strategies to minimize exposure to risks and potential losses. A common approach involves using a corporate structure where a holding company oversees multiple subsidiary trading companies. Each subsidiary operates a distinct line of business, with assets strategically separated to safeguard valuable holdings from the vulnerabilities associated with higher-risk activities. ## Asset Protection in Estate Planning For High Net-Worth Individuals (HNWIs), structures such as trusts and foundations are pivotal tools for securing wealth across generations. These structures provide an array of advantages, such as: ## (i) Protecting Estate Division Dividing estates among heirs often leads to conflicts and costly legal proceedings, halting the estate’s potential use or development. Trusts help avoid such fragmentation, maintaining assets as cohesive units for up to 125 years. ## (ii) Shielding Against Personal Liabilities Assets placed in a trust are legally distinct from the personal property of trustees or settlors, insulating them from creditors and providing protection in cases of insolvency or bankruptcy. ## (iii) Reducing Tax Burdens Trusts offer various tax benefits, including minimizing estate taxes, deferring taxable events, and transferring tax liabilities to beneficiaries who might face lower tax rates. ## (iv) Guarding Against Inexperienced Heir Management Without guidance, heirs may mismanage their inheritance. Discretionary trusts ensure that assets are not immediately transferred to heirs, protecting the estate from premature dissipation. ## (v) Ensuring Succession Planning Flexibility Trusts offer adaptability to respond to unforeseen circumstances, such as providing additional support to beneficiaries facing hardships even after the settlor’s passing. ## Conclusion In an uncertain world, asset protection is not a luxury but a necessity. By implementing well-structured strategies, you can secure your wealth, safeguard your legacy, and provide peace of mind for yourself and your loved ones. Let Zeta guide you in fortifying your financial future. ## How Can Zeta Assist? At Zeta, we specialize in crafting tailored asset protection solutions to meet the unique needs of individuals and corporations. Our expertise spans corporate structuring, estate planning, and risk mitigation, ensuring your wealth remains secure and optimized for future generations. --- ## Malta Bareboat Charters **Date:** 2025-01-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-bareboat-charters ## What is a Bareboat Charter? A bareboat charter is a charter whereby the Charterer acquires the ‘bare’ boat for a fixed period of time. Therefore, he must provide his own master and crew to sail her during such period of time. The Charterer also acquires the right to temporarily register the ship under an alternative flag (referred to as the ‘Bareboat Charter Registry’), whilst it retains its original flag (referred to as the ‘Underlying Registry’) for the purposes of protecting the owner’s rights. Maltese law provides for both the Bareboat Charter Registration of a foreign ship under the Maltese flag (referred to as a Bareboat Charter-In Registration), as well as for the Bareboat Charter Registration of a Maltese ship under a foreign flag (referred to as a Bareboat Charter-Out Registration). ## Bareboat Charter-In Registration ## Eligibility for Registration In order for a foreign ship to be eligible for Bareboat Charter Registration in Malta, it must satisfy certain pre-requirements. Firstly, it must satisfy the pre-requisites relating to ownership and vessel age applicable to standard ship registrations (kindly refer to our section on Standard Ship Registration for further information). Furthermore, the following pre-requisites must be met: (i) The Charterer must be a person eligible to own a Maltese ship; (ii) The Ship is not a Maltese ship; (iii) The Ship is registered in a Compatible Registry; (iv) The Ship is not registered in another Bareboat Charter Registry. ## Registration Procedure The following must be submitted to the Registrar: (a) An application for Bareboat Charter registry made by the charterer or his authorised representative. (b) A Declaration of Bareboat Chater made by the charterer; (c) A copy of the Chater Agreement; (d) Transcript of the underlying registration of the ship; (e) Payment of the Prescribed Fee. (f) International Tonnage Certificate. (g) Evidence of Seaworthiness. Consent in writing for the ship to be Bareboat Charter registered in Malta must also be provided from: (a) The authorities of the underlying registry; (b) The owners of the ship; (c) All registered mortgagees. ## Registration Upon all conditions being met, the Registrar will issue a Provisional Certificate of Bareboat Charter Registry or a Certificate of Bareboat Charter Registry, as the case may be. If the ship is not in possession of all valid certificates required by international conventions ratified by the Government of Malta and such other certificates as prescribed by the Regulations, the Registrar will issue a Non-Operational Certificate of Bareboat Chater Registry. ## Obligations of Charterer Following Registration Upon receiving a Certificate of Bareboat Charter Registry, all documents issued by the underlying registry shall be surrendered to the underlying registry. The Charterer shall also deliver a declaration that he has surrendered such documents to the Maltese Registrar. ## Duration and Renewal of Registration The Bareboat Charter Registration shall expire upon the shorter of (i) the termination of the Bareboat Charter, (ii) the expiration of the underlying registration or (iii) two years from the date of Bareboat Charter Registration. The Bareboat Charter Registration can also be renewed for further periods, provided that the Charter produces a transcript of the underlying registry and the consent of the underlying registry, owners and mortgagees. Upon renewal, the Registrar will issue a Renewal Certificate. ## Legal Matters Upon Bareboat Charter registration in Malta, the ship becomes subject to the jurisdiction and control of Malta, and shall comply with all the laws applicable to Maltese ships. However, matters relating to title (ownership), transfers and mortgages over the ship shall remain regulated by the law of the underlying registry. ## Bareboat Charter-Out Registration ## Eligibility The Merchant Shipping Act also allows the possibility for a Maltese ship to be bareboat charter registered in a foreign registry if: (a) The Registrar-General gives his consent in writing; and (b) The Bareboat Charter Registry is a compatible registry. ## Procedure The following documents must be submitted to the Registrar-General prior to consent being granted: (a) An application for Bareboat Charter Registration in a foreign registry; (b) Consent in writing of all registered mortgagees; (c) Written undertaking by the owners to surrender the Maltese Certificate of Registry within 30 days from the bareboat charter registry; (d) Written undertaking by the charterer that the Maltese flag will not be hoisted during the period of bareboat charter registration; (e) A copy of the Bareboat Charter Agreement. ## Duration of Validity and Renewals The Registrar-General’s consent shall remain valid for the shorter of (i) the duration of the bareboat charter agreement, (ii) the expiration of the Maltese registration of the ship; (iii) a period of 2 years. The Registrar-General may renew the validity of his consent for a further period upon the request of the owner or his authorised agent. Obligations of Owner Upon Bareboat-Out Charter Registration Upon registration in a foreign registry, the owner shall inform the Registrar of such registration. Within 15 days from such registration, the owners shall deliver a declaration to the Registrar that the name of the foreign home port has been marked on the stern of the ship in lieu of the name Valletta. Within 30 days from such registration, the owner shall also surrender the Maltese Certificate of Registry and deliver an extract of the foreign bareboat charter registration to the Registrar. Notwithstanding the bareboat-out charter registration, the Maltese ship shall continue to be subject to the payment of all annual fees in Malta. Furthermore, all matters relating to title (ownership), transfers, mortgages and encumbrances continue to be regulated by Maltese law. --- ## Malta: The Perfect Location to Centre your Maritime Operations? **Date:** 2025-01-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-the-perfect-location-to-centre-your-maritime-operations ## General Malta boasts one of the largest ship registers in the world, with over 9,300 vessels (amounting to 86 million tonnes) registered under its flag. This article delves into Malta’s strategic location, tax regime, regulatory framework and modern infrastructure to understand how Malta has become a global maritime powerhouse. ## Malta’s Geographical Location Strategically located in the heart of the Mediterranean, Malta serves as a vital bridge between Europe, North Africa and the Middle East. This central positioning makes it a prime hub for international trade and commerce, particularly for businesses dealing in physical goods. ## Malta’s Modern Infrastructure Malta complements its geographic advantage with world-class port infrastructure, ensuring efficient and reliable global distribution and shipping. This combination of accessibility and logistical support solidifies Malta’s status as the perfect location for companies targeting multiple regional markets. ## Malta’s Skilled Workforce Malta also boasts a highly skilled and multilingual workforce, making it an attractive destination for businesses requiring professional talent. The emphasis on education and training ensures a steady pipeline of professionals equipped to support diverse business needs. ## Malta’s Tax Regime Malta stands out for its highly advantageous corporate tax framework making it one of the most competitive jurisdictions in Europe. Whilst the headline corporate tax rate is set at 35%, the Malta Refundable Tax Credit System allows shareholders to benefit from a 6/7th’s tax refund upon a distribution of dividends. This effectively reduces the corporate tax rate to just 5%, among the lowest in the EU. Malta’s full imputation system of dividend taxation eliminates the risk of double taxation. Corporate profits are taxed only once, since any tax paid by the company is credited in full against the personal tax due on dividends received by shareholders. Malta’s extensive network of Double Taxation Treaties coupled with unilateral double tax relief measures further reduce tax exposure for businesses with international operations, ensuring seamless global business interactions. ## Malta’s Advanced Modern and Legal Regulatory Framework Malta’s modern and transparent regulatory system is designed to support innovation and foster a business-friendly environment. Combining elements from both common law and civil law systems, Malta offers a unique legal landscape that provides certainty and efficiency for entrepreneurs and businesses. The regulatory framework is particularly attractive to maritime companies and lenders, offering robust protections like security by title transfer or mortgage. The streamlined legal processes, including the use of security trustees, minimize bureaucracy and ensure that businesses can operate with confidence and agility. ## So, is Malta the Perfect Location to Centre your Maritime Operations? With its strategic geographic location, competitive tax regime, modern regulatory framework, and advanced infrastructure, Malta is uniquely positioned as a premier hub for maritime operations. Whether you are a shipping company, a logistics provider, or a business requiring access to multiple regional markets, Malta offers unparalleled benefits. ## How can Zeta Assist? At Zeta, we specialize in helping businesses establish and optimize their operations in Malta. From navigating the regulatory landscape to ensuring the most efficient corporate structure for your business, our team provides expert guidance to ensure a smooth and successful transition to Malta’s dynamic maritime ecosystem. Let us help you seize the opportunities Malta has to offer. Contact Zeta today to learn more! --- ## Malta: The Perfect Location to Set Up Your Company? **Date:** 2025-01-03 **Category:** Company Formation **URL:** https://zeta-financial.com/news/malta-the-perfect-location-to-set-up-your-company ## Introduction Over the years, Malta has cemented its reputation as a prime destination for global entrepreneurs and international businesses. Offering a unique combination of advantages that distinguish it from other jurisdictions, Malta continues to attract companies seeking a supportive, strategic and thriving environment. This article delves into Malta’s tax benefits, strategic location, regulatory framework and exceptional quality of life to explore why Malta has become a magnet for entrepreneurs and businesses alike. ## Malta’s Tax Regime Malta stands out for its highly advantageous corporate tax framework making it one of the most competitive jurisdictions in Europe. The headline corporate tax rate is set at 35%, but shareholders may benefit from a 6/7th’s tax refund upon the distribution of dividends. This reduces the effective tax rate to just 5%, among the lowest in the EU. Malta’s full imputation system of dividend taxation prevents company profits from being taxed at both corporate level (corporate tax on company profits) and personal level (income tax on dividends), since any tax paid by a company is imputed in full as a credit against the tax due by the shareholder on the dividend received. Additionally, Malta has a robust network of double taxation treaties and offers unilateral double tax relief in cases where no treaty exists, ensuring minimal tax exposure for businesses with international operations. ## EU Membership Malta’s accession to the European Union in 2004 significantly bolstered Malta’s business appeal. All companies and businesses registered in Malta enjoy unrestricted access to the EU Single Market, allowing for the free movement of goods, services, people and capital across all Member States. This seamless integration into the EU provides businesses in Malta with unparalleled opportunities to expand and operate without facing trade barriers. ## Malta’s Geographical Location Strategically located in the heart of the Mediterranean, Malta serves as a vital bridge between Europe, North Africa, and the Middle East. This central positioning makes it a hub for international trade and commerce, especially for businesses dealing in physical goods. Malta complements its geographic advantage with world-class port infrastructure, ensuring efficient and reliable global distribution and shipping. This combination of accessibility and logistical support makes Malta a preferred location for companies targeting multiple regional markets. ## Malta’s Advanced Modern Legal and Regulatory Environment Malta’s legal and regulatory system is designed to encourage innovation, foster supportive environment for business and provide certainty. The regulatory landscape is modern, transparent and efficient, enabling entrepreneurs and businesses to navigate legal processes with ease and certainty. ## Malta Enterprise – Financial Support to Attract Investment To maintain its competitive edge on the global stage, the Maltese government, through Malta Enterprise, offers a range of grants, subsidies, and financial assistance programs. These initiatives are tailored to attract foreign direct investment and support entrepreneurs, reinforcing Malta’s position as a hub for innovation and growth. ## The Mediterranean Lifestyle In addition to its sunny climate, Malta offers a remarkable standard of living that caters to both personal and professional well-being. The island is renowned for its excellent healthcare services and robust education system, ensuring residents enjoy access to top-tier facilities and opportunities. Complementing its modern amenities, Malta boasts a unique cultural blend—steeped in history yet buzzing with contemporary arts, festivals, and a vibrant nightlife. This harmonious mix of tradition and modernity, combined with Malta’s reputation as one of the safest countries in Europe, creates an inviting and secure environment for families and professionals alike. ## So, is Malta the Perfect Location to Set Up a Company? Malta combines geographic advantages, business-friendly policies, and a supportive infrastructure to create an environment where international businesses can thrive. Its mix of strategic benefits and quality of life makes it an outstanding choice for entrepreneurs and companies looking for a dynamic base of operations. ## How can Zeta Assist? At Zeta, we specialize in making the process of setting up and managing your company in Malta seamless and stress-free. Whether you need assistance with company formation, advisory services, structuring, or relocation, our team of experts is here to help. Get in touch with us today to discover how we can turn your vision into reality and ensure your success in Malta’s dynamic business landscape. --- ## Mastering Yacht Ownership: The Power of a Strategic Ownership Structure **Date:** 2025-01-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/mastering-yacht-ownership-the-power-of-a-strategic-ownership-structure ## Introduction Owning a yacht is often seen as the pinnacle of luxury, offering unparalleled freedom, leisure and status. Whether you envision cruising the open seas, hosting lavish parties on pristine waters or enjoying tranquil retreats in secluded coves, a yacht represents more than just a mode of transportation – it is a lifestyle statement. However, with this privilege comes significant responsibility, particularly in managing the financial and logistical complexities of ownership. A well-planned ownership structure is essential for maximizing benefits while minimizing liabilities and ensuring compliance with legal and tax regulations. Decisions such as selecting the right legal entity and registering in an optimal jurisdiction have far-reaching implications, addressing key concerns like privacy, tax efficiency, and liability protection. This guide will delve into the importance of planning an effective yacht ownership structure, exploring key considerations to help prospective and current yacht owners navigate the complexities of this exciting and rewarding endeavour. ## Asset Protection A well-planned ownership structure is crucial for asset protection, particularly in the context of yacht ownership. By carefully designing the ownership arrangement, such as incorporating a legal entity like a Maltese company, owners can shield their personal assets from potential liabilities arising from yacht operations. This separation ensures that claims, disputes, or other financial risks related to the yacht do not directly impact the owner’s personal wealth. ## Tax Planning A well-planned ownership structure is essential for achieving tax optimization in yacht ownership. Strategic decisions regarding the jurisdiction of registration, ownership entities, and operational arrangements can significantly reduce the overall tax burden associated with owning and operating a yacht. By incorporating a company to hold the yacht and structuring its operations in compliance with local and international tax regulations, owners can benefit from reduced VAT rates, tax deferrals, and deductions. Furthermore, a carefully designed structure ensures that tax obligations are clearly defined and legally optimized, reducing the risk of unexpected liabilities or penalties. This approach not only maximizes the financial benefits of yacht ownership but also ensures long-term compliance and efficiency. ## Privacy A well-planned ownership structure is vital for ensuring privacy in yacht ownership. Registering a yacht through a legal entity, such as a company or trust, helps protect the owner’s personal identity by separating it from public records associated with the yacht. This separation is particularly important for high-net-worth individuals who value discretion and wish to avoid unwanted attention. A robust ownership structure also allows for greater control over the release of sensitive information, ensuring that details about the yacht’s ownership, operation, and financial arrangements remain confidential. By prioritizing privacy through a carefully designed structure, owners can enjoy their investment without compromising their security or personal boundaries. ## Eligibility for the Maltese Flag The Maltese maritime flag is highly attractive to yacht owners, offering a prestigious reputation, favourable tax incentives, and robust legal protections. As one of the largest and most efficient ship registries globally, Malta provides streamlined registration processes and a regulatory framework aligned with international standards. Its favourable VAT schemes and low operational costs make it particularly appealing, while its recognition within the European Union ensures credibility and respect in global ports. Malta’s maritime focus and efficient processes make it an ideal choice for yacht registration. However, non-EU, EEA, Swiss or British citizens cannot register a yacht under the Maltese Flag in their personal name. This limitation can be easily addressed by establishing a Maltese company to hold ownership of the yacht. By incorporating such a company, yacht owners gain eligibility to register under the Maltese flag, allowing them to benefit from its numerous advantages while complying with regulatory requirements. ## Yacht Management Expertise A well-planned ownership structure is essential for leveraging yacht management expertise effectively. By incorporating a dedicated legal entity, such as a Maltese company, yacht owners can streamline operational management by engaging professional management services under the entity’s umbrella. This structure facilitates clear contractual relationships with crew, maintenance providers, and charter operators, ensuring smooth and efficient operations. Additionally, it allows for the delegation of administrative tasks, such as compliance with maritime regulations, insurance management, and financial reporting, to experts who can handle them with precision. A strategic ownership setup not only enhances operational efficiency but also ensures that the yacht is managed to the highest standards, maximizing its value and the owner’s enjoyment. ## How can Zeta Assist? At Zeta, we specialize in delivering end-to-end solutions tailored to the unique needs of yacht owners, ensuring their maritime ventures are as seamless and rewarding as possible. From establishing robust ownership structures that optimize asset protection, tax efficiency, and privacy, to managing the day-to-day operations of yachts, we provide comprehensive support across all aspects of ownership and management. Our expertise extends to forming and administering companies or trusts, selecting the ideal flag for registration, and ensuring compliance with ever-evolving regulations. Additionally, our yacht management services include charter oversight, financial reporting, vessel administration, and crew management, ensuring all operational aspects are handled with precision. By prioritizing expertise, efficiency, and compliance, Zeta empowers yacht owners to focus on enjoying their investment while we take care of the complexities. Whether through tailored solutions for financial optimization, meticulous oversight of regulatory requirements, or facilitating the recruitment and training of skilled crew members, we are dedicated to safeguarding your interests and enhancing your yachting experience. Trust Zeta to be your reliable partner in navigating the intricacies of yacht ownership and management, allowing you to enjoy the open seas with confidence and peace of mind. For more information on our Yacht Services, please visit the following page: services/maritime.html --- ## Mortgage in Maltese Maritime **Date:** 2025-01-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/mortgage-in-maltese-maritime ## What is a Mortgage? A mortgage is an instrument executed by the mortgagor (the debtor) in favour of the mortgagee (the debtor), by which a ship may be made security for a debt. The Instrument of Mortgage must be made in the prescribed form, in the presence of a witness. The Instrument of Mortgage is usually accompanied by a Deed of Covenants specifying the time and method of repayment of the debt, the interest rate, insurance requirements, restrictions on the operation of the ship and the rights of the mortgagee upon default. ## Why Use a Mortgage? Mortgage is considered to be an extremely secure form of security under Maltese Law due to (i) its extended reach, (ii) limitation rights available to the mortgagee, (iii) priority rights granted upon default and (iv) strong self-help remedies available upon default. ## Extended Reach Maltese law expressly provides that a ship shall include together with its hull, all equipment, machinery and other accessories belonging to the ship. Even equipment, machinery or accessories which have been temporarily removed from the ship are considered to constitute part of the ship for security purposes. Hence, a mortgage over a ship also extends to such equipment, machinery and accessories. The mortgage continues to attach to the ship and accessories until it is discharged or extinguished. It can only be extinguished in three cases, being: (i) If the asset is forfeited and the mortgagee has consented to or conspired in the act leading to the forfeiture. (ii) If the asset is sold by court order (judicial sale), in which case the rights of the mortgagee shall pass on to the proceeds of the sale. (iii) If the asset is sold by a mortgagee in possession free from encumbrances, in which case the rights of all prior ranking mortgagees shall pass on to the proceeds of the sale. The mortgage also extends to any indemnity arising from collisions and other mishaps as well as any insurance proceeds. A mortgage may cover future obligations provided a maximum sum is expressly stated in the Instrument of Mortgage. However, the application of this rule is limited to mortgages executed in favour of credit institutions in approved jurisdictions. ## Limitation Rights The Instrument of Mortgage can also be drafted in a manner to require the prior written consent of the mortgagee prior to any further mortgages being registered on the ship. However, this rule shall not apply where such further mortgage is executed in favour of an existing mortgagee. ## Priority Rights Under Maltese law, a ship constitutes a separate and distinct asset to the estate of its owner for the security of actions to which it is subject. This means that all claims to which the ship is subject will have preference over all other claims of the owner’s estate. This preference is also not affected by the bankruptcy or insolvency of the owner. Even in cases of bankruptcy or insolvency of the owner, the claims of mortgagee shall not be interrupted by any liquidators. ## Self-Help Remedies Upon default and due notice in writing to the mortgagor, the mortgagee shall be entitled to: (a) Take possession of the ship; (b) Sell the ship, provided there are no prior ranking mortgagees (in which case, the consent of all prior ranking mortgagees is required); (c) Apply for any extensions, pay fees, receive certificates and generally do all such things in the name of the owner as may be required to maintain the status and validity of the registration of the ship. A mortgage is also considered to be an executive title under Maltese law, meaning that the mortgagee may enforce his claim against the mortgagor without needing to go through lengthy and expensive court proceedings. ## Registration of Mortgage ## Importance of Registration Mortgages rank amongst each other from the day and hour on which they are registered. Furthermore, many of the aforementioned rights (such as all self-help remedies) are only available to registered mortgages. --- ## Outsourcing Payroll Services: A Game-Changer for Your Business **Date:** 2025-01-03 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/outsourcing-payroll-services-a-game-changer-for-your-business ## Introduction In today’s fast-paced business environment, managing a company’s administrative functions has become increasingly complex. For many businesses, outsourcing certain tasks has emerged as a practical way to ease the burden on management while ensuring efficiency and compliance. Payroll is one such function that many companies choose to outsource—and for good reason. Let’s explore why this trend is growing and how it can benefit your business. ## The Benefits of Outsourcing Payroll ## Compliance One of the most compelling reasons to outsource payroll is the need for compliance. In Malta, employment laws and regulations surrounding tax and social security are becoming increasingly intricate. Understanding and adhering to these rules is a critical but daunting responsibility for businesses. Failure to comply can result in heavy penalties, legal disputes, or reputational damage. Businesses essentially have two choices: they can either hire and supervise in-house payroll professionals, which still leaves them bearing the compliance risk, or they can outsource payroll to experts who specialize in navigating these complexities, ensuring full compliance with local laws and regulations. ## Time-Efficiency Time efficiency is another significant advantage of outsourcing payroll services. Managing payroll internally demands a deep understanding of employment laws and meticulous attention to detail, both of which require considerable time and effort from management. Overseeing an in-house payroll team further adds to this administrative burden. By outsourcing payroll, businesses free up valuable time for their management teams, allowing them to focus on activities that directly contribute to the company’s profitability and growth. ## Cost-Efficient Cost efficiency is an equally important factor, especially for small to medium-sized businesses that may lack the resources to maintain an in-house payroll team. Running an internal team is not only expensive but can also be inefficient if payroll needs fluctuate. Outsourcing provides a more cost-effective solution, as businesses can leverage the expertise of payroll professionals without the fixed costs of maintaining full-time staff. ## Accuracy Ensuring accuracy in payroll processing is crucial to maintaining trust and avoiding disputes. Errors, such as overpayment or underpayment, can have significant consequences, from financial loss to strained employee relationships and morale issues. Outsourcing payroll to experienced professionals significantly reduces the risk of mistakes, as these specialists use their expertise and advanced tools to ensure precise calculations and timely payments. This accuracy not only benefits employees but also safeguards the company’s financial stability and reputation. ## Reliability Reliability is a cornerstone of effective payroll management. In-house payroll teams, especially in small businesses, may face disruptions due to staff absences or competing priorities. This can lead to delayed payments, negatively impacting employee satisfaction and morale. Outsourced payroll providers guarantee consistent and reliable service, ensuring that employees are always paid on time, which contributes to a positive and motivated workforce. ## How Can Zeta Assist? At Zeta, we understand the challenges businesses face when it comes to managing payroll. Our team of experienced professionals offers comprehensive payroll solutions designed to meet the unique needs of any business. From assisting with applications for Maltese residence and work permits to drafting employment contracts, registering employees, and managing tax submissions, we provide end-to-end support to simplify the payroll process. Our services also include processing salary payments, distributing payslips, preparing employee tax returns, and ensuring compliance with FS3, FS5, and FS7 submissions. Additionally, we assist with specialized needs, such as maternity leave applications, further reducing the administrative burden on your team. With Zeta’s reliable and accurate payroll solutions, businesses can focus on their core activities, confident that their payroll is in safe hands. Outsourcing payroll is more than a convenience; it’s a strategic move to enhance efficiency, reduce costs, and ensure compliance. Contact Zeta today to find out how we can support your business and help it thrive. --- ## Relocating to Malta: Your Solution to the End of the UK Non-Dom Regime **Date:** 2025-01-03 **Category:** Residency **URL:** https://zeta-financial.com/news/relocating-to-malta-your-solution-to-the-end-of-the-uk-non-dom-regime ## Understanding the Current UK Non-Dom Regime The United Kingdom’s current UK Non-Dom Regime currently provides a favourable tax regime for individuals resident but not domiciled in the UK (UK Non-Doms). Under this system, UK Non-Doms are only required to pay UK tax on (i) income arising in the UK and (ii) foreign income and capital gains which are remitted to the UK. ## The End of an Era: Abolishment of the Non-Dom Regime On 30 October 2024, the UK’s Autumn Budget announced that the Non-Dom Regime will be abolished, effective 6 April 2025. On the same day, the HM Treasury and HM Revenue and Customs issued a policy paper outlining the upcoming changes. ## What’s Changing? The Key Reforms As from 6th April 2025, domicile will no longer be used as a connecting factor in the UK tax system. Instead, taxation will be based solely on tax residence. Consequently, all UK tax resident, including former Non-Doms, will become taxable on their worldwide income and capital gains, regardless of whether these are remitted to the UK. The reform introduces a temporary Four-Year Foreign Income and Gains (FIG) Regime. Under this regime, new UK tax residents—who have not been UK tax residents for at least 10 years prior—can benefit from tax relief on foreign income and capital gains not remitted to the UK during their first four years of residence. ## The Solution: Relocation to Malta In light of the upcoming reforms, many UK Non-Doms are seeking alternative jurisdictions to establish their tax residence. Malta, renowned for its idyllic landscapes and rich cultural heritage, has emerged as a leading contender. Malta’s tax system offers even greater benefits than the pre-reform UK Non-Dom Regime. Maltese Non-Doms are taxed only on (i) income and capital gains sourced in Malta and (ii) foreign sourced income remitted to Malta. This means that any foreign capital gains, whether remitted to Malta or not, are not taxable in Malta. This attractive remittance-based tax system is further enhanced by Malta’s extensive network of Double Taxation Treaties. Additionally, Malta imposes no inheritance or wealth taxes, making it an excellent choice for individuals aiming to preserve their wealth for future generations. ## Malta: Tailored Residency Options for Every Need Malta offers diverse residency routes for EU/EEA citizens and non-EU/EEA nationals, accommodating a variety of personal and professional needs. ## EU Ordinary Residence EU Citizens enjoy the right to leave their home state and freely reside within the territory of another Member State, including Malta. However, where an EU citizen intends to reside in Malta for a period exceeding 3 months, they must obtain a Maltese temporary residence card under one of the following categories: (i) employment in Malta; (ii) self-employment in Malta; (iii) student in Malta; (iv) self-sufficiency, or (v) family. Once any EU national who has obtained temporary residence in Malta has lawfully resided in Malta for an uninterrupted period exceeding five years, they may apply for permanent residency. Temporary absences of up to six months per year do not interrupt the five-year period. ## The Single Permit Third-Country Nationals (TCNs) require a residence permit to remain in Malta following the expiry of their Schengen Visa (or 90-day period in the case of Schengen-exempt countries). Persons looking to be employed in Malta must obtain a Single Permit, which entitles them to reside and work in Malta. ## Other Residence Options Malta also offers a wide-range of alternative residency routes, with some conferring favourable tax regimes too: ## (i) The Malta Retirement Programme The Malta Retirement Programme is available to all EU, EEA and Third-Country Nationals. Under the Malta Retirement Programme, beneficiaries enjoy a favourable tax rate of 15% on all income arising in Malta (subject to an annual minimum tax of €7500). ## (ii) The Malta Residence Programme and the Global Residence Programme The Malta Residence Programme and Global Residence Programme are essentially identical programmes, with the Malta Residence Programme being available to EU/EEA nationals and the Global Residence Programme being available to TCNs. Under either of these programmes, beneficiaries enjoy a favourable tax rate of 15% on all income arising in Malta (subject to an annual minimum tax of €15,000). ## (iii) The Malta Digital Nomad Visa The Malta Digital Nomad Visa is available to TCNs only. Under the Malta Digital Nomad Visa, residents enjoy a favourable tax rate of 10% on authorised work. ## (iv) The Malta Permanent Residence Programme Under the Malta Permanent Residence Programme, successful applications obtain the right to reside permanently in Malta, provided they continue to meet the requirements for the first five years of residence. ## Why Choose Zeta? Your Trust Partner in Relocation At Zeta, our experienced professionals specialize in assisting individuals and families with relocation and residency applications. From navigating the application process to identifying the most suitable residency programme for your needs, we ensure a seamless transition to life in Malta. Contact us today to learn how we can help you take advantage of Malta’s exceptional tax and lifestyle opportunities. --- ## Shipping Organisations **Date:** 2025-01-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/shipping-organisations ## What is a Shipping Organisation? The Merchant Shipping Act provides that an organisation shall qualify as a shipping organisation if: (a) its principal objects consist in one or more of the following activities (hereinafter referred to as the ‘Activities’): (i) The ownership, operation, administration and management of Maltese ships and carrying on of all ancillary financial, security or commercial activities in connection therewith; (ii) The ownership, operation, administration and management of foreign ships and carrying on of all financial, security or commercial activities in connection therewith; (iii) The holding of shares/interests in entities established for any of the aforementioned purposes and the carrying out of all ancillary financial, security or commercial activities in connection therewith; (iv) The raising of capital through loans, guarantees or securities when the purpose is to achieve any of the objects aforementioned for the shipping organisation itself or for other shipping organisations within the same group; and (v) The carrying out of other activities within the maritime sector which the Minister may prescribe by Regulations. AND (b) It obtains and maintains a licence from the Registrar-General to enable it to carry on such activities. ## Licensing of Shipping Organisation ## Automatic Licensing in Certain Cases A shipping organization carrying out the Activities indicated in (i) or (iv) above, which becomes a registered owner or registered bareboat charterer shall be deemed to have been granted a licence as a shipping organisation authorising it to carry out such Activities. In all other cases, the standard procedure below applies. ## Application A shipping organisation may file an application to be licenced as such. The application for licensing as a shipping organisation shall be signed by an authorised officer, representative or attorney of the applicant giving such information, details and documents as may be required by the Registrar-General. ## Granting of the Licence If the Registrar-General is satisfied that the applicant qualifies as a shipping organisation and on payment of the prescribed fee, he shall issue a licence in favour of the applicant organisation, authorising it to carry on any one or more of the Activities. ## Validity The licence shall remain valid for a period of 5 years from the date of issue. The licence may be renewed for further periods of 5 years upon application and payment of the prescribed fee. ## Amendment of Licence A licenced shipping organisation may file an application requesting to be authorised to carry out further Activities on addition or instead of any Activities already authorised. If the Registrar-General is satisfied that the shipping organisation qualifies to have its licence so altered, he shall authorise that organisation to carry out the Activities. ## What Form can a Shipping Organisation Take? A shipping organisation can be in the form of (i) a partnership or (ii) a limited liability company, whether private or public, (iii) a trust, (iv) a foundation or (v) any foreign corporate body or other entity enjoying legal personality which has an established place of business in Malta. Under the Merchant Shipping (Licensing of Shipping Organisations) Regulations, international owners are deemed to have an established place of business in Malta. ## Shipping Company Where the shipping organisation is to take the form of a shipping company, the directors shall elect whether the company shall be regulated by the Companies Act or by the Merchant Shipping (Shipping Organisations – Private Companies) Regulations. This can be done upon incorporation or at any time by means of an appropriate declaration in the Memorandum of Association. The law provides that the directors are vested with the power to amend or vary the relative clause of the Memorandum of Association at their discretion without reference to the general meeting of the company. Such an election shall be binding on the company for at least one calendar year. It is important to note that it is only private companies which may opt to be regulated under the latter. Should a private company registered under the Regulations change its status to a public company, it shall no longer be regulated by the Regulations and shall become subject to the Companies Act. ## Benefits of a Shipping Company under the Merchant Shipping (Shipping Organisations – Private Companies) Regulations – The Regulations allow for Shipping Companies to be constituted as Single Member Companies. – The Single Member may also be the sole director of the Shipping Company. – No Company Secretary is required under the Regulations. ## Taxation and Other Matters Relating to Shipping Organisations ## Taxation of Shipping Organisations ## Taxation ## Corporate Taxation Shipping Organisations satisfying the conditions laid out in the Merchant Shipping (Taxation and Other Matters relating to Shipping Organisations) Regulations are exempt from: (a) Any further tax payable on the income of the shipping organisation deriving from shipping activities. (b) Any further tax payable on the profits or gains of the shipping organisation derived from the sale or other transfer of a tonnage tax ship. (c) Any further tax payable on the profits or gains of the shipping organisation derived from the disposal of any rights to acquire a ship which when completed would qualify as a tonnage tax ship. ## Dividend The distribution of profits to shareholders derived from the activities specified above shall also be exempt from tax. ## The Conditions ## Payment of Tonnage Taxes The tax exemption only applies if all relevant tonnage taxes are duly paid by the shipping organisation in accordance with the Regulations. ## Separate Accounts For the year in respect of which the exemption from tax is applied, separate accounts must be held clearly distinguishing the payments and receipts of the shipping organisation concerned in respect of shipping activities and the payments and receipts in respect of any other business. ## Taxation of Ship Management Activities ## What are Ship Management Activities? Ship Management Activities are those activities carried out by a ship manager and consisting in, but not limited to: (a) the provision of competent personnel to supervise the management and general efficiency of a ship; and/or (b) the provision of other technical management services usually performed by a ship manages as defined in the BIMCO Standard Ship Management Agreement. ## Who is a Ship Manager? A Ship Manager is a shipping organisation established in the Union that satisfies all the following conditions: (a) It has assumed responsibility for the technical or crew management of a ship; (b) It complies with international standards and fulfils the requirements under EU Law; (c) It satisfies the conditions prescribed by the Registrar-General; (d) Its objects specifically include the activities specified in (a); (e) It has registered with the Registrar-General. ## Taxation ## Corporate Any income derived by a ship manager from ship management activities shall also be deemed to be income derived from shipping activities and thus, exempt from tax, if all the following conditions are met: (i) Separate accounts are held distinguishing payments in respect of shipping activities and payments in respect of any other business. (ii) The ship manager has paid the relative annual tonnage tax. (iii) At least 2/3rds of the tonnage of the ships to which ship management activities are provided are managed from the territory of the Union. (iv) The tonnage of the ships to which ship management activities are provided satisfies the flag-rink requirement. ## Dividends The distribution of profits to shareholders derived from the activities specified above shall also be exempt from tax. ## Taxation of Qualifying Ancillary Activities ## Taxation ## Unconditional Exemptions Any profits derived from the following ancillary activities may also benefit from tax exemptions: (a) The embarkation and disembarkation of passengers on a tonnage tax ship operated by a shipping organisation. (b) Sales and facilities which are normally provided to customers by seagoing passenger ships, including (i) the provision of food or drink for immediate consumption and (ii) entertainment for which no additional fee is charged, but not betting or gambling. (c) Shipping activities carried on by the shipping organisation in relation to a tonnage tax ship operated by another qualifying shipping organisation in the same group. (d) Other activities of a similar nature to the above. (e) Activities approved by the European Commission as eligible for tonnage tax purposes. ## The First Set of Conditional Exemptions The provision of the following specified ancillary activities may also benefit from the tax exemptions provided that the revenues generated from such activities does not exceed 50% of the gross revenues generated from shipping activities: (a) The carriage of passengers or cargo on non-tonnage tax ships operated by a licensed shipping organisation, where certain conditions are met. (b) Sales and facilities which are normally provided to customers by seagoing passenger ships, including (i) the sale of alcohol, perfume and tobacco, (ii) currency exchange for personal expenditure, and (iii) health and spa services. (c) Administrative and insurance services directly related to the carriage of passengers or cargo. (d) The provision of holidays sold to the customer, where certain conditions are met. (e) The loading and unloading or cargo on a tonnage tax ship. (f) The consolidation or breaking of cargo carried on a tonnage tax ship. (g) The temporary placement of cargo carried on a tonnage tax ship. (h) The rental of containers for goods to be caried on a tonnage tax ship. (i) The provision of excursions for passengers of a tonnage tax ship. (j) Advertising and marketing corresponding to the sale of advertising space on board tonnage tax ships. In order to benefit from the tax exemptions, such ancillary activities must relate to tonnage tax ships that have a substantial connection with the shipping organisation’s shipping activities, or with the shipping activities of another qualifying licensed shipping organisation within the same group. However, commercial activities which form part of the operation of a port carried on for profit are explicitly excluded. ## The Second Set of Conditional Exemptions The provision of the following specified ancillary activities may also benefit from the tax exemptions provided that the turnover from such activities amounts to less than 25% of the turnover of the first set of exempted ancillary activities: (a) Betting or gambling facilities normally offered to customers by seagoing passenger ships for entertainment; (b) The sale to passengers on seagoing ships of luxury goods of a kind normally offered to such passengers. In order to benefit from the tax exemptions, such ancillary activities must relate to tonnage tax ship that have a substantial connection with the shipping organisation’s shipping activities, or with the shipping activities of another qualifying licensed shipping organisation within the same group. However, commercial activities which form part of the operation of a port carried on for profit are explicitly excluded. ## Limitation Revenues derived from the sale of goods or services on board ships not customarily provided to passengers may not benefit from the tax exemption. ## Taxation of Certain Maritime Services ## Taxation of Ocean Towage The provision of ocean towage services may benefit from the tax exemption if: (a) The tug is a Union ship; (b) More than 50% of the towage activity effectively carried out by the tug constitutes maritime transport. ## Taxation of Dredging Services The provision of dredging services may benefit from the tax exemption if: (a) The ship providing the dredging services is self-propelled; (b) The ship providing the dredging services is a Union ship; and (c) The ship spends at least 50% of its yearly operational time in maritime transport. However, the tax exemption shall only apply in respect of income derived from maritime transport services. ## Tonnage Tax Ships ## Application to be Registered as a Tonnage Tax Ship As seen, many of the tax exemptions apply solely to tonnage tax ships. In order to qualify as a tonnage tax ship, the shipping organisation wishing to own, manage or operate a tonnage tax ship shall make an application to the Registrar-General. ## What Ships may be Declared as Tonnage Tax Ships? ## Union Ships Any ship which is engaged in shipping activities may be declared as a tonnage tax ship. Shipping activities are the following: (a) The international carriage of goods or passengers by sea and other activities approved for tonnage tax purposes by the European Commission. (b) Activities that are integral or directly linked to the business of operating tonnage tax ships when carried out in conjunction with (a); (c) Ancillary activities when carried out in conjunction with (a). ## Non-Union Ships Non-Union ships that are owned, chartered, managed, administered or otherwise operated by a shipping organisation may also be declared as a tonnage tax ship if: (a) the strategic and commercial management of all ships owned, managed or operated by the shipping organisation is actually carried out from the Union; AND (b) (i) the shipping organisation owns, manages and operates at least 60% of its total tonnage under a Union flag; or (ii) a percentage of the tonnage is Union-flagged, and that the percentage operated by shipping organisations established in Malta has not decreased on average over a period of three years. ## Disclaimer The information provided in this text is intended for general informational purposes only. It is not, and should not be construed as, professional legal, tax, financial, or any other form of professional advice. While we strive to ensure that the information shared is accurate and up-to-date, it may not reflect the most current legal, regulatory, or tax developments. Additionally, laws and regulations can vary significantly across different jurisdictions, and their interpretation and application can change over time. --- ## The United Nations Pensions Programme (UNPP) **Date:** 2025-01-03 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/the-united-nations-pensions-programme-unpp ## Introduction The United Nations Pensions Programme (UNPP) is regulated under the United Nations Pensions Programme Rules, which came into force in 2015 and were subsequently amended in 2020. Under the United Nations Pensions Programme (UNPP), all United Nations retirees (other than Maltese nationals) may apply for residence in Malta together with a Special Tax Status. ## Benefits Upon receiving Special Tax Status in Malta, the beneficiary will be granted the right to reside in Malta and will be taxed in Malta as follows: – UN Pension/Widow’s Benefit income: 0% (exempt from income tax in Malta); – Foreign-Sourced Income Remitted to Malta: 15% (subject to a minimum tax of €10,000 per annum); – Malta-Sourced Income: 35%. Any (i) foreign-sourced income which is not remitted to Malta and (ii) any foreign-sourced capital gains, whether or not remitted to Malta, are not usually subject to Maltese tax. It may also be possible for beneficiaries to claim double tax relief under Malta’s wide network of Double Tax Treaties and Unilateral Double Tax Relief Mechanisms. ## Eligibility Criteria In order to be eligible to apply for special tax status under the United Nations Pensions Programme, applicants must satisfy the following conditions: ## (i) Receipt of a UN Pension or Widow/Widower’s Benefit The applicant must be in receipt of a United Nations pension or Widow/Widower’s benefit. Furthermore, at least 40% of the aforementioned pension must be received in Malta. ## (ii) Qualifying Property Holding The applicant must hold a Qualifying Property and occupy it as their primary residence. Qualifying Property holdings can take the form of a: ## (a) Qualifying Owned Property: – Immovable Property situated in Malta for at least €275,000; or – Immovable Property situated in Gozo or the South of Malta for at least €220,000. ## (b) Qualifying Rented Property: – Immovable Property situated in Malta leased for not less than €9600 per annum; or – Immovable Property situated in Gozo or the South of Malta for at least €8750 per annum. Under the United Nations Pensions Programme Rules, the following localities are considered ot be in the South of Malta: Birzebuggia, Cospicua, Fgura, Ghaxaq, Gudja, Kalkara, Kirkop, Luqa, Marsascala, Marsaxlokk, Mqabba, Paola, Qrendi, Safi, Santa Lucija, Senglea, Siggiewi, Tarxien, Vittoriosa, Xghajra, Zabbar, Zejtun and Zurrieq. ## (iii) Other General Requirements 1. They must not be permanent or long-term residents of Malta; 2. They must be in receipt of stable and regular resources sufficient to maintain themselves without recourse to the social assistance system in Malta; 3. They must be in possession of sickness insurance; 4. They must be in possession of a valid travel document; 5. They must be able to communicate in English or Maltese; 6. They must be Fit and Proper persons. ## The Application Procedure ## Requirement of an Authorised Registered Mandatary (ARM) All individuals seeking special tax status under the United Nations Pensions Programme shall authorise an Authorised Registered Mandatary to act on their behalf in respect of all applications, submissions and filings. ## Application The applicant must first complete and file an application to the Commissioner for Revenue (CFR) through the Authorised Registered Mandatary. Upon submission of the application, the applicant must pay (i) an administrative fee of €4000 if the Qualifying Property is situated in Malta; or (ii) an administrative fee of €3500 if the Qualifying Property is situated in Gozo or the South of Malta. ## Acknowledgement Letter The CFR will then issue an Acknowledgement Letter and deliver it to the Authorised Registered Mandatary. The Acknowledgement Letter will state whether any additional documents need to be submitted and whether any of the submitted documents do not satisfy the requirements. ## Due Diligence and Face-to-Face Meeting The CFR will then conduct its Due Diligence procedure, including the holding of a face-to-face meeting. ## Letter of Intent If the Due Diligence procedure is successfully completed, the CFR will issue a Letter of Intent and deliver it to the Authorised Registered Mandatary. Within twelve months from the date of issue of the Letter of Intent, the applicant, through the Authorised Registered Mandatary, must provide the CFR with following documents: – A Certified Copy of the Final Deed of Sale (in the case of a Qualifying Owned Property) or Lease Agreement (in the case of a Qualifying Rented Property); – A Completed Notice of Primary Residence. The applicant will also need to pay the Minimum Tax and provide the CFR with a receipt confirming that the Minimum Tax has been paid. ## Letter of Confirmation Once the above have been submitted, a Letter of Confirmation will be issued confirming the applicant’s right to reside in Malta and Special Tax Status. --- ## Liquidation **Date:** 2024-11-27 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/liquidation ## Introduction The terms ‘liquidation’, ‘dissolution’ and ‘winding-up’ are commonly used interchangeably. However, they have different meanings within corporate law. Dissolution is used to refer to a specific moment in time, marking the date when the winding-up procedure is commenced. Winding-up, on the other hand, constitutes all of that occurs following dissolution. ## Dissolution Maltese company law provides for two main types of dissolution, being (a) voluntary dissolution and (b) involuntary dissolution, i.e. court order dissolution. ## Voluntary Dissolution Voluntary dissolution occurs where the shareholders enter into an extraordinary resolution to dissolve the company, which can be of two types: (i) an extraordinary resolution for the company to be dissolved and wound up by the court or (ii) an extraordinary resolution for the company to be dissolved and wound up voluntarily. Where the shareholders opt for the company to be wound up voluntarily and the company is solvent, then the procedure to be followed is the ‘Members Voluntary Winding Up’. If, on the other hand, the company is insolvent, the ‘Creditors Voluntary Winding Up’ procedure is followed. ## Involuntary Dissolution – Court Dissolution In the case of court dissolution, Maltese company law distinguishes between two distinct situations, being (i) situations where the court has the discretion (but is not under a duty) to dissolve a company, and (ii) situations where the court shall (and thus, is under a duty) to dissolve a company. (i) Court’s Discretion to Dissolve a Company The Court has a discretion to dissolve a company (a) if business is suspended for an uninterrupted period of 24 months or (b) if a company is unable to pay its debts based either on the Cash Flow Test or the Balance Sheet Test. (ii) Court’s Duty to Dissolve a Company The Court is under a duty to dissolve a company if (a) the number of members is reduced and remains below the minimum allowed by law for over 6 months; (b) the number of directors is reduced and remains below the minimum allowed by law for over 6 months; (c) there are grounds of sufficient gravity which warrant the company’s dissolution; or (d) the company’s period, if any, expires. When the Court dissolves a company, it must also determine whether the company is to be wound-up by court or voluntarily. ## Winding-Up As aforementioned, there are two principal modes of winding-up, being (a) voluntary winding-up and (b) court/compulsory winding-up. ## Voluntary Winding-Up As discussed in the voluntary dissolution section, a voluntary winding-up can take the form of either (a) a Member’s Voluntary Winding Up procedure, or (b) a Creditor’s Voluntary Winding Up procedure. (a) Member’s Voluntary Winding Up Procedure In order for the shareholders to make use of the Member’s Voluntary Winding Up Procedure, the company must file a Declaration of Solvency. The Declaration of Solvency is a declaration by the directors of the company that, after having examined the company’s affairs, the company will be able to pay all its debt within a specified period not exceeding 12 months from the date of the Declaration. In this case, the shareholders will choose the liquidator to be responsible for the winding-up of the company and fix the remuneration to be paid to him. The shareholders also retain the power to remove the liquidator from his office by extraordinary resolution. The liquidator shall first ensure that the company’s debts can be paid within the period specified in the Declaration of Solvency. If he is of the opinion that the company will not be able to pay its debts within such period, then he shall summon a meeting of the creditors of the company and the winding-up procedure shall automatically transform into a Creditors Voluntary Winding Up Procedure. Once the liquidator ensures that the company will be able to pay its debts as specified in the Declaration of Solvency, he shall proceed to wind-up the company. Once the company is fully wound up, the liquidator will make an account of winding up and draw up a scheme of distributions which he shall lay before the shareholders. Once approved, the account and scheme of distribution will be submitted to the Registrar for publication. The company will then be struck off following 3 months of publication. (b) Creditor’s Voluntary Winding Up Procedure If there is no Declaration of Solvency (or if the liquidator disagrees with the Declaration of Solvency as aforementioned), then the liquidation follows the Creditor’s Voluntary Winding Up Procedure. In this case, the directors of the company shall convene a meeting of the creditors within 2 weeks from the date of dissolution. At this meeting, the creditors will nominate the liquidator to be in charge of the company’s winding up and decide upon his remuneration. It is also possible for the creditors to appoint a liquidation committee to decide upon the liquidator’s remuneration. Furthermore, the creditors maintain the right to remove and replace an appointed liquidator. The liquidator shall make an account of winding up and draw up a scheme of distribution, which he shall present to the general meeting and the meeting of creditors for approval. The creditors have the right to appoint an auditor to review the account of winding up. Once approved, the account and scheme of distribution will be delivered to the Registrar for publication. The company will be struck off following 3 months of publication. ## Court/Compulsory Winding-Up During a court winding-up, it is the creditors who appoint the liquidator. The liquidator shall realise all the property of the company and distribute the final payment. The court will then cause a report to be prepared on the liquidator’s accounts. Once satisfied that the liquidator has complied will all his duties, the court will release the liquidator from his appointment. It will then proceed to make an order that the name of the company be struck off. ## How can Zeta Assist? At Zeta, our experienced team takes on the critical responsibility of ensuring that all aspects of the winding-up process are handled smoothly, beginning with the confirmation of the company’s solvency. Throughout the process, we manage the winding-up, prepare detailed accounts, and develop a fair distribution scheme for shareholders’ approval. Our commitment ensures compliance, efficiency, and a seamless conclusion to the company’s affairs, culminating in the company’s final removal from the register. --- ## Malta Budget 2025 **Date:** 2024-11-27 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/malta-budget-2025 ## General On the 28th of October 2024, Malta’s Finance Minister unveiled the Malta Budget 2025, laying down the Government’s new intended measures to reduce taxes whilst increasing tax deductions, increase the minimum wage and boost pensions. The Malta Budget 2025 highlighted Malta’s economic performance during 2024, including a 7.5% increase in Gross Domestic Product (GDP) in 2023 and a projected 4.9% increase by end of 2024. The Government deficit decreased to 4% from 4.5% in 2023 and is projected to fall to 3.5% in 2025. Inflation has also fell significantly from 5.6% in 2023 to a projected 2.5% in 2024. ## Income Tax The Malta Budget 2025 unveiled widened income tax bands for single, married and parent tax payers, as illustrated below: This is complemented by a significant increase in Personal Tax Deductions for parents with children in private schools: (i) Kindergarten: €3,500 in 2025 from €1,600 in 2024. (ii) Primary School: €4,600 in 2025 from €1,900 in 2024. (iii) Secondary School: €6,500 in 2025 from €2,600 in 2024. ## Value Added Tax The Malta Budget 2025 also eliminates all Value Added Taxes (VAT) on female sanitary products and other medical accessories used by female cancer patients. Purchasers of bicycles and electric scooters will continue to benefit from a full VAT refund in 2025. ## Stamp Duty A reduced stamp duty rate of 1.5% for transfers of businesses to descendants has been extended to 2025. ## Salaries The Government intends to increase the minimum wage by €8.24 per week, in line with its 2023 agreement with workers’ unions. The Cost-of-Living Adjustment (COLA) is set to be €5.24 per week. ## Pensions In order to encourage pensions to continue working beyond retirement age, 80% of pension income will not be considered taxable income. Additionally, elderly pensions will increase by €8 per week in 2025, with the widower’s pension also set to increase by €3 per week. Government institutions will be enrolling all employees in occupational pension schemes, matching all employees’ contributions up to a maximum of €100 per month per employee. Private employers are also under a duty to offer each employee the opportunity to contribute to an occupational pension scheme, although they are under no obligation to make contributions. ## Energy and Transport To contribute to Paris Agreement’s Net Zero goal, Malta’s will continue to support the generation of renewable energy through grants for photovoltaic panels (solar panels), battery storage and solar heaters. Malta will also continue to promote the purchase of electric vehicles. However, the grant for cars and vans has been reduced to €8,000 in 2025 from €11,000 in 2024. On the other hand, electric cars with a range exceeding 50km will be exempt from registration and annual circulation taxes. ## Immovable Property The Malta Budget 2025 renews grants for eligible first-time buyers, who will receive a one-time grant of €15,000 for properties purchased in Malta, or €40,000 for properties purchased in Gozo. ## Regulatory Goals Malta seeks to remain a reputable and attracting jurisdiction, intending to publish innovative frameworks for key sectors such as sustainable finance, family offices, wealth management, aircraft leasing and fintech in 2025. A new residence programme may be introduced targeting professional gamers and streamers. --- ## Registering a Ship Under the Malta Flag: Key Requirements **Date:** 2024-11-27 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-flag-registration ## Requirement for Registration As a general rule, only ships registered under the Merchant Shipping Act (MSA) shall enjoy the rights and privileges of a Maltese ship and be recognised as a Maltese ship. However, the following ships are excluded from the requirement of registration: – Ships exempted from Registry; – Ships under 6M; – Ships between 6-24M registered under Authority for Transport in Malta Act (however, ships not employed solely in the navigation of the coasts of Malta are not exempt). ## Over-Arching Power of the Minister The Minister may director the Registrar-General not to register any ship, irrespective of age, if he is of the opinion that it would be detrimental to the national interest of Maltese shipping for the ship to be registered. ## Pre-Requirements Age of Ships Ships over 25 years old shall not be registered unless with the express permission of the Registrar-General. The Registrar-General will usually grant such permission if the ship forms part of a younger fleet of ships. Ships between 15-25 years old are required to pass an Authorised Flag State Inspection prior to provisional registration. Ships between 10-15 years old are required to pass the Authorised Flag State Inspection prior to or within one month of provisional registration. Persons Qualified to Own a Maltese Ship Ships may only be registered if owned by: (a) citizens of Malta; (b) bodies corporate established in Malta, having their principal place of business in Malta or having a place of business in Malta and satisfying the Minister that they can and will ensure due observance with the laws of Malta; (c) Citizens of EU Member States, the EEA, Switzerland or the UK residing in Malta; (d) International owners. International owners include (i) foreign corporate bodies or other entities which satisfy the Registrar-General that they can and will ensure due observance of the laws of Malta; and (ii) citizens of the EU, EEA, Switzerland or UK not residing in Malta. Appointment of Resident Agent International owners must appoint a resident agent in writing. The resident agent must: (i) be habitually resident in Malta; (ii) not be interdicted, incapacitated or an undischarged bankrupt; (iii) not be convicted of any crimes affecting public trust, theft, fraud or knowingly receiving property obtained by theft or fraud; and (iv) satisfy the Registrar-General that he is capable of carrying out the functions of a Resident Agent. The functions of the Resident Agent include: a) acting as a channel of communication between the international owner and the Maltese government departments and authorities; b) signing and filing all declarations and forms required by Maltese law on behalf of the international owner; c) acting as the judicial representative of the international owner for judicial proceedings in Malta; d) applying, on behalf of the international owner, for the registration of a ship and doing all other things as may be considered conducive or ancillary thereto; e) paying all relative fees and taxes; and f) authenticating documents issued by the international owner. Change in Ownership If at any point, a registered ship ceases to be wholly owned by persons qualified to own a Maltese ship, such ship shall cease to be a Maltese ship. ## Registration Procedure ## General The registration procedure is generally straightforward. The ship must first undergo provisional registration. ## Procedure for Provisional Registration In order to be provisionally registered, the following requirements must be satisfied: (1) Application for Registration The application for registration shall be made by the owner or by an authorised representative (agent). If made by an authorised representative, the authority of the representative shall be testified in writing. If required, the application for registration must be accompanied by an application for change of name of the ship. (2) Declaration of Ownership The owner or authorised representative shall make and sign a declaration of ownership before the Registrar, including: (a) a statement of his qualification to own a Maltese ship, and where a body corporate, the document of incorporation; (b) in the case of international owners, proof of appointment of a resident agent; (c) a statement of the extent to which the applicant is entitled to be registered as owner; (d) a declaration that no unqualified person is entitled as owner to any interest in the ship; (e) a declaration as to what registered encumbrances, if any, exist on the ship; and (f) a statement of the time and place where the ship was built or if not known, a statement that the declarant does not know the time and place. (3) Registration Fees Upon an application for provisional registration, the initial registration fee and the annual fee specified in the First Schedule shall be paid. The fees are based on the tonnage declared by the owner of the ship on the application for registry, which shall be adjusted in accordance with the tonnage specified in the surveyor’s certificate. (4) Evidence of Seaworthiness Where the ship is already built, the applicant must provide evidence of seaworthiness. The Registrar may also require the ship to be inspected by an appropriate inspector or surveyor or ships. (5) Other Documents The owner or agent must also provide proof of: (a) A copy of the International Tonnage Certificate (where applicable); (b) A copy of the Certificate of Survey (where applicable); (c) A copy of the Antifouling Certificate (where applicable); (d) A copy of the International Oil Pollution Prevention Certificate (where applicable); (e) An application for a Ship Radio Station Licence; (f) An application for a Minimum Safe Manning Certificate (where applicable); (g) An application for a Declaration of Maritime Labour Compliance; ## Provisional Registration Upon completion of the provisional registration of a ship, the Registrar shall grant a Provisional Certificate of Registry. Provisional registration is valid for a period of 6 months, extendable by a further 6-months upon good cause being shown. However, if the ship is not in possession of valid certificates required by international conventions and such other certificates as the Regulations prescribe, the Registrar shall grant a non-operational provisional certificate. ## Documents to be Provided during Provisional Registration Within the first month of provisional registration (extendable by a further two months upon good cause being shown), the owner shall provide the Registrar with: (a) A builder’s certificate or bill of sale or other document under which the ship was transferred to the applicant; (b) Evidence that any foreign registration of the ship has been legally cancelled; Within six months of provisional registration (extendable by a further six months upon good cause being shown), the owner shall provide the Registrar with: (a) Proof that the ship has been issued with the valid certificates required by international conventions which have been ratified by the Government of Malta; (b) A Certificate of Survey; (c) A copy of the International Tonnage Certificate; and (d) A carving or marking note or evidence that the vessel has been marked in accordance with the requirements of the MSA; (e) In the case of SOLAS ships, a copy of the last updated Continuous Synopsis Record; ## Registration Upon completion of registry of a ship, the Registrar shall grant a Certificate of Registry. However, if the ship is not in possession of valid certificates required by international conventions and such other certificates as the Regulations prescribe, the Registrar shall grant a non-operational provisional certificate. The Certificate of Registry, if issued within the first 12 months of provisional registry, shall be valid for the remaining period. If issued at the expiry of the 12 months, it shall be valid for a period of 1 year. It is also possible for the owner to request that the Certificate of Registry be issued for the remaining period combined with a further twelve months. Furthermore, a Certificate of Registry in respect of ships exceeding 500 gross tonnage may be issued for a maximum period of 5 years. ## Renewals The Registrar shall issue a renewal certificate within a period of three months prior to the expiry of the Certificate of Registry upon payment of the annual fee. No renewal certificate shall be issued, except in cases of loss or destruction of a certificate, unless the certificate currently held by the owner of the ship is returned. However, the Registrar may, at his own discretion, issue a certificate if the owner undertakes to return the certificate within a maximum period of one month. --- ## Revised Malta Permanent Residence Programme (MPRP): Key Updates Effective January 2025 **Date:** 2024-11-27 **Category:** Residency **URL:** https://zeta-financial.com/news/revised-mprp-key-updates-effective-january-2025 ## Introduction The Malta Permanent Residence Programme was introduced in 2021, granting beneficiaries the right to reside, settle or stay in Malta indefinitely, provided her adheres to all obligations and conditions. For further information on the current framework, kindly refer to our article here. On the 19th of November 2024, the Malta Permanent Residence Programme (Amendment No. 2) Regulations 2024 were published in the Government Gazette, introducing a number of changes to the current regulatory framework which are to come into force as from 1st January 2025. ## Narrower Definition of Dependent Currently, eligible dependents include: (a) The spouse; (b) A child of the applicant/spouse under 18-years-old; (c) A child of the applicant/spouse over 18-years-old who is not married and is principally dependent on the main applicant; (d) A parent/grandparent of the applicant/spouse who is principally dependent on the main applicant; (e) An adult child of the applicant/spouse who is certified as having a disability. As from 1st January 2025, eligible dependents will include: (a) The spouse; (b) A child of the applicant/spouse under 18-years-old; (c) A child of the applicant/spouse who is above 18 but younger than 29-years-old, is not married at the time of the application and is principally dependent on the main applicant ; (d) A parent/grandparent of the applicant/spouse who is principally dependent on the main applicant; (e) An adult child of the applicant/spouse who is certified as having a disability. ## Increase in Price of Qualifying Owned Property Currently, the qualifying owned property must be (a) a property of not less than €350,000 in Malta or (b) a property of not less than €300,000 in South of Malta or Gozo. As from 1st January 2025, the distinction between properties situated in Malta and South of Malta or Gozo will be removed. Furthermore, the minimum purchase price to qualify as qualifying owned property will increase to €375,000. ## Increase in Price of Qualifying Rented Property Currently, the qualifying rented property must be leased at (a) at least €12,000 per annum in Malta; or (b) at least €10,000 per annum in South of Malta or Gozo. As from 1st January 2025, the distinction between properties situation in Malta and South of Malta or Gozo will be removed, with the minimum lease to qualify becoming €14,000 per annum. ## Alternative Criteria as Evidence of Possession of Assets Currently, an applicant must provide evidence of possession of assets of not less than €500,000, of which €150,000 must be financial assets. As from 1st January 2025, an applicant has a choice to provide proof of: (a) Possession of assets of not less than €500,000, of which €150,000 must be financial assets; or (b) Possession of assets of not less than €650,000, of which €75,000 must be financial assets. ## Increase in Non-Refundable Administration Fee ## Main Applicant’s Administration Fee The non-refundable Administration Fee is set to increase from €40,000 to €50,000 as from 1st January 2025. The first settlement due upon submission of the application will increase from €10,000 to €15,000 as from 1st January 2025. The remaining €35,000 must be paid within 2 months from the date of issue of the Letter of Approval in Principle. ## Dependent’s Administration Fee Currently, no further administration fee is required for dependents to be included in the main applicant’s certificate when applying for a certificate. This is set to change as from 1st January 2025, with a non-refundable administration fee of €5,000 becoming due for each and every dependent upon the issuance of the Letter of Approval in Principle. However, dependents certified as having a disability will not be subject to the payment of any non-refundable administration fee. ## Increase in Government Contribution ## Main Applicant’s Contribution Currently, the main applicant must pay a contribution of: (a) €28,000 when the Qualifying Property is s Qualifying Owned Property; or (b) €58,000 when the Qualifying Property is a Qualifying Rented Property. As from 1st January 2025, these will increase to (a) €30,000 when the Qualifying Property is a Qualifying Owned Property or; (b) €60,000 when the Qualifying Property is a Qualifying Rented Property. ## Dependent’s Contribution Currently, an additional contribution of €7,500 for each and every parent/grandparent dependent included in the application becomes due upon issuance of the Letter of Approval in Principle. As from 1st January 2025, the additional contribution will decrease to €5,000 but its scope will be broadened, becoming due in respect of each and every dependent included in the application. However, dependents certified as having a disability will not be subject to the payment of any contribution. ## Summary of Changes --- ## A Beginner's Guide to UK Inheritance Tax **Date:** 2024-09-26 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/a-beginners-guide-to-uk-inheritance-tax ## Background UK Inheritance Tax (often referred to as IHT) operates within a complex framework of factors, clauses, exemptions and exclusions. In this guide, we outline the fundamentals of IHT and explain how tax liability can vary greatly depending on individual circumstances. ## Who is Subject to UK Inheritance Tax? The estate of any person domiciled in the United Kingdom is subject to IHT, irrespective of their last place of residence. ## Residence vs Domicile Residency refers to the country where a person is currently living or residing. On the other hand, Domicile usually refers to one’s home country or the country which they consider their real home, even if they are currently residing in another country. What does this Mean? This means that the estate of a UK domiciled person will remain liable to UK Inheritance Tax for as long as they remain domiciled within the UK. ## UK Inheritance Tax Rate UK Inheritance Tax is calculated at a rate of 40% of the value of the estate that exceeds £325,000. Any estate valued under £325,000 will not be subject to IHT. Example: Calculation of IHT on Estate Valued at £1,000,000 £1,000,000 – £325,000 = £675,000 40% x £675,000 = £270,000 Total UK Inheritance Tax liability: £270,000. ## How is the Value of the Estate Calculated? UK Inheritance Tax is charged on worldwide assets. This means that even property situated outside the UK is considered as part of the estate for the purposes of calculating IHT. Transfers of assets or wealth made during the last seven years of life are also subject to IHT and thus, included in the estate’s value for calculating IHT. The Spousal Exemption Spouses (or partners within a civil partnership) are permitted to transfer assets between themselves, whether inter vivos (whilst alive) or causa mortis (on the death of one of the spouses) without any IHT liability. The only limitation to this exemption is that the spouse/partner receiving the assets must be UK domiciled. Assets transferred through the Spousal Exemption are excluded from the valuation of the estate for the purposes of calculating UK Inheritance Tax. Other Exclusions The following assets may also be excluded from the estate for the purposes of calculating IHT in certain circumstances: - Agricultural properties (partly exempt); - Trading commercial businesses (partly exempt); - Any gifts made at least seven years prior to death (exempt). ## UK Inheritance Tax for Non-Doms The estate of a Non-Domiciled UK resident is only subject to IHT on assets situated or held within the UK. Rate of UK Inheritance Tax on Non-Doms In this case, IHT is calculated at a rate of 40% on the value of UK-based assets exceeding £325,000. ## UK Inheritance Tax – A Voluntary Tax? In the financial advisory sector, UK Inheritance Tax is sometimes viewed as a voluntary tax because there are numerous legal and compliant strategies available to significantly reduce or even eliminate IHT liability. ## Can I Change my Domicile? Many UK Expats explore the option of changing their domicile to avoid UK Inheritance Tax. Malta is a popular destination for re-domiciliation as it does not impose an inheritance tax equivalent to the UK’s IHT. ## How can Zeta Assist? Here at Zeta, we specialize in helping individuals navigate the complexities of UK Inheritance Tax (IHT). Our team of experienced professionals is well-versed in providing tailored relocation services to individuals seeking to transfer their domicile to more tax-efficient jurisdictions. Our team also focuses on structuring comprehensive, tax-efficient strategies aimed at minimizing potential tax liabilities. Whether you are exploring domicile options or looking for ways to reduce your tax exposure, Zeta is here to guide you through every step of the process, ensuring your estate is managed effectively and in compliance with legal standards. --- ## An Update to the Protected Cell Company Regime **Date:** 2024-09-26 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/an-update-to-the-protected-cell-company-regime ## Background Under the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations, a company may be constituted as a Protected Cell Company for the purpose of carrying on the business of insurance. ## What is a Protected Cell Company? A Protected Cell Company (PCC) is a corporate vehicle used to segregate assets of a company into two or more cells. The assets of the PCC are classified as either cellular assets or non-cellular assets. Cellular assets of the PCC are those which are attributable to a particular cell. Non-cellular assets comprise of those assets not attributable to any cells. ## The Benefit of a Protected Cell Company Each cell in a PCC will have assets which are attributable to it (the ‘cellular assets’) as well as liabilities which are due by it (the ‘cellular liabilities’). The cellular assets of a particular cell will only be available to the creditors of the PCC who are creditors in respect of that cell. This means that they are absolutely protected from creditors of the PCC who are not creditors in respect of that cell. In fact, the Regulations provided that “any cellular assets not attributable to the relevant cell shall not be used to satisfy the liability”. ## Amendments to the Legislative Framework Governing Protection Cell Companies On the 30th of August 2024, the Companies Act (Cell Companies Carrying on Business of Insurance)(Amendment) Regulations 2024 were published by the Maltese Government, introducing a number of changes to the PCC regime. An End to the Limitation of Liability of Cells Exclusively Carrying On Business of Affiliated Insurance or Business of Reinsurance Prior to the 2024 amendments, a PCC could, by specific written agreement, provide that only the cellular assets of a cell may be utilised to satisfy the cellular liability of the cell, when such cell: - Exclusively carried on the (a) the business of affiliated insurance or (b) the business of reinsurance; and - It was specifically permitted to do so by its M&AA. Furthermore, where the business of the cell relates to compulsory insurance, the PCC was obliged to have sufficient guarantees in place for the protection of insured persons, policyholders, creditors and other interested parties. Following the amendments, this possibility is no longer available to PCCs. However, the Regulations allow a 10-year grace period for those PCCs already operating on the basis of such agreements. In fact, PCCs which have entered into such specific written agreements prior to the introduction of the Regulations may continue to pursue the business on the basis of the said specific written agreements, until 30th of August 2034. A New Regime for the Limitation of Liability of Cells Carrying on the Business of Affiliated Insurance A PCC can now, by specific written agreement to that effect, provide that only the cellular assets of a cell may be utilised to satisfy the cellular liability of the cell, when such cell: - Exclusively carries on the business of affiliated insurance; - Holds eligible basic own funds to cover the Solvency Capital Requirement; - Is specifically permitted to do so by its M&AA. However, where the business relates to compulsory insurance, the PCC shall have sufficient guarantees in place for the protection of insured persons, policyholders, creditors or other interested parties. An Amendment to the Framework Regulating Transfers of PCCs’ Cellular Assets Prior to the amendments, the transfer of cellular assets was less regulated and more flexible. Following the amendment, it is now only possible for the cellular assets attributable to any cell of a PCC to be transferred to: - Another PCC authorised under the Insurance Business Act; - An Authorised Insurance Undertaking, European Insurance Undertaking or European Reinsurance Undertaking; - A Third-Country Insurance Undertaking; - Another cell of the same PCC. Furthermore, such a transfer may only take place when: - The transferring cell does not have specific written agreements in place for the limitation of liability in relation to the business of affiliated insurance or the business of reinsurance under the old regime; and - The shareholders of the transferring cell and the receiving cell are the same persons. It is also possible for the cellular assets attributable to any cell of a PCC enrolled in the Managers List to be transferred to: - Another PCC enrolled as an Insurance Manager; - Another Insurance Manager (other than a PCC). Similarly, cellular assets attributable to any cell of a PCC enrolled in the Brokers List can now be transferred to: - Another PCC enrolled as an Insurance Broker; - Another Insurance Broker (other than a PCC). Whenever the transferee is a PCC (whether authorised under the Insurance Business Act, or enrolled as an Insurance Manager or Insurance Broker), the PCC intending to transfer the cellular assets of one of its cells shall deliver a notice to the Registrar. The notice shall be delivered in the form set out in Schedule I to the Regulations. The Registrar shall then publish such notice on its website. All such transfers are subject to the approval of the MFSA, which can subject any such transfer to conditions as it deems fit. Where the MFSA approves the transfer, the PCC transferring the cellular assets shall deliver a copy of the approval to the Registrar. Furthermore, the Regulations now require the Registrar to (i) strike off the name of the cell from under the name of the PCC, (ii) register the name of the cell under the transferee company and (iii) inform the MFSA of such changes. An Amendment to the Regime Regulating Winding-Up of Cells Prior to the amendments, the Regulations only required the MFSA’s consent for the liquidation of a cell. The scope of this provision has been widened, requiring MFSA consent for the ceasing of any cell, the run-off or services of any cell or the winding-up of any-cell. Furthermore, a PCC is now bound to deliver a notice to the Registrar whenever any of its cells intends to cease to carry on business, informing the Registrar that the cell shall be wound up and confirming whether the solvency or insolvency of such cell. The notice shall be delivered in the form set out in Schedule II to the Regulations. --- ## The Malta – Cura\u00e7ao Double Tax Treaty **Date:** 2024-09-26 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/the-malta-curacao-double-tax-treaty ## Background On the 18th of November 2015, Malta and the Kingdom of Netherlands, in respect of Curaçao, signed a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. The Convention has now come into force as from the 1st of September 2024, through Legal Notice 209 of 2024. ## General The Convention applies to all individuals, trusts, partnerships, collective investment schemes, companies and any other body of persons which is resident in Malta or/and Curaçao. It seeks to provide double taxation relief in relation to income tax imposed by the laws of Malta, and (i) income tax, (ii) wage tax, (iii) profit tax and (iv) dividend tax imposed by the laws of Curaçao. ## Business Profits The profits of any business carried on by a resident of one Contracting State shall be taxable only in that State unless such person carries on business in the other Contracting State through a permanent establishment situated therein. In such case, the profits of such person may be taxed in the other State but only insofar as they are attributable to the permanent establishment. ## Shipping and Air Transport Profits from the operation of ships or aircraft in international traffic shall only be taxable in the Contracting State in which the place of effective management of the enterprise is situated. ## Dividends Dividends paid by a company resident in one Contracting State (the ‘Paying State) to a resident of the other Contracting State (the ‘Receiving State) may be taxed in the Receiving State. They may also be taxed in the Paying State, subject to the below limitations: - Where the dividend is paid by a company resident in Curaçao to a resident of Malta, who is the beneficial owner of the company, the tax charged in Curaçao shall not exceed: - 0% if the beneficial owner directly holds at least 10% of the capital of the company; - 5% in all other cases. - Where the dividend is paid by a company resident in Malta to a resident of Curaçao, who is the beneficial owner of the company, the tax charged in Malta shall not exceed that chargeable on the profits out of which the dividends are paid. ## Income from Employment Subject to certain exceptions, salaries and other similar remuneration derived by a resident of a Contracting State shall only be taxable in that State unless the employment is exercised in the other Contracting State. ## Others The Convention also includes provisions on pensions, directors’ fees, capital gains and other income. ## Disclaimer The information provided in this article is for informational purposes only and should not be construed as tax, legal, or other professional advice. Zeta makes no guarantees as to the accuracy or completeness of the information, nor does it take any responsibility for actions taken based on the contents of this article. Readers are advised to seek independent advice from qualified professionals before making any decisions. Furthermore, Zeta does not warrant that the interpretation of the relevant provisions of the Malta-Curaçao Double Tax Treaty is correct or applicable to individual circumstances. --- ## Malta Leads the Way: Successful Implementation of EU Mobility Directive **Date:** 2024-09-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/malta-leads-the-way-successful-implementation-of-eu-mobility-directive ## What is the Mobility Directive? Directive (EU) 2019/212, known as the Mobility Directive, was published by the European Union on the 27th of November 2019, seeking to introduce a harmonised framework for cross-border mergers, conversions and divisions of limited liability companies in the EEA. The Mobility Directive was transposed into Maltese Law on 31st January 2023 through the Cross-Border Divisions of Limited Liability Companies Regulations, the Cross-Border Conversions of Limited Liability Regulations and the Cross-Border Mergers of Limited Liability Companies Regulations. ## The Cross-Border Mergers of Limited Liability Companies Regulations The Regulations apply to cross-border mergers of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that at least one of the merging companies or the company resulting from the merger is a Maltese company. In particular, the Regulations set out provisions concerning the procedure and formalities relating to the merger, the protection of creditors and the rights of employees. ## The Cross-Border Divisions of Limited Liability Companies Regulations The Regulations apply to cross-border divisions of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that at least 1 of the dividing companies is a Maltese company. In particular, the Regulations set out the procedure and formalities relating to the division, both when the company being divided is registered in Malta as well as when Malta is to be the jurisdiction of a recipient company. It also regulates the protection of creditors and the rights of employees. ## The Cross-Border Conversions of Limited Liability Company Regulations The Regulations apply to cross-border conversions of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that Malta must be either a departure jurisdiction or a destination jurisdiction. In particular, the Regulations set out the procedure and formalities relating to conversions, both when Malta is the departure jurisdiction as well as when Malta is the destination jurisdiction. The Regulations also provide for the protection of creditors and the rights of employees. ## The Regulations’ Success The Malta Business Registry’s Annual Report for 2023 showcases the Regulations’ success. In fact, in 2023 alone, 20 cross-border mergers, 20 conversions and 2 divisions took place. The MBR also confirmed that a draft Legal Notice has been prepared which will introduce certain amendments to the Regulations to ensure further legal certainty in cross-border mobility operations --- ## Malta's Strive for Financial Services Superiority **Date:** 2024-09-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/maltas-strive-for-financial-services-superiority ## Malta at the Forefront of Innovation Malta strives to reach financial services superiority by constantly developing and implementing innovative legislation which offers high degrees of consumer protection whilst also promoting creativity in business development. This has allowed the Maltese financial sector to grow exponentially, with the Maltese financial sector experiencing a growth of 11.8% between 2022 and 2023 alone. Malta’s 10-Year Strategy for Financial Services ## General Aims In 2023, the Government of Malta, through the Malta Financial Services Advisory Council unveiled Malta’s 10 Year Strategy for Financial Services, confirming Malta’s commitment to further strengthen Malta’s position and performance in the financial sector by creating a digitally enabled, easy-to-use financial system. Malta’s Strategy confirms that Malta seeks to “be recognised as a competitive, secure and credible jurisdiction for Financial Services that excels in innovation and responsiveness through a nimble and joined-up regulatory framework and a robust technology foundation.” ## Key Strategic Thrusts The proposed strategy is built on several key strategic thrusts designed to underpin Malta’s transformation. Streamline Regulation Malta seeks to align and integrate regulatory processes across key institutions to ensure consistency, timeliness and proportionality in approvals, compliance and enforcement. Standardize Payments Malta aims to enhance the national payments system for greater transparency, security and efficiency, linking seamlessly with international payment hubs. Consolidate Identity Malta seeks to develop a constant and secure identity management system to facilitate due diligence and compliance processes. Modernize Taxation Malta intends to implement a technology-driven tax reform to simplify processes, enhance compliance and reduce opportunities for abuse. Retain a Responsive Legal Framework Malta strives to retain its highly responsive and adaptable legal framework to ensure it continuously reflects the current and future economic and commercial realities, ensuring robust and modern financial regulations that ensure legal certainty and stability. Continuously Build Talent Malta seeks to continuously build talent to propel the Maltese financial services sector by offering free high-quality education all the way to tertiary level, as well as other schemes which promote the highest levels of education, ensuring a workforce which excels in meeting the demands of the ever-evolving financial sector. ## Achieve Financial Excellence with Zeta’s Guidance Zeta’s team possesses a deep understanding of regulatory frameworks, innovative financial technologies and market trends, allowing us to assist clients in navigating the complexities of the financial landscape. Contact Zeta today to see how we can assist you in achieving your goals. --- ## Patent Box Regime (Deduction) Rules **Date:** 2024-09-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/patent-box-regime-deduction-rules ## General The Income Tax Act provides for a specific deduction, referred to as the Patent Box Deduction, which may be claimed against income derived from Qualifying IP (Qualifying Intellectual Property). The Patent Box Regime (Deduction) Rules go a step further, expanding on the conditions required to benefit from the deduction and the mode for calculation the deduction. ## The Deduction The Deduction is calculated through the following formula: Thus, beneficiaries may enjoy up to 95% tax relief on any income or gains derived from Qualifying IP. ## Defining Key Terms Defining Qualifying IP Qualifying IP includes: - Patents, whether issued or not; - Other assets in respect of which protection rights are granted in terms of national, European or international legislation; - Utility models; - Software protected by copyright under national or international legislation; and - Other intellectual property assets as are non-obvious, useful, novel and having feature similar to those of patents (only applicable to small entities). Marketing-related intellectual property assets including brands, trademarks and trade-names are expressly excluded from the definition of Qualifying IP. Defining Income or Gains Derived from Qualifying IP Income or gains derived from Qualifying IP include: - The total income derived from the use, enjoyment and employment of Qualifying IP; - Royalty or similar income; - Advances and similar income; - Any sum paid for the grant of a licence or similar empowerment to exercise rights under Qualifying IP; - Compensation for infringements in respect of Qualifying IP; - Gains on disposal of Qualifying IP; and - Other similar or related income as is derived from the Qualifying IP. Defining Total IP Expenditure Total IP Expenditure shall include expenditure directly incurred in the acquisition, creation, development, improvement or protection of the Qualifying IP. Defining Qualifying IP Expenditure Qualifying IP Expenditure shall include (a) expenditure directly incurred in the creation, development, improvement or protection of the Qualifying IP, (b) expenditure incurred for activities related to the creation, development, improvement and protection of the Qualifying IP subcontracted to persons, and (c) certain other forms of expenditure. ## Other Conditions In order to be entitled to the deduction, the following conditions must be satisfied: - The activity consists of research, planning, processing, experimenting, testing, devising, designing, development or similar activity leading to the creation, development, improvement or protection of qualifying IP; - The activity shall be carried out wholly or in part by the beneficiary, solely or together with any other person; - The beneficiary shall be the owner of the qualifying IP or the holder of an exclusive licence in respect of the qualifying IP; - The qualifying IP is granted legal protection in at least one jurisdiction; and - The beneficiary maintains sufficient substance in the relevant jurisdiction. ## Procedure In order to benefit from this deduction, the beneficiary must specifically request the Patent Box Regime deduction when computing his tax return. Such deduction may also be requested where a patent in still pending. However, if such patent is rejected, any benefit claimed shall be reversed by making the appropriate adjustment in the year the application is rejected. ## Malta’s Favourable Business Environment and Tax Regime The Patent Box Regime compliments Malta’s favourable business environment, strengthening its position as a leading hub for intellectual property management, incentivising businesses across the globe to develop, protect and commercialise their IP within the jurisdiction. --- ## The End of UK Non-Dom Status: Key Change and Implications for Tax and Residency **Date:** 2024-09-02 **Category:** Residency **URL:** https://zeta-financial.com/news/the-end-of-uk-non-dom-status ## What is Non-Dom Status? ## Distinction between Domicile and Residency In order to better understand Non-Dom Status, one must first distinguish between the concepts of ‘Residency’ and ‘Domicile’. Residency refers to the country where a person is currently living or residing. On the other hand, Domicile usually refers to one’s home country or the country which they consider their real home, even if they are currently residing in another country. ## Defining Non-Dom Status Non-Dom Status, short for Non-Domiciled Status, is a special tax status in the United Kingdom. It applies to persons who are resident (live) in the UK but are not domiciled there (as they consider somewhere else to be their real home or intend or returning to their home country). ## What is the Benefit of Non-Dom Status? Non-Domiciled residents benefit from a favourable tax regime known as a ‘remittance basis tax system’, whereby they are exempted from paying any tax on any income or capital gains derived outside the UK, unless such income is remitted (brought) to the UK. Furthermore, Non-Dom Status protects non-domiciled residents from being subject to Inheritance Tax on non-UK sited assets. ## What is Changing? On the 29th of July 2024, the British Government published a policy document confirming that there will be substantial amendments to the current tax regime. As from the 6th of April 2025, the UK Non-Dom Regime will begin to be phased out of the UK Tax System. Thus, non-domiciled residents will become subject to tax on their worldwide income and gains in accordance with the normal tax rules for UK residents. Non-domiciled residents will also become subject to Inheritance Tax on their worldwide assets if they have been resident in the UK for over 10 years. More information regarding the change in tax regime is expected to be published with the Autumn Budget in October. ## Malta as an Attractive Alternative The announcement has caused many UK Residents holding Non-Dom Status to consider relocating to other jurisdictions with favourable tax regimes. Malta, renowned for its idyllic landscapes and rich cultural heritage, is one of the most popular alternatives being considered by such individuals. Individuals residing in Malta benefitting from Non-Dom Status are only taxed on (i) income sourced in Malta and (ii) other income remitted (brought) to Malta. This means that any foreign capital gains, whether remitted to Malta or not, are not taxable in Malta. ## Route to Maltese Residence for EU/EEA Citizens EU and EEA citizens enjoy the right to leave their home state and to move and freely reside within the territory of any other Member State, including Malta. This right is also extended to family members of EU and EEA citizens. Our brochure for EU citizens looking to relocate to Malta provides further information: https://www.linkedin.com/posts/zeta-financial_relocating-to-malta-eu-citizens-guide-activity-7163178616208502788-BBlw?utm_source=share&utm_medium=member_desktop Route to Maltese Residence for Third-Country Nationals Third-country nationals (TCNs) include all persons not domiciled in the EU, EEA or Switzerland. There are a number of different routes by which a TCN can the right to reside in Malta. Our brochure for non-EU citizens looking to relocate to Malta provides further information: https://www.linkedin.com/posts/zeta-financial_relocating-to-malta-non-eu-citizen-guide-activity-7163487488173404161-TVZo?utm_source=share&utm_medium=member_desktop Route to Maltese Residence under Retirement Schemes Our brochure on Retirement Opportunities in Malta provides alternative options to both EU Citizens and TCNs: How can Zeta Assist? Here at Zeta, we specialize in assisting individuals in navigating the complexities of relocating. With our expertise, we can help you identify the most suitable route for residency, handle the necessary paperwork and offer personalised advice tailored to your specific circumstances. Our team of experienced professional is dedicated to providing comprehensive guidance throughout the entire residency application process, ensuring a seamless and efficient experience. --- ## The Income from Sports Activities Rules 2024 **Date:** 2024-09-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/the-income-from-sports-activities-rules-2024 The ‘Income from Sports Activities Rules, 2024’ were published on the 28th of June 2024, extending the scope of the special tax rate on income deriving from sports activities. Under these Rules, a special tax rate of 7.5% applies to any income satisfying the following conditions: - The income is derived from services: - that are provided in the course of a sports activity which is practiced wholly or mainly in Malta; or - that are directly related to a sports activity which is practiced wholly or mainly in Malta; AND - The services are provided on a full-time or part-time basis by an individual in his capacity as a: - Registered Player or Athlete, being a member of a sports club registered with SportMalta and affiliated with a national regulatory body that is registered with SportMalta; - Licenced Coach, registered as a coach with a sports club registered with SportMalta and affiliated with a national regulatory body that is registered with SportMalta, and whose licence as a coach is recognised by the national regulatory body; - Licensed Match Official, being a person who is licensed as a match official in a sport by a national regulatory body that is registered by SportMalta; - Match Analyst, being a person who is accredited as a match analyst in a sport by a national regulatory body that is registered with SportMalta for the said particular sport; - Team Manager or Sporting Director, being a person who is accredited as a team manager or sporting director in a sport by a national regulatory body that is registered with SportMalta; - Sport Administrator, being a person who is accredited as a team sport administrator in a sport by a national regulatory body that is registered with SportMalta; - Team Doctor, being a medical officer engaged by a sports club registered with SportMalta and affiliated with a national regulatory body that is registered with SportMalta to provide medical services during sport activities of such club or in connection with such activities; or - Team Physiotherapist, being a physiotherapist engaged by a sports club registered with SportMalta and affiliated with a national regulatory body that is registered with SportMalta to provide physiotherapy services during sports activities of such club or in connection with the said activities. The Income from Sports Activities Rules 2024 shall become effective as from the year of assessment 2025. --- ## The Malta Business Registry Annual Report and Financial Statements 2023 **Date:** 2024-09-02 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-malta-business-registry-annual-report-2023 ## Introduction On the 25th of July 2024, the Malta Business Registry published its Annual Report and Financial Statements for 2023. The Malta Business Registry (MBR) has once again committed to maintain Malta’s global reputation as a jurisdiction of choice by ensuring that legislative frameworks remain innovative and efficient. The MBR’s Annual Report also reveals its ambition to be recognised as a top-tier business registry, both locally and internationally. Hon. Silvio Schembri, Malta’s Minister for Economy, Enterprise and Strategic Projects, confirmed the Registry’s mission to maintain Malta’s global reputation, holding that “it is essential for an entity to continuously look within itself and understand how it can improve to better serve its clients, and this is what the MBR does continuously.” Dr Geraldine Spiteri Lucas, CEO and Registrar of the Malta Business Registry, commented on the Registry’s success over 2023, accrediting success to the Registry’s stance and vision on digitalisation, spearheaded by the launch of the Business Automation Registry Online System (BAROS). Annalise Zammit, COO and Deputy Registrar, summarised the success of the Malta Business Registry in 2023 in three key words, being “Reputation, Simplification and Digitalisation”. ## Statistics The Annual Report indicates that a total of 3283 registrations have taken place in 2023. These registrations consist of: - 3150 Limited Liability Companies; - 42 Overseas Companies; - 74 Partnerships en Nom Collectif; - 14 Partnership en Commandite; - 2 European Companies; and - 1 European Economic Interest Grouping. The MBR’s Registry and Compliance also rejected a combined total of 901 proposed new companies. 1521 companies were placed into voluntary liquidation, 1230 companies were dissolved, and 4,726 companies were struck off the Registry. Furthermore, 46 companies were re-domiciled to Malta whilst 45 Maltese companies were re-domiciled out of Malta. A total of 215,916 documents were registered with the MBR. The Registry issued 14,100 certificates and processed 8698 name reservations. The Compliance Unit reviewed 21,928 notifications and conducted 1661 onsite inspections. It also screened 36,754 beneficial owners of existing companies, 14,349 beneficial owners of proposed new companies, 32,737 directors of existing companies and 12,860 directors of proposed new companies. The Legal and Enforcement Unit was involved in a number of legislative projects, including a Bill to amend the Companies Act. Furthermore, Subsidiary Legislation was introduced, amending provisions relating to the Regulations implementing the Mobility Directive. The Unit also issued 1186 Final Warnings and served 500 Judicial Letters relating to penalties. --- ## Family Offices **Date:** 2024-07-07 **Category:** Multi-Family Office **URL:** https://zeta-financial.com/news/family-offices ## What is a Family Office? A family office is a private entity composed of qualified and experienced professionals appointed to manage a family’s assets and needs. The entity’s mission usually entails wealth planning to support the current and future needs of multiple generations whilst preserving the family legacy. Thus, a family office requires competent professionals with expertise in corporate structuring, trust and estate planning, investment management, accounting and asset management and oversight. ## Why Choose Malta? A number of families choose to establish their family office in Malta due to the unmatched privileges offered through its sound legal framework, tax efficiency, supportive investment environment, global reputation and culture. In fact, the Maltese government committed to supporting the development of family offices in Malta in its Strategy for Financial Services launched in 2023. ## Exceptional Legal Framework ## Hybrid Legal System Traditionally, the Maltese legal framework is based on civil law principles. However, it has also been greatly influenced by common law principles whilst under British Rule from 1800 to 1964. Therefore, the Maltese legal system serves as a hybrid legal system, offering a combination of the advantages of both legal systems. In fact, the Maltese legal system is the European jurisdiction which provides a framework for the incorporation of both foundations and trusts. ## Innovative Legal System Malta also boasts an extremely responsive legal system, constantly developing and introducing legislation to keep up with new and changing financial markets. ## Tax Efficiency The Maltese legal system also offers a transparent, fully onshore but highly competitive tax system which is complemented by over 70 Double Tax Treaties. Additionally, the tax legislation offers legal certainty and clarity, allowing families peace of mind. The Maltese tax system is also in full conformity with all EU legislation, ensuring and preserving Malta’s high reputation. ## Supportive Investment Environment ## Less Stringent Regulation The Maltese legal system recognises the use of Private Collective Investment Schemes as a common form of investment vehicle used by family offices. Thus, it exempts Private Collective Investment Schemes from a number of stringent regulations which are applicable to all other forms of Collective Investment Schemes, preventing unnecessary costs and complications whilst also providing for flexibility in investments. ## Investor Protection The Maltese legal system’s hybridism provides for a diverse range of securities to financiers and lessors. Its incorporation of common law securities such as Mortgages and Security by Title Transfer complement Malta’s investor friendly environment, offering investors strong self-help remedies, preventing delays in enforcement and expenses being incurred during court proceedings. Malta has also ratified numerous international conventions, such as the Cape Town Convention, further enhancing the protection of Maltese investors. ## Lifestyle and Culture Malta has gained an exceptional reputation amongst travellers and expats as an affordable and welcoming destination. Located in the centre of the Mediterranean sea, Malta provides year-round sunny days and beautiful beaches, complemented by exquisite Mediterranean cuisine and seafood. Malta also enjoys world-class healthcare (ranked among the top five in the world by the World Health Organization), one of the lowest crime rates in the world and a top-tier education system. ## Residency Malta offers a number of routes by which both EU nationals and Third-Country Nationals can obtain a residence permit. Kindly refer to our articles for further information on residency. ## How can Zeta Assist? Zeta Corporate & Management Services Limited is staffed with experienced professionals competent to assist clients with estate planning and other related services including trust formation, company incorporation, asset management, relocation and residency assistance, aviation and yachting, tax support, accounting and bookkeeping services. Contact us today to see how we can assist you in achieving your goals. --- ## The Key Employee Initiative **Date:** 2024-07-07 **Category:** Residency **URL:** https://zeta-financial.com/news/the-key-employee-initiative ## Background Third-Country Nationals (“TCNs”), whether entering Malta from a visa-exempt country or through a Schengen Visa, may reside in Malta for a maximum of 90 days, unless there is a valid legal basis to remain. All TCNs require a work permit in order to be able to work in Malta. There are a number of different routes by which a TCN can obtain a permit to reside and work in Malta (kindly refer to our article on TCN Residence in Malta: ## The Key Employee Initiative The Key Employee Initiative (KEI) was introduced to serve as an expedited Single Permit (combined work and residence permit) application procedure available to highly-skilled TCNs. ## Eligibility In order to be eligible to file an application under the KEI expedited procedure, the applicant must: - Hold a managerial or highly-technical post which requires specific qualifications or adequate experience; - Have a signed contract with a Maltese company with an annual gross salary of at least €35,000; - Provide proof of professional qualifications directly related to the employment or of a minimum of 3 years’ previous experience in the field; - Provide a declaration by his employer that the applicant has the necessary credentials to perform the duties being assigned. ## Procedure The applicant must first complete the full application, consisting of: - The Residence Application Form; - A full copy of the Applicant’s Passport; - A covering letter by the Employer; - The work contract; - A Curriculum Vitae (CV); - A Declaration of Suitability; - Proof of the Applicant’s Qualifications or Reference Letters; - Health Screening; - Property Lease or Purchase Agreement and Housing Authority Approval; - Health Insurance Policy - Any other document requested by Identita’ (the Maltese competent authority). The application is to be filed online and can be made before the applicant even arrives in Malta. Identita’ will then review the application and given a decision within 5 working days. If approved, a Single Permit will be issued with a validity of one year, which may be renewed for further periods of up to three years. ## Taxation of TCNs Residing in Malta ## Tax TCNs not domiciled but resident in Malta are only taxed on income sourced in Malta as well as any other income received in Malta. This means that any foreign capital gains are not taxable in Malta. TCNs are usually taxed at progressive rates ranging from 0-35%. However, individuals employed in certain roles or offices may benefit from a 15% flat tax on income. ## Social Security All employed TCNs between the ages of 16-65 are to pay social security contributions. However, a TCN may request to be exempted from paying social security in Malta if a state contribution is being paid in their country of origin. ## Rights of TCNs Residing in Malta ## Long-Term Residence Third-country nationals who have lawfully resided in Malta for an uninterrupted period exceeding 5 years are eligible to apply for long-term resident status. ## Family Third-country nationals are also entitled to bring their family members to Malta, which include (i) the spouse or long-term partner, (ii) unmarried minor children and (iii) unmarried children who are dependent on the TCN for financial support. Family members are given residency, but should they wish to seek employment in Malta, they must make a separate work permit application. ## Healthcare Third-country nationals and their family members have access to the Maltese public healthcare system if they pay social security in Malta. ## Education Third-country nationals and their family members also have access to the educational system. ## Driving Licence Driving licences issued by non-EU/EEA member states are recognised for a period not exceeding 12 months from the date of entry of the TCN into Malta. Following the expiration of the 12-month period, TCNs are required to exchange the licence for a Maltese driving licence. Immovable Property Third-country nationals usually require an AIP permit when purchasing immoveable property in Malta. However, there are Special Designation Areas (SDAs) where TCNs do not require an AIP permit to purchase immoveable property. ## How can Zeta Assist? Our team of experienced professionals specialise in guiding both employers and prospective employees through the residency application, assisting in the preparation of the application and communicating with the regulatory authority. Contact us today to see how we can assist you in achieving your goals. --- ## The Specialist Employee Initiative **Date:** 2024-07-07 **Category:** Residency **URL:** https://zeta-financial.com/news/the-specialist-employee-initiative ## Background Third-Country Nationals (“TCNs”), whether entering Malta from a visa-exempt country or through a Schengen Visa, may reside in Malta for a maximum of 90 days, unless there is a valid legal basis to remain. All TCNs require a work permit in order to be able to work in Malta. There are a number of different routes by which a TCN can obtain a work permit to reside and work in Malta (kindly refer to our article on TCN Residence in Malta: ## The Specialist Employee Initiative The Specialist Employee Initiative (SEI) was introduced in January 2024, serving as an expedited work/residence permit application procedure available to highly-skilled TCNs. ## Eligibility In order to be eligible for application under the SEI, the TCN must: - Have a signed contract with a Maltese company with a minimum annual gross salary of €25,000; and - Be in possession of: - Qualifications of at least MQF Level 6 in an area directly related to the employment position being offered in Malta; OR - Any other academic, vocational or other certified qualified skill qualifications which are directly related to the position being offered by the Maltese employer together with a minimum of 3 years’ experience in a position directly related to that being offered. Where the applicant submits an application based on (b)(ii), proof of experience must be presented in the form of (a) previous employment contracts, (b) employment history issued and officially certified by the employment authority of the country of employment, or (c) reference letters from former employers, showing both the start and end dates of the employment as well as the details of work carried out during employment. ## Procedure Applications are to be submitted by the employer to Identita’ (the Maltese competent authority for issuing work permits). Identita’ will then request the proposed employee to confirm the application and validate the information submitted by the employer. Once confirmed, the employer will receive notice that the application has been fully submitted. Identita’ will then review the application and decide whether to approve the issuance of a residence and work permit. If approved, the permit will be valid for a period of one year. It may be extended for further periods of up to three years, provided that the employment contract covers all the validity period. Identita’ usually takes 15 working days to process the application, starting from the date of submission of the full application. ## Taxation of TCNs Residing in Malta ## Tax TCNs not domiciled but resident in Malta are only taxed on income sourced in Malta as well as any other income received in Malta. This means that any foreign capital gains are not taxable in Malta. TCNs are usually taxed at progressive rates ranging from 0-35%. However, individuals employed in certain roles or offices may benefit from a 15% flat tax on income. ## Social Security All employed TCNs between the ages of 16-65 are to pay social security contributions. However, a TCN may request to be exempted from paying social security in Malta if a state contribution is being paid in their country of origin. ## Rights of TCNs Residing in Malta ## Long-Term Residence Third-country nationals who have lawfully resided in Malta for an uninterrupted period exceeding 5 years are eligible to apply for long-term resident status. ## Family Third-country nationals are also entitled to bring their family members to Malta, which include (i) the spouse or long-term partner, (ii) unmarried minor children and (iii) unmarried children who are dependent on the TCN for financial support. Family members are given residency, but should they wish to seek employment in Malta, they must make a separate work permit application. ## Healthcare Third-country nationals and their family members have access to the Maltese public healthcare system if they pay social security in Malta. ## Education Third-country nationals and their family members also have access to the educational system. ## Driving Licence Driving licences issued by non-EU/EEA member states are recognised for a period not exceeding 12 months from the date of entry of the TCN into Malta. Following the expiration of the 12-month period, TCNs are required to exchange the licence for a Maltese driving licence. ## Immovable Property Third-country nationals usually require an AIP permit when purchasing immoveable property in Malta. However, there are Special Designation Areas (SDAs) where TCNs do not require an AIP permit to purchase immoveable property. --- ## UK Non-Doms Planning International Relocation **Date:** 2024-07-07 **Category:** Residency **URL:** https://zeta-financial.com/news/uk-non-doms-planning-international-relocation ## Background Until recently, the UK was seen as an attractive destination for persons not domiciled in the UK (UK Non-Doms) due to its favourable tax regime, requiring them to pay tax in the UK only on (i) income arising in the UK and (ii) on foreign income and capital gains that are remitted to the UK. However, the recent ‘UK Sprint Budget’ as well as the Labour Party’s election manifesto both propose changes which could significantly affect the tax advantages available to UK Non-Doms. Thus, many UK Non-Doms have begun evaluating alternative tax residence options. ## Malta Malta, renowned for its idyllic landscapes and rich cultural heritage, is one of the most popular alternatives being considered by UK Non-Doms. Persons not domiciled but resident in Malta are taxed only on (i) income sourced in Malta and (ii) other income remitted to Malta. This means that any foreign capital gains, whether remitted to Malta or not, are not taxable in Malta. ## Route to Maltese Residence for EU/EEA Citizens EU and EEA citizens enjoy the right to leave their home state and to move and freely reside within the territory of any other Member State, including Malta. This right is also extended to family members of EU and EEA citizens. Our brochure for EU citizens looking to relocate to Malta provides further information: www.linkedin.com/posts/zeta-financial_relocating-to-malta-eu-citizens-guide-ugcPost-7163178615407366144-KBJj?utm_source=share&utm_medium=member_desktop ## Route to Maltese Residence for Third-Country Nationals Third-country nationals (TCNs) include all persons not domiciled in the EU, EEA or Switzerland. There are a number of different routes by which a TCN can the right to reside in Malta. Our brochure for non-EU citizens looking to relocate to Malta provides further information: https://www.linkedin.com/posts/zeta-financial_relocating-to-malta-non-eu-citizen-guide-activity-7163487488173404161-TVZo?utm_source=share&utm_medium=member_desktop ## Route to Maltese Residence under Retirement Schemes Our brochure on Retirement Opportunities in Malta provides alternative options to both EU Citizens and TCNs: --- ## Malta Company Formation – A Straightforward Guide **Date:** 2024-07-02 **Category:** Company Formation **URL:** https://zeta-financial.com/news/malta-company-formation-a-straightforward-guide ## Why Set-Up a Company? The main benefit of conducting business through a company stems from the doctrine of limited liability, which provides for a legal distinction between the patrimony of the owner of the company (“the shareholder”) and the patrimony of the company. Thus, shareholders enjoy a great degree of financial protection since their liability is limited to the amount unpaid on any share capital, if any. ## Registration Procedure ## Preparation of Initial Company Formation Documentation The first step involves preparing the Memorandum and Articles of Association (M&AA), the Beneficial Ownership Form, an Organisation Structure and other documents required by the Malta Business Registry (MBR). ## Depositing the Initial Share Capital The shareholders must also deposit the initial share capital of the company. The Malta Business Registry will require proof that the initial share capital of the company is readily available, either in a company-named account or through the services of a Company Service Provider (CSP). ## Submission to the Malta Business Registry The shareholders must submit all prepared company formation documentation and proof that the initial share capital is readily available to the Malta Business Registry. Once all necessary documentation has been submitted, the Malta Business Registry will issue a Certificate of Registration. ## Post-Registration Procedure ## Registering with Tax Authorities Once registered, the Company must register with the Tax Authorities to obtain a Tax Identification Number (TIN). If the Company supplies goods or services, it must register with the VAT Department within 30 days of supplying goods and services for the first time. ## Maintaining the Company in Good Standing The Company will need to prepare and maintain adequate registers and issue share certificates to all shareholders. Furthermore, the Company Secretary will need to notify the Malta Business Registry of any changes in the company organisation. ## Financial Reporting The Company will need to prepare and maintain adequate trade books and financial statements. The financial statements must be audited and submitted to the Malta Business Registry. ## Other Procedures (If Applicable) Registering with Employment Authorities Companies which intend to employ persons in Malta must register with Jobsplus and apply for a PE Number. ## Registering with Regulatory Authorities Certain business activities (such as air operations, investment services, banking, etc) require prior licensing or authorisation from competent regulatory authorities. ## Contact Us Zeta Corporate & Management Services Limited can assist in incorporating your company, maintaining your company and registering with tax and other competent authorities. --- ## Malta Shines in ICS's Shipping Industry Flag State Performance Table for 2023-2024 **Date:** 2024-07-02 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-shines-in-ics-shipping-industry-flag-state-performance-table ## Background The International Chamber of Shipping (ICS) recently published its ‘Shipping Industry Flag State Performance Table 2023/2024’, aiming to (i) encourage shipowners and operators to examine whether a Flag State has sufficient substance before using it and (ii) to encourage shipowners and operators to put appropriate pressure on their Flag State Administrations to affect any necessary improvements, particularly in relation to safety of life at sea, protection of the marine environment and the provision of decent working and living conditions for seafarers. ## ICS Member National Shipowners Association The Malta International Shipowners Association (MISA) boasts a substantial amount of tonnage of various types of ships operated by reputable owners of high statute from several countries. MISA is an active member of the European Community Shipowners’ Association and an Affiliate Member of the International Chamber of Shipping. ## Port State Control Performance Examining the collective Port State Control record of ships flying a specific Maritime Flag serves as an effective method of assessing the effective enforcement of international maritime rules. Malta scored positive performance indicators in all aspects of Port State Control, being placed on the white-list of all three principal Port State Control authorities (the Paris MOU, the Tokyo MOU and the United States Coast Guard). Furthermore, Malta remains off the Paris MOU Black List, the Tokyo MOU Black List and USCG Target List. ## Ratification of Conventions The ratification of International Maritime Conventions provides a glimpse at a Flag State’s willingness to conform with international maritime standards in the realms of safety and the protection of maritime environment. Malta’s ratification of all ‘core’ International Maritime Conventions (including SOLAS, MARPOL, LL66, STOW 78, ILO MLO and OLC/FUND 92) was confirmed by ILC’s Shipping Industry Flag State Performance Table. ## Use of Recognized Organizations in Compliance with the IMO Code for Recognized Organizations Recognized organizations are those entities authorized to conduct inspection and survey work on behalf of the competent maritime authorities of a Flag State. The IMO Code for Recognized Organizations sets an obligation on Flag States, requiring them (i) to establish controls over recognized organizations authorized under their authority; (ii) to ensure that recognized organizations are adequately staffed and resourced to carry out the tasks assigned; and (iii) to submit data, including a list of the recognized organizations authorized under their authority to the IMO. ILC’s Shipping Industry Flag State Performance Table confirms Malta’s compliance with the IMO Code for Recognized Organizations, including its use of high-performing recognized organizations. ## Age of Fleet ILC’s Shipping Industry Flag State Performance Table indicates that the average fleet age of vessels registered in Malta falls amongst the lowest average Flag States. This confirms Malta’s hesitance to register vessels exceeding 25 years of age, unless they form part of a younger fleet of vessels. ## Compliance with Reporting Requirements Flag States are under an obligation to perform various reporting requirements to both the IMO and ILO. The ILC’s Shipping Industry Flag State Performance Table confirms Malta’s compliance with reporting requirements. ## Attendance at IMO Meetings Malta’s attendance at IMO meetings (including meetings of the Maritime Safety Committee, meetings of the Marine Environment Protection Committee, and meetings of the Legal Committee) confirm Malta’s commitment to implement and enforce IMO Rules. ## IMO Member State Audit Malta successfully underwent the IMO Member State Audit, confirming its conformity with the IMO Convention and all applicable mandatory IMO Instruments. --- ## Retirement Opportunities in Malta **Date:** 2024-07-02 **Category:** Residency **URL:** https://zeta-financial.com/news/retirement-opportunities-in-malta ## General Malta, renowned for its idyllic landscapes and rich cultural heritage, offers two distinct initiatives designed to attract foreign retirees seeking to make the island nation their home: the Malta Retirement Programme (MRP) and the United Nations Pensions Programme (UNPP). These programs provide advantageous tax arrangements and residency statuses, catering to different segments of retirees. Let’s delve into a detailed comparison of the two: ## The Malta Retirement Programme (MRP) The MRP targets individuals considering retirement in Malta who are not engaged in employment and rely on a pension as their primary income source. Participants in this program enjoy a flat tax rate of 15% on foreign-sourced income remitted to Malta, with provisions for double taxation relief. Moreover, MRP participants receive a residence permit, granting them the right to reside in Malta. Eligibility criteria include meeting specific requirements such as annual minimum tax payment, ownership of a qualifying property in Malta, and maintenance of health insurance coverage. Tax and Residency Status Under the MRP, individuals retiring to Malta benefit from favourable tax treatment on pension income, with foreign income remitted to Malta subject to a 15% tax rate (or a minimum tax of 7,500 EUR, whichever is higher). Income sourced within Malta is taxed at regular rates. ## The United Nations Pensions Programme (UNPP) The UNPP, tailored for retiring individuals with ties to the United Nations, extends benefits to eligible former United Nations Joint Staff members and their dependents. This program offers a specialized tax status to EU/EEA, Swiss, and third-country nationals (excluding Maltese citizens) receiving a United Nations pension or widows/widowers benefit, with at least 40% of the pension received in Malta. Tax and Residency Status Under the UNPP, foreign-sourced income not remitted to Malta remains tax-exempt, and beneficiaries are spared taxation on their UN pension, including widows’ benefits (with a minimum applicable tax of 10,000 EUR). A special tax rate of 15% is applicable to income remitted to Malta by beneficiaries or their dependents. ## Conclusion In conclusion, both the Malta Retirement Programme and the United Nations Pensions Programme present attractive opportunities for eligible retirees to settle in Malta and enjoy preferential tax rates and residency statuses. While the MRP caters to retirees reliant on pension income, the UNPP targets individuals receiving United Nations pensions or widows/widowers benefits, outlining specific tax rates, exemptions, and residency criteria tailored to their circumstances. Whether one seeks retirement amidst Malta’s Mediterranean charm or as a retiree with UN ties, these programs offer a pathway to a fulfilling retirement in this picturesque island nation. --- ## The 12% VAT Rate for Malta Yacht Charters **Date:** 2024-07-02 **Category:** Maritime **URL:** https://zeta-financial.com/news/the-12-vat-rate-for-malta-yacht-charters ## Background ## What is VAT? Value Added Tax (VAT) in Malta is regulated by the Value Added Tax Act (VAT Act), requiring VAT to be paid on every supply of goods or services that takes place in Malta. ## When are Yacht Charters Subject to VAT in Malta? Not all yacht charters are subject to VAT in Malta. ## The Rules The Third Schedule to the Maltese VAT Act provides that the place of short-term hiring of a means of transport shall be the place where the means of transport is actually put at the disposal of the customer. On the other hand, in cases other than short-term hiring, the place of hiring a pleasure boat to a non-taxable person, shall be the place where the pleasure boat is actually put at the disposal of the customer, if the service is provided by the supplier from his place of business or a fixed establishment situated in that place. It clarifies that ‘short-term’ means the continuous possession or use of the means of transport throughout a period of not more than 90 days in the case of vessels. ## What does this Mean? In simple terms, a yacht charter will be subject to VAT in Malta when (a) the yacht is chartered for a period not exceeding 90 days and the yacht is put at the disposal of the customer in Malta (the customer takes physical possession of the yacht in Malta); or (b) the yacht is chartered for a period exceeding 90 days, the yacht is put at the disposal of the customer in Malta and the owner (person supplying the yacht) has his place of business or a fixed establishment in Malta. ## Rate of VAT ## Calculation of Taxable Value of Service Prior to considering the rate of VAT applicable to yacht charters, one must first understand the taxable value of yacht charters. The Seventh Schedule to the VAT Act sets out the general rule being that the taxable value of a charter shall be the total value of the consideration payable to the owner of the vessel by the charterer, including any subsidy directly linked to the provision of the charter, but excluding the VAT chargeable under the VAT Act on that charter. It shall also include incidental expenses such as commissions, transport and insurance costs charged by the owner of the vessel to the charterer, even if they are covered by a separate agreement. However, it shall not include price reductions, penalties and interests for late payments, disbursements or deposits. ## The Actual Rate of VAT The general rule found in the VAT Act is that the provision of services is to be taxed at a rate of 18%. However, the Eighth Schedule to the VAT Act sets out a list of exceptions to this rule. One such exception, introduced on the 1st of January 2024, provides a special VAT rate of 12% in respect of yacht charters. In order to qualify for this special VAT rate, the following conditions must be met: (i) the charter must be conducted in accordance with a charter agreement; and (ii) the charter period, together with any other charter period made to the same person in relation to the chartering of the same yacht or a yacht of the same kind during the previous year, must not exceed 5 weeks. ## Deductions from VAT Chargeable Persons subject to VAT may also deduct from the amount of VAT chargeable during a period, (i) any input tax credit for that period; or (ii) any other deductions allowed under the Tenth Schedule to the VAT Act. --- ## The Role of the Company Secretary in Regulated Entities **Date:** 2024-07-02 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-role-of-the-company-secretary-in-regulated-entities ## What is a Company Secretary? ## Who may be Appointed as a Company Secretary? The Maltese Companies Act requires all companies to appoint as Company Secretary, a person who appears to have the requisite knowledge and experience to discharge the functions of a company secretary. Apart from the aforementioned, the Companies Act does not provide any specific criteria for eligibility. On the other hand, it sets out certain disqualifications, providing that a company shall not appoint as Company Secretary, (i) a person interdicted, incapacitated or an undischarged bankrupt; (ii) a person convicted of an offense relating to money laundering, affecting public trust, theft, fraud or knowingly receiving property obtained by theft or fraud; (iii) a minor not emancipated to trade or (iv) a person who has been made subject to a disqualification order. ## The Role of the Company Secretary The Company Secretary’s Role in ordinary private limited liability companies usually consists of (i) drawing up and maintaining minute books and registers, (ii) organizing and ensuring proper notice of all meetings, (iii) authenticating company documents and (iv) preparing and delivering all returns and other documents required by the Registrar of Companies. Failure to carry out these duties can lead to significant penalties being imposed on the company itself, as well as personally on the person assuming the Company Secretary role. Thus, it is crucial that the Board of Directors appoint a person that is familiar with the functions and duties of the Company Secretary are set out by Maltese Company Law. ## What are Regulated Entities? Regulated Entities are those entities which operate within a framework of specific regulations set out by the Maltese Financial Services Authority (MFSA) or other competent regulatory authorities. These entities mainly consist of public limited liability companies (“listed companies”) and other entities which require a licence or authorisation to operate (“licensed companies”), such as collective investment schemes (funds), banks and other payment institutions, businesses operating in gaming or blockchain, etc. ## Extended Responsibilities of the Company Secretary in a Regulated Entity The Regulatory Authorities’ ever-increasing demand for disclosure and reporting obligations, as well as the increased rate at which inspections are being conducted, necessitates that the books and minutes of the Regulated Entity are kept in a clear, detailed and pristine manner. Thus, it is becoming ever more crucial that the person appointed as Company Secretary of a Regulated Entity is a person that possesses sufficient knowledge, experience and qualifications to understand the complex business transacted at General Meetings and Board Meetings of the Company, in order for such person to be able to reduce the discussions and decisions taken into clear and organised minutes. For this reason, Regulated Entities are opting to appoint qualified professionals which, apart from possessing a basic understanding of Maltese Company Law, understand the business in which the regulated entity operates and are constantly keeping up to date with the development of legislation and regulatory requirements in that particular field. --- ## The Transfer Pricing (Amendment) Rules, 2024 **Date:** 2024-07-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/the-transfer-pricing-amendment-rules-2024 ## General The Transfer Pricing (Amendment) Rules 2024 amended Article 1(2) of the Transfer Pricing Rules, as discussed in the section dealing with Application of the Rules below. ## What are the Transfer Pricing Rules? The Minister for Finance introduced the Transfer Pricing Rules on 18th November 2022 through Legal Notice 284 of 2022. ## Application - ****General Rule on Application Article 1(2) provides that the Transfer Pricing Rules shall apply for basis years commencing on or after 1st January 2024, in relation to: - any arrangement entered into on or after the 1st of January 2024; - any arrangements entered into before the 1st of January 2024, but only to those arrangements that are materially altered on or after that date. However, the new amendment under the Transfer Pricing (Amendment) Rules provides a further ground for application, being: - any arrangement entered into before the 1st of January 2024 and which were not materially altered after that date, but only as from 1st of January 2027. - ****Definition of Arrangement It defines an ‘arrangement’ as: “(a) any transaction, agreement or dealing of any kind, where, at the relevant time, the parties to such an agreement are associated enterprises. An arrangement shall also include a series of transactions, agreements or dealings of any kind; or (b) any notional dealing with a body of persons and its permanent establishment.” 3. Definition of Associated Enterprises The Transfer Pricing Rules provides that enterprises are associated where: - One enterprise controls another through more than 75% in voting rights or the ordinary capital of the other enterprise; - One enterprise controls another by virtue of any powers conferred in the articles of association or any other document regulating the other enterprise; - The same person (legal or natural) controls multiple enterprises through more than 75% in the voting rights or ordinary share capital in each enterprise. - The same person (legal or natural) controls multiple enterprises by virtue of any powers conferred in the articles of association or any other documents regulating such enterprises. However, in the case of enterprises qualifying as entities of a MNE Group, the aforementioned percentage interest qualification is reduced to 50%. 3(a) Definition of MNE Group A MNE Group is defined in Annex III of the ‘Cooperation with Other Jurisdictions on Tax Matters Regulations’ (SL.123.127), as any Group that (i) includes two or more enterprises which are tax resident in different jurisdictions or (ii) includes an enterprise which is tax resident in one jurisdiction but is subject to tax in another jurisdiction with respect to business carried out through a permanent establishment. However, it also excludes Excluded MNE Groups from the definition. It then defines an Excluded MNE Group as a Group having total consolidated group revenue of less than €750,000 during the Fiscal Year immediately preceding the Reporting Fiscal Year. It defines a ‘Group’ as a collection of enterprises related through ownership or control such that it is either (i) required to prepare Consolidated Financial Statements for financial reporting purposes or (ii) would be so required if equity interests in any of the enterprises were traded on a public securities exchange. 4. Cross-Border Arrangements As will be discussed later, the provisions of the Transfer Pricing Rules apply to cross-border arrangements. 4(a) Definition of Cross-Border Arrangement A cross-border arrangement is defined as any arrangement between associated enterprises which satisfied any of the following conditions: - At least 1 party is a company resident in Malta and at least 1 party is not resident in Malta, and the arrangement is relevant in ascertaining the total income of that company. - At least 1 party is a company resident in Malta and at least 1 party maintains a permanent establishment situated outside Malta to which the arrangement is effectively connected, and the arrangement is relevant in ascertaining the total income of that company. - At least 1 party is not resident in Malta and at least 1 party, not being resident in Malta, maintains a permanent establishment situated in Malta to which the arrangement is effectively connected, or otherwise derives income or gains arising in Malta, and the arrangement is relevant in ascertaining the total income of that company. 4(b) Definition of Company The Rules also provide that the term ‘company’ shall not include any micro, small or medium-sized enterprises. 5. Exceptions Article 9 provides that these rules shall not apply where: - The arrangement comprises a securitisation transaction in terms of the Securitisation Transactions (Deductions) Rules; or - The Aggregate arm’s length value of transactions of a revenue nature do not exceed €6,000,000 and the aggregate arm’s length value of transactions a capital nature do not exceed €20,000,000. ## The Arm’s Length Principle The Transfer Pricing Rules introduces the Arm’s Length Principle into Maltese law. ## What is the Arm’s Length Principle? The Arm’s Length Principle is a fundamental rule in transfer pricing which aims to prevent the parties to a transfer colluding to minimise tax responsibilities. Thus, it requires that transfers between associated enterprises are made at a fair-market value, referred to as the “arm’s length amount”. ## Article 3 – The Arm’s Length Principle in Ascertaining the Total Income Article 3 confirms that in cross-border arrangements, the arm’s length amount automatically applies over the actual amount of the transfer for the purposes of calculating the total income of any company in terms of the Income Tax Act. Article 3(a) provides that where any amount incurred under any cross-border arrangement differs from the arm’s length amount, it shall be deemed that the arm’s length amount was incurred instead of the actual amount incurred. Article 3(b) provides that where any amount accrued under any cross-border arrangement differs from the arm’s length amount, it shall be deemed that the arm’s length amount was accrued instead of the actual amount accrued. ## Article 4 – Definition of Arm’s Length Amount The Arm’s Length Amount is defined at the amount that independent parties would have agreed to in relation to the arrangement had those independent parties entered into that arrangement in comparable circumstances. ## Article 5 – Calculation of Fair Market Value The Commissioner for Revenue is under an obligation to issue guidelines designating the methodologies by which the Arm’s Length Amount shall be calculated for such transactions. The Commissioner for Revenue has since provided that the preferred methodology shall be those outlined in Chapter II of the OECD Transfer Pricing Guidelines. However, other methods may be accepted in accordance with Paragraph 2.9 of the OECD Transfer Pricing Guidelines. ## Article 6 – Duty to Prepare and Keep Records Any company under an arrangement to which these rules apply, shall prepare on a timely basis and retain records as required to determine that the total income of the company has been ascertained in accordance with the Transfer Pricing Rules. ## Unilateral Transfer Pricing Rulings ## General The Transfer Pricing Rules also establish a framework for the request and issuance of unilateral transfer pricing rulings. ## What is Unilateral Transfer Pricing Ruling? It is defined as a ruling issued by the Commissioner for Revenue, which determined an appropriate set of criteria for the determination of the transfer pricing for an arrangement in advance, including the method used to arrive at the transfer pricing, comparables and appropriate adjustments thereto and critical assumptions as to future events. ## Article 11(1): Power of Commissioner to Issue Rulings The Commissioner may issue a unilateral transfer pricing ruling in order to provide certainty in relation to the application of these rules. ## Article 11(2)-(7): Request for Ruling A request for a ruling shall (a) be made by a party to the arrangement or his authorised representative, (b) be made in writing, (c) be made in relation to a specific cross-border arrangement, (d) include a reference to these rules, (d) disclose the identities of the directly interested parties, (e) include any other detailed as determined by Guidelines issued under the Income Tax Acts and (f) a non-refundable fee of €3000. ## Article 11(8): Effect of Ruling The ruling shall remain binding on the Commissioner for a period of 5 years from the date it takes effect. However, it is possible for the Commissioner to expressly provide for a shorter period when issuing the ruling. ## Article 11(9)-(11): Relevant Material Changes A ruling becomes null and void upon any material change to any arrangement. Where any party becomes aware of such change, they shall notify the Commissioner within 30 days. Such notification may also include a request for a new ruling. --- ## The Virtual Financial Assets (Amendment) Act, 2024 **Date:** 2024-07-02 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/the-virtual-financial-assets-amendment-act-2024 ## Background The Virtual Financial Assets Act was introduced on 1st November 2018, seeking to regulate the field of Initial Virtual Financial Asset Offerings, Virtual Financial Assets and other ancillary matters. The Virtual Financial Assets (Amendment) Act brings with it a number of significant changes to the VFA framework. - ****Removal of the VFA Agent Role Prior to the introduction of the Virtual Financial Assets (Amendment) Act, an issuer of VFAs was required to appoint an authorised VFA agent to (i) assist, monitor and provide guidance throughout the whitepaper process and offering stage; (ii) oversee the operations of the issuer in relation to the VFA offering; (iii) ensure the issuer’s regulatory compliance and (iv) act as a channel of communications between the issuer and the MFSA. However, following the introduction of the new amendments, the role of VFA agents has been completely repealed from the VFA Framework. All VFA agents must cease to offer any services within 3 months from the coming into force of the amendments. Furthermore, all VFA agents shall submit a VFA Agent Deregistration Form within 3 months from the coming into force of the amendments. The former duties and functions of VFA Agents have now been redistributed onto Virtual Financial Asset Service Providers (VFASPs) and issuers of VFAs. - ****MiCA Transitory Provisions Following the MFSA’s revision to Chapter 3 of the VFA Rulebook in the last quarter of 2023, the VFA (Amendment) Act introduces a number of provisions preparing for the alignment of the VFA service provider (VFASP) framework in the VFA with that of the Markets in Crypto Assets Regulation (MiCA) framework. This alignment is set to take place on the 1st of August 2024 and aims to draw Maltese VFASPs closer to achieving full MiCA compliance, which is set to enter into force in 2024. - ****Exclusion of E-Money Tokens (EMTs) and Asset Referenced Tokens (ARTs) As from the 30th of June 2024, asset-referenced tokens (ARTs) and e-money tokens (EMTs) shall be excluded from the application of the VFA. Instead, they will be regulated solely by the MiCA Regulation as from 30th of June 2024 onwards. - ****VFA Service Provider Applicant Deadline The transitory provisions provide that any application for a VSASP licence made on or following the 1st of August 2024 shall not be accepted by the competent authority. Thus, all persons seeking to provide VFA services under the existing framework must submit their licence application prior to the 1st of August 2024. --- ## The Small Commercial Yacht Code (sCYC) **Date:** 2024-04-06 **Category:** Maritime **URL:** https://zeta-financial.com/news/the-small-commercial-yacht-code-scyc ## Introduction The Small Commercial Yacht Code was introduced by the Merchant Shipping Directorate following extensive consultation with various industry stakeholders, acknowledging the importance of the small commercial yacht segment, which has seen a sharp increase in the last years. The Code became effective as from the 1st of April 2024, updating and replacing the previous requirements contained in the Commercial Yacht Code (CYC). All CYC certified yachts are automatically deemed to be in compliance with the sCYC. However, any yachts falling under its application shall begin to be surveyed and certified in conformity with the Code as from the yacht’s first renewal survey carried out on or after the 1st June 2024. ## Applicability The Code provides that it is applicable to Commercial Yachts which are (i) at least 12 metres in hull length, (ii) less than 24 metres in length, (iii) engaged in commercial operations, and (iv) which do not carry more than 12 passengers. The Code defines a Commercial Yacht as a yacht that is engaged in lawful trade, which is in commercial use for sport or pleasure, which does not carry cargo and which does not carry more than 12 passengers. The Code clarifies the exact definitions and manner in which both the Hull Length and the Length of the yacht are to be measured in its definition section. Furthermore, it provides the requirements for a person to qualify as a passenger, expressly excluding persons employed on board the yacht and children under the age of one. The Code also specifically excludes the following from its application: · Yacht Design Category D and Rigid Inflatable Boats (RIBs Design Category C or D; · Military vessels and vessels belonging to the State and used for non-commercial purposes; · Vessels owned or operated for non-commercial services. ## Purpose The Small Commercial Yacht Code sets out the required standards of safety, pollution prevention and crew welfare which are appropriate for the size and navigation notation of the yacht, which standards take into consideration International Conventions, EU Regulations and Directive, Industry Standards and other equivalent standards. In particular, the Code sets out requirements relating to the Structural Strength and Watertight Integrity (Section 4), Machinery (Section 5), Electrical Installation (Section 6), Stability (Section 7), Freeboard and Freeboard Markings (Section 8), Life Saving Appliances (Section 9), Fire Protection, Detection and Extinction (Section 10), Anchors, Cables and Lifts (Section 11), Merchant Shipping Rules (Section 12), Protection of Personnel (Section 13), Navigation and Communication (Section 14), Marine Pollution Prevention (Section 15), Manning and Seafarer Certification (Section 16), Bareboat Charters and Special Category Yachts (Section 17), Medical Stores (Section 18), Yacht Tenders (Section 19), Static Chartering (Section 20), and Survey and Certification (Section 21). The Code also allows a discretion to the Registrar-General of Shipping and Seamen to exempt any yacht from any of the Code’s requirements which are proven to be disproportionately onerous and technically impracticable on a case-by-case basis. --- ## Benefits of Gibraltar **Date:** 2024-03-11 **Category:** Residency **URL:** https://zeta-financial.com/news/benefits-of-gibraltar ## Lifestyle Gibraltar, positioned at the entrance of the Mediterranean, benefits from the typical warm Mediterranean climate and relaxed lifestyle. Coupled with its reputation as an international finance centre and favourable tax regime, Gibraltar is the perfect location for entrepreneurs and retirees. ## Tax Gibraltar does not charge any (i) inheritance or succession taxes, (ii) capital gains taxes, (iii) wealth taxes, (iv) tax on savings and investment income, (v) VAT or (vi) Stamp Duty. Furthermore, High Net Worth individuals may apply for Category 2 Status or High Executive Possessing Specialist Skills (HEPSS). ## Category 2 Status or HEPSS Status Anyone having a net worth in excess of GBP 2,000,000 may apply for Category 2 status. Such persons benefit from paying income tax only on the first GBP118,000.00 received, paying a maximum of GBP44,740.00 Income Tax. Anyone earning an annual employment income exceeding GBP160,000 may apply for HEPSS (High Executing Possessing Specialist Skills) Status. Persons holding such status benefit from paying income tax only on the first GBP160,000 received, limiting tax liability to a maximum of GBP43,140. In order to qualify for Category 2 or HEPSS Status, an applicant must: (i) Reside in a ‘Prime Area’ approved property. (ii) Hold Private Comprehensive Health Insurance. (iii) Provide a Statement of Net Worth or Income. (iv) Provide a Valid Passport and CV. (v) Provide 2 professional references (including one from an international bank). --- ## Gibraltar upgraded to whitelist by FATF **Date:** 2024-03-04 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/gibraltar-upgraded-to-whitelist-by-fatf Gibraltar’s recent and noteworthy inclusion in the FATF Whitelist is a testament to the jurisdiction’s resolute dedication to adhering to and conforming with international standards in Anti-Money Launder (AML) and Combating the Financing of Terrorism (CFT). This prestigious inclusion results from Gibraltar successfully completing a series of rigorous assessments, followed by the proactive introduction of robust and sustainable measures to fulfil its action plan, resulting in its removal from the FATF’s Grey List. This notable progress reaffirms Gibraltar’s reputation as a responsible and transparent financial hub, committed to maintaining the highest levels of compliance with international obligations. Furthermore, it signifies the jurisdiction’s ongoing progress in conforming with global best practices and proves its unwavering commitment to complying with FATS processes. Hon Fabian Picardo, Gibraltar’s Chief Minister celebrated the news and praised the work of all agencies and authorities involved: “This is very welcome news and I am delighted that our continued and ongoing work and political commitment to future development has been recognised. I am grateful to all the agencies and authorities that have contributed to this work as well as the private sector that has wholeheartedly joined us in our fight against economic crime. Gibraltar’s FATF white listing not only enhances our reputation but also strengthens our position as a trusted and compliant international financial centre. This is excellent news for the Jurisdiction. I particularly want to highlight the work of successive Ministers Isola and Feetham in this regard. Their political leadership in financial services and Samantha Sacramento’s work in the Ministry for Justice has been essential in achieving this proud mile stone.” Hon Nigel Feetham, Gibraltar’s Minister for Justice, Trade and Industry, confirmed Gibraltar’s commitment to remaining compliant with international standards: “I gave my personal commitment last October that we would be white listed at the first opportunity. We have worked hard, very hard, to deliver this and I am sincerely grateful to all the team that have made this possible not least to all the relevant public servants and my former ministerial colleagues Albert Isola and Samantha Sacramento for their work. We have not only focused on our delisting, but on the work that we have already started to plan for the next evaluation, in three 3 years, to ensure we remain fully in line with the FATF standards. We are 100% committed to fighting economic crime and playing our part with the international community in tackling money laundering and terrorist financing.” --- ## The Maltese Holding Company and the Participation Exemption **Date:** 2024-03-03 **Category:** Company Formation **URL:** https://zeta-financial.com/news/the-maltese-holding-company-and-the-participation-exemption ## What is a Holding Company? A holding company is a company that is characterized by its lack of operational activities but is set up to hold, own and protect assets such as (i) real estate holdings, (ii) fixed assets, (iii) aircraft, (iv) maritime vessels, (v) bank accounts, (vi) intellectual property, and (vii) shares in other companies. ## Benefits of Opening a Maltese Holding Company ## Segregation of Business Activities and Assets One of the greatest benefits attributable to a holding company stems from the concept of separate legal personality. A number of subsidiary trading companies can be set up under the ownership of a parent holding company, each operating in a separate line of business and having its own separate legal personality. As a result, the assets and liabilities of each subsidiary company will be segregated from the rest. Therefore, creditors of one trading companies will not be able to attack the assets of the parent company or other companies within the structure, offering greater protection of assets and limiting the potential impact of liabilities or financial setbacks in one sector on the overall corporate structure. Structuring the business in this manner not only entails the strategic consolidation of assets but also affords the flexibility for each subsidiary to operate from the most advantageous jurisdiction based on its specific business line. This approach recognizes the varying regulatory, tax, and legal landscapes in different regions and enables the holding company to optimize its subsidiaries’ locations for maximum benefit. ## The Participation Exemption A holding company may benefit from the participation exemption which exempts any dividend income and capital gains derived from a participating holding from tax. ## What is a Participating Holding? The Income Tax Act provides that a participating holding arises where either: (a) A company directly holds at least 5% of the equity shares of a company, which holding entitles the company to at least two of the following: (i) 5% of the right to vote. (ii) 5% of profits available for distribution. (iii) 5% of assets available for distribution on a winding up. (b) A company is an equity shareholder in a company and is entitled at its option to call for and acquire the entire balance of the rest of the shares in the company to the extent permitted by the law of the country in which the shares are held. (c) A company is an equity shareholder in a company and is entitled to first refusal in the event of a proposed disposal, redemption or cancellation of all of the shares of that company not held by it. (d) A company is an equity shareholder in a company and is entitled to (i) sit on the Board or (ii) appoint a person to sit on the Board of that company as a director. (e) A company is an equity shareholder in a company and holds an investment exceeding €1,164,000 in value as on the date it was acquired in that company and that holding is held for an uninterrupted period of not less than 183 days. (f) A company is an equity shareholder in a company and the holding of such shares is for the furtherance of its own business and not as trading stock for the purpose of a trade. ## What is an Equity Shareholder? It then defines an equity shareholder as a company which holds an equity holding, defined as holding of the share capital in a company which is not a property company, when the shareholding entitles the shareholder to at least any two of the following rights: (i) A right to votes. (ii) A right to profits available for distribution to shareholders. (iii) A right to assets available for distribution on a winding up of that company. ## Tax Exemption for Participation Holdings Any income or capital gains derived by a Maltese company from a participating holding or from the transfer of such holding shall be exempt from tax. However, with respect to dividends derived from participating holdings acquired on or after 1st January 2007, the exemption only applies if: (a) The entity in which the participating holding is held is (i) resident or incorporated in an EU Member State, or (ii) is subject to any foreign tax of at least 15%, or (iii) it does not derive more than 50% of its income from passive interest or royalties; or (b) The equity holding is (i) in an entity not resident in Malta, (ii) is not a portfolio investment and (iii) the entity or its passive interest or royalties have been subject to any foreign tax which is not less than 5%. ## Other Tax Benefits Malta also boasts a robust double tax treaty network, effectively reducing withholding taxes on received dividends. Being a member of the EU, Malta has implemented several EU directives, including the Parent-Subsidiary Directive and the Interest and Royalties Directive. Remarkably, no withholding tax is applied to distributions from the holding company to its parent company or shareholders, regardless of the shareholder’s residence. Additionally, the issuance of share capital incurs no capital duty, and subsequent transfers of shares do not attract stamp duty. This tax-friendly environment enhances the attractiveness of Malta as a jurisdiction for holding companies, providing favourable conditions for efficient dividend distribution and share transactions. ## Good Reputation Malta offers a great alternative to offshore company formulation. With the ever-increasing need for due-diligence and transparency, offshore companies have been put under pressure. Financial institutions and governments may have a negative outlook on offshore companies or view offshore companies as high-risk entities. Therefore, Malta offers fantastic tax incentives whilst also maintaining a good reputation through compliance with EU principals and directives. ## Simple Process Maltese Company Formation is a very simple and straightforward process, involving relatively low setup and ongoing administration costs. In fact, the Maltese Companies Act adopts a uniform approach to the minimum initial share capital, setting it at €1,165 without distinction between holding and trading companies, with only 20% of the minimum share capital required to be paid-up at the time of incorporation. For further information on the Maltese Holding Company and the Participation Exemption, contact us today to discuss your options. --- ## Yacht Services **Date:** 2024-03-03 **Category:** Maritime **URL:** https://zeta-financial.com/news/yacht-services ## Introduction Malta has maintained a high reputation within the maritime field, primarily due to its strategic location, natural harbours, extensive maritime services and finance law. At Zeta, we specialize in collaborating with yacht owners, trust and family offices, legal professionals, and yacht brokers, delivering a comprehensive array of services, including yacht ownership services, yacht management services and yacht crew management services. ## Yacht Ownership Services Forming a company, trust or other vehicle to own and operate a yacht provides a number of benefits for the owner, such as asset protection, qualification for a flag not available to the individual owner, delegation of the day-to-day running of the vessel, beneficial owner discretion and VAT registration in a suitable jurisdiction for commercial yachts. ## Structuring Our experienced team is well-equipped to guide you through the process of selecting the most suitable corporate vehicle for yacht ownership. We understand the importance of establishing a solid foundation and are committed to assisting you in crafting the initial ownership arrangement. ## Administration We understand that the complexities of yacht ownership extend beyond the initial setup, and we are here to seamlessly manage the day-to-day responsibilities and administrative tasks associated with your maritime venture. Our dedicated is committed to providing continuous support in the ongoing administration of the company, trust or other corporate vehicle chosen. From regulatory compliance to financial management, our team ensures that your yacht ownership experience remains smooth and worry free. Entrust us with the ongoing care and governance of your corporate entity, allowing you to focus on enjoying the open seas with confidence that the administrative aspects are expertly handled. ## Regulatory Compliance Rapid changes in the regulatory landscape demand a specialized approach, and our dedicated team is poised to offer comprehensive expertise and guidance to guarantee your compliance with the intricate and swiftly evolving regulatory environment. Navigating the complexities of regulations can be challenging, particularly in the fast-paced world we operate in. Our specialists are committed to staying ahead of the curve, ensuring that your company, trust, or chosen corporate vehicle remains fully compliant with all relevant regulations governing yacht ownership. With a focus on staying abreast of the latest developments, we provide proactive insights and strategic advice to safeguard your operations. Trust our team to be your vigilant partner, safeguarding your interests and ensuring that your yacht ownership remains in full adherence to the dynamic regulatory landscape. ## Company Directors Our team provides solutions to fit each of our client’s need, whether this be individual of corporate Directors. Zeta’s directors are experts in varied professional background as both executive Directors and non-executive Directors across a wide range of industry sectors. ## Company Secretary Services Our team works effectively with our clients, to provide the correct solutions required. We maintain a high reputation for excellence and provide valuable experience in a wide range of industry sectors. Therefore, you can have peace of mind that Zeta provides specialist support and advice on all company secretarial matters. ## Yacht Management Services ## Flag Registration Services Our team has the necessary expertise to advice clients on the most suitable choice of flag for the yacht. We will also take care of the registration process, organising surveyors, radio licences, carving and marking notes, as well as any other requirements. Furthermore, our team can provide ongoing management services such as assisting in the renewal of registration or in changes to registration. ## Charter Management Our dedicated team is well-equipped to provide comprehensive assistance in the efficient management of charter fees, Advance Provisioning Allowance (APA), and any applicable Value Added Tax (VAT) requirements. We understand the intricacies involved in the luxury charter industry, and our expertise extends to facilitating the seamless appointment of fiscal agents. When it comes to charter fees, we meticulously handle the entire process, ensuring accuracy, transparency, and timely management. Our commitment to excellence extends to overseeing the Advance Provisioning Allowance, where we take care of the budgeting, tracking, and reporting aspects to meet the unique needs of each client. Navigating the complexities of VAT requirements is a crucial aspect of our service. We stay abreast of the latest regulations and work diligently to ensure compliance, minimizing any potential challenges for our clients. Additionally, we offer invaluable support in the selection and appointment of fiscal agents, streamlining the process for a hassle-free experience. ## Oversight and Reporting Transform your financial landscape with the support of our dedicated finance team, providing a comprehensive suite of services tailored to meet your organization’s unique needs. Our adept professionals excel in meticulous bookkeeping, maintaining accurate and up-to-date records essential for sound financial decision-making. Beyond routine tasks, we specialize in crafting strategic budgets, collaborating to set financial targets, allocate resources efficiently, and monitor variances for optimal financial performance. In the realm of financial reporting, we go beyond numbers, translating complex data into meaningful insights that empower informed decision-making. Our reports adhere to industry standards, offering a comprehensive view of your organization’s financial health. Moreover, our expertise extends to the precise preparation of financial statements, ensuring compliance with regulatory standards while providing powerful tools for stakeholders to assess performance. ## Vessel Administration Count on our experienced team to ensure the ongoing validity of both vessel and crew certifications and documentation. We handle the intricacies of verifying and renewing certifications, ensuring compliance with industry standards and regulatory requirements. Our dedicated support enables you to confidently navigate the regulatory landscape, guaranteeing that your vessel and crew operate with the latest and most accurate documentation. This commitment promotes safety, compliance, and operational excellence throughout your maritime endeavours. ## Compliance Our team can facilitate compliance with regulatory requirements for your yacht, covering aspects such as vessel maintenance, manning, health and safety, security, and the marine environment. We work diligently to ensure that your yacht operates within the parameters of industry regulations, guaranteeing a seamless adherence to standards. Our comprehensive assistance encompasses all facets of regulatory compliance, allowing you to navigate the complexities of vessel management confidently while prioritizing safety, security, and environmental responsibility. ## Crew Management Services ## Crew Recruitment We streamline the journey from interviewing to screening, ensuring a thorough assessment of prospective candidates. Our dedicated approach includes collecting all necessary documents, easing the administrative burden and facilitating a comprehensive evaluation of potential crew members. With our assistance, the recruitment process becomes efficient, thorough, and tailored to meet the specific needs and standards of yacht ownership, allowing you to assemble a skilled and qualified crew with confidence. ## Employment, Payroll and Leave Tracking We offer comprehensive employment services, from drafting and reviewing employment contracts to providing payroll solutions. Our approach includes tracking crew leave and absences, ensuring strict compliance with employment regulations. With our support, you can navigate the complexities of employment seamlessly, confident in the accuracy of contracts and the adherence to regulatory standards, allowing you to focus on the smooth operation of your maritime ventures. ## Training and Development Empower your crew with our expertise in establishing robust training programs aligned with current regulations. Our team ensures that all crew members maintain optimal qualifications and skills through tailored training initiatives. We focus on creating comprehensive programs that address evolving industry standards, guaranteeing that your crew remains proficient and compliant. With our assistance, you can cultivate a skilled and well-prepared team, ready to navigate the dynamic challenges of the maritime landscape while meeting regulatory requirements with confidence. For further information on Yachting Services, contact us today to discuss your options. --- ## MFSA Launches Framework for Notified PIFs **Date:** 2024-02-09 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsa-launches-framework-for-notified-pifs ## PIF or Notified PIF? A Professional Investor Fund (PIF) follows a standard licensing process with the Malta Financial Services Authority. Typically the process adheres to rigorous scrutiny and a timeline of approximately six to eight months for it to go to market. A Notified PIF (NPIF) follows a notification procedure with a duration of 10 working days from submission to launch. It has lower set up costs to that of a PIF. The Malta Financial Services Authority published an article on the 18th of December 2023 to inform the industry about the framework being launched regarding the Notified PIF. The establishment of this new framework requires amendments to the existing fund’s rulebooks. The announcement made by the MFSA introducing a new fund structure in Malta, enhances the Maltese financial landscape comes as a result of thoughtful consideration and feedback received during two public consultations. This being a result of the MFSA’s continuous work to introduce additional ways to market for smaller and or emerging managers. Introduction of the NPIF provides a lighter regulatory regime available to de minimis managers under the EUs AIFM directive. The NPIF framework operates under a set of proportional and risk-based criteria, ensuring a smooth onboarding process. NPIFs are exclusively serviced by specified regulated providers, align with established asset thresholds, and are designed for eligible investors. ## The NPIF is particularly of interest to: - a licensed de minimis Alternative Investment Manager (AIFM) in Malta; - a de minimis AIFM which is duly authorised in an EU or EEA State; or - a third country AIFM which has been authorised in a jurisdiction with which the MFSA has a bilateral cooperation agreement of memorandum of understanding on securities. The Notified Professional Investor Fund (NPIF), is a distinctive non-retail collective investment scheme. NPIFs are tailored for professional and/or qualifying investors with a minimum investment of €100k per investor. At launch Chief Officer Strategy, Policy and Innovation, Michael Xuereb, shared his insights on this groundbreaking initiative: “These initiatives are aimed at further improving the regulatory platform for professional investment funds by means of streamlined, pragmatic and risk-based policymaking. It is expected that the framework will lead to lower setup, operational and regulatory costs than those currently experienced in operating a fully licensed fund.” ## Benefits of setting up a NPIF NPIFs can be established in various legal structures such as a common fund in a contractual form, a unit trust, a RICC (Recognised Incorporated Cell Company) or as a limited partnership. Alternatively, they can be organized as an investment company with variable/fixed capital (SICAV/INVCO), utilizing any of the legal formats specified in the Maltese Companies Act. Additionally, NPIFs may adopt an umbrella structure with separate compartments and may operate as either closed-ended or open-ended entities. A notified PIF can be utilized for capital-raising throughout the EU, with adherence to national regulations in each jurisdiction. The promotion of an NPIF outside of Malta in EU or EEA countries may be permissible, contingent upon compliance with the respective national regulations. This type of structure is suitable for a private equity fund, hedge fund and also real estate funds, but not as a loan fund. ## What are the requirements to establish a NPIF A NPIF is subject to supervision by the MFSA and therefore one must appoint a Maltese service provider that is recognised by the local regulator to monitor the fund. The appointed service provider will assist with the application process and filing the notification request. It is their responsibility to ensure that a thorough due diligence review is carried out before the notification is submitted. Like a PIF, a NPIF is not obliged to appoint a depository for the safekeeping, a prime broker is also acceptable. A Fund Manager, Fund Administrator, Money Laundering Officer and Compliance Officer shall also be appointed. Additionally, a local Auditor will be required to audit the mandatory annual accounts of the NPIF. The notification process takes 10 days from the date of submitting the notification request and supporting documents to the MFSA, the competent authority. The MFSA will include the NPIF in the official list of NPIFs within 10 working days. To discuss in detail contact us and request a free exploratory call to obtain more information on this framework. --- ## Amendments to Investment Services Rulebooks Malta **Date:** 2023-09-13 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/amendments-to-investment-services-rulebooks-malta The Malta Financial Services Authority (MFSA) is the competent authority in Malta responsible for granting authorization to individuals or organizations seeking to carry out financial services activities, including investment services. The authorization process plays a crucial role in the overall supervisory framework of the MFSA, which acts as a gatekeeper for entities entering the financial services industry in Malta. On September 4th, 2023, the MFSA issued a circular to provide industry stakeholders with information regarding several amendments made to the Investment Services Rulebooks. These amendments can be accessed here. This information is particularly relevant for those involved in investment services within Malta. --- ## Zeta Celebrates 10 Years of Excellence; A Decade of Trusted Corporate Services **Date:** 2023-08-30 **Category:** General **URL:** https://zeta-financial.com/news/zeta-celebrates-10-years-of-excellence ## A Journey of Growth and Success Over the past ten years, Zeta has grown from humble beginnings to become a leading force in the corporate services industry. Our journey has been nothing short of remarkable, filled with challenges, triumphs, and valuable lessons that have shaped us into the organization we are today. ## A Stellar Team of Employees At the heart of our success lies our exceptional team of employees. Their unwavering commitment, expertise, and passion have been instrumental in driving our company forward. Each member of our team brings unique skills and perspectives, making us a dynamic force in the corporate world. Together, we have weathered storms, celebrated victories, and fostered a culture that values collaboration, innovation, and continuous improvement. ## Gratitude to Our Esteemed Clients We owe a debt of gratitude to our esteemed clients, without whom this journey would not have been possible. Your trust in our services and unwavering support has been the cornerstone of our success. We take immense pride in being a trusted partner to each and every one of you, and we pledge to continue delivering top-notch solutions that exceed your expectations. ## Our Key Achievements Over the last decade, we have accomplished significant milestones that define our commitment to excellence: Expansion of Services: From company formation and registration to compliance and advisory services, our offerings have evolved to cater to a diverse range of client needs. Global Presence: We have expanded our reach across borders, serving clients from around the world and forging valuable international partnerships. Cutting-Edge Technology: Embracing digital transformation, we have integrated advanced technology to streamline processes and enhance client experiences. A Reputation for Reliability: Our dedication to maintaining the highest standards of professionalism and integrity has earned us the trust of industry peers and regulatory bodies. ## Impactful Relationships As we celebrate this milestone, we also celebrate the enduring relationships we have built with our clients and partners. Your success stories inspire us to continuously innovate and provide tailor-made solutions that empower your businesses to thrive. ## Looking Ahead As we step into the next chapter of our journey, we remain steadfast in our commitment to delivering exceptional services and forging new paths in the corporate services sector. Our vision is to continue being at the forefront of industry trends, anticipating our clients’ needs, and leveraging emerging technologies to drive efficiency and growth. ## Thank You! To our dedicated team, loyal clients, and supportive partners, thank you for being an integral part of our ten-year journey. Your belief in us has been the fuel that has kept us moving forward. Here’s to the next milestone of continued success, innovation, and meaningful partnerships! --- ## Final Delegated Act Adopted on the First European Sustainability Reporting Standards (ESRS) **Date:** 2023-08-18 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/adoption-of-the-final-delegated-act-esrs The MFSA issued a circular to inform the industry on the significant development that has taken place for the European Union, the adoption of the Final Delegated Act on the First Set of European Sustainability Reporting Standards (ESRSs). The Final Delegated Act on the First Set of ESRSs sets out the specific requirements for companies falling within the scope of the Non-Financial Reporting Directive (NFRD). The NFRD applies to large public-interest entities with more than 500 employees, including listed companies, banks, insurance companies, and other entities deemed significant for their impact on society and the environment. The ESRSs aim to enhance the quality, consistency, and comparability of sustainability reporting by specifying the disclosure requirements and reporting principles. ## Scope and Objectives The scope of the ESRSs covers a wide range of sustainability topics, including climate change, biodiversity, pollution, human rights, and employee welfare. The objectives of the ESRSs are to enable companies to disclose relevant and decision-useful sustainability information, facilitate the integration of sustainability factors into investment decisions, and promote corporate accountability and transparency. ## Key Reporting Requirements The Final Delegated Act defines specific reporting requirements for companies, including the disclosure of non-financial and diversity information. Companies are required to provide a comprehensive and balanced overview of their sustainability performance, risks, and impacts. The Act also emphasizes the need for forward-looking information, focusing on the company’s strategy, targets, and actions to address sustainability challenges. The adoption of the Final Delegated Act on the First Set of ESRSs represents a significant milestone towards achieving greater transparency and consistency in sustainability reporting within the EU. By providing a standardized framework for reporting on environmental, social, and governance performance, the ESRSs enable companies to communicate their sustainability efforts effectively. The Act also promotes the integration of sustainability into business operations, facilitates informed investor decision-making, and ensures regulatory compliance. As businesses adapt to the new reporting requirements, the ESRSs have the potential to drive positive change, contributing to a more sustainable and resilient future. Read the MFSA circular here. --- ## ESMA publish its first consultation package under the Markets in Crypto Assets Regulation **Date:** 2023-08-08 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/esma-first-consultation-package-mica The European Securities and Markets Authority (ESMA) is an independent EU Authority that contributes to safeguarding the stability of the European Union’s financial system by enhancing the protection of investors and promoting stable and orderly financial markets. ESMA is seeking input on proposed rules for cryptoasset service providers (CASPS). The regulation of crypto-assets within the European Union has been an area of increasing interest and concern due to the rapid growth of the cryptocurrency market. ESMA has been closely monitoring developments in this sector to ensure that appropriate regulatory measures are in place to address potential risks and challenges associated with crypto-assets. The Markets in Crypto-Assets Regulation (MiCA) is a regulatory framework proposed by the European Commission to establish harmonized rules for crypto-assets and related services across the EU. The regulation aims to create a clear regulatory framework for issuers of crypto-assets, service providers operating in the crypto-asset space, and market participants. It seeks to ensure investor protection, market integrity, and financial stability. Further to the press release issued last month, the consultation package is the first of three consultation packages, ESMA’s effort to gather input from stakeholders and market participants on the regulatory framework proposed under MiCA. This is a common practice in the regulatory process, as it allows relevant parties to provide feedback and insights on the proposed regulations before they are finalized. Verena Ross, Chair of ESMA, said: “This first consultation package is an important milestone for ESMA in the implementation of the MiCA framework. It translates our ambition to set high regulatory standards in the EU for crypto-asset related activities into concrete requirements. We are determined to ensure entities involved in crypto-asset related activities understand that the EU is not a place for forum-shopping. We also want to remind consumers that, even with the implementation of MiCA, there will be no such thing as a safe crypto-asset.” Stakeholders, including financial institutions, crypto-asset issuers, service providers, investors, and the public, are encouraged to participate in the consultation process by submitting their opinions, concerns, and suggestions. ESMA reviews the feedback received during the consultation period and takes it into consideration when finalizing the regulatory standards. Any comments are to be received by no later than 20 September 2023. --- ## ESG Is Here to Stay: Asset Managers and Policymakers Set on an Irreversible Course **Date:** 2023-07-24 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/esg-is-here-to-stay Interestingly we see a transformative shift of institutional investors towards ESG investing in private markets, highlighting its rise, the demand for enhanced reporting, and the potential for a sustainable future. According to a report published by PwC Luxembourg, titled ‘GPs’ Global ESG Strategies: Disclosure Standards, Data Requirements & Strategic Options‘, institutional investors are transforming their investment philosophy as they increasingly prioritise environmental, social and governance (ESG) considerations. As the momentum behind ESG grows, most institutional investors plan to cease non-ESG private market investments by 2025. ## Growing commitment to ESG Institutional investors have shown a solid commitment to ESG. Most surveyed, expressed their intention to increase their private market ESG investments over the next two years. More than a third of these investors are targeting more than 20% increases. This growing trend indicates that institutional investors recognise the potential for ESG-focused investments to deliver sustainable returns while aligning with their values and expectations. Long-term value is becoming more self-evident. While opportunities and challenges vary significantly from region to region and asset class to asset class, the key message remains: rethink the status quo and view your operations and license to exist through an ESG lens. Sustainability experts emphasise the widespread adoption of ESG approaches and policies among industry managers and underscore the longstanding importance of good governance and commercial sustainability in private market investment. Furthermore, the significance of quantifying and reporting these aspects to investors clearly and meaningfully is stressed. Quantifying and reporting ESG aspects to investors transparently and effectively are the fundamental change we see developing, driven by investor interests and recognising the importance of ESG risks and opportunities. According to experts, the transformative trend towards ESG is driven by the increasing recognition of ESG risks and opportunities and the growing interests of investors. ## ESG challenges and reporting discrepancies It is being seen that private equity (PE) has needed to be faster in adopting ESG practices due to perceived incompatibility. This observation is made in comparison to other private market asset classes. Desired improvements include qualitative data on Taxonomy alignment and more frequent data on sustainable development goals (SDG) alignment and climate impact. The report recommends maintaining an open dialogue with investors to adapt reporting practices and exceed regulatory compliance. While overall satisfaction with ESG reporting is high, it is essential to be mindful of potential reputational damage and loss of business if they fail to address shortcomings. Institutional investors can enhance their portfolios and contribute to a more sustainable and resilient private market ecosystem by capitalising on this growth potential. ## Building trust through EU regulation The sentiment towards EU regulation regarding ESG is overwhelmingly positive among institutional investors. This attitude demonstrates the positive impact of ESG regulation in providing a clear framework and standardisation, which contributes to building trust and confidence among institutional investors. According to the report, some may consider the regulations as an additional compliance burden rather than guidance to prevent greenwashing, as they believe they already have strong internal policies. ## A strategic imperative The current rise of ESG indicates a significant shift in the institutional investment space. Nowadays, financial returns and societal impact are viewed as interconnected concepts. A recent report has backed up this viewpoint by highlighting the potential for institutional investors to drive positive change and help shape a more sustainable future. This change can be achieved by institutional investors proactively adopting ESG principles, improving reporting standards, and seizing growth opportunities in private markets. The quality, reliability, and transparency of ESG data reporting are critical factors in investment management. They allow for informed decisions that can genuinely impact the world. In Europe, investors are increasingly placing importance on ESG considerations, which enable investments to align with values and expectations while delivering sustainable returns. This growing commitment to ESG reflects an appreciation of its potential to unlock long-term value and contribute to a resilient investment ecosystem. Despite this, challenges remain, such as the need for standardised methodologies and transparent reporting to prevent greenwashing. Open dialogue, adaptation, and continual improvement in ESG practices are also essential. As institutional investors contemplate the transformative power of ESG, they may be inspired to consider their role in shaping a responsible investment landscape. By embracing ESG principles, the outlook is bright: investors can help create a more sustainable future while still achieving financial success. For further information on Malta Investment Funds, contact us today to discuss your options. --- ## Malta remains in the top 10 best destinations to set up a business. **Date:** 2023-07-18 **Category:** Company Formation **URL:** https://zeta-financial.com/news/malta-remains-in-the-top-10-best-destinations ## Malta, a small island nation located in the Mediterranean Sea, offers several benefits as a business hub, particularly for companies looking to expand their operations in both Europe and the North Africa. Here are some key advantages of Malta: Strategic Location: Malta’s geographical location is advantageous, as it serves as a bridge between Europe, North Africa, and the Middle East. It is situated at the crossroads of major shipping and air routes, making it an ideal base for companies seeking to establish a presence in these regions. EU Membership: Malta is a member of the European Union (EU), providing businesses with access to the vast European market of over 500 million consumers. This membership ensures the free movement of goods, services, and capital within the EU, creating a favorable environment for trade and investment. Stable Economy and Business Environment: Malta boasts a robust and stable economy, which has consistently experienced positive growth rates in recent years. The country has a pro-business climate, with a well-established legal framework and strong regulatory institutions. Additionally, its political stability, low corruption levels, and adherence to EU regulations make it an attractive destination for investors. English Proficiency: English is one of Malta’s official languages, making it an ideal location for international business operations. The workforce in Malta is highly proficient in English, which facilitates seamless communication and collaboration with clients, partners, and suppliers from Europe and North Africa. Competitive Tax System: Malta offers a highly attractive tax regime for businesses, including a low corporate tax rate of 35%, which can be further reduced through various incentives and exemptions. The country also has an extensive network of double taxation agreements, providing businesses with opportunities for tax optimization and reducing the overall tax burden. Financial Services Sector: Malta has developed a strong and reputable financial services sector, including banking, insurance, asset management, and fintech. The country is known for its regulatory expertise, particularly in sectors like blockchain and cryptocurrency, making it a preferred destination for companies operating in these industries. Skilled Workforce: Malta has a well-educated and skilled workforce, with a focus on sectors such as information technology, finance, gaming, and hospitality. The country offers excellent educational institutions and vocational training programs that produce a talent pool capable of meeting the demands of various industries. Incentives and Grants: The Maltese government offers various incentives and grants to attract foreign direct investment (FDI). These include financial incentives for research and development, training programs, grants for startups, and support for innovation and technology projects. Quality of Life: Malta is renowned for its high quality of life, with a pleasant Mediterranean climate, beautiful landscapes, and a rich cultural heritage. It offers a safe and family-friendly environment with excellent healthcare and education systems, making it an attractive location for professionals seeking a favorable work-life balance. Overall, Malta’s strategic location, EU membership, stable economy, business-friendly environment, competitive tax system, skilled workforce, and quality of life make it an appealing business hub for companies looking to expand their operations in both Europe, North Africa and the Middle East. --- ## Malta Startup Residence Programme **Date:** 2023-06-09 **Category:** Residency **URL:** https://zeta-financial.com/news/malta-startup-residence-programme On the 13th of October 2022 the Maltese government launched the program to foster innovation, create job opportunities, and support Malta’s growing economy. The scheme offers residency to talented entrepreneurs from non-EU countries, including Pakistan. This article provides an in-depth look at the eligibility criteria, application process, and benefits of the Malta Startup Residence Scheme. The Programme has proved to be very popular and effective. The Malta Startup Residence Scheme targets founders and co-founders of innovative startups with scalable, high-growth potential. The program focuses on attracting entrepreneurs who can contribute to Malta’s development in critical sectors, such as technology, healthcare, and finance. To be eligible for the scheme, applicants must meet the following requirements: Be a third-country national: Applicants must not be citizens of the European Union (EU), European Economic Area (EEA), or Switzerland. Own or co-own an innovative startup: The startup should be in the early stages of development and demonstrate potential for growth and job creation. The applicant must hold a minimum 25% shareholding in the company. Demonstrate financial self-sufficiency: Applicants must prove they can support themselves and their dependents without relying on social assistance in Malta. ## Application Process The application process for the Malta Startup Residence Scheme consists of several steps: Obtain a valid visa or residence permit for Malta: Before applying for the program, third-country nationals must secure a license to enter and reside in Malta. Complete the application form: Applicants must fill out the form, providing details about their personal information, startup, and funding. Prepare and submit the required documentation: In addition to the application form, applicants must submit several documents, including a valid passport, proof of financial self-sufficiency, and a comprehensive business plan outlining their startup’s potential for growth and innovation. Pay the non-refundable processing fee: Applicants must pay a processing fee when submitting their application. Await the decision: The application processing time varies but typically takes three months. Successful applicants will receive a residence permit and can then proceed with establishing their startup in Malta. Benefits of the Scheme: The Malta Startup Residence Scheme offers numerous benefits to successful applicants: Residency rights: Entrepreneurs receive a residence permit, granting them the right to live and work in Malta. The key is valid for one year and can be renewed annually, provided the startup meets the eligibility criteria. Family reunification: Successful applicants can apply for their spouse, children, and other dependents to join them in Malta, ensuring a smooth transition for the entire family. Business support and networking: Malta boasts a vibrant startup ecosystem, with various support services available to entrepreneurs. Participants in the Startup Residence Scheme gain access to mentorship, networking opportunities, and potential funding from local and international investors. Favourable business environment: Malta offers a competitive tax regime, an efficient regulatory framework, and a skilled workforce, making it an attractive destination for startups. Conclusion The Malta Startup Residence Scheme offers an attractive opportunity for third-country entrepreneurs. The program benefits entrepreneurs and contributes to Malta’s economic development, creating a win-win situation for the country and its new residents. By granting residency rights and providing access to valuable resources and networking opportunities, Malta is positioning itself as a hub for global innovation and growth. ## How to Apply Get in touch with us to arrange a free consultancy to see how we can assist you with the application process. Feel free to send an email to bd@zeta-financial.com or give us a call. ## Frequently Asked Questions Q: How long is the residence permit valid? A: The residence permit is valid for one year and can be renewed annually, provided the startup meets the eligibility criteria. Q: Can my family members join me in Malta? A: Successful applicants can apply for spouses, children, and other dependents to join them in Malta. Q: How long does the application process take? A: The processing time varies, but applicants can expect a decision within three months of submitting their application. Q: Are there any specific industries or sectors the Malta Startup Residence Scheme targets? A: While the scheme welcomes startups from various sectors, it mainly focuses on innovative businesses in technology, healthcare, and finance that can contribute significantly to Malta’s economic development. Q: Is there a minimum investment requirement for my startup? A: There is no specific minimum investment requirement for the scheme. However, applicants must demonstrate financial self-sufficiency and provide a robust business plan highlighting their startup’s growth, innovation, and job creation potential. Q: Can I work for another company while participating in the Malta Startup Residence Scheme? A: The primary purpose of the scheme is to support entrepreneurs in establishing their startups in Malta. While there is no explicit restriction on working for another company, applicants should prioritise their efforts on their startup’s development and growth. --- ## Merger by Acquisition of Companies in Malta **Date:** 2023-03-14 **Category:** Company Formation **URL:** https://zeta-financial.com/news/merger-by-acquisition-of-companies-in-malta ## As in many jurisdictions, Malta’s legislative framework for merger and acquisition activity encompasses laws and regulations that seek to regulate several aspects that may feature in a merger and acquisition transaction, including local and cross-border movements. Having said this, the Companies Act (Chapter 386 of the Laws of Malta) (the “Act”) is the primary legislation that regulates mergers and acquisitions of private and public companies in Malta. It provides for the amalgamation of companies in the form of a merger by forming a new company and a merger by acquiring a company by another company. It is important to note that a company may only be amalgamated with another company, meaning that the Act does not allow for the process to happen with another type of commercial partnership. Therefore, it is essential to note from the beginning that some mergers and acquisitions within specific fields require regulatory authorization to conclude the procedure, and this usually takes a significant period which one would need to factor in. ## The Process of a Merger by Acquisition Here we refer to a specific process where a company acquires all the assets, liabilities and obligations of the company (or companies) being acquired. Furthermore, the company’s shareholders will become shareholders of the new company, and ultimately, the company that is being acquired is then placed into dissolution. The acquired company may be dissolved without having to be wound up as per the provisions of the Act, and the dissolution will occur as soon as the amalgamation becomes effective. The Registrar will issue a new certificate of registration reflecting the recent merger for the acquiring company. Before the Registrar strikes off the acquired companies, several requirements must be satisfied and discussed. Generally, a merger and acquisition for a private company takes less time to conclude. This process will take place through a transfer of shares by private agreement. Acquisition of a publicly listed company generally occurs through a takeover offer or a takeover bid that may be mandatory or voluntary. These bids are public offers made to the shareholders of a public listed company to acquire all or some of its securities to achieve the acquisition of control of that company. All types of acquisitions under Maltese law, the EU regulations and directives are heavily regulated. The laws and rules are in place to protect the company and the shareholders, including the minority shareholders of such companies, throughout the acquisition process. The Listing Rules in Malta clearly outline the steps that must occur within specific timeframes and be respected. For example, after the bid’s announcement, the bidder has twenty-one days to make his offer document public. The offer document must present a certain level of information disclosed publicly and includes an independent expert report on the consideration offered. SICAVs are governed by the Companies Act (SICAV Incorporated Cell Companies) Regulations (SL 386.14 of the Laws of Malta), and thus such legislation is to be taken into account when a merger and acquisition in this regard is taking place. The Investment Services Act (UCITS Mergers) Regulations (SL 370.19 of the Laws of Malta) regulate mergers for UCITS (Undertakings for Collective Investment in Transferable Securities) specifically. Similarly, specific fields, such as gaming or financial services, require regulatory clearance from their relevant regulatory or licensing authority, and this is also an important point to consider when contemplating a merger and acquisition. ## General Requirements The directors of each respective company must draw up the “Draft Terms of Merger”, which document shall specify, among other things, the status of the company, the name and registered office address of the companies to be merged, as well as the terms relating to the allotment of shares in the acquiring company. The final merger draft terms are then signed by at least one director and company secretary of each amalgamating company and subsequently filed with the Malta Business Registry. The Registrar will review and approve the documents provided all the requirements are satisfied. An extraordinary resolution of each of the concerned companies must be drawn up and approved. This resolution must be agreed upon at least one month after and not later than three months from the publication of the Draft Terms of the Merger. The directors must address the general meeting of their company and inform the directors of the other amalgamating companies accordingly so that, in turn, they may address their respective company general meetings duly of any material changes. The above shall not apply if all the shareholders of all the companies involved in the amalgamation have agreed. A written report to the shareholders is to be drawn up by one or more experts (which shall be approved by the Registrar) acting on behalf of each amalgamating company. The report shall specify whether the share exchange ratio is fair and reasonable, and to this effect, it shall: - Indicate the method or methods used to arrive at the share exchange ratio proposed; and - State, whether such method or methods are adequate in the case in question, indicating the values arrived at using each method and giving an opinion on the relative importance attributed to such method or the methods used to arrive at the value decided on. The report shall describe any particular valuation difficulties which have arisen, and each expert shall be entitled to obtain from the amalgamating companies all relevant information and documents and to carry out all necessary investigations. The directors will appoint one or more independent experts to draw up a joint report for all the amalgamating companies by the Registrar at the joint request of the companies involved. The above shall not apply if all the shareholders of all the companies involved in the amalgamation have agreed. The shareholders of the amalgamating companies are entitled to inspect the following documents at the registered office of each company at least one month before the date fixed for the general meeting, which is to decide on the Draft Terms of Merger: - the Draft Terms of Merger; - the annual accounts and the directors’ reports of the amalgamating companies for the preceding three accounting periods; - where required, an accounting statement drawn up as at a date which shall not be earlier than the first day of the third month preceding the date of the draft terms of the merger if the latest annual accounts relate to an accounting period which ended more than six months before that date; - where required, the reports of the directors of the amalgamating companies relating to the amalgamation; - where required, the reports of the experts relating to the amalgamation; and - for paragraph (c), an accounting statement is not required if the company publishes a half-yearly financial report in accordance with listing rules issued in terms of the Financial Markets Act and governing such reports and makes it available to shareholders in accordance with this sub-article. Furthermore, an accounting statement shall not be required if all the shareholders and all holders of other securities conferring the right to vote for each of the companies involved in the merger have so agreed. Notwithstanding the above, any interim depreciation, provisions and material changes in actual values not shown in the companies’ accounting records are considered. ## Creditors The consolidation process of the companies comes into effect three months from the date of the last statement published in the Gazette or the website maintained by the Registrar. During this time, any creditor of any of the respective companies whose debt existed before the Draft Terms of Merger was officially published may object to the amalgamation by sworn application, giving clear reasons why it should not take effect. Contact our business development team to learn how we can assist you. --- ## An update to ESMA Q & As on the Implementation of DLT Regulation **Date:** 2023-02-24 **Category:** Investment Services **URL:** https://zeta-financial.com/news/an-update-to-esma-q-as-on-the-implementation-of-dlt-regulation The MFSA published a circular on the 21st of February 2023 on the new ESMA Q&As on the Implementation of DLT Regulation (‘DLTR’). The circular addresses central securities depositories, investment firms, credit institutions providing investment services and/or performing investment activities as well as market operators including any trading venues they operate. This circular must be read together with DLTR, CSDR, MiFID II and MiFIR, the delegated regulations and previous circulars issued by the Malta Financial Services Authority. The purpose of the circular is that The Authority wanted to inform the respective market participants that on the 3rd of February 2023, the European Securities and Markets Authority (‘ESMA’) updated its Q&A document in relation to the practical application of MiFIR RTS 22, MiFIR RTS 23 and MiFIR RTS 1 and RTS 2 in the DLT Pilot Regime. The updates made to the Q&A document provide: • Clarification as to how DLT MTFs or DLT TSS should report on behalf of natural persons that are not subject to Article 26 of MiFIR; • Clarification on who should be considered the issuer of the DLT instrument under different possible scenarios; • Clarifications on how to populate the “instrument identification code field” when publishing post-trade information. Any queries or requests for clarifications on the contents of this Circular should be addressed to the Authority via email on MarketInfrastructures@MFSA.mt --- ## The Rise of Drones and Malta's Light UAS Operator Certificate, LUC **Date:** 2023-02-03 **Category:** Aviation **URL:** https://zeta-financial.com/news/the-rise-of-drones-and-maltas-luc Drones are seemingly everywhere and used for new and different tasks every day. The consumer-oriented drones that have become so popular are only a tiny segment of the market. The need for industrialised drones for commercial purposes is on the increase. Companies in supply chain operations are deploying drones, otherwise known as unmanned aerial vehicles (UAV). The drones serve in a wide variety of roles that make some tasks that were previously very time-consuming and labour-intensive, highly efficient, less expensive, and significantly improve worker safety when deployed properly. Examples of this is for carrying out inspection and monitoring, aerial surveillance, search and rescue missions beyond visual line of sight. The transportation and logistics environment has taken to drones in several arenas because of their ability to manoeuvre around and above otherwise difficult to reach areas like warehouses and shipping container ports and terminals. And part of their repertoire includes multiple ways to communicate and share information. ## Drones that fall into the Specific Category Considering the moderate level of risk involved, flights in this category require authorisation before they can operate. The permission is taking into consideration the mitigation measures identified in an operational risk assessment. For specific standard scenarios an operator declaration is sufficient. The Maltese agency responsible for drone safety and licensing is the Civil Aviation Directorate (CAD). Flying and operating drones in Malta are subject to European Union Regulation 2019/947. The Malta Civil Aviation Directorate (CAD) supervises and implements the Regulation in Malta. This reform aims to create consistency for the highest level of safety in the drone market within Europe. Once a drone Οperator has received authorisation from the State of registry they will be allowed to manoeuvre in the European Union freely. There are three categories of drone operations, Open, Specific and Certified each according to the level of risk involved. Drone operations are to be conducted according to the Commission Delegated Regulation (EU) 2019/945 and Commission Implementing Regulation (EU) 2019/947 (as amended). When the CAD is satisfied, it will issue a light UAS operator certificate (LUC) and assign privileges to the drone operators based on their level of maturity. ## The LUC privileges may allow the organisation to • Conduct operations covered by standard scenarios without submitting the declaration; • self-authorise operations conducted by the drone operator and covered by a PDRA without applying for an authorisation; • self-authorise all operations conducted by the drone operator without applying for an authorisation. ## What is a LUC The LUC is an optional operational certificate which, if obtained, guarantees some privileges to its holder. The highest privilege may be the possibility to start operations in the specific category without needing an operational authorisation by the NAA. The availability of LUC certification represents a quantum change in the efficiency of drone aerial services, while ensuring safe conditions. Many working hours can be saved by speeding the process that otherwise would halt any work waiting for an authorisation to be formalised and approved. ## Who can apply for a LUC? Only operators with a legal entity are eligible to apply for a LUC. However, some of the activities contained in the manual can be subcontracted. Regulatory reference: UAS.LUC.010. ## LUC’s validity The validity of a LUC is unlimited, as long as the organisation remains compliant with its LUC’s requirements. An organisation with a LUC can be subject to an oversight inspection by its competent NAA. A LUC can be revoked or surrender by the awarding NAA. A LUC certificate is valid throughout the European Union. Regulatory reference: UASE.LUC.080 of EU regulation 2019/947. ## How will compliance with the drone’s technical requirements be verified by the organisation under the LUC? The technical requirements applicable to the drone will be derived by the risk assessment and are independent from the fact that an organisation may hold an LUC. They will depend on the specific assurance and integrity level (e.g. SAIL in SORA) of the operation, the technical mitigations applied (e.g. mitigation M2 in SORA) and the requirements on containment (e.g. step 9 of SORA). Regulatory reference: article 12 of EU regulation 2012/947. ## General requirements to obtain a LUC certificate Operators must prove that they work in a structured way applying the basic elements of the safety management system, ensuring that flights are carried out safely, with control over planning, implementation, maintenance and back office administration. Criteria includes but are not limited to the following: - ****A safety management system to ensure that potential risks to aviation are effectively mitigated and managed; - ********Staff have the necessary remote pilot competencies along with planning, implementation, maintenance and administrative skills and competencies required for aspects such as daily operations, risk analysis and documentation; - ****Maintaining and managing a documentation system, keeping a log of relevant operating data accessible by the relevant NAA if necessary; - ****An operating LUC safety manual, covering a safety policy, objectives and including roles and responsibilities in the organisation concerning drone operations as well as where procedures and activities are documented, including emergency procedures. ## A LUC is not… It is not a “blank check” to do anything the organisation wants. The LUC holder can only conduct the operations described within the LUC terms of approval. This is why operating with a LUC certificate is both a great benefit and a responsibility. We can act as your local advisor to assist you with processing the application with the relevant authority Transport Malta. Contact us today to have a call to discuss your project. --- ## The Digital Nomad Malta **Date:** 2023-01-26 **Category:** Residency **URL:** https://zeta-financial.com/news/the-digital-nomad-malta ## The Nomad Residence, Permit Malta (NRPM) program The Nomad Residence, Permit Malta (NRPM) program allows individuals to establish residence in Malta temporarily while maintaining the flexibility to travel and work remotely. The program is open to non-EU citizens enabling them to stay in Malta for up to one year, with the possibility of renewing the permit. To qualify for the NRPM, individuals must prove that they have a stable income and can support themselves financially while in Malta. Proof of an existing employment contract or that of running own business from Malta. They must also provide proof of health insurance and pass a background check. The NRPM allows the permit holder to travel within the Schengen area with a valid permit and no need to apply for a visa. ## What Malta has to offer Malta is an entertainment hub and has grown exponentially in recent years as the destination for digital Expats. The island boasts a colourful culture, history and art. It is truly a multicultural, cosmopolitan island connecting many individuals opting to move to Malta as their remote working base. Malta is an all-year-round destination and caters for those who love the sun, sea and outdoor summer lifestyle and the winter months are great for exploring the coastline and seeing the Islands from a different angle. Malta’s healthcare system, as well as its educational institutions, rank high. Malta is located strategically in the centre of the Mediterranean sea, close to Europe and North Africa as well as the Middle East, which makes travelling easy. The Nomad Residence Permit is open to individuals from third countries who would typically (but not necessarily) require a Visa to travel to Malta. The permit is issued for one year by the respective Authority, Residency Malta. It can be renewed upon application at the discretion of Residency Malta as long as the applicant still meets the set eligibility criteria. Who is Eligible for this Program Applicants must prove they can work remotely using telecoms. Applicants must also be third-country nationals. In addition, applicants must prove they fall under any one of the following three categories: - Work for an employer registered in a foreign country and have a contract of work; - Conduct business activities for a company registered in a foreign country and of which the applicant is a partner/shareholder; or - Offer freelance or consulting services to clients whose permanent establishments are in a foreign country and with whom the applicant has contracts. Persons contracted by a foreign company and giving services to the company’s Maltese subsidiary are not eligible for the Nomad Residence Permit. Moreover, an applicant must reach a gross monthly income of EUR 2,700. Additional eligible family members will have thresholds as stipulated in the [Agency Policy](https://nomad.residencymalta.gov.mt/wp-content/uploads/2022/10/Nomad-Policy.pdf). If you would like to know more about this program, do contact us today for more information. --- ## EU Regulations on Disclosure and Transparency for Investment Funds: A Closer Look **Date:** 2023-01-14 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/eu-regulations-on-disclosure-and-transparency-for-investment-funds The EU has established a set of regulations to govern the investment funds industry. These regulations aim to protect investors, ensure fair competition, and promote the orderly functioning of financial markets. The rules cover various aspects of the fund industry, from authorization and supervision of fund managers to risk management and transparency requirements for funds. It is crucial for the industry players and investors to keep themselves informed and updated on these regulations to comply with and adapt to the changes. The EU regulations on disclosure and transparency for investment funds aim to ensure that investors have access to accurate and relevant information when making investment decisions. This includes information on the fund’s investment strategy, performance, and risk profile, as well as information on the fund manager and the fund’s costs and charges. One of the key regulations in this area is the UCITS (Undertakings for Collective Investment in Transferable Securities) Directive, which sets out disclosure and transparency requirements for mutual funds that are authorized for sale across the EU. The UCITS Directive requires that funds provide investors with a Key Investor Information Document (KIID), which contains information on the fund’s investment objectives, risks, and costs. The fund manager is also required to provide regular reports on the fund’s performance and to make a wide range of information available on the fund’s website. Another important regulation is the AIFMD (Alternative Investment Fund Managers Directive) which applies to all alternative investment funds (AIFs) and AIF managers authorized for marketing within the EU. AIFMD requires that AIF managers provide investors with an AIFMD compliant Investor Disclosure Document (IDD), which contains similar information as the KIID. In addition to the above, EU regulations also require investment funds to disclose their portfolio holdings regularly to enable investors and regulators to monitor the level of risk in the fund and to detect any potential conflicts of interest. Overall, the EU regulations on disclosure and transparency for investment funds are designed to provide investors with the information they need to make informed investment decisions and to help protect them from fraud and mismanagement. ## Malta a Hub for Investment Funds in the EU Malta is a popular jurisdiction for establishing and operating investment funds due to its favourable regulatory environment and membership in the European Union. The Malta Financial Services Authority (MFSA) is responsible for regulating investment funds in Malta. The Maltese regulatory framework for investment funds is based on the EU regulations, such as the UCITS Directive and the AIFMD, which provide a common set of rules for the authorization, supervision, and marketing of investment funds across the EU. In Malta, investment funds are classified as either Professional Investor Funds (PIFs) or Retail Investor Funds (RIFs), depending on the type of investors to which they are marketed. PIFs are intended for professional investors and are subject to fewer regulatory requirements than RIFs, which are designed for retail investors and are subject to more stringent requirements to protect those investors. Malta has also established a regulatory framework for the establishment of ETFs (Exchange-Traded Funds) and has been recognized as a leading jurisdiction for the domiciliation and administration of ETFs. In addition to the EU regulations, Malta has also established its own regulatory framework for the authorization, supervision, and ongoing operation of investment funds. The MFSA is responsible for the authorization and ongoing supervision of investment funds in Malta and works closely with other EU regulators to ensure that funds established in Malta comply with EU regulations. Overall, Malta is considered a well-regulated and transparent jurisdiction for establishing and operating investment funds, which is why it’s become a popular location for fund managers and investors. For further information on how we can assist you with establishing a Malta Investment Fund contact us today for a call. --- ## Why should I create a Family trust? **Date:** 2023-01-10 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/why-should-i-create-a-family-trust One of its unique characteristics is the acquisition of ownership of the trust assets by the trustee in the settlor’s fiduciary capacity. Having said this, the beneficial ownership of said assets will continue to vest in the beneficiaries of the trust. A trust is a legal entity created when one party, known as a ‘settlor’, wishes to transfer property to another party, the ‘trustee’. To hold, administer and perhaps employ and deal in the said property for the benefit of beneficiaries and or for one or more charitable purposes following the terms of the trust and applicable law. Another characteristic is that a trust continues to protect the settlor’s assets if they lose the capacity to manage their affairs or after death. Why set up a family trust? Passing on wealth via a will or lifetime gift can be inefficient in most scenarios. A trustee is requested to set up a trust to: - protect assets for beneficiaries who cannot look after the assets themselves; - set funds aside for the benefit of future generations (for example, to pay for education); - protect assets from divorcing spouses and business creditors; - ring-fence your property should you need residential care in the future; - provide for children under the age of 18 in an income tax-efficient way; - ensure that a current spouse and children from a previous relationship are all cared for. What is the role of the trustee? The trustee is the person the settlor appoints as the legal owner of the trust property. Trustees in Malta are licensed, regulated, and supervised by the MFSA. The legal obligation that binds a trustee means that they must deal with the trust property over which they exercise control for the exclusive benefit of the objects of the trust. The trustee has a legal duty of care to the beneficiaries and cannot receive any personal benefit from the trust other than fees and reimbursement of expenses incurred by the trustee in connection with the trust. Malta is a jurisdiction for trusts It is rare to find trusts incorporated in the law systems of civil law countries. Malta, however, is different from a civil law jurisdiction that recognises the trust concept. In the Maltese trusts and trustees act, a trust may validly exist until the 125th anniversary of the date on which it came into existence and, unless sooner terminated, would then close. This limitation (against perpetuities) would not apply in respect of a trust created for charitable purposes, a unit trust, or a qualifying retirement scheme. In the Maltese trust law, the comprehensive definition of a trust identifies three elements: the trustee, beneficiary, and settlor. The trustee and beneficiary are viewed as the key components of trusts in Malta, whereas the settlor is considered the third party that establishes the property in a trust. Malta is among the few countries which acknowledge and enforces foreign law or trusts governed by international laws. Whether the settlor is establishing a trust as per the Hague Convention requirements or setting up a property trust governed by foreign laws, Malta’s trust jurisdiction will acknowledge and enforce any trust law. One of the key reasons why the Maltese trusts laws have become a popular tool around the world is the ability to establish a customised trust. Trusts can be established with solutions that meet your needs. Malta is also among the few jurisdictions that have successfully incorporated the Anglo-Saxon trust concept. The establishment of a trust in Malta has suggestively lower administration and set-up costs that are required compared to other jurisdictions. While the set-up cost remains reasonably lower, the Maltese professional classes have upheld an unquestionable global reputation. Malta offers high-quality services in the form of professional trustees. Zeta’s subsidiary Premier Fiduciary and Trusts Limited, Co Reg No. C54929 is authorised to act as a Trustee or Co-Trustee, to provide Fiduciary Services and to act as Administrator of Private Foundations by the Malta Financial Services Authority. Contact us to schedule a call or meeting for further information on establishing a trust in Malta. --- ## Crypto Assets Regulation: How can MiCA benefit the EU crypto-asset industry? **Date:** 2022-12-15 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/crypto-assets-regulation-how-can-mica-benefit-the-eu The European Commission expects the Markets in Crypto Assets Regulation (‘MiCA’) implementation to happen within the next four years. There is no actual timeframe for this proposed legislation to be put through the complex EU process before it becomes law. This is what we are being informed. This legislation was first introduced in September 2020 as part of the EC’s Digital Finance Package, aiming to regulate cryptocurrencies throughout the EU by 2024. Once adopted, the MiCA Regulation will apply across all the EU Member States, including Malta. MiCA aims to create an EU regulatory framework for crypto-assets that currently fall outside existing financial services legislation. It will introduce licensing and conduct of business requirements and a market abuse regime concerning crypto assets. ## What are the MiCA’s regulatory objectives? The Markets in Crypto-assets proposal presents four general objectives: - To provide legal certainty for crypto-assets not covered by existing EU financial services legislation, - To establish uniform rules for crypto-asset service providers and issuers at EU level. - To replace current national frameworks applicable to crypto-assets not covered by existing EU financial services legislation. - To establish specific rules for so-called ‘stablecoins’, including when these are e-money. ## Malta and the MiCA During early discussions, several EU Member States had already moved ahead to adopt new national legislation for regulating the crypto-asset market. In 2018, Malta was at the forefront and adopted the Virtual Financial Assets (‘VFAs’) Regulatory Framework. The framework adopted is rigorous, with a stringent application process to obtain a VFA licence. Given the new MiCA Proposal, Malta’s VFA Framework could be a basis for the eventual adoption and enforcement of the Markets in Crypto Assets Regulation. There is, again, the potential to attract new businesses to set up in Malta as their preferred jurisdiction. Feel free to get in touch for further information on the MiCA Regulation. --- ## FIAU Notice to Subject Persons re newly published EBA Guidelines on Remote Customer Onboarding **Date:** 2022-12-06 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/fiau-notice-eba-guidelines-remote-customer-onboarding 6th of December 2022 The EBA has issued guidelines on the application of AML/CFT rules in the context of remote customer onboarding. The Financial Intelligence Analysis Unit (FIAU) informs subject persons that the EBA published the guidelines following a public consultation between the 10th of December 2021 and the 10th of March 2022. A considerable demand for remote onboarding of customers has risen over recent years, especially during the COVID-19 pandemic. Therefore, the EBA has identified the necessity to implement guidelines to clarify the application of the remote customer onboarding Customer Due Diligence (CDD) processes as generally outlined in Directive (EU) 2015/849 (Fifth AML Directive). The guidelines are there to fulfil the subject person’s AML/CFT obligations in ensuring consistency and efficient methods in their processes for remote onboarding of customers. The guidelines establish: 1. The forms of new technologies that are appropriate, adequate, and reliable when financial institutions accept customers remotely whilst respecting the principle of technological neutrality. 2. The parameters that need to be followed through by financial institutions when adopting new technologies for remote customer onboarding. Such as internal policies and procedures, governance, pre-implementation assessment and ongoing monitoring. 3. The approved remote customer onboarding digital documentation. 4. The circumstances when reliance on third parties and outsourcing can take place. The FIAU informs that these Guidelines will enter into force six months after the publication and will be published in all EU official languages. Subject persons may access the document by clicking on this link which can be found on both the EBA website and the FIAU website. --- ## Malta Business Registry Notice – BO Information Declared Invalid by CJEU **Date:** 2022-12-05 **Category:** Company Formation **URL:** https://zeta-financial.com/news/malta-business-registry-notice-bo-information-cjeu On the 25th of November 2022, the Malta Business Registry informed the general public that the Court of Justice of the European Union ruled that the provisions in Directive (EU) 2015/849 which granted public access to Registers of Beneficial Owners to legal entities are invalid. This ruling was delivered on the 22nd of November 2022. In the notice published by the Malta Business Registry, the Authority explains that it will limit access to the Beneficial Owners register ONLY to competent authorities and subject persons. Access to the Beneficial Owners register is contingent on registration with the Malta Business Registry through the Authority’s portal. The request will be reviewed by the Registrar and will grant access accordingly. Furthermore, the notice states that in the same delivery the Court of Justice of Justice of the European Union stated that ‘’Article 1(15)(c) of Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, is invalid in so far as it amended point (c) of the first subparagraph of Article 30(5) of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, in such a way that point (c) of the first subparagraph of Article 30(5), as thus amended, provides that Member States must ensure that information on the beneficial ownership of companies and of other legal entities incorporated within their territory is accessible in all cases to any member of the general public.’’ You may refer to the Malta Business Registry’s notice by clicking on here. --- ## Consultation Paper Launched by ESMA – Risk of ‘Greenwashing’ in Fund Names **Date:** 2022-11-21 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/esma-consultation-greenwashing-fund-names The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, launched a consultation on the 18th of November 2022, seeking input on draft guidelines on the use in funds’ names of ESG or sustainability-related terms. ESMA seeks to address the risk of ‘greenwashing’ concerning names used for investment funds which fail to meet evidence of sustainable characteristics outlined in the fund’s investment objectives, thus misleading investors. The consultation is therefore requesting feedback from all stakeholder’s on the introduction of quantitative thresholds for the minimum proportion of investments sufficient to support the ESG or sustainability-related terms in funds’ names. In particular, the guidelines propose that a fund’s name is transparent and that such a name that contains ESG or sustainability-related terms must be supported in a material way within the terms of the investment objectives policy. Verena Ross, ESMA chair, stated ‘’ The objective is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims while providing both NCAs and asset managers with clear and measurable criteria to assess names of funds, including ESG or sustainability-related terms.” ESMA is proposing the following: a quantitative threshold (80%) for the use of ESG related words; • an additional threshold (50%) for the use of “sustainable” or any sustainability-related term only, as part of the 80% threshold; • application of minimum safeguards to all investments for funds using such terms (exclusion criteria); • additional considerations for specific types of funds (index and impact funds). ESMA proposes that the draft guidelines become applicable three months after the publication of their translation on the ESMA website. ESMA suggests a transitional period of six months for those funds launched before the application date to comply with these Guidelines. The consultation period will close on the 20th of February 2023, after which ESMA will then consider the feedback it receives to this consultation and finalise duly. --- ## Investment Opportunities in Malta **Date:** 2022-10-28 **Category:** Residency **URL:** https://zeta-financial.com/news/investment-opportunities-in-malta Malta offers excellent business opportunities, especially for those seeking to relocate. The country offers safe and comfortable living conditions, providing a stable economy and an investor-friendly climate. The island ranks as one of the best countries to move to for life and investment. ## What Are the Opportunities? Located in the heart of the Mediterranean Sea, Malta is an ideal hub to do business within the EU, Middle East and North African markets. The country has a well-developed maritime logistics business and financial services, with Authorities such as the Malta Business Registry for Company Formation and the Malta Financial Services Authority, Malta’s sole regulator for setting up Collective Investment Schemes and other licensing applications. Malta is popular with tourists, with more than a million visiting the country annually. The tourism sector accounts for roughly a third of the country’s GDP, and real estate rentals with tourists are consistently increasing. ## There are several reasons investors find investing in Malta’s businesses profitable. The following list is not exhaustive: - Malta is among the most economically developed and politically stable states. Rating agencies gave Malta an A or A+ rating in 2020 despite the severe economic impact of the pandemic. - Several reputable, well-known corporations and large companies have settled on the island. Malta is considered an international business centre with a robust financial services sector. - The Maltese government and its respective Authorities provide business support programs whilst offering tax benefits to its residents. - The government provides attractive residency opportunities for those individuals and their families seeking relocation. - ****Residency Malta Agency offers international investors permanent residency rights, which apply only to non-EU / EEA / Swiss nationals. - ****Agenzija Komunita Malta administers all Maltese citizenship-related matters, including accepting and processing applications for acquiring Maltese citizenship by birth, registration, naturalisation through long-term residence, and exceptional services by merit and for exceptional services by direct investment in Malta. - ****Identity Malta Expatriates Unit is involved in legal migration and caters to processing and issuing residence documentation. This service consists of implementing the provisions of national legislation regarding the EU nationals’ freedom of movement and other regulations concerning third-country nationals’ residence documentation. - Starting up or relocating your business to Malta could not be more attractive. Malta offers benefits and advantages to a non-resident. The following are some main benefits that Malta can contribute to such companies: - Exemption from Duty on Documents. - Over 70 Double Taxation Treaties were signed. - No capital gains taxes, provided the assets do not include real estate in Malta. - No withholding tax for distributed dividends. - Numerous attractive investment schemes to incentivise incorporation. Our team of Professionals have extensive experience and will be happy to assist with your request. For more information, please contact our Business Development team on bd@zeta-financial.com. --- ## Malta Removed From the FATF Grey List **Date:** 2022-06-20 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/malta-removed-from-the-fatf-grey-list The 20th of June 2022 On the 8th of June 2022, Malta was voted off and removed from the Financial Action Task Force grey list, precisely one year after the global watchdog marked the country as an untrustworthy financial jurisdiction. In June 2021 a decision was taken by the members of the global anti-money laundering watchdog to add Malta to its grey list after identifying that Malta was not doing enough to combat financial crime, following years of international criticism of Maltese policymaking, the lack of legal action against individuals suspected of corruption, and the sale of Maltese passports. The government has since been working hard and fast to address all these shortcomings flagged by the FATF. Being on the greylist negatively impacts the listed country’s economy. ## How was the FATF vote taken? The vote is secret, and a formal announcement of that decision took place during the Plenary of the FATF held between the 14th and 17th of June 2022, announcing that Malta has been removed from the list of jurisdictions with strategic deficiencies and hence was no longer subject to increased monitoring by the FATF. The decision to take Malta off the list comes four months after the FATF publicly announced that initial indications showed that Malta had substantially completed the necessary reforms and appeared to have addressed the shortcomings identified. The main issues addressed by the FATF were primarily about implementing changes to how Malta combats tax evasion, collects information on ultimate beneficial ownership, and shares information with local and international authorities. This action plan had to be implemented before the global anti-money laundering body gave the country a clean bill of health. ## What is the FATF Grey List? The FATF grey list is the agency’s official list of countries and jurisdictions that are identified as having strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. Unlike the blacklisted countries, the grey list countries actively work with the FATF to address strategic deficiencies in their regimes within agreed timeframes. The FATF encourages its member to apply a risk based approach when analysing its prospects or clients. As of June 2022, the following countries are on the FATF grey list: Albania; Barbados; Burkina Faso; Cambodia; Cayman Islands; Democratic Republic of the Congo; Gibraltar; Haiti; Jamaica; Jordan; Mali; Morocco; Mozambique; Panama; Philippines; Senegal; South Sudan; Syria; Tanzania; Türkiye; Uganda; United Arab Emirates; and Yemen. --- ## The Company Secretary Corporate Governance **Date:** 2022-04-26 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-company-secretary-corporate-governance ## Overview A Company Secretary’s role is not a role that is purely administrative or passive. It is a crucial role that covers a multitude of tasks and responsibilities. The Company Secretary ensures effective corporate governance by taking on an empowered role with specific functions and duties under Maltese law. The Company’s Act provides for this responsibility role to be undertaken by an individual or a local corporate entity licensed to act and provide such a service. ## The Profile of a Company Secretary Extensive filing obligations for newly incorporated and existing companies are imposed on the Company Secretary. There is the standard drafting and distributing of documents for the annual board meetings, taking the minutes and preparing said minutes after that, keeping the register and filing of the returns. This work mentioned above forms part of a long list of daily duties of the Company Secretary’s office, backed by fines in case of a breach thereof. There is a constant emphasis on ensuring a high level of professionalism in the provision of company secretarial services. The Companies Act does not require a company secretary to have academic or professional qualifications. Having said that, the proposed individual or legal entity must understand company law and administration principles. What Knowledge is Required?The company secretary must have an understanding of the nature and contents of a Memorandum and Articles of Association and, very importantly, must be competent in the various duties incumbent upon the role under the Companies Act. Understanding how a company operates and how Directors manage it is essential. ## Legal and Statutory Functions The Companies Act (“the Act”) imposes numerous duties on the company secretary. The role is a focal point of the company’s Directors for keeping the company records in good standing. There are three main areas of duty: - Functions and responsibilities imposed by statutory provisions; - Functions and duties relating to the board and general meetings; - Miscellaneous functions and duties. The general responsibility of compliance, such as keeping company records and registering beneficial owners, are obligations ultimately vested in its officers, including the Directors and the Company Secretary. The most common submissions to the Malta Business Registry made by the company secretary are, in particular, the following: - Notices of transfer or transmission of shares - Notices of change of beneficial ownership - Amendments to the memorandum or articles of association - Changes amongst officers and persons vested with representation - Appointment and removal of auditor - Annual Return - Notice of dissolution The duties of the company secretary include signing or authenticating such documents. ## Inspections by the Authority, the Malta Business Registry From time to time, the Registrar may appoint inspectors to investigate the company records and issue a report. All the officers must make company records available, including all accounting and company documents. If required, be present to assist in such investigation. Failure to produce or refuse to communicate information to the Authority concerning the affairs of the company is considered a criminal offence and will incur penalties for such offences. --- ## MFSA Consultation Paper on Enhancing Governance, Culture and Conduct **Date:** 2022-02-22 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/mfsa-consultation-paper-governance-culture-conduct 22nd February 2022 The Malta Financial Services Authority (MFSA) launched a month-long consultation dated today on its proposed Corporate Governance Code, an essential factor in fostering and enhancing Governance, culture and conduct. We would all agree that good Governance ensures institutions operate transparently. Good Governance is fundamental for investor protection, market integrity, and financial soundness, minimises the risk of failure, safeguards stakeholders’ rights and avoids excessive risktaking in corporate decision making. As soon as the Corporate Governance Code is in place, this will apply to all persons authorised by the MFSA, except to listed entities falling within the scope of the MFSA Capital Market Rules. Corporate Governance was identified as one of the Authority’s main strategic objectives. The Consultation Document can be accessed from the Authority’s website. The industry is encouraged to provide comments or feedback no later than 22nd of March 2022. Comments and feedback are to be addressed to the Strategy, Policy and Innovation function via email to corporategovernance@mfsa.mt. The Corporate Governance Code is intended to: - Set out best practices in corporate Governance for Malta’s financial services sector and encourage their adoption by all authorised entities; - Improve relationships between authorised entities and their stakeholders. - Ensure effective functioning of authorised entities’ Boards so that the best decisions are taken; - Ensure that: (i) boards exercise adequate oversight of executive management; (ii) boards have an adequate understanding of risk; (iii) firms maintain high standards of corporate and compliance culture; and that (iv) firms have adequate internal controls; - Support authorised entities to implement improved governance standards to achieve enhanced resilience and sustainable operations. - Encourage authorised entities to integrate sustainable, environmental and social aspects in their business strategy. --- ## The MFSA Introduces New Legislation for Cross-Border Crowdfunding Services **Date:** 2021-11-17 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/mfsa-introduces-new-legislation-crowdfunding-services The MFSA has recently introduced a new application to license Crowdfunding Service Providers. This new development is part of the economic policy initiatives presented by the European Union’s Capital Markets Union. This new application means that European Crowdfunding Service Providers can now provide crowdfunding services on a cross-border basis throughout the EU without requiring authorisation in each Member State. The Crowdfunding platforms must go through an application process to get authorised via the competent national Authority in their EU Member State. The Regulation on Crowdfunding defines uniform rules across the EU for investment-based and lending-based crowdfunding services related to business financing. These will include innovative start-ups and small to medium enterprises that find it difficult to access funds via traditional means such as loans or through the capital markets. These methods can also prove to be a costly exercise as well and time-consuming. Crowdfunding service providers enable such parties to connect to and raise funds from multiple investors using digital platforms. The MFSA’s Head of Securities and Markets Supervision stated the following “In many respects, this is a very welcome development for the sector, bringing about much-needed clarity. This new legislation benefits the businesses that need to raise funds, the investors, through appropriate safeguards for consumer protection and ultimately stimulates the wider economy. It also facilitates the cross-border provision of crowdfunding services in the EU, which has been one of the biggest hurdles faced by crowdfunding platforms, leading to high compliance and operational costs. We believe that Malta is well placed to host such platforms, being a jurisdiction which is predominantly composed of SMEs and inclined towards FinTech driven entities”. Important to note that the new Crowdfunding Regulation only applies to investment-based and lending-based crowdfunding services. Other types of crowdfunding, such as reward and donation-based crowdfunding, do not fall within the scope of this legislation. For further information, contact our Business Development team at Zeta. --- ## Guidelines for Changeovers of Commercial Yachts and Pleasure Yachts **Date:** 2021-10-29 **Category:** Maritime **URL:** https://zeta-financial.com/news/guidelines-changeovers-commercial-yachts-pleasure-yachts The Guidelines issued on the 2nd of September 2021 were construed to list the principal points and procedure for a yacht owner to consider when they wish to change the status of registration of a Malta flag yacht from commercial to pleasure and vice-versa. The aim was to provide clarification on the existing procedure to facilitate a smooth transition throughout the process. The change will be administered by the appointed Resident Agent who will handle the change over directly with the Merchant Shipping Directorate within Transport Malta. There are no limits to the number of changes made to the registration status of a Malta-flagged yacht nor to the time limit in regards to the duration of change of such registration. As one will see, these Guidelines were construed to offer Malta yacht owners and yacht managers a clear, concise and flexible framework that is compliant with international regulations and the expected standards of the Malta Commercial Yacht Code. The new Guidelines recommend that Malta yacht owners and managers maintain the same survey as well as the certification standards required for commercial yachts even whilst the yacht’s status is changing into a pleasure yacht. Such approach should allow for a smooth transition back to commercial status when the need arises. The change of registration is subject to the payment of a fee. The Guidelines stipulate that there are exceptions concerning any fees payable should there be multiple changes in the status of the Malta yacht that takes place during the same year. The newly issued Guidelines have been welcomed by the yachting sector. Our team at Zeta will be happy to assist you should you wish to receive further information on Malta flag yacht registration. --- ## The Impact of the 6th Anti-Money Laundering Directive **Date:** 2021-08-26 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-impact-of-the-6th-anti-money-laundering-directive Up until June 2021, Malta’s position apropos anti-money laundering was the implementation of the 5th European Directive which was originally transposed to complement and reinforce the 4th European Directive against money laundering. The 5th Directive has already been dubbed with the 6th anti-money laundering Directive, which came into effect on the 3rd of December 2020, and was in turn implemented into national law by the various Member States by the 3rd of June 2021. The 6AMLD focuses on a risk-based approach agenda which should, primarily, be given strict interpretation and ought to be undergone by all financial institutions. The Directive aims at helping said financial institutions fight the offences of money laundering by featuring amendments which vary from criminal law provisionsto definitions which have stringently highlighted the nature of the crimes. The following are some of the major key points of 6AMLD: – ## Further harmonization The 6AMLD stipulates the different definitions of money laundering, with the aim of removing loopholes and lacunas in Member States’ domestic legislation. A harmonized list of 22 predicate offences which symbolise money laundering and which must be criminalised by the Member States implementing this Directive, has also been equipped. This list includes: - Participating in an organized crime group or racketeering - Terrorism - Human trafficking and migrant smuggling - Sexual exploitation - Illicit trafficking in narcotic drugs and psychotropic substances - Illicit arms trafficking - Illicit trafficking in stolen and other goods - Corruption - Fraud - Counterfeiting currency - Counterfeiting and pirating products - Murder - Kidnapping and hostage-taking - Robbery or theft - Smuggling - Tax crimes relating to direct and indirect taxes - Extortion - Forgery - Piracy - Insider trading and market manipulation - Environmental crime - Cybercrime ## Expanding the regulatory framework The terms “aiding and abetting, inciting and attempting” have also been added to this Directive. Their inclusion indicates that anyone who, in some way or another, assists, supports, incites this offence, and attempts to launder money, is nonetheless liable of being an accomplice to such an offence and faces the same penalties as those who profit from money laundering activities. ## Extending criminal liability The 5AMLD, caters for individuals’ punishments only, whereas the 6AMLD introduced further liability, allowing for legal persons, such as companies or partnerships, to be held criminally and legally liable for the crime of money laundering. Legal representatives acting on behalf of a legal person, may also be held criminally liable. 6AMLD has also introduced the notion of dual criminality, wherein the requirement of having the offence be unlawful in both jurisdictions ie. The country in which the offence takes place and the jurisdiction in which the crime of money laundering is committed, is vital. ## Enhanced measures A maximum term of imprisonment of at least four years, has been introduced as a punitive measure for natural persons culpable with money laundering. In addition, non-criminal monetary fines, penalties such as the temporary prohibition from public welfare benefits or a ban from conducting business, may also be sanctioned vis-à-vis natural persons. On the other hand, the punitive measures for legal persons include exclusion from entitlement to public benefits or aid, temporary or permanent; exclusion from access to public funding; disqualification from commercial activities; closure of establishments which have been used for committing the offence, and possibly, judicial winding-up. ## Member State’s co-operation Following the dual criminality requirement, the demand for co-operation between Member States has increased tremendously, specifically since this synergy will greatly benefit judgements, in that they are issued in a more coherent manner, and, the centralisation of legal proceedings. ## Conclusion The enactments of the Directive strive to alter the corporate sector, and hence, its parallel CSPs, companies and institutions have taken up the hint to increase and improve their risk management policies, internal checks, and due diligence checks for clientele at a corporate governance level prior to banks, to mention a few. Financial institutions should also adapt to reporting any crimes to the relevant authorities, where necessary, or else, risk facing sanctions. In this manner, any fraudulent business is halted at the doorstep with no possibility of furthering its filthy roots internally or at domestic level. Zeta Corporate & Management Services Limited is an Authorised Company Service Provider authorised and regulated by the Malta Financial Services Authority (the “MFSA”) in terms of the Company Service Providers Act (Cap. 529 of the Laws of Malta, as amended by Act L of 2020). For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Private or Charter? Is Owning A Yacht For Charter Profitable? **Date:** 2021-08-02 **Category:** Maritime **URL:** https://zeta-financial.com/news/private-or-charter-is-owning-a-yacht-for-charter-profitable There will come a time for some superyacht owners when they look into chartering their yacht. The yacht is their unique retreat and, for some, their beloved home. One can fully understand the value of privacy their yacht provides them. However, the idea of yacht chartering is considered an attractive option. High costs associated with the ownership of a private vessel can mount up, which then leads to such a commercial position. Keeping a yacht charter business is also an excellent way to maintaining a good working crew and keeping the yacht in good order. The main is that the owner must always keep in mind that yacht charter is a business and should be treated as such if they wish to succeed. A private yacht cannot provide a commercial charter, so there is a need for a company and the vessel to be registered as a commercial yacht. The yacht will need to abide by the Commercial Yacht Code Regulations under the chosen registry. Should Malta be the chosen jurisdiction, then a limited liability Malta company will be registered under the Merchant Shipping Act and set up following local requirements. Other considerations such as ensuring that the Charter yacht is compliant with international health and safety regulations, employment law, as well as tax and vat requirements. All of this can seem overwhelming for the owner to have to deal with, so it is vital to identify the local professional partner to provide a seamless setup and ongoing business relationship. Before deciding on which jurisdiction to settle on, it is essential to consider the residence of the owner (the ‘company’), where the activity will take place, and under which flag to register the yacht. It would be advisable for the novice yacht owner to engage with a Yacht Management company that will offer sound advice and assist in recruiting a sound crew, which is crucial for good charter business. There is so much to consider when engaging with a new crew, such as contracts, checking all certifications, payroll, crew welfare insurance, etc. Let the experts do the work! And finally, VAT applicable conformity when chartering in EU waters. This process should be left to the professional who has expertise in this area, ensuring that VAT is paid when and where it is due and, where applicable, a VAT recovery. Zeta is authorised and regulated by the Malta Financial Services Authority to provide Corporate Services. We assist with company set ups and provide bookkeeping and administration services. Zeta is registered and authorised to provide local representation and help with the registration of vessels for private or commercial use. Zeta works closely with an established partner whose team is experts in the field of Yacht & Crew Management. We will ensure that the entire process is plain sailing. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Bill No. 233 of 2021 – Amendments to the Companies Act **Date:** 2021-07-28 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/bill-no-233-of-2021-amendments-to-the-companies-act The objective of Bill No. 233 of 2021 is to effect certain modifications to the Companies Act (Chapter 386 of the Laws of Malta), which are mainly related to the qualifications required for a person to hold the role of a director of a company, as well as the registration of electronic addresses and the obligation of every company to have a register of officers’ and shareholders’ residential and electronic addresses. Article 69(1)(d) of the Companies Act currently provides that the memorandum of association of a company is to state the registered office address of the company. Under the proposed amendments, the memorandum of association will also need to state the electronic mail address of the company. Furthermore, Article 69(1)(g) will also be amended to allow for the first director/s of the company to provide a service address rather than a residential address. Another amendment is that relating to Article 123 of the Act whereby over and above the requirement for every company to keep a register of its members, there will be a further requirement for companies to keep a register of the registered addresses of its officers and shareholders. Such a register is to record details such as the names of its officers and shareholders, the usual residential address of its officers and shareholders, and the electronic mail address of each of the company’s officers and shareholders. As per the amendment, it shall be the duty of the directors and the company secretary to deliver a copy of this register to the Registrar of Companies within fourteen days of any change which may be made. Another proposed amendment relates to Article 139 of the Act. A person will not be capable of being appointed as a director of a company unless he has personally signed the memorandum of association of the company, thus indicating his consent to act as a director, or unless he has signed and delivered his consent in writing to act as a director, to the Registrar of Companies. In addition, prior to being appointed as a director, the person proposed is to declare to the Registrar of Companies if he is aware of any circumstances which could lead to his disqualification from holding such office. The proposed amendments also state that any person holding the office of a director or company secretary in terms of the Company Service Providers Act, without holding the necessary authorization from the Malta Financial Services Authority, shall not be qualified to be appointed or to hold such office. The Bill also provides that should the Registrar of Companies become aware that an officer of a company is disqualified or does not hold a license in terms of the Company Services Providers Act, the Registrar is to inform the company of this, and the company is to provide for the removal of such officer within fourteen days of such notification, in default of which, the Registrar shall file an application in court requesting such removal. Finally, the Bill includes new duties of the Registrar of Companies, including the duty to take all steps to ascertain that the information or documentation relating to the identification of individuals is correct, prior to registering a new company. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## The MFSA revisits the Notified AIF Regime (NAIF) **Date:** 2021-07-20 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsa-revisits-the-notified-aif-regime-naif The NAIF regime was introduced by the MFSA in February 2016 with the aim to offer Alternative Investment Fund Managers (AIFMs) an uncomplicated and better time to market for setting up AIFs in Malta. One of the main benefits of the Notified AIF Regime is the short time to market. The application is registered by the Malta Financial Services Authority within ten (10) working days from the receipt of the complete Notification pack. The MFSA has now published a new rulebook that is dedicated to NAIFs which reflects the key changes namely the following: - Changes to the prospectus must be acknowledged by the MFSA within five (5) working days from the notification of change. This was previously ten (10) working days. - It is now possible to request the conversion of a licensed collective investments scheme into a NAIF. - A Notified AIF may acquire (but not originate) loans, these will be subject further requirements as set out in the NAIF Rules. - A Notified AIF shall not subject to any restrictions on the type of asset classes in which it may invest, with the exception of ‘Loan Origination’, which remains restricted, whilst ‘Loan Acquisition’ is subject to certain requirements, as further detailed in the Rules. These revised rules are applicable to current and prospective Notified AIFs effective from the 24th of June 2021. Furthermore, AIFMs of existing NAIFs are expected to undertake an impact assessment of the revised Rules against their current operations. Action by the scheme is required should any potential issues arise as a result and must be addressed by no later than the 31 st of December 2021. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Malta Government launches New Nomad Residence Permit **Date:** 2021-06-03 **Category:** Residency **URL:** https://zeta-financial.com/news/malta-government-launches-new-nomad-residence-permit The government has launched a new residence permit, referred to as the Nomad Residence Permit, to attract remote workers to the country. The Secretariat for Citizenship and Communities noted that the new permit was a joint initiative between Residency Malta Agency and Identity Malta Agency. The permit allows holders to retain their current employment-based in another country whilst legally residing in Malta. The permit is eligible to individuals who can work remotely and independent of location, using telecommunications technologies. The Nomad Residence Permit offers a six-month visa and an option of obtaining a one-year ‘Nomad Residence Permit’ and costs €300. Potential applicants must prove that they are either: - Contracted to work remotely by a company based overseas; - Run their own business; or - Offers freelance service to clientele based abroad. The CEO of Residency Malta, Charles Mizzi, stated that applicants would go through a comprehensive due diligence process whereby applicants will need to show that they have “a good reputation and police conduct”. They must also be in possession of a valid passport and prove that they live in a residential property in Malta. The new scheme comes into effect in June 2021 and can be applied online at the following link. Parliamentary secretary for citizenship Alex Muscat said that Malta already has a community of roughly 1,000 digital nomads who already lived and worked from Malta. The government hopes to attract between 1,000 to 1,200 applicants a year. Muscat also stated that the majority of local nomads were European citizens. With the boom in remote working due to the Covid-19 pandemic, they sought to expand the opportunity to third-country nationals. Applicants can rest assured that Malta is an ideal safe and secure destination to live and work in. As a small Mediterranean island, Malta has a lot to offer as a country, from its desired climate, exceptional healthcare system and the fact that English is commonly spoken throughout the country. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Foundations in Malta **Date:** 2021-05-27 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/foundations-in-malta Maltese legislation combines main elements of both Common Law and Civil Law, adding to its appeal, for individuals from countries operating either of these legal systems. Maltese Foundations are regulated by the Second Schedule of the Civil Code (Chapter 16 of the Laws of Malta), which was introduced by Act XIII of 2007 to complement the detailed regulatory framework for trustee and fiduciary activities, and voluntary organisations. The subsequent legislation was introduced, regulating the taxation of foundations, and this has further enhanced Malta as a jurisdiction for international private asset planning. Three types of foundations can be registered in Malta: - ****Private foundations – For the benefit of a beneficiary or group of beneficiaries; - ****Charitable foundations – Public benefit foundations exclusively promoting a social or public purpose on a non-profit making basis; - ****Purpose foundations – Established for a purpose, without beneficiaries and generally have a philanthropic objective, although they can be established with a private purpose. ## Taxation of a Foundation In Malta a foundation can either be treated as a company, which is both resident and domiciled in Malta, or as a trust: - ****Taxation as a Company If a Maltese foundation opts to be taxed as a company, just like any other company in Malta, the income and/or gains realised are subject to tax in Malta on a worldwide basis at the rate of 35%. However, if beneficiaries are not resident and/or domiciled in Malta the beneficiaries will be entitled to a refund of 6/7ths of the Malta tax paid by the foundation, giving an effective tax rate of 5%. - ****Taxation as a Trust A Maltese foundation can elect for the foundation to be treated as a trust, for tax purposes. To be treated as a trust gives rise to beneficial private asset planning opportunities, particularly where the founder and beneficiaries are not resident and/or domiciled in Malta. In such a situation no tax and/or duty will be payable in Malta. This applies on settlement and in relation to the income, attributable to the foundation. ## Why Establish a Foundation in Malta? There are many factors as to why a foundation may be of benefit, and why many establish their foundations in Malta: - The foundation deed only includes the foundation’s name, registered address, a description of the initial endowment with which it was formed, and its purposes and objects; - A foundation can create a degree of privacy and flexibility as appose to a will alone. Foundations can be used to avoid the separation of family estates and to prevent disputes between heirs; - It is possible to redomicile to Malta a foundation established abroad, subject to the foundation deed permitting such a move; - Within the founder’s lifetime, he/she may add, remove or change the foundation beneficiaries as well as their beneficial interest; - A Maltese foundation can be converted to a trust and vice versa. ## Where is the Foundation Registered? The registration of a foundation and associations has recently been delegated to the Malta Business Registry (MBR), a new unit within the MBR has been set up to handle the registration process. The new unit will also be tasked with vetting and registering the documents or notifications of these legal organisations in addition they will also handle the screening and verification of the beneficial owners, administrators and founders prior to the registration taking place. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Banking in Malta **Date:** 2021-05-21 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/banking-in-malta As a top jurisdiction of choice for financial services, Malta has seen a dramatic increase in foreign investors expanding their business operation to Malta over the past decade. Further to this, the small Mediterranean island has also seen the demand for skilled foreign employees, which has created an economic expansion within the sector. Such an increase has also created a rise in the market for local banking services to support such opportunities that were created within the local financial sector. Malta is home to more than 20 operating Banks, and each offering accounts for individuals and companies in Malta. All banks operating in Malta fall under the supervision of the Malta Financial Services Authority (MFSA). Being that the MFSA is the competent authority responsible for the licensing, regulation and supervision of credit institutions, electronic institutions and financial institutions in Malta, it is their obligation when issuing banking licenses that the credit institution in question meets all of the requirements and upholds itself as a reputable banking facility. ## How to Open a Bank Account in Malta All EU national are entitled to a basic bank account by law, providing that the applicant does not already hold a similar account in any of the other licensed banks operating in Malta. The basic payment account offers access to the following services: - Checking/deposit; - EU direct debits; - SEPA transfers; - Online banking. ## How to Open a Corporate Bank Account in Malta All business require a business account to contiune operating successfully. The key elements that should be taken into account is the access, user ability, physical presence, the services offered and fees. Pior to the bank opening the account the bank will require a standard set of documentation in order to better understand the company and the use of the account. Banks in Malta typically collect information regarding the proposed intention for the account, due diligence documents for all indivduals behind the company and any authorised users for the account. Apart from the individuals the banks will also require a set of coporate documents for the company and an understanding of the business activities of the company. ## Types of Accounts Offered to Businesses Banks in Malta provide a variety of accounts, all with different options and fees available. The following generic accounts are often available from banks in Malta: - Business Checking/ Deposit Account; - Business Savings Account; - Business Loan; - Business Credit Card; - Business Overdraft; - Start-Up Business Account ## Why Malta? - Strong Economy; - Strategic Location; - Diverse Business Markets; - An array of Double Taxation Agreements; - International Trade Currencies For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Overview of a Trust in Malta **Date:** 2021-05-20 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/overview-of-a-trust-in-malta ## What is a Malta Trust? Maltese law defines the concept of a trust as a “legal institute” where the settlor places the ownership of their assets to the trustee for the benefit of the beneficiaries. Trusts have become common practice for families looking to preserve and manage their wealth for future generations. The creation of a trust was first legalised in Malta in 1988 however, the Trusts & Trustees Act (TTA), came into force in 2005 which has streamlined and simplified the trust regime making Malta an attractive jurisdiction for international clients. ## The Legal Concept of a Malta Trust In Malta, a trust is not a legal entity, but a form of legal relationship. The settlor, this being an individual or corporate entity will use the trust to either distribute funds, shares or property to another individual or corporate entity known as the trustee. The trustee will then either distribute funds, shares or property to another individual or corporate entity, referred to as the beneficiary. In most cases, the trustee is a corporate entity in order to ensure continuity. For a trust to be effective three key elements must be in place: - The intention of the settlor to create a trust; - The trust asset(s); - A beneficiary or beneficiaries. The absence of any of the three can result in the termination of the trust or hinder its formation. ## Taxation on Maltese Trusts In regards to Maltese tax law, a trust is brought within the Malta tax net and all income attributable to a trust is taxed in Malta where at least one of the trustees is a Malta tax resident. The income attributable to a trust comprises all income or gains chargeable to tax under Maltese law derived by the trustees from the property that has been settled in trust or property acquired in the course of the administration of the trust throughout such trust’s lifetime. In Malta, a licensed trustee has the option to elect for the trust to be treated as a company that is ordinarily resident and domiciled in Malta for tax purposes. This is made possible when: - The trustee is an authorised trustee; - The trust has been established by an instrument in writing; - The election is made within 30 days from constitution of trust or appointment of Malta resident trustees; - Income attributable to the trust consists only of dividends, interest, royalties, capital gains and income from investments. ## Why Malta? The settlor of the trust can have peace of mind when establishing a trust in Malta, Malta is known for being a highly regulated EU Member State with an up-to-date legislative system in place. Malta also boasts an array of highly skilled accountants, bankers, lawyers and investment advisors holding overseas qualifications while having local and international experience. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## The implementation of Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (PEPP) **Date:** 2021-04-20 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/pan-european-personal-pension-product-pepp The Malta Financial Services Authority (MFSA) issued a Circular on the 26th March 2021, concerning the implementation of Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (the Regulation). This regulation will become applicable as from the 22nd March 2022. The Regulation identifies that despite EU households being amongst one of the highest savers in the world, the majority of those savings are held in bank accounts with short maturities. The Regulation also distinguishes that old age pensions constitute as an essential part of a retiree’s income. The Regulation was presented with the intent of encouraging the provision and distribution of personal pension products across the internal market. In light of this some Member States do not yet have a market for personal pension products, and other States where such products are available have a high degree of fragmentation between national markets, limiting the degree of portability of these products. The Regulation has introduced a portable pan-European Personal Pension Product (PEPP) with the main objective being to create an attractive product for the younger generation in order to benefit EU citizens to live and work across the Union. The PEPP will work in tandem with current public and occupational pension systems, as well as national private pension schemes. ## The Meaning of PEPP? PEPP means a long-term savings personal pension product, that is provided by an eligible financial undertaking and is subscribed to by a PEPP saver, in view of retirement. The Regulation requires that PEPPs should provide for long-term capital accumulation and thus the possibilities for early withdrawal are to be strictly limited. The financial undertakings eligible to apply for registration of a PEPP are: - Credit institutions authorised in accordance with Directive 2013/36/EU - Insurance undertakings authorised in accordance with Directive 2009/138/EC, provided that these are engaged in direct life insurance according to that Directive - Investment firms authorised in accordance with Directive 2014/65/EU, providing portfolio management - Institutions for occupational retirement provision (IORP) authorised or registered in accordance with Directive (EU) 2016/2341 which are also authorised to issue personal pension products pursuant to national law - Investment companies or management companies authorised in accordance with Directive 2009/65/EC - EU alternative investment fund managers (EU AIFMs) authorised in accordance with Directive 2011/61/EU The above-mentioned financial undertakings may also be authorised to issue a PEPP which is not manufactured by them. Other entities which can issue a PEPP and consequently fall under the category of a PEPP Distributor are investment firms providing investment advice, or insurance intermediaries as defined in the Insurance Distribution Directive. In order to provide and issue a PEPP, any of the above financial undertakings first need to apply for registration through the MFSA. Following MFSA approval, the PEPP shall then be registered in a central register kept by EIOPA. Once registered, PEPP providers and distributors will then be able to sell their PEPP in all EU Member States. Once registered with the MFSA, PEPP providers are obliged to provide requested information to the MFSA on an annual basis. These reporting requirements form part of the MFSA’s supervisory role of registered PEPPs. The MFSA intend to ensure that all PEPP providers are providing their products in accordance with the Regulation and that the PEPP providers are in accordance with the relevant sectorial supervisory regime and standards. ## Obligations of PEPP Providers Financial undertakings looking to provide of distribute PEPPs must first adhere to certain obligations arising out of the Regulation. A PEPP provider must first provide PEPP Savers with a Key Information Document (KID). This document will assist potential PEPP savers in obtaining knowledge on the PEPP as well as identify any risks and rewards prior to signing the contract. Once a contract has been successfully concluded, the PEPP providers shall then provide PEPP savers with a personalized PEPP Benefit Statement on an annual basis, which shall include the amount of contributions made, costs incurred and investment returns. To read the full Circular on the implementation of Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (PEPP) Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## New Malta Permanent Residency Programme **Date:** 2021-01-25 **Category:** Residency **URL:** https://zeta-financial.com/news/new-malta-permanent-residency-programme The Malta Government has announced the establishment of a new agency ‘Residency Malta Agency’. The new Agency plans to launch a new permanent residency by investment program for non-EU nationals, this new program Malta Permanent Residency Programme (MPRP), will replace the current successful Malta Residence Visa Program (MRVP), which was launched back in 2016. A conference delivered by Hon. Alex Muscat – Parliamentary Secretary for Citizenship and Communities was held earlier this month addressing all Accredited Agents outlining the new MPRP program. While the new program regulations are not yet officially announced, the new legislation is expected to introduce the following changes: ## 1. Government Contribution Following the new MPRP program, the main applicant will pay a €98,000 fee for administrative fees and a contribution if they rent a property in Malta or €68,000 for applicant who purchase a property in Malta. In addition, there will be a contribution payable by each dependent in the amount of €7,500 and €5,000 for each child over 18 years of age. ## 2. Philanthropic Donation The new program requires the main applicant to make a donation to a Maltese-registered NGO in the amount of €2,000. ## 3. Property Investment The new MPRP program will require the main applicant to purchase a property or rent a property in Malta. The minimum purchase fee for a property is €350,000 for properties located in the northern and central parts of Malta, and €300,000 in the south of Malta or Gozo. For those who opt to rent a property the minimum rental fee is €12,000 per year in the central or northern part of Malta and €10,000 in the south of Malta or Gozo. ## 4. Income or Asset Documentation Under the old MRVP program, the main applicant had to prove either a minimum annual income of €100,000 or €500,000 in personal assets. The new MPRP program intends to remove the proof of income option, while retaining the €500,000 proof of asset obligation with a new requirement of €150,000 of total assets being available as liquid funds. ## 5. Securities Investment Under the old MRVP program, the main applicant was required to make a refundable investment of at least €250,000 into government approved securities for a period of 5 years. The new program will remove this requirement. The new MPRP program will remain available to married couples, unmarried couples in a long-term relationship, dependent unmarried children of any age, and parents and grandparents. Zeta is an Accredited Agent and can assist, as well as offer advice on the application process of this new program. For more information, you may contact our Business Development team on bd@zeta-financial.com. --- ## MFSA Circular to the Industry on Brexit **Date:** 2020-11-26 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsa-circular-to-the-industry-on-brexit On the 18th of November 2020, the Malta Financial Services Authority (MFSA) has issued a circular addressed to licensed Insurance, Investments, Credit and Financial Institutions, providing guidance on the measures to be taken in light of the end of the Brexit transition period on 31st December 2020, whereby EU law will no longer apply in the United Kingdom. The aim of this Circular is to outline the expectations regarding the preparation and implementation of contingency plans, ensuring adherence to the applicable EU legislation, whilst keeping clients informed of any changes that will affect them. The MFSA also outlined an update to entities licensed in the UK providing services in Malta in its circular. Upon the expiry of the transition period, all UK licensed entities can no longer provide financial services in Malta through the freedom of services and/or establishment. Such entities have been advised to obtain the necessary authorisation in Malta or in another EU Member State. Clients must be provided the necessary information about availability of services, alternative arrangements and contact details in case of enquiries. In relation to UK Investment Firms and Investment Funds, the previous communication on a temporary permission regime (TPR) for investment firms and investment funds in the case of a no-deal Brexit issued by the MFSA is no longer applicable. The options outlined by the MFSA for such firms are: - To terminate the existing contracts in an orderly manner; - Obtain the necessary authorization; - Proceed with the assignment of the existing contracts to a duly authorized entity. UK UCITS and AIFs Marketed in Malta as from 1st January 2021 shall be considered non-EU AIFs and are permitted to be marketed in Malta under the National Private Placement Regime (NPPR), and subject to the notification procedures established in the AIFMD. The MFSA has started accepting applications under the NPPR as of the 18th November 2020. The MFSA has also issued a letter for UK/Gibraltar insurance undertakings and insurance intermediaries conducting business of insurance in Malta through freedom of services and freedom of establishment. The letter informs such undertakings and intermediaries that they cannot conclude new insurance contracts or establish, renew, extend, increase or resume insurance cover under the existing insurance contracts in Malta without obtaining authorisation from the MFSA. ## Maltese Licence Holders Providing Services in the UK Such firms that wish to continue providing financial services in the UK should do so in accordance with the guidance provided by the relevant UK financial services regulator. Such license holders need to apply to join the relevant UK TPR prior to 31st December 2020. Following the end of the transition period, the MFSA’s Financial Services Register will remove any reference to passporting activities of licensed entities in or out of the UK. To read the full Circular to the Industry on Brexit Readiness Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## MFSA Publishes Revised Loan Funds Rules Framework **Date:** 2020-11-11 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsa-publishes-revised-loan-funds-rules-framework The Malta Financial Services Authority (MFSA) has recently published an updated version regarding the Standard Licence conditions applicable to Collective Investment Schemes authorised to invest through loans. The MFSA stated that the recent revision was conducted in the aim of achieving a better balance between for a sound regulatory framework and to make such regime more pragmatic and accessible to the fund industry. The revision took into account the market developments and the current economic scenario from the serve impact due to the coronavirus outbreak which has led many businesses unable to gain access to capital through traditional lending sources. Furthermore, the MFSA explained that it took note of the relevant EU regulatory developments and, particularly, the focus being placed on the area of non-bank financing by the European Commission, within the wider context of the Capital Markets Union. In addition, consideration was given to the feedback provided by the industry to the Authority since the framework was set up. The MFSA’s Chief Officer Supervision and Chief Executive Officer Ad Interim Dr Christopher P. Buttigieg addressed that “This marks the attainment of one of the first key milestones forming part of the overarching MFSA Asset Management strategy related initiatives. This strategy is aimed at strengthening Malta’s position as an asset management jurisdiction, also demonstrating the Authority’s commitment to contributing towards the sustained development of this sector”. To read the full Circular on the Restructuring of the MFSA Loan Funds Regime, Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## MFSA Guidance Note on Source of Wealth and Source of Funds **Date:** 2020-10-02 **Category:** Company Formation **URL:** https://zeta-financial.com/news/mfsa-guidance-note-source-of-wealth-and-source-of-funds The Malta Financial Services Authority (MFSA) has issued a Guidance Note on the submissions of the source of wealth (SOW) and source of funds (SOF). Currently, certain positions within authorised entities providing financial services are subject to prior regulatory approval and to a due diligence assessment carried out by the MFSA. The abovementioned Authority assesses the individual reputation and, on his integrity, and solvency. In this sense the anti-money laundering as well as combating the financing of terrorism form a significant part of the MFSA valuation, especially to those considered to be politically exposes persons and persons (PEPs) holding significant or controlling interests with authorised entities. Going forward, the overall aim of the Guidance Note is to guide and support individuals when submitting their declarations of source of wealth and source of funds when requested by the Authority. ## Source of Wealth (SOW) The source of wealth declaration submitted should provide a detailed overview that includes all sources of an individual net worth, together with any of their assets & liabilities. It is important to note that all information provided should also detail how the wealth was acquired, along with supporting evidence. Individuals should keep in mind that any declarations submitted with general or vague descriptions will not be accepted and will delay the application processing. Further to the above all source of wealth declarations needs to be verified by a qualified accountant or auditor in his professional capacity. ## Source of Funds (SOF) The source of funds declaration should classify the origin of the particular funds or assets which are the subject of the business relationship or transaction which is to take place. In practice, it is the activity, event, transaction, contract, business, occupation or employment from which the funds used are generated or derived. The information on the source of funds will be required both at the application stage in respect of the initial capital and on an ongoing basis thereafter, where necessary. When submitting the source of funds declaration, individuals should be aware that declarations submitted with general or vague descriptions derived from the business activity of the individual will not be accepted and will delay the application. It is important to note that funds should preferably be remitted from a regulated credit or financial institutions within the European Union or within any jurisdiction with a high standard of AML/CFT. Furthermore, funds should be remitted from the account held in the name of the associated individual. Having said this, if the funds are provided by or through a third party, a clear and detailed explanation informing the Authority on the relationship between the said individual and the abovementioned third party must be included. Any individuals who do not comply with the MFSA requirements or whom provide incorrect and misleading information could potentially lead to a refusal of an application. To read the full MFSA Guidance Note Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Malta's Long Stay Visa Fees Regulations 2020 **Date:** 2020-07-24 **Category:** Residency **URL:** https://zeta-financial.com/news/maltas-long-stay-visa-fees-regulations-2020 ****Following the legal notice concerning Long-stay Visa Fees conferred by article 2 of the Fees Ordinance, the Minister for Home Affairs, Law Enforcement and National Security with the concurrence of the Minister of Finance and Financial Services has introduced the following new regulations – Legal Notice 287 of 2020. Highlighted in these regulations, a long-stay visa issued to a third-country national shall be valid for not less than ninety (90) days and shall not exceed a period of three hundred and sixty-five (365) days. The relevant fees which are payable for the granting of a long-stay visa in Malta are based on €70 for study purposes and €100 for any other purpose. ## Malta Long-stay Visa Fees Points and Regulations The legal notice, states the below points: - Fees are to be paid directly at the offices of a Consulate of Malta in any country where such a representation is present. - Alternatively, the fees can also be paid at an external service provider who is contracted or at the Central Visa Authority or at the border crossing points, as the case may be. - Any relevant fees paid upon the application for a long-stay visa are not refundable. - Long-stay visas are issued free of charge to: - Family members as defined in article 2 of the Free Movement of European Union Nationals and their Family Members Order; and - Minors under six (6) years of age. - The Central Visa Authority may waive fees at their discretion and for justified reasons. This Legal Notice hereby repeals Fees (Schengen Visas) Regulations – Subsidiary Legislation 35.31. Zeta Corporate & Management Services Limited can assist with the application for ordinary residence permits to those who are EU/EEA and Swiss nationals. In addition, Zeta is an accredited agent and can assist high net worth individuals and families with the Malta Residence and Visa Programme. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Cell Companies Now Offer Asset Structuring Opportunities in Shipping and Aviation **Date:** 2020-07-08 **Category:** Aviation **URL:** https://zeta-financial.com/news/cell-companies-asset-structuring-shipping-aviation The Minister for Economy, Investment and Small Businesses has issued new regulations relating to the Companies Act (Shipping and Aviation Cell Companies) Regulations. The aim of these regulations is to create a new structure to be used by companies operating in the shipping and aviation sector through the means of a cell company. ## Cell Companies in Malta Cell Companies are regulated under Maltese law and are generally used by insurance companies under the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations and also by securitisation vehicles and investment companies with variable share capital under the Securitisation Act. With the success of cell companies for the above mentioned it was decided that cell companies can also apply to the shipping and aviation sector. ## Benefits of Cell Companies for Shipping and Aviation Companies The opportunity for shipping and aviation companies to benefit from a cell company structure, requires the fulfilment of certain legislative requirements as detailed in Article 84E. Such an opportunity to incorporate cell companies into the two sectors will prove to be a progressive step forward for Malta. Malta is already market-leading jurisdiction within both the shipping and aviation sector. The use of a cell company structure by companies operating in the shipping and aviation sector offers key benefits, such as: - The assets and liabilities of each individual cell are a distinct patrimony and are disconnected from the core cell company and from other individual cells allowing for the structuring and ring-fencing of each cell; - The core cell company is a single legal person and the formation of each new cell does not create a new legal person separate from the core cell company therefore, each individual cell is bound to transact by means of the core cell company; - When the cell company is established, it is a quick process for new cells to be set up and begin operations; - Only one board of directors and one set of Memorandum and Articles of Association is required for the cell company and all its cells; - Only one operative license is required for an entire cell company including its individual cells; - The creditor of one particular cell only has recourse to the assets to that particular cell and not the remaining cells or the core cell company; - The insolvency of a cell has no impact on the remaining cells or the cell company; - Cell companies and their cells benefit from Malta’s tax imputation system. To read the full amendments made to the Companies Act allowing for the introduction of regulations regarding Cell Companies carrying on or engaged in Shipping or Aviation Business (the “Regulations”) Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## The Guidelines in Relation to the Consolidated Group (Income Tax) Rules **Date:** 2020-06-24 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/guidelines-consolidated-group-income-tax-rules Malta recently published on 31 May 2019 the Consolidated Group Income Tax Rules through Legal Notice 110 of 2019. The Rules include that a parent company may make an election in order for itself and its ninety-five percent (95%) subsidiary(s) to form a fiscal unit. For a subsidiary to qualify, at least two of the following conditions below must be met: - The parent company holds at least 95% of the voting rights in the subsidiary company; - The parent company is beneficially entitled to at least 95% of any profits available for distribution to the ordinary shareholders of the subsidiary company; and - The parent company would be beneficially entitled to at least 95% of any assets of the subsidiary company available for distribution to its ordinary shareholders on a winding up. Apart from the above conditions, the 95% subsidiary must have its accounting period beginning and ending on the same dates as the accounting period of the parent company in all the years in which it forms part of the fiscal unit. Where a parent company elects to form a fiscal unit with its 95% subsidiary(s), it is then effective from the year of assessment in which the election is made, unless the due date for the subsidiary’s tax return has already passed, in such cases the election is effective from the following year. To read the full guidelines in relation to the consolidated group (income tax) rules Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Important Notice: Beneficial Owners of Maltese Companies **Date:** 2020-06-24 **Category:** Company Formation **URL:** https://zeta-financial.com/news/important-notice-beneficial-owners-maltese-companies In July 2019 the Companies Act (Register of Beneficial Owners) (Amendment) Regulations were put into place and will become effective following the entry into force of Legal Notice 247 of 2020. The Malta Business Registry (MBR) has produced a notice that requires the attention of all company officers. The notice provides an overview of the regulatory changes that will be implemented and effective as of 1st July 2020. ## Key Amendments Highlighted in this Notice: On the anniversary of a company’s registration, a return in the form set out in the First Schedule of the Regulations is to be submitted. This return shows any change in the details on beneficial owners such as name, country of residence or official identification document number, in the cases where there are no changes, the company needs to confirm that no changes took place. The return is to be signed by at least one director of the company or the company secretary and sent to the Registrar for registration within forty-two days after the anniversary date. For any changes in the senior managing officials of a company, the company has to within fourteen days after the date of when the change was recorded with the company deliver to the Registrar a notice of the change, in the form set out in the First Schedule of the Regulations. The Registrar powers have extended in relation to registration matters. The Registrar can in fact: - Refuse to register documents of a company if the beneficial ownership information was not submitted or if they are not satisfied that the company has provided accurate and up to date information regarding the beneficial owners of the company; - Refuse new incorporations for directors involved in other Maltese registered companies that failed to submit information regarding the beneficial owners; - Before registering a new company or return, request additional information or documentation which they seem necessary regarding the beneficial information submitted to him. The penalty imposed by the Regulations whereby the Registrar deems it necessary to update the beneficial ownership information in the register in terms of the Regulations, has increased and every officer of the company shall be liable to a penalty of no more than €100,000. Administrative penalties will be increased to a maximum one time penalty of 10,000 per default apart from a maximum daily penalty of €500 per default. To read the full amendments made to the Companies Act (Register of Beneficial Owners) (Amendment) Regulations Click Here. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Benefits of Incorporating a Business in Malta **Date:** 2020-05-05 **Category:** Company Formation **URL:** https://zeta-financial.com/news/benefits-of-incorporating-a-business-in-malta ## Malta as a Business Destination Although being a small European state, Malta is a highly attractive location to do business in the EU especially for foreign investors. Malta has been welcoming investors into the country for over the past 70 years, both in the private and public sectors. Setting up a business in Malta is straightforward and transparent, many investors seek out service providers in order to handle the legal and logistical requirements starting from company registration, banking facilities, recruitment of staff and an array of many more services. Setting up a business in Malta can qualify you to benefit from a variety of advantages that the country has to offer to a non-resident who chooses to incorporate a company in Malta. the main benefits that Malta can offer include: ## TAX Benefits With an extraordinary competitive tax system in place, it is unquestionably the main factor that attracts investors to Malta. The system in place is in full conformity with European Union legislation, backed with over 70 Double Taxation agreements. Malta currently stands at 35% of the chargeable income of the company, although investors that register a company in Malta and are not themselves a resident in Malta can expect to receive tax refunds that ultimately lowers the tax as low as 5%. This is reinforced by Malta’s specialised financial services sector along with a robust regulator that Safeguards the provision of quality advice pertaining to international tax systems. ## Well-Regulated Regulatory Jurisdiction Malta is a prominent well-regulated jurisdiction, with detailed legislation covering a variety of different forms of entities such as foundations, trusts, protected cell companies, single-member companies, etc. Malta has built a renowned reputation across multiple sector areas such as gaming, maritime, financial services, and intellectual property. ## Competitive Incorporation and Ongoing Fees ****The minimum share capital of a company in Malta is €1200, investors can choose to pay as little as 20% upfront that being only €240. As previously mentioned, many investors use the services of service providers, such service providers have a vast array of experience relating to corporate services and can assist prospective investors at a reasonably competitive fee. The basic setup fee for a Maltese Holding company is €1,500 plus 18% VAT. For further information please read our Malta incorporation factsheet. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Importation Procedures for Yachts **Date:** 2020-04-07 **Category:** Maritime **URL:** https://zeta-financial.com/news/importation-procedures-for-yachts Yachts that are imported into the EU for commercial purposes, must undergo relative VAT and customs procedures in order to then be imported into the EU. Having said this, for a yacht to be positioned in the EU indefinitely it would need to be registered in an EU member state. Malta would be an ideal location for yacht registration. Yachts that are proposed for commercial use can be imported into the EU through Malta for the necessary VAT and customs procedures to be undertaken. This allows for yachts to be chartered out and freely sail within EU waters. The VAT rate regarding the importation of yachts for commercial use in Malta is 18%, although a VAT deferment is available which would replace the need to pay the 18% VAT. There is also the possibility for yacht owners with a non-EU flag, who are non-EU residents and who plan to use their private yachts temporarily in EU waters, to place their yacht under a temporary importation via Malta. This process requires the mentioned yacht to call at Malta and be subjected to temporary importation with the Maltese customs authority. The yacht owner would be able to use the yacht freely within EU waters and can move from one member state to another with no further formalities of a period of 18 months. Further to discussions with the local authorities, a number of new procedures relating to the importation of yachts in Malta have been confirmed. Such procedures are aimed at the deferment of VAT on the importation of commercial yachts highlighted below: - Deferment of VAT on the importation of commercial yachts by Maltese owning entities having a Maltese VAT registration without the requirement of the importing entity setting up a bank guarantee; - Deferment of VAT on importation of commercial yachts by EU owning entities having a Maltese VAT registration provided that the company appoints a VAT representative in Malta in terms of Article 66(2)(b) of the VAT Act without the requirement of the importing entity setting up a bank guarantee; - Deferment of VAT on the importation of commercial yachts by non-EU owning entities on provision by the importing entity of a bank guarantee in an amount equivalent to VAT on 0.75% of the value of the yacht which would be capped at 1 million EUR. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## From Hemp to Hope – How Malta is Planting the Seeds of Medical Innovation **Date:** 2020-01-09 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/from-hemp-to-hope-how-malta-is-planting-the-seeds-of-medical-innovation Plants have provided most of our most pervasive and most effective medicines. Even the advent of industrial pharmacy did not substantially change this relationship between man and plant for many of our most successful pharmaceuticals are simply refinements of products that occur naturally in botanical nature. Aspirin is, in fact, a successor and refinement to Salicin, naturally occurring and produced in the bark of Willow trees. Aspirin is among the biggest botanical benefactors of humanity, but it is just one of so many pharmaceuticals to come from plants. But it takes much labour, research and investment to deliver a scientifically reliable product from the phytochemistry of its origin. Malta is currently working on delivering another such wonder product to the world of public health – Medical Cannabis. ## Malta – A Tradition of Innovation Since accession to the EU, Malta has taken advantage of the facilities offered by EU membership to leverage all its assets in setting up a jurisdiction that combines agile legislation, adaptable regulation, and passporting right across the EU. In the past fifteen years, Malta has set up unrivalled legal facilities for iGaming, Shipping and Aviation, and Distributed Ledger Technology. It is also working on setting up equally favourable regimes for Artificial Intelligence, and the Internet of Things. Now Malta is applying this same drive and initiative to do the same for Medical Cannabis. Malta’s support of innovation and emergent trends takes a two-pronged approach. The first one is legal. It is fully aware of the importance of legal certainty for businesses, researchers, investors, and clients. It is only through legal certainty that one is free to operate with peace of mind. Moreover, Maltese EU membership ensures that anyone acquiring a licence to operate in Malta has full passporting facilities throughout the EU. In mid-Q2 2018, Malta passed into law the Production of Cannabis for Medicinal and Research Purposes Act (Chap. 578 of the Laws of Malta). Any person satisfying the usual regulatory criteria of other Maltese authorities in finance and business, and has the requisite and recognized qualifications, can apply for a licence to cultivate cannabis for the abovementioned reasons. Subsequently, Subsidiary Legislation complementary to the Act (S.L. 578.01) was published to further explicate the new Maltese law. The second prong of Malta’s approach is the focus on research. The country recognizes that the world we are living in is driven by breakneck innovation and the unstoppable emergence of new technologies. Without adequate research, there is risk that these technologies do not fulfil the promise of the potential that they hold, or may do harm. Since EU membership made Malta an attractive destination for investors and researchers, Malta has built industry after industry simply by providing a friendly and supportive jurisdiction for research and development. The Malta Cannabis Act is a natural product of this approach. With the facility of such legislation and regulation, Malta is attracting businesses keen to set up facilities for carrying out research into the medical and scientific use of cannabis in an EU-regulated jurisdiction. With the serenity of legal certainty provided by the Maltese jurisdiction, these companies are beginning to provide the research that this plant has lacked for so long. Nonetheless, the focus on research does not emerge only from the provision of legal certainty. Malta’s calendar is full of summits and conferences that bring together scientists and investors to share their research into the particular industry in which they are working. Malta is becoming such a hub of global research in emerging technology that such events are held almost on a weekly basis. In November alone, Malta held two summits on Medical Cannabis, one in the first week of November, and the other in the third week of the same month. ## Operating in Malta If the prospect of legal certainty and full EU passporting is not inducement enough to operate in Malta, there are other considerations that are certain to tip the balance. Malta has a young population with an unusually high percentage of university graduates. Its politicians are still young, and belong to a generation that started to acquire multiple degrees in all fields. This has created an environment full of young, highly educated human resources full of passion for innovative ideas, and a completely open mind. It is therefore no surprise that Malta’s highly educated politicians, professionals and workforce have created an environment that thrives on setting up new industries and seeking business opportunities in new ideas. From Malta Enterprise, Malta’s economic agency, whose will to assist investors is proverbial, to its regulators that run a tight ship without undue burden, setting up a business or an institution in Malta is a quick and painless process. Malta has a plethora of specialist businesses that provide all necessary financial and corporate services to new organizations, helping them make the most of all the benefits that the jurisdiction offers, including very a competitive tax system, that, among other benefits, includes full imputation. However, without a doubt, Malta’s most attractive feature is the interaction between the regulatory regimes for its innovative industries, such as iGaming, Fintech, Distributed Ledger Technology, Artificial Intelligence, Internet of Things, and the technological and corporate synergy between these industries. An institution producing Cannabis for medical and scientific purposes that is seated in the middle of such technological, legal, financial and corporate synergy with full access to the entire EU will enjoy advantages that few of its competitors ever will. Imagine carrying out research into the medical benefits of cannabis while concurrently experimenting in a secure sandbox with a blockchain to track and provide guaranteed provenance for all your Cannabis supplies and products! In Malta, you can do this and so much more. ## Zeta Zeta is one of most farsighted companies in Malta today. From its establishment, Zeta has recognized that we are on the threshold of one of the most dramatic transformations in history. Zeta has therefore focused on developing services that have both legacy and future application. We offer the full gamut of financial and corporate services, getting our clients to hit the ground running and providing them with every service that they might need so that they can focus on their core business without spending time and energy on ancillaries. Moreover, we have the expertise to support businesses in every one of the innovative industries mentioned above. With such a portfolio of services and expertise, and commitment to research and development Zeta can take care of your activities in Malta from the very first enquiry to the ultimate fruition of your goals. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Malta Establishes New Maritime Registry Office in Greece **Date:** 2019-12-16 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-establishes-new-maritime-registry-office-in-greece Malta has one of the largest shipping registries in the European Union, and the sixth-largest maritime flag in the world. Its location in the very middle of the Mediterranean, as well as its reputation as a robust and safe jurisdiction, have made the Maltese flag attractive for shipowners, financiers and ship management companies. In 2019 the UNCTAD ranked the Maltese flag among the top performers in its review of Maritime Transport 2019. This review was carried out on the leading flags of registration by dead-weight tonnage. Currently, there are more than 8,300 vessels and 780 luxury yachts bearing the Maltese flag. Malta, however, has not paused for breath. It is registering tremendous growth to accommodate which the Merchant Shipping Directorate has had to expand its offices outside the country. Thus, in October 2019, the Minister of Transport, Infrastructure and Capital Projects inaugurated the first regional shipping office to be set up in Greece, in the seat of the ancient maritime superpower, Athens. The launch of the Athens office is intended to promote the Maltese ship registry in Greece so that it may provide swift and convenient services to current Greek shipowners whose vessels are registered with the Maltese flag. An ancillary goal is to attract more Greek investors to the Maltese maritime sector. The move by Malta to set up a maritime office in Malta follows upon many years of strong links between the two Mediterranean countries. Malta and Greece have the warmest of ties at every level, and this move by Malta is expected to serve not only Malta’s strategic interests, but to further related ones of Greece. Minister for Transport, Infrastructure and Capital Projects Ian Borg said that the establishment of the office would help Malta continue meeting clients’ expectations, while looking ahead to a prosperous future. Minister Borg also attended a maritime conference in Cyprus, where he held numerous meetings with vessel operators registered under the Maltese flag. Together they discussed the challenges encountered by the industry and the ways in which the Maltese registry can become more competitive in such a dynamic sector. Zeta provides resident agent services and assistance to individuals and entities who are looking at setting up corporate structures as well as to register pleasure or commercial yachts under the Malta flag. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Stimulating Innovation – Malta's New Patent Box Regime **Date:** 2019-11-20 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/stimulating-innovation-maltas-new-patent-box-regime In the middle of August 2019, Malta introduced a patent box regime, which is a regime that provides lower effective tax rates on income derived from intellectual property (IP). In truth, Malta used to have a very attractive patent and copyright box regime that when stacked with other benefits, such as a generous refund system, and a low taxation on IP income, would reduce effective taxation on royalty income arising from IP rights to 0%. However, this scheme was closed as of 2016 when the Organisation for Economic Co-operation and Development’s (OECD) in 2015 identified patent box regimes as harmful tax practices due to the very wide parameters. In October 2015, the OECD’s Action 5 final report “Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance” required “substantial activity for any preferential regime”. In the case of IP, it recommended a nexus approach that the benefits of an IP regime be conditional on a direct nexus between the income receiving benefits and the expenditures contributing to that income. As Malta is a Base Erosion and Profit Shifting (BEPS)-compliant jurisdiction, it set about to update its tax regime to achieve full compliance with the OECD’s BEPS requirements. The result is the new patent box regime of 13 August 2019 by virtue of Legal Notice 208 of 2019. The Legal Notice defines qualifying IP, eligibility criteria, the calculation of the deduction, costs to be taken into account, loss, submission of documentation to the Commissioner for Revenue, and issue of confirmation. Qualifying IP includes patents, assets granted protection rights in terms of national, European or international legislation, IP assets that are not obvious provided that certification is obtained by Malta Enterprise. “Marketing-related” IP, such as brands, trademarks and trade-names are explicitly excluded. Deduction can be claimed by a beneficiary for qualifying IP if the qualifying IP meets all the following conditions: - The qualifying IP is developed by the beneficiary in whole or in part, if the beneficiary is the owner in whole or in part. - The qualifying IP is granted legal protection in at least one jurisdiction. - The beneficiary “maintains substantial substance…. Commensurate with the type and extent of activity being carried out in the relevant jurisdiction with respect to the qualifying IP”. - Where the beneficiary is a body of persons, it is empowered to receive income. - The request for deduction is included in the beneficiary’s tax return. The deduction will be calculated on the basis of this formula: 95% x [(Qualifying IP Expenditure divided by Total IP Expenditure) x (Income/Gains derived from Qualifying IP)]. Losses can be set off, while there are some very reasonable compliance obligations. These rules apply on qualifying IP on or after 1 January 2019. Specifically designed to meet the Action 5 standard of the OECD, and comply with the BEPS-standards, this new regime provides the support needed to encourage the further development of IP, which is so fundamental to the contemporary economy. In the same vein, it’s rigorous compliance with BEPS-standards demonstrates once more Malta’s commitment to encouraging business, research, and development without providing scope for harmful tax practices that run counter to its international obligations. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## MFSA's Assessment of Possible Brexit Impact on Key Areas of Financial Markets **Date:** 2019-09-17 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/mfsas-assessment-of-possible-brexit-impact ## Is the UK Heading Towards a Hard Brexit? As the UK Government steps up its efforts to achieve Brexit by the current deadline, which is 31 October, the probability of a Hard Brexit is now higher than ever. Hard Brexit, which is the popular reference for a scenario in which the UK leaves the EU without a deal. Since the UK joined the European Communities (EC) in 1973, some 45 years ago, it has become increasingly intertwined with the rest of the EU through policies and agreements intended to ensure seamless trade between EU members. Moreover, the UK is a member of many European institutions as well as of EU bodies that govern rules on everything imaginable. These harmonised laws, rules, policies and institutions bestow the free movement of goods, capital, services and labour within the EU to all individuals and businesses that are citizens of EU Member States, or based in such States. These benefits of the EU do come with the requirement to surrender some national sovereignty to the EU, and EU law prevails if it comes in conflict with national law. This is to ensure the harmonisation between the Member States without which the four freedoms are not possible. Since the UK is so closely intertwined with the EU after 45 years, it has become dependent on the EU for many crucial areas, including the economy, and even its own internal stability, such as in the case of Ireland. For this reason, there are fears that a drastic exit without a deal, a Hard Brexit, between the UK and the EU would lead to the total disruption of the movement of goods, capital, services, not to mention labour, between the UK and the EU, though the UK has become heavily dependent on such free movement. Tariffs would start to apply to most British goods going into the UK. Border checks would also slow movement tremendously. Services could be hit badly, especially with respect to financial services. ## Malta’s Temporary Passporting Rights to UK Entities Malta and the UK have shared a common history in the Mediterranean for hundreds of years. Moreover, in the same way that London has become a major hub for financial services, Malta is now becoming an equally important hub for financial services in the Mediterranean. For this reason, Brexit is particularly important for Maltese and UK firms and investors who carry out business with each other. Thus, the Maltese financial regulator, the Malta Financial Services Authority (MFSA) has been busy preparing for the eventuality of a Hard Brexit for quite some time. The MFSA provides financial services stakeholders with updates on applicable transitional measures. Its key objective is to ensure that licenced entities continue business with minimal disruption. These licenced entities are Maltese, but the MFSA makes efforts to provide to UK entities, conditional equivalence status and other measures in certain scenarios. It has, for example, granted Temporary Passporting Rights to UK entities that already passport their services and activities to local clients. All these measures however are temporary and remain subject to decisions and recommendations as may be made by the European Banking Authority, the European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority. The key document that outlines the MFSA’s position on this matter is the FAQ on the Implications of a Hard Brexit on the Local Asset Management Industry. However, at the end of August, it issued a succinct overview of the eight key areas that could be impacted by a Hard Brexit. Following the existing structure of the FAQ, the eight areas are the following: - Possible system changes for UK brokerage firms servicing Maltese clients since the provision of brokerage activities is governed by MiFID II, AIFMD and EMIR, UK entities will lose their passporting rights. However, if brokerage services are initiated by a Maltese fund, there should be no impact on the provision of brokerage services by UK entities. After Brexit, UK firms should be able to provide brokerage services to Maltese clients in terms of Article 39 of MiFID II and Regulation 3 of the Investment Services Act (Provision of Investment Services and Activities by Third-Country Firms) Regulations, 2017. - UK Undertakings for the Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs) will need to offer funds in Malta under the National Private Placement Regime (NPPR) not under the UCITS directive nor under the Alternative Investment Fund Managers Directive (AIFMD). - New Maltese UCITS should seek guidance from UK Financial Conduct Authority (FCA). - Three options for UK-managed AIFs – Maltese AIFs managed by UK AIFMs have three options in case of a Hard Brexit. They can either appoint an EU AIFM, convert to a Maltese PIF, or convert into a self-managed AIF. Similarly, Maltese UCITS managed by a UK UCITS ManCo would have to either convert into an EU UCITS ManCo or into a self-managed UCITS. - Investment management delegation will remain possible. - UK depositories will not be allowed to perform direct depository services however UCITS and AIFs may delegate the provision of custody services to third-party custodians, therefore, allowing UK depositories to continue acting as sub-custodians. - Changes to UCITS asset eligibility criteria – Hard Brexit may impact asset eligibility criteria in serval ways. - Business as usual for UK-managed Maltese PIFs – Maltese PIFs managed by UK firms will not be impacted by Brexit. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Temporary Passporting Rights to UK Entities Granted by the MFSA **Date:** 2019-08-23 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/temporary-passporting-rights-to-uk-entities The Malta Financial Services Authority (MFSA) has recently released an update regarding UK licensed investment funds, asset managers and investment firms also known as ‘UK entities’ passporting into Malta. The Malta Financial Services Authority proposes to grant a Temporary Permission Regime (referred to as TPR) to UK entities that already passport their services and activities into Malta. The objective of the Temporary Permission Regime is to assure financial stability, business continuity as well as to protect existing investors/clients. The temporary permission regime would only be valid to existing clients and valid contracts, if the UK leaves the EU zone without a withdrawal agreement by the Brexit date. The temporary permission regime that will remain valid for twelve months after the Brexit date. Through this Temporary Permission Regime, UK operators will be able to: - Obtain the necessary authorization; - Terminate existing contracts; or - Assign contracts to authorized entities. UK entities that passport into Malta would not be allowed to offer their services to new investors/clients in Malta after the Brexit date. Any entity that provides cross-border services from the UK to Malta through the current passporting arrangements, and would like take advantage of the Temporary Permission Regime should notify the Authority of its intents and if they are planning to apply for a Maltese licence. The introduction of the Temporary Permission Regime would also be subject to any EU legislation that may be applicable from time to time. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Amendments to the Companies Act (Register of Beneficial Owners) Regulations **Date:** 2019-08-08 **Category:** Company Formation **URL:** https://zeta-financial.com/news/amendments-companies-act-register-beneficial-owners The Companies Act (Register of Beneficial Owners) (Amendment) Regulations, 2019 has been put into place on 12th July 2019. This is aimed to amend the Companies Act (Register of Beneficial Owners) Regulations which had come into force on 1st January 2018. One of the main amendments introduced by Legal Notice 158 of 2019 pertains to Regulation 7 of the principal regulations and involves access to the beneficial ownership register. As of now, information regarding the beneficial ownership of a company is held by the Registrar of Companies and any access to this information is limited to the following persons: - National competent authorities that are designated with the responsibilities of combating money laundering and terrorist financing; - The Financial Intelligence Analysis Unit; - National Tax Authorities; - Subject persons for the purposes of carrying out customer due diligence; - Persons who have a legitimate interest. The amended Regulation 7, which will be effective 1st January 2020 stipulates that “any member of the general public” shall have access to the name, date of birth, nationality, country of residence and extent and nature of beneficial interest regarding the beneficial owners of a company. Thus, effective 1st January 2020 persons wishing to obtain information on the beneficial ownership of a company would not need to demonstrate a legitimate interest, as the information will be available to them publicly. In certain cases, access to information about the beneficial owner of a company may be restricted to subject persons and the general public, these can either be fully or partly restricted. These restrictions would apply in situations where access to the beneficial ownership information would expose the beneficial owner to certain risk such as: - Blackmail - Extortion - Risk of fraud - Kidnapping - Or where a beneficial owner is a minor or legally incapable. The amendment also includes provisions that stipulate that once a company has been struck off, the information regarding the beneficial ownership of the said company will remain available on the Malta Business Register and the system of interconnection of registries for a period of five years from the date of striking off the company. Sub-Regulation (2) of Regulation 5 has also been amended and now requires that any natural person who has reasonable cause to believe to be a beneficial owner of a company shall be bound to provide the information required to the company without delay. According to the amendments to Sub-Regulation (2), the company shall obtain the information listed under sub-regulation (1) from the shareholders of the company and, or from any natural person whom it has reasonable cause to believe to be a beneficial owner who shall be bound to provide such information to the company without delay. Every beneficial owner who acquires disposes of, increases or reduces his beneficial interest in the company shall also be bound to immediately provide the pertaining information to the company. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Registering an Aircraft in Malta **Date:** 2019-08-06 **Category:** Aviation **URL:** https://zeta-financial.com/news/registering-an-aircraft-in-malta In 2010, the Aircraft Registration Malta Act came into force, the main aim of this act is to regulate the registration of an aircraft in accordance with Maltese law. The Act also takes into consideration the registration and enforcement of aircraft mortgages and the implementation of the Cape Town Convention. Malta is a highly competitive jurisdiction with high economic development in several areas of the aviation industry and a well-established legal infrastructure. Not to mention the freedom of movement within European Union Member States on international and internal flights has made Malta an ideal jurisdiction for private aircraft registration. Maltese registered aircrafts are documented in a register by the Director-General whose authority falls under the Civil Aviation Directorate, this is the main authority responsible for aircraft registration. ## Who Is Qualified to Register an Aircraft in Malta? Although Maltese law is not limiting the types of aircrafts that are registered in Malta, the eligible registrants differ depending on whether the aircraft is used for commercial air services or for private purposes. The following individuals may register an aircraft in Malta: - The owner of the aircraft who operates the said aircraft; - The owner of an aircraft that is undergoing construction or temporarily not being operated or managed; or - The operator of an aircraft under a temporary title which gratifies the conditions which may be prescribed; or - The buyer of an aircraft under a conditional sale or title reservation which satisfies the conditions which may be prescribed and who is authorised thereunder to operate the aircraft mentioned. Such owner, operator or buyer is eligible to register an aircraft in Malta if the individual or company is either of the following: - The Government of Malta; - A citizen of Malta or a citizen of a Member State of the EU or of an EEA State, or Switzerland, having a place of residence or business in Malta, the EU, the EEA, or Switzerland, including a person sharing in the ownership of such aircraft by virtue; - Of the community of acquests subsisting between such person and a citizen as described above in whose name the aircraft is registered; - An undertaking formed and existing in accordance with the laws of Malta, of a Member State of the EU, of an EEA State, or of Switzerland and having its registered office, central administration and principal place of business within Malta, or the EU, or the EEA, or Switzerland, whereof not less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, or by any Member State of the EU or by persons referred to above, whether directly or indirectly through one or more intermediate undertakings. With regards to private aircrafts, a natural person who is a citizen of, or an undertaking established in a jurisdiction approved by the Minister by the Legal Notice ‘Aircraft Registrations (Approved Jurisdictions) Regulations, 2011’, for the purposes of the Act (termed “International Registrant” in the Act), provided it has legal capacity to own/operate an aircraft in terms of law, may register an aircraft under Maltese law. Once an application is submitted by an International Registrant from an approved jurisdiction, the applicant is required to appoint, prior to registration of an aircraft, a Resident Agent who shall be based in Malta and who will act as the channel of communication between the International Registrant and the Director-General and other Maltese government departments and authorities. The main advantages of registering aircraft in the Maltese jurisdiction are: - An attractive corporate tax system; - Robust legislative framework and an extensive network of double taxation treaties; - High standards of safety and security. - No withholding tax on lease payments where the lessor is not a tax resident of Malta; - Transparency of rights and interests in aircraft; - Competitive minimum depreciation periods for aircraft; - An extensive network of double taxation treaties; and - No taxable fringe benefits arising from the private use of the aircraft by non-resident individuals who are shareholders, employees or officers of companies involved in the international transport of goods or passengers. For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com. --- ## Malta Double Tax Agreements **Date:** 2019-04-30 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/malta-double-tax-agreements The Multilateral Instrument (‘MLI’) comes into force in Malta law as from the 1st of April 2019. Malta’s double tax agreements will have to be modified further to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (commonly referred to as the ‘MLI’) came into force under Malta law on 1 April 2019. The Office of the Commissioner for Revenue has made the synthesised text of any modified DTAs available on the Double Taxation Conventions, these are available for viewing on their official website (note the countries for which modified texts are available are marked with a “‡”). The Office of the Commissioner for Revenue informs that the text is being modified in joint agreement with the relevant competent authorities and that the modified texts will be made available as soon as agreement has been reached. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## VAT Treatment on a Yacht Lease in Malta **Date:** 2019-04-11 **Category:** Maritime **URL:** https://zeta-financial.com/news/vat-treatment-on-a-yacht-lease-in-malta The new guidelines relate to the lease of pleasure yachts by a lessor to a lessee, also clarifying the manner in which VAT is levied on the leasing of pleasure yachts at each chargeable event. The new rules issued by the Commissioner for Revenue are still based on Article 59A of the VAT Directive. take into consideration the place of supply of the leasing of pleasure yachts and the overall VAT incurred on the leasing of such yacht which may be reduced substantially depending on the use and enjoyment of the yacht when a yacht is supplied by a Lessor to a Lessee in Malta. No Maltese VAT is applied when the lessee makes use of the pleasure yacht outside of European territorial waters. An initial ratio calculation will be used for the first or first and second annual tax period depending on the start of the lease. The Guidelines stress the importance that the lessor maintains adequate records which includes documentary evidence and/or technical data to determine the ‘actual’ effective use and enjoyment ratio throughout the term of the lease. Furthermore, an adjustment of the difference will be made in the next VAT return. ## The New VAT Guidelines impose specific obligations that need to be fulfilled for the guidelines to apply: - A Malta registered company, is to own the private yacht and act as the lessor and is VAT registered in Malta. - The lessor will enter into a long-term yacht lease agreement (i.e. a lease covering more than 90 days’ continuous possession or use) with a non-taxable third party (Maltese/non-Maltese). - The conditions of the lease, including its duration and the consideration to be paid by the lessee to the lessor, shall be agreed contractually between both parties. - The yacht must be placed at the disposal of the lessee in Malta (effective from the commencement of the lease agreement). - Prior approval in writing must be sought from the Maltese VAT department approving the application of Maltese VAT based on effective use and enjoyment. - That the effective use and enjoyment of the yacht in EU territorial waters is evidence-based. The lessor is required to obtain from the lessee documentary and/or technological data to demonstrate the yacht’s movements within/outside EU waters; - An annual declaration is to be submitted by the lessor with the Commissioner for Revenue within the prescribed timeframe. The 2019 Guidelines may be accessed here for ease of reference. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Malta's Implementation of the EU Anti-Tax Avoidance Directive **Date:** 2019-02-12 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/maltas-implementation-of-the-eu-anti-tax-avoidance-directive Following the adoption of the Anti-Tax Avoidance Directive by the European Council, as with the other European Jurisdictions, Malta has been bound to implement a number of provisions in its tax legislation to ensure compliance thereto. Malta’s new regulation implementing the Council Directive (EU) 2016/1164 of 12 July 2016 in relation to tax avoidance practices that directly affect the functioning of the internal market (‘ATAD Implementation Regulations’) come into force on 1 January 2019. The ATAD Implementation Regulations is meant to deter tax avoidance and associated artificial strategies, abuse and debt arrangements intended to minimise tax. The said Regulation shall apply to all companies, trusts and similar arrangements that are subject to tax in Malta, as well as to entities that are not resident in Malta but have a permanent establishment in Malta that are subject to tax in Malta. Some of the crucial elements introduced by the said Regulations are as follows: - A general anti-abuse rule also referred as GAAR Rule. The GAAR is set to regulate aggressive tax planning. - A Controlled Foreign Company (CFC) rule, also referred to as the CFC Rule, with the purpose of deterring profit-shifting to a low- or zero-tax country, which requires that an entity, or a permanent establishment, of which the profits are not subject to tax or are exempt from tax, shall be treated as a CFC when certain conditions are met. - A new tax policy that includes an interest limitation to deter artificial debt arrangements intended to minimise tax. Exceeding borrowing costs shall be deductible in the tax period in which they are incurred only up to 30% of the taxpayer’s earnings before interest, tax, depreciation and amortisation (EBITDA). In line with the EU Directive, Malta’s new Regulation also introduces an exit taxation rule directed at preventing companies from avoiding tax when relocating assets. This tax applies to capital gains at an amount equal to the market value of the transferred assets at the time of exit of the asset. This provision shall come into force on 1 January 2020. Malta has therefore embraced the same anti-tax avoidance regimes applicable in other EU member states, but despite the adoption of such regulations, the Maltese general tax system and the current rules on the taxation of company profits, including the significant tax refunds to shareholders based on the imputation tax system, remained unchanged allowing Malta to retain its distinct advantage in terms of competitivity and efficiency. ## How can Zeta help you? Zeta is a lean, highly flexible and ambitious financial services company. It has assembled a multi-disciplinary team focused on providing: - Tax-efficient management of your financial affairs. - Tax-efficient investment structures; - Advice and arrangement of tax-advantaged products; - Advising on the incorporation and functioning of the holding and sub-holding companies; - Advice and administration of trust arrangements; - Tax compliance; - The tax treatment of split-ups and liquidation transactions; - Structuring collateral and guarantees.quality services for anyone interested For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Important Update on UCITS and AIF Depository Rules **Date:** 2019-01-31 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/important-update-on-ucits-and-aif-depository-rules The MFSA has issued a circular to Collective Investment Schemes and Depositories notifying them of upcoming changes covering the legal requirements of custodians under the UCITS and AIFMD Directives. This follows on from the publication in May 2018 of two Commission Delegated Regulations concerning the safe keeping duties of depositories and related amendments published in October 2018. The proposed changes are designed to strengthen the protection of client assets held in custody by prohibiting the co-mingling of client and depository assets and addressing the frequency of reconciliations. Also, as anticipated in the draft regulations, a new requirement has been introduced when the depository function has been delegated to a third party outside the member state. In such cases, independent legal advice must be sought in relation to the host country’s laws on insolvency and account segregation. The changes outlined above will come into effect in April 2020. Click here to read the full circular issued by the MFSA dated 14th January 2019 with reference to the Commission Delegated Regulations in question. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## UK FCA Temporary Permissions Regime **Date:** 2019-01-17 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/uk-fca-temporary-permissions-regime As the March 29 deadline for Brexit comes ever closer, parties with interests in the matter must step up their preparations for this event. By means of a circular dated 11 January, The Malta Financial Services Authority (MFSA) is drawing the attention of fund managers and investment firms licensed in Malta (Maltese Licensed Entities) that are currently passporting into the UK that they need to apply to the UK Financial Conduct Authority (FCA) under the Temporary Permissions Regime (TPR) so that they may carry on conducting their business within the scope of their current permissions in the UK. Maltese Licensed Entities currently passporting into the UK and intending to continue offering their services in the UK need to apply for the TPR through the FCA ‘Connect system’. This notification will expire on March 28, on the eve of Brexit. Passporting is an EU system that allows banks and financial services companies to operate in any EU and EEA countries if they are already authorised to operate in any one of them. There are nine such passports and together these form the framework for the EU single market in financial services. A member state acquires each passport by adopting a particular regulatory framework related to financial services into national law. Once such a regulatory framework is adopted, a member state achieves the passport related to that framework and firms licensed in that member state to operate under that regulatory framework can carry out the same operations in any other state of the EU and the EEA with minimal additional authorisation. States outside the EU do not have the opportunity of adopting these passports although there is a ‘third-party regime’ that gives firms of countries that the EU accepts has equivalent regimes to such a passport, to offer some services in the EU, but these are heavily limited in scope and extension. Once Brexit takes place, not only will the UK will fall out of this system, affecting not only the ability of its businesses to offer their services in the UK, but EU businesses too will lose their passporting rights into the UK. Unless Maltese Licensed Entities apply for the TPR, they will be unable to continue offering their services in the UK. Click here to read the full circular issued by the MFSA dated 11th January 2019 with reference to the UK FCA Temporary Permissions Regime. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## DLT Legislation **Date:** 2018-10-05 **Category:** General **URL:** https://zeta-financial.com/news/dlt-legislation Over the past year, the main stakeholders of Malta, including its political parties, parliament, government, and the financial, corporate and technological sectors have shown increasing interest in developing the Maltese islands into a global hub for blockchain and Distributed Ledger Technology industries. In July 2018, the Maltese parliament passed into law three bills to regulate the DLT sector, thus setting up the regulatory environment that is crucial for the sector. The three new acts are the Malta Digital Innovation Authority act (MDIA), the Innovative Technology Arrangements and Services act (ITAS) and the Virtual Financial Assets (VFA) act. The MDIA act came into force on 18 July 2018 and through its powers the Malta Digital Innovation Authority was set up to promote government policies related to DLT and technological innovation, to carry out regulatory oversight and ensure compliance with international obligations while offering support to users and other parties interested in the sector. The ITAS act focuses on innovative technology arrangements and services, with particular reference to blockchain, DLT, and smart contracts and works hand-in-hand with the MDIA act to allow for MDIA oversight over the industry. The VFA act, on the other hand, is concerned with the regulation of virtual financial assets and related matters, including cryptocurrencies, exchanges, ICOs, and services related to these activities. After agreement by the MDIA, the Malta Financial Services Authority (MFSA) and the Junior Minister for Financial Services, Digital Economy & Innovation, the Hon. Silvio Schembri, the Government of Malta has now announced that the ITAS and VFA acts will come into force on 1 November 2018. Once these two acts come into force, Malta will have a tripartite legislative structure to support, oversee, and regulate all activity in the sphere. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Consultation Paper on the VFA Rules **Date:** 2018-09-07 **Category:** General **URL:** https://zeta-financial.com/news/consultation-paper-on-the-vfa-rules The Malta Financial Service Authority (MFSA) has recently published a consultation document on the Virtual Financial Assets (VFA) rules for VFA providers. This consultation, published on 31 August 2018, is part of an ongoing series of consultations leading to the introduction of a “Virtual Financial Assets Rulebook”. This rulebook will be divided into three chapters covering the Virtual Financial Assets rules for (1) VFA agents, (2) Issuers of Virtual Financial Assets and (3) VFA service providers. This latest consultation paper is concerned with the rules for VFA service providers. This consultation document therefore deals with Chapter 3 of the VFA rulebook concerning VFA service providers and their licencing and regulation according the VFA Act (“the Act”). The document proposes to divided this chapter in four sections consisting of (1) The high-level principles guiding VFA service providers in the provision of their VFA activity in or from within Malta, (2) The licensing requirements and respective licensing process for VFA service providers, (3) The ongoing obligations that VFA Service Providers must adhere to, and (4) Enforcement and misconduct by VFA Service Providers. The document makes note of Article 62(1)(c) of the Act which provides for transitory provision in respect to VFA Service Providers. This article states that any person providing a VFA service with the meaning found under the Act must apply to the competent authority for licence within twelve months from the date that this Act came into force. The proposals for the high-level principles require VFA service providers to act in an ethical manner, and in the best interest of Malta. They are required to act honestly, fairly, professionally and in full compliance with the Act and all relative regulations, rules, laws and regulatory requirements, while co-operating the MFSA openly and honestly, providing it with the information it may require. The second set of proposals, concerned the licensing requirements for VFA Service providers outline, among other things, the four licence classes, the requirement to appoint a VFA agent, the possibility that the MFSA may require the appointment of a Systems Auditor, the criteria taken into consideration by the MFSA prior to granting a licence, as well as initial capital requirements. It also outlines processes for the application for, revision, suspension and surrender of a licence, together with the approval and departure of appointed persons. The third section deals with ongoing obligations that VFA service providers must adhere. Among these are (i) organisational requirements, [ii] prudential requirements; [conduct of business obligations], together with [iv] record-keeping, reporting and disclosure requirements. This section also sets out supplementary conditions for VFA exchanges. The last set of proposals covers enforcement and sanctions, including administrative penalties and other sanctions. Where a VFA agent breaches or infringes a rule, the MFSA has, by virtue of the authority granted to it under Article 48 of the Act, can impose administrative penalties, without recourse to a court of law, up to a maximum of EUR 150,000. In determining whether to impose a penalty and the one to the case, the MFSA shall be guided by the principle of proportionality. The Consultation paper can be found here. The MFSA are encouraging those interested to provide their feedback to the Malta Financial Services Authority by no later than the 14th of September 2018. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## MFSA's Rules for Virtual Financial Assets Agents **Date:** 2018-08-02 **Category:** General **URL:** https://zeta-financial.com/news/mfsas-rules-for-virtual-financial-assets-agents The Malta Financial Services Authority (MFSA) is currently preparing the rules underpinning and substantiating the Virtual Financial Assets (VFA) Act and the VFA Regulations. These rules will provide further guidelines and regulations to operators int is field of financial services. The MFSA is working on the introduction of a rulebook with the title of “Virtual Financial Assets Rulebook”. This rule book will be subdivided in to the following three chapters: Chapter 1 – Virtual Financial Assets Rules for VFA Agents Chapter 2 – Virtual Financial Assets Rules for Issuers of Virtual Financial Assets Chapter 3 – Virtual Financial Assets Rules for VFA Service Provider Around the end of July 2018, the MFSA released a consultation document to obtain industry feedback on chapter one of the proposed rulebook. For this reason the proposals outlined in this consultation document are not final and are subject to change depending on the feedback. Apart from a statement on scope and principles, the consultation document is divided into three main parts, outlining in turn the requirements for issuers, another one overseeing initial VFA offerings and trading on DLT exchanges and final one concerned with enforcement and sanctions. The general requirements for Issuers were set out as follows: - An issuer must be a legal person formed under any law in force in Malta. - The Issuer must have a board of administration to ensure that the issuer complies with its obligations under the rules and guidelines issued by the MFSA. - It is incumbent upon the board to act honestly and in good faith in the interests of the issuer and investors, and it is expected to show exercise reasonable care, skill, and diligience and conform to the standards of ethical behaviour. - An issuer must also appoint and have in place at all the times the following functionaries: a systems auditor, a VFA agent, an auditor, and a money-laundering reporting officer. - An issuer also needs to ensure a cyber-security framework and keep adequate documentation. The rules overseeing initial VFA offerings and trading on DLT exchanges reaffirm the principle that no issuer shall offer VFA to the public in or from within Malta, or apply for their admission to trading on DLT exchange without drawing up a whitepaper which complies with the requirements of the VFA act and is regiserest with the MFSA in accordance with the VFA act. If an issuer wants to issue VFA offerings or do so and apply for their admission to trading on a DLT exchange, the issuer shall submit through its VFA agent, the whitepaper, the copy of the Financial Instrument Test, confirmation from the Systems Auditor tha tthe technology arrangements are compliant with the MDIA’s standards, a copy of the issuer’s audited annual accounts for the last three financial years, and consolidated accounts for the same time period of the group if the issuer forms part of such group, a certified copy of the its constitutional document, and the applicable registration fee. The consultation period for this document closes on 13 August 2018. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## The Impact of the Fifth Anti-Money Laundering Directive **Date:** 2018-07-19 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-impact-of-the-fifth-anti-money-laundering-directive Barely a year following the implementation of the 4th Anti-Money Laundering Directive, the European Parliament has adopted a new directive which aims to add further layers to the European anti-money laundering framework. The 5th Anti-Money laundering directive has been adopted and entered into force on 9 July 2018 and should be fully implemented into national law by the various Member States into their national legislation by 10 January 2020. The key points of strengthen set by the 5th AML Directive are: • Improving transparency on the real owners of companies and trusts to prevent money laundering and terrorist financing via opaque structures; • Improve the work of Financial Intelligence Units interconnecting the beneficial ownership registers at EU level; • tackle terrorist financing risks linked to anonymous use of virtual currencies and of pre-paid instruments; • Improve the cooperation and enhancing cooperation between financial supervisory authorities, anti-money laundering supervisors and with the European Central Bank; • Broadening the criteria for assessing high-risk third counties and ensure a common high level of safeguards for financial flows improving checks on transactions from such countries. With the 5th Anti-Money Laundering Directive, the beneficial ownership registers for legal entities should be public in all Member States. This wider access to part of the beneficial ownership information will be preventing the misuse of legal entities for money laundering and terrorist financing purposes and enhancing public scrutiny. The national registers on beneficial ownership information will be interconnected directly to facilitate cooperation and exchange of information between Member Countries. In addition, Member States will have to put in place verification mechanisms of the beneficial ownership information collected by the registers to help improve the accuracy of the information and the reliability of these registers. The Directive also extends the scope of the European Union’s Regulatory Authority to Virtual Currency Transactions. In fact, the maximum monthly payment transactions for remote payment transactions for general purpose anonymous prepaid cards, it is being reduced from €250 to €150. Furthermore, the maximum amount of money stored in such cards is not to exceed this threshold. Granting anonymity on electronic money products will be possible only in two situations: (i) when customers use their prepaid instrument directly in the shop for a maximum transaction amount of EUR 150; (ii) when customers carry out an online transaction with a prepaid card below EUR 50. The rules set by the 5th AML Directive are extended to entities which provide services that are in charge of holding, storing and transferring virtual currencies, tax related services offered by external accountants and tax advisors, and persons trading in in works of art. These new actors will have to identify their customers and report any suspicious activity to the Financial Intelligence Units. Member States will be required to set up centralised bank account registers or retrieval systems to identify holders of bank and payment accounts. The Commission will work on the technical aspects to ensure the interconnection of such registers or retrieval systems. With respect to enhancing cooperation between financial supervisory authorities, the European Commission has already set up a joint working group to support such exchange of information, with the Central Bank, given that risks exposure to money laundering can pose the financial stability of a bank at risk. Moreover, new criteria have been added under which to assess high-risk third countries, including transparency of beneficial ownership. Member States will have to ensure that the sectors dealing with countries presenting strategic deficiencies in their Anti-Money Laundering and Counter Terrorism financing regimes, apply systematic enhanced controls on the financial transactions from and to countries listed by the European Commission. In addition, the listing of the Commission will include third-countries with no appropriate and dissuasive sanctions, with low transparency on beneficial owner registration or which do not cooperate nor exchange information. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Securitization Pros and Cons **Date:** 2018-06-11 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/securitization-pros-and-cons Securitization is a financial process that takes an asset of some kind and turns it into a security, which is a tradable financial asset. The assets that provide the basis for securitization are fundamentally those that generate receivables, essentially debt owed to a company by its debtors and customers. Receivables comprise capital and periodic interest. Assets generally used for securitization include loans (student loans, car loans, credit card loans etc.) and mortgages. When a company decides to securitize such assets, it takes the debt that it is owed and puts it into a different entity, usually a trust or a special purpose vehicle (SPV) that it then sells on to another investor or group of investors called the master owner. The originating company receives payment for transferring this debt to the master owner and is now out of the transaction. The SPV now in the hands of the master owner contains a large number of assets of some type or other that all generate receivables, and therefore income. These assets are divided into layers of securities or bonds called tranches. Each tranche comes with a risk rating, from the lowest risk rating of AAA to increasingly higher risk, until the riskiest tranche of all, which is the equity tranche. These tranches are then sold to investors according to their risk appetite. Since the SPV comprises assets that generate periodic income, holders of these tranches have a claim to the income generated by the assets on which their securities are based. However, the lower the risk rating of a tranche, the lower the income it generates, but its owner is the first to receive payment. The higher the risk rating of a tranche, the higher the income it generates, but the further down the line its owner has to wait to receive income on his investment. This becomes a factor when, in a poor economy, the assets contained by an SPV are not all generating the income that they should be generating. Of course, an investor does not have to keep the securities in which he has invested. He can also sell these securities on their particular markets. ## The Advantages of Securitization Perhaps the greatest advantage of securitization is that it creates liquidity in the marketplace for the assets being securitized. This helps a company with debt on its books remove that debt from its balance sheet and acquire new funding in place of that debt. This is done by transforming that debt into securities through the process described above. As a result, the company would have received liquid funds in exchange for the debt that it has moved into securities. Even more attractively, removing that debt of its balance sheets may help to raise that company’s credit rating, thus allowing it to raise funds more cheaply than if that debt had remained on its balance sheets. However, transforming that debt into securities need not mean removing the account associated with that debt. Hence, these companies remove the risk of the debt, turn it liquid, but still earn income through the maintenance of that account. Another advantage is that these debts can be layered into different tranches with different risks. These offer great choice to investors as through these tranches investors have access to returns and risk that more closely match their appetites. For example an ultra-cautious investor may choose to invest in securities rated at AAA, meaning that they will be the first to receive a return on income, but with the lowest rate of that income. An investor that has a higher risk appetite may choose to invest in BBB securities, meaning that they will have to wait until the investors in higher rated securities have been paid off, but in return they will receive a higher rate of income of their securities. Securitization also has advantages for borrowers. Given that securitization allows companies to efficiently use the debt on their books and make it liquid, while giving investors a range of attractive options for investment, securitization means that these debt assets are valuable and attractive. Hence, companies compete in offering loans to borrowers and this competition leads to all sorts of advantages for these borrowers, including more competitive rates, cheaper financing, more choice and quicker processing times. Essentially, with securitization, companies compete for the custom of borrowers, whose loans they can transform into securities to enjoy the benefits outlined above. ## Disadvantages and Risks Securitization is an exceptionally clever process that has very significant benefits for practically everyone involved. It takes debt off a balance sheet and replaces it with liquidity. It provides third-party investors with clearly rated investments that pay according to the risk that they are willing to shoulder. And it leads to greater choice and competitive rates for borrowers, whose loans are now treated as far more of an asset than as a liability. However, the complications of the process can lead to opacity that can severely raise the risk to investors in the securities themselves. Nonetheless, with proper oversight and expertise, these risks can be so carefully managed that they are reduced to the absolute minimum. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## UK Accused of ‘Modern Colonialism’ by Overseas Territories **Date:** 2018-05-25 **Category:** Multi-Family Office **URL:** https://zeta-financial.com/news/uk-accused-of-modern-colonialism-by-overseas-territories A cross-party amendment to the Sanctions and Anti-Money Laundering Bill in the UK’s House of Commons was accepted after rebel goverment MPs supported the proposed amendment. This amendment, brought by Labour MP Margaret Hidge and Conservative MP Andrew Mitchell on 1 May 2018, requires the UK’s overseas territories to introduce public registers of beneficial ownership by the end of 2020. If these overseas territories fail to introduce such public registers, the UK government will issue an order-in-council to force these territories to introduce such a public register. ## Overseas Territories and the Order-in-Council The UK has fourteen territories that remain under its jurisdiction and sovereignty. They are remnants of the British Empire that have, for one reason or another, remained British terrorities. These territories are Akrotiri and Dhekelia, Anguilla, Bermuda, British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn Islands, Saint Helena, Ascension and Tristan da Cunha, South Georgia and the South Sandwich Islands, and Turks and Caicos Islands. Those of these territories that are permanently inhabited have internal self-government, but they remain under the jurisdiction and sovereignty of the UK. The UK therefore has the power to force them to adopt UK legislation even though these territories are self-governing. To do so, the UK government would use an order-in-council, legislation in the name of the Queen by and with the advice of the Privy Council. Since the Queen is also the Queen of the UK’s overseas territories, this order-in-council will be binding on them despite their legislative autonomy. ## Dispute Of the British overseas territories, a number of them are reputed to be opaque offshore financial centres. These include Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Gibraltar. There are concerns by UK MPs that these territories are enabling corrupt governments around the world to hide away money stolen from their citizens. Hence, this amendment to make these territories transparent and open to scrutiny. Nonetheless, this amendment has not gone down well with these territories. In fact, on 2 May, Cayman Islands Premier Alden McLaughlin said that the “imposition of legislation, through powers that date back to the colonial era, over and above the wishes of the democratically elected legislative bodies of the Overseas Territories represents a gross affront to the constitutional relationship we currently have with the United Kingdom.” Be it as it may, a majority of UK MPs was determined to pass this amendment and the current Conservative government was powerless to stop it. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Consultation Paper on the Financial Instrument Test **Date:** 2018-04-20 **Category:** General **URL:** https://zeta-financial.com/news/consultation-paper-on-the-financial-instrument-test On 13 April 2018, the Malta Financial Service Authority (MFSA) published a circular to the industry about a consultation paper on the Financial Instrument Test. The objective of this test is to determine whether a Distributed Ledger Technology (DLT) asset, depending on its features, falls within the sphere of either the traditional European and local financial services legislation, or within the sphere of the proposed Virtual Financial Assets Act (VFAA), or is otherwise exempt from regulation. To this end the MFSA published a consultation paper on the Financial Instrument Test, with the consultation period remaining open until 4 May 2018. The MFSA’s consultation paper on the Financial Instrument Test is a 44-page document that presents an analysis of the definitions of the financial instruments listed under Markets in the Financial Instruments Directive (MiFID), as well as their relevance and implications to DLT assets. The paper also outlines the methodology used in for the test, as well as considerations to be taken within the context of EU and national legislative frameworks. The document is divided into five sections. Apart from the introduction and conclusion, these include sections on the Financial Instrument Test, on the Financial Instrument Test and the Proposed VFAA, and on the Financial Instrument Test and the Existing Legal Framework. The objective of the test is to determine how a DLT asset should be classified. Under the proposal, the test will consist of two stages. The first stage of the test will determine if a particular DLT qualifies as a virtual token (VT). If it does not qualify as a VT, the second stage of the test will assess if the DLT asset qualifies as a financial instrument as defined by Section C of Annex 1 to MiFID. If it fails this test, the DLT will qualify as a Virtual Financial Asset (VFA) under the VFAA. The test will apply to issuers of ICOs conducted in or from within Malta. The purpose of this is to determine if the respective activity falls within applicable EU and respective national legislative and regulatory framework or otherwise. Moreover, there may be entities intending to provide any service and/or perform any activity related to a DLT whose classification has not been determined for any reason. In such cases, these entities will need to conduct this test on that asset. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## The Benefits of the New GDPR **Date:** 2018-04-10 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/the-benefits-of-the-new-gdpr Malta’s new General Data Protection Regulation (GDPR) will come into effect on 25 May 2018, and when it does it will replace the old Data Protection Directive (DPD). With the new GDPR regulations, Malta will become fully compliant with European data protection guidelines, and personal data will acquire extremely strong protection from potential risks and abuse. Fundamental elements of the GDPR framework include data portability, by which individuals have the right to move their data from one organisation to another, data breach notification, enhanced security by design and default, enhanced territorial scope, new requirements on entities involved in data processing, the right to be forgotten, Data Protection Impact Assessments, accountability and data governance, and seriously debilitating fines for violations when they happen. The GDPR regulations should go a long way in protecting individuals from cavalier and depredatory attitudes to their personal data by businesses and corporations. These regulations put added onus on businesses to make the data of their clients as secure as possible and ensure that this data is under the ultimate control of their clients. Moreover, it increases transparency and accountability in all practices related to personal data. While the greatest beneficiary of the new GDPR framework is the individual, businesses and corporations, despite the undeniable challenges of implementing this framework, still stand to benefit. In particular, given the immense value of data in a global economy that is increasingly digital, these new regulations should provide a major incentive to businesses and corporations to update their infrastructure and practices, and this will lead to increased streamlining and therefore efficiency. Moreover, the adoption of these regulations will endow organisations with extremely effective systems to meet the increasing requirements of transparency and auditability, even in areas of action beyond data protection. The GDPR should therefore bring great benefits to all stakeholders sharing and processing data. Although the adoption of these regulations by those entities to whom these regulations are applicable is no trivial task, by adopting them they will come to benefit from highly enhanced security and efficiency, thus protecting themselves from black swan events that may have extremely deleterious effects on their operations. Above all, individuals may rest easy that their data will be protected in the most rigorous manner possible. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Corporate Tax Avoidance **Date:** 2018-03-21 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/corporate-tax-avoidance The Council of the EU has just reached an agreement to work on a directive intended to tackle cross-border tax planning. This agreement was reached on 13 March 2018 at a meeting of the Economic and Financial Affairs Council. The fundamental idea of the directive is to pre-empt tax planning schemes detrimental to the interests of the EU’s member states before they are actually implemented. The directive, which is currently still in draft, has two components. It requires intermediaries involved in tax planning, such as tax advisors, accountants and lawyers, to report schemes that may be considered aggressive in terms of cross-border tax planning. These intermediaries will be required to report such dubious schemes to their national authorities. Tax advisors and other intermediaries who do not comply with these regulations will suffer penalties imposed by their national authorities. The second component of this directive requires member states to exchange the information received through such reports by means of a centralised database. The measure will greatly increase the ability of the EU’s member states to assess the potential risk of aggressive tax planning schemes across borders, and block them before they are implemented. The EU deems this directive necessary in the light of the increasing sophistication of tax planning schemes that are implemented across multiple borders The very sophistication of these schemes endow them with a level of opacity that has hitherto been very hard to penetrate. Vladislav Goran, the minister for finance of Bulgaria, which currently holds the presidency of the Council said that the key to the EU’s strategy for combating tax avoidance and tax evasion was to enhance transparency. The agreement will be adopted without further discussion once the text has been finalised in all official languages. Member States will have to adopt it into their national law by 31 December 2019. The new requirements will then come into force on 1 July 2020. Member States will be obliged to exchange information every three months. The exchange of information is required to take place within one month of the end of the quarter in which the information was filed. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Resolutions on Libya and Related Measures **Date:** 2018-03-21 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/resolutions-on-libya-and-related-measures The illicit exploitation of Libya’s natural resources has been explicitly condemned by the United Nations Security Council (UNSC). At first referring to attempts to illicitly export crude oil from Libya, the condemnation was later extended to cover the exploitation of all of Libya’s natural resources. The UNSC is concerned that the illicit exploitation of Libya’s natural resources supports the armed groups and criminal networks threatening the peace, stability and security of Libya. The UNSC has encouraged regional states, including Libya, to cooperate in stabilising this country. Cooperation should include, but is not restricted to, the prevention of illicit acts deemed by the UNSC to contribute to the destabilisation of Libya. The UNSC reaffirmed the importance of international support for Libyan sovereignty over its territory and resources, and extended measures previously adopted in duration, as well as scope. The UNSC extended previous measures explicitly to all vessels involved in the smuggling of Libyan oil products out Libya. The President of the United States of America used the UNSC Resolutions as a basis for Presidential Executive Order 13726, by which persons involved in any activity related to the aforementioned oil smuggling, or the smuggling of any other natural resource out of Libya, might be subjected to an asset freeze. The United States Office of Foreign Assets Contral (OFAC) used Executive Order 13726 to sanction 6 individuals, 24 entities and 7 vessels that it had publicly identified as involved in this smuggling of Libyan resources out of Libya. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Malta Gaming Authority – A New Gaming Bill in the Maltese Parliament **Date:** 2018-03-16 **Category:** Advisory and Structuring **URL:** https://zeta-financial.com/news/malta-gaming-authority-a-new-gaming-bill A new gaming bill has been tabled in the Parliament of Malta. On 13 March 2018, the Hon. Silvio Schembri, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation, tabled a motion in Parliament for the first reading of a new gaming bill. The purpose of this new gaming bill is to repeal all extant legislation on this activity and replace it with one primary act. In time, the act is expected to be accompanied by subsidiary legislation covering gaming regulation, together with a set of technical directives and guidelines currently under consultation. The Hon. Schembri said that the bill marked a major step in streamlining and encompassing the governance of all gaming services offered in and from Malta and across all channels under the competence of the Malta Gaming Authority. He went on to say that the government wanted to ensure that the gaming industry continued to be run responsibly, fairly and free from criminal activity. Thus the Maltese jurisdiction will provide a safe and well-regulated environment where the industry can also develop and innovate. The bill ensures the Malta Gaming Authority (MGA) has all the necessary resources and powers to protect consumers and regulate the sector effectively. It will strengthen the MGA’s compliance and functions of enforcement in line with recent developments in Anti-Money Laundering and Funding of Terrorism obligations. However, it also streamlines the structure, thus reducing unnecessary regulatory burdens without losing effectiveness in achieving its objectives. Further elements in this bill include replacing the current multi-license system with just two licences, a Business-to-Consumer (B2C) licence, and a Business-to-Business (B2B) licence. Moreover, the bill includes increased protection for consumers, but also assistance for operations in distress, including support for winding down such an organisation with the least risk possible. A significant benefit is the exemption of B2B licensees from gaming tax. Malta has become one of the leading and most respected European jurisdictions in the sector of gaming. Through this bill, Malta will retain its competitive edge in this sector, ensuring that operations setting up in Malta will enjoy unprecedented benefits for their activities. You may view the draft bill on the proposed legislation here. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Amendments to the EU's List of Non-Cooperative Jurisdictions in Matters of Taxation **Date:** 2018-03-14 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/amendments-to-the-eus-list-of-non-cooperative-jurisdictions On 13 March 2018, the Council of the EU published its latest amendments to its list of non-cooperative jurisdictions in matters of taxation. Changes include the removal of Bahrain, the Marshall Islands and Saint Lucia, and the addition of the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands. These changes were made in the light of commitments made by listed jurisdictions and an assessment of jurisdictions for which no listing decision had yet been taken. Bahrain, the Marshall Islands and Saint Lucia were removed because they made specific commitments to tackle and remedy EU concerns. These commitments were judged sufficiently reliable to warrant the removal of these three jurisdictions from this list. Tax advisors working in these jurisdictions will now be able to offer their clients services that are in conformity with the EU’s policies and practices. However, the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands were added to the list since, in spite of letters requesting commitments to settle EU concerns, no commitment to do was forthcoming from these jurisdictions. There are currently nine jurisdictions on this list. Apart from the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands, the other six non-cooperative jurisdictions are American Samoa, Guam, Namibia, Palau, Samoa, and Trinidad and Tobago. The EU is concerned that lax regulation in these jurisdictions may offer scope for tax planning schemes deleterious to the EU’s member states. The EU’s list of non-cooperative jurisdictions is intended to promote good governance in taxation, and minimise the potential for crime and fraud related to tax, as well as tax avoidance of all sorts. The EU encourages jurisdictions on the list to tackle its concerns and make the changes requested of them since, without such changes, their practices may lead to loss of revenues for the EU’s member states. The EU does not exclude taking defensive measures against jurisdictions on this list unless at least commitments to tackle the EU’s concerns are forthcoming. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## AML and GDPR Compliance in the Financial Services Industry **Date:** 2018-03-07 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/aml-and-gdpr-compliance-in-the-financial-services-industry The Fourth Anti-Money Laundering Directive has been transposed into Maltese law by virtue of amendments to the Prevention of Money Laundering Act, the enactment of new regulations under said act, and through the publication of various regulations intended to set up beneficial ownership registers for companies, trusts, associations, foundations and other legal entities. The General Data Protection Regulation was published in the Official Journal of the European Union on 4th May 2016 and will be applicable in its entirety as from 25th May 2018. The GDPR will have direct legal effect throughout the EU, without requiring transposition into national legislation. Therefore, from 25th May 2018, any organisation established within the European Union that holds, stores or uses personal data will be required to comply with the new rules. While the GDPR protects people and their human rights by defending privacy of personal information, the 4AMLD is in favour of transparency and disclosure of certain information. The introduction of a register of beneficial owners is one of the most controversial aspects of the relation between the two regulations. The interaction between the AMLD and the GDPR will have a significant impact upon the financial services industry. Finding the balance between data protection and AML requirements while Incorporating Data Privacy into Anti-Money Laundering procedures is the main challenge that Financial Services will have to face in consideration of the heavy penalties attendant upon breaches of these laws. In connection with the requirements imposed by the two regulations, concerned entities may want to consider the installation or upgrade of screening tools. In fact, the implementation of regulatory technology in CDD processes should not only be intended for AML compliance but should also take into consideration requirements under the GDPR. The 4AMLD and the GDPR should be seen as a good opportunity to revisit the amount and extent of personal data collected and retained for AML purposes. The old policies and modus operandi should be reviewed and amended to ensure that the data being processed is limited to that which is required at law. This will not only entail a change in systems but will require, more importantly, a cultural change that will force operators to discard a perfunctory approach to AML compliance. While the operators of the financial services industry are obliged to set out proper measures to ensure compliance both with GDPR and AML regulations, it is an undisputed fact that these regulations are opposed in intent and that therefore the process of compliance will not come without its challenges. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## The World Calls for Better Cryptocurrency AML Policy **Date:** 2018-03-04 **Category:** General **URL:** https://zeta-financial.com/news/the-world-calls-for-better-cryptocurrency-aml-policy The Financial Action Task Force (FATF) have been asked by 35 countries and the European Commission to revise anti-money laundering policies pertaining to cryptocurrencies. The FATF, who are responsible to regulate the global anti-money laundering standards has promised to present a revised AML Policy with better countermeasures at the upcoming G20. FATF had earlier observed the many benefits that the admissable use of cryptocurrencies offers such as - increased payment efficiency and lower transaction costs; - Cryptocurrencies also facilitate international payments and - have the potential to provide payment services to populations that do not have access or limited access to regular banking services. FATF stated that the other characteristics of virtual currencies, coupled with their global reach, present potential AML/CFT risks, such as: - the anonymity provided by the virtual currencies trade on the internet - the limited identification and verification of participants - the lack of clarity regarding the responsibility for AML/CFT compliance, supervision and enforcement for these transactions that are segmented across several countries - the lack of a central oversight body For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Zeta has Incorporated its Own Securitisation Cell Company **Date:** 2018-02-20 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/zeta-has-incorporated-its-own-securitisation-cell-company Zeta has incorporated it’s own SCC by the name of Pomegranate SCC p.l.c. We promote Pomegranate to third parties who may be looking to undertake a securitisation transaction without incurring additional time and costs required for the purposes of incorporating, setting up and maintaining a dedicated securitisation vehicle or an SCC. To this end, Pomegranate offers a securitisation cell platform with a robust and dependable internal management structure comprising directors having the requisite knowledge and experience in securitisation business and working closely with third party service providers as may be required to secure maximum efficiencies and compliance. ## Securitisation Securitisation is the process of taking an illiquid asset, or group of assets, running them through a complex process of financial engineering and turning them into a security, which is a financial instrument that holds some type of monetary value. Illiquid assets that can be securitized include loans, such as mortgages, goods, or liabilities. Though illiquid, these generate a predictable cash flow, or the promise of future cash flow. Securitisation turns these assets into securities and then sells them on to investors. ## The Process of Securitisation Typically, the process is started when the Originator transfers these assets, known as “securitisation assets” to another party, called the “Securitisation Vehicle” (SV) against consideration or payment. The SV uses its acquisition to create financial instruments and then offers them to the public on markets pertinent to the instrument in question. ## Securitisation and Malta Malta offers a favourable environment for securitization, one that has enjoyed the support of governments and authorities for a long time. Malta drafted specific legislation to make Malta an extremely competitive jurisdiction for securitisation. Malta offers many possibilities to SVs for achieving tax neutrality. There are no undue burdens and regulations on Originators and a number of protections for the same. The SV itself is covered by a number of protections limiting action and litigation. There is no limitation on what may consist of an asset suitable for securitisation through securitisation transfers or instruments issued by SVs must exceed €1,000,000. Given such benefits, Malta’s reputation as a hospitable climate for securitization has grown dramatically, and Malta is now reportedly the fastest growing securitisation jurisdiction in the EU. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Establishing a Collective Investment Scheme in Malta **Date:** 2018-02-13 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/establishing-a-collective-investment-scheme-in-malta There are several types of investment funds that can be set up in Malta. These range from the traditional UCITS fund to Professional Investor Funds (PIFs), Alternative Investment Funds (AIFs), Private Funds and the recently launch Notified Alternative Investment Fund (NAIF). UCITS funds, which tend to target retail investors, have the highest regulatory protection. They usually have a large target AUM to justify high set up costs and are subject to a number of restrictions, including, importantly, the requirement to diversify assets. As the name implies, PIFs target wealthy or sophisticated investors. As such, the regulatory rules governing PIFs are lighter resulting in lower setup costs and a faster time to market. Most investment funds in Malta are PIFs. Funds investing in non traditional assets classes, which includes most hedge funds, private equity funds and real estate funds, would be set up as AIFs. Private Funds are intended for no more than 15 investors who are limited to ‘family and friends’ of the sponsor or a defined group of persons known to the sponsor. NAIFs are Alternative Investment Funds which have an external manager licensed as an Alternative Investment Fund Manager (AIFM). With a NAIF the fund itself is not actually regulated- the onus of regulatory responsibility is on the fund manager who must be AIFMD (Alternative Investment Fund Managers Directive) compliant. ## Company Formation In terms of the legal formation of the investment vehicle, there are also a number of choices. The most popular is the SICAV (société d’investissement à capital variable) which is essentially an investment company with variable share capital. Closed ended funds or investment companies with a fixed share capital INVCOs are also permitted. Limited partnerships, unit trusts and common contractual funds are less common but can be constituted under Maltese law. ## Setup Choices Once the type of fund, its regulatory status and its legal formation have been established, the next step is to decide on how to structure your investment fund. There are 3 choices; a stand alone fund, a sub fund arrangement or a cell on a RICC (Recognised Incorporated Cell Company) platform. This is an important step which impacts not only the cost and speed of fund formation but also potentially the ongoing management and internal structure of your fund. In addition there are legal implications which need to be carefully considered. The simplest structure is a stand alone fund where a new fund is created especially for your collective investment scheme. This is a bespoke option where your fund will be entirely independent of any other fund. It will not form part of an umbrella structure or sit on a platform but will exist in isolation. This option is the most expensive and would therefore be appropriate for very large investment funds where the costs can be justified. A popular alternative is to use an umbrella structure where a sub fund is created to host your fund. This is normally done through a ManCo (Management Company) or Super ManCo. As the master fund is already regulated and fully established, the creation of a sub fund saves on costs and time. In 2012 the Companies Act established the RICC platform, which allows multiple funds to exist on the same platform. The aim was to create a simple and economical option which brought together the advantages of a stand alone fund and the multi fund arrangements cited above. RICC platforms are licensed by the MFSA and are able to hold multiple funds on the same regulated platform. Each fund is held in an independent cell and so enjoys the same legal separation and segregation of assets as a stand alone fund. RICC platforms are able to use template application forms which have been pre-approved by the regulator, allowing for a simpler and faster regulatory process. This template approach extends to relationships with third party providers. Due to the economies of scale inherent in the RICC platform, new cells can leverage existing relationships with administrators, audit firms, law firms and custodians, enjoying competitive pricing from reliable service providers. In cases where a new fund already has a preferred service provider this can also be accommodated. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## New Set of Rules Regulating Collective Investment Schemes using Virtual Currencies in Malta **Date:** 2018-01-26 **Category:** General **URL:** https://zeta-financial.com/news/new-rules-collective-investment-schemes-virtual-currencies-malta The Malta Financial Services Authority (‘MFSA’) published a new set of rules regulating collective investment schemes using virtual currencies. On 22 January 2018, The Malta Financial Services Authority (MFSA) issued a feedback statement on industry responses to its own consultation on the proposed regulation of collective investment schemes in virtual currencies. The consultation document was launched on 23 October 2017, with the consultation process closing on 10 November 2017. The consultation document proposed a standalone rulebook applicable to Professional Investment Funds (PIFs) that have investment in virtual currencies (VCs) as their investment objective. Building on existing rules applicable to PIFs, the MFSA added further rules specifically intended to mitigate the potential risks of investing in VCs. The main proposals, aiming to safeguard the interest of investors and the integrity of the financial market in the context of virtual currencies, require the PIF and, in some instances, its service providers to ensure competence, include risk warnings, guarantee quality assessment, implement risk management and carry out valuation of investment in VCs. The MFSA invited interested individuals to submit their feedback on the consultation document over the three weeks succeeding its launch. The product of this publication is a 19-page feedback statement published on 22 January. This statement summarises the responses received by the MFSA and outlines the MFSA’s response and position to these responses. Hereunder follows a summary of the MFSA’s position following the requested feedback from the public. ## General Points In response to a significant number of comments on the matter, the MFSA revised its position on the publication of a standalone rulebook applicable to PIFs investing in VCs and will now insert additional requirements pertaining to such PIFs as supplementary licence conditions applicable to such collective investment schemes. The idea of the standalone rulebook was consequently dropped. The framework will be applicable to collective investment schemes investing in VCs irrespective of their exposure. The framework will also be applicable to those PIFs investing in VCs either directly or indirectly through trading companies or special purpose vehicles. Any other type of indirect investment including investment in units of a collective investment scheme that itself invests in VS will be understood to fall outside the scope of this framework. However, all investments in units of collective investment schemes created through Initial Coin Offerings (ICOs) will be construed as “direct” investments in VCs. A number of respondents suggested that PIFs investing in VCs should be allowed to convert to Alternative Investment Funds (AIFs) whose assets under management exceed the thresholds prescribed under Article 3(2) of the Alternative Investment Fund Manager Directive (AIFMD). The MFSA is inclined to extend to scope to further encompass AIFs and Notified AIFs but this issue will remain under consideration until the conclusion of the consultation process on the Discussion Paper on Initial Coin Offerings, Virtual Currencies and Related Service Providers, in particular with respect to Question 11 of that discussion paper. ## Definitions The MFSA reiterates the definition of cryptocurrency as a “math-based, decentralised virtual currency that is protected by cryptography”. Cryptocurrencies are thus considered a sub-category of VCs. Likewise, ICOs are now considered another such sub-category of VCs. Furthermore, the MFSA has proposed a Financial Instrument Test to determine under which circumstances a VC would be classified as a financial instrument in accordance with the general principles of the European Securities and Market Authority (ESMA). ## Legal Structure The MFSA was of the view that the legal structure for PIFS making such investments should be limited to SICAV and INVCO structures. These are required to have a board of directors responsible for the overall conduct of business of the collective investment scheme. Limited Partnerships and Unit Trust Structures were also considered to meet the safeguards of additional governance oversight and the decision was taken to extend the regime to these limited partnerships and unit trusts. Moreover, PIFS wishing to invest in VCs may be additionally established as Incorporated Cell Companies (ICCs) or Incorporated Cells (ICs) of either a SICAV ICC or a Recognised Incorporated Cell Company (RICC) ## Investor Base The MFSA has decided that the proposed regime be available only to Qualifying Investors. However the MFSA is considering whether credit and financial institutions should be allowed to deal in VCs, subject to the conditions stipulated therein, solely on behalf of their clients whereas (re)insurance companies and retirement pension schemes are still prohibited from dealing in VCs, either on their own account or for their clients. Final determination on this matter is pending. ## Competence The MFSA emphasised its expectation that the governing body of PIFs should have a suitable mix of skillsets encompassing financial services, the field of VCs and their underlying technologies. This requirement also applies to the governing bodies of existing PIFs launching sub-funds investing in PIFs. The Compliance Officer is expected to have an understanding of the field of VCs and the technologies underpinning them while the MLRO is further expected to remain up-to-date with various money-laundering and funding of terrorism typologies adopted with the Digital Ledger Technology (DLT) ecosystem. ## Quality Assessment This requirement ensures that the appointed investment manager carries out appropriate research to assess the quality of the VCs being invested in. Assessment should be carried out prior to investing in the VC. Thereafter the offered scheme should ensure that the VC investment remains in accordance with investment objectives, policy and restrictions described in the scheme’s offering documentation. ## Diversification On the basis of the feedback received, the authority has decided to maintain the regulatory status quo that currently exists under the existing PIF regime and conformity with the principle of risk spreading shall also remain optional for PIFs investing in VCs. ## Safekeeping and Custody PIFs investing in VCs are expected to adopt a combination of cold and hot storage. For cold storage, multi-signature wallets, requiring the input of two out of two signatories to access the wallet and carry out transactions, are required. The investment manager (or the investment committee and/or portfolio manager where the PIF is self-managed) is expected to be the first signatory, and the custodian the second signatory. Subsequently, these individuals may transfer the VCs from the multi-signature (cold) wallet to the sole-signature (hot) wallet to which the investment manager (investment committee and/or portfolio manager) will have sole access. The authority will assess, on a case-by-case basis, the adequacy of safekeeping and custody arrangements applicable to PIFs investing in VCs. ## Service Providers and Governing Body It is necessary for service providers wishing to act as such to PIFS investing in VCs to have sufficient financial resources and liquidity to enable them to conduct their business, as well as such business organisations, systems, and experience deemed necessary by the MFSA for them to act in this role. Collective Investment Schemes are required to ensure that proposed service providers meet these requirements. Competence in the area of VCs of the relevant service providers will be assessed by the MFSA on a case-by-case basis. Although the features of DLT permit real-time financial auditing, the MFSA still considers periodic audit cycles to be neither irrelevant nor obsolete. It also expects auditors engaged by PIFs investing in VCs to have necessary knowledge and expertise in this area. An investment manager authorised in an EU/EEA State or Recognised Jurisdiction does not need prior approval of the in-house investment committee members by the MFSA. The MFSA retains that the additional requirements introduced by the framework are commensurate to the associated risks and are deemed necessary for members of a collective investment scheme’s governing body to be in a position to discharge their duties in a diligent manner. ## Risk Management The manner in which the investment manager (or investment committee and/or portfolio manager) performs Risk Management, including stress testing procedures, is a business decision that should be undertaken by the aforementioned individual. The MFSA will issue guidance and other rules based on industry best practices. ## Liquidity PIFs investing in VCs should ensure that the appointed investment manager employs an appropriate liquidity management policy, monitors the liquidity risk of the scheme and ensures the liquidity profile of the investments of the scheme complies with its underlying obligations. The MFSA is of the view that not all VCs can be considered as liquid and thus should not be termed “highly liquid assets”. As such, the investment manager should employ appropriate liquidity tools. ## Valuation The MFSA clarifies that the valuation policies and procedures applicable to the other asset classes should also be adopted to the valuation of VCs exposures and the calculation of the net asset value of the scheme. PIFs are expected to use appropriate and consistent procedures to ensure proper and independent valuation of assets. The MFSA will issue guidance and other rules as deemed necessary. ## Listing Listing on a regulated market shall also be available to PIFs investing in VCs. This possibility shall not encompass those units that have been created through an ICO until the until the conclusion of the consultation process on the Discussion Paper on Initial Coin Offerings, Virtual Currencies and Related Service Providers and the regulatory framework ensuing in implemented. ## Reporting The MFSA is currently considering the matter of the manner in which PIFs investing in VCs will discharge their reporting obligations in terms of Article 3(3)(d) of the AIFMD, and it will issue further guidance in due course. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Commission Welcomes Entry Into Force of New Rules to Prevent Tax Evasion and Money Laundering **Date:** 2018-01-04 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/commission-welcomes-new-rules-prevent-tax-evasion-money-laundering The Commission has welcomed the entry into force of new rules obliging Member States to give tax authorities access to data collected under anti-money laundering legislation. As of 1 January 2018, national tax authorities will have direct access to information on the beneficial owners of companies, trusts and other entities, as well as customer due diligence records of companies. The new arrangements should give a major boost to tax authorities in the fight against the types of structures highlighted in the ‘Paradise Papers’. Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “We want to give tax authorities crucial information on the individuals behind any company or trust. This is essential for them to be able to identify and clamp down on tax evaders. To do this, tax authorities will now have access to anti-money laundering information.” The new amended rules, enshrined in the Directive on Administrative Cooperation (Directive 2011/16/EU), will give tax authorities much-needed access and enable them to react quickly and efficiently to cases of tax evasion and avoidance. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Why Should Asset Managers Settle for Malta? **Date:** 2017-12-31 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/why-should-asset-managers-settle-for-malta Malta’s solid reputation as a European hub for financial services has proven to be popular amongst Asset Managers and those wishing to set up funds in Malta. There are regulatory, tax benefits tied to the establishing of an Asset Manager or setting up funds in Malta. A Category 2 licence in terms of the Investment Services Act People is required for those wishing to establish an individual portfolio management and/or a collective portfolio management. The Malta Financial Services Authority (‘MFSA’) is the Island’s regulator, operates with an open-mind servicing its’ clientele within a robust regulatory framework. High standards of compliance are maintained by the regulator, whose responsibility is also to safeguard the reputability and credibility of Maltese licences. The MFSA provides with an open-minded approach, offering various options for vehicles which in turn create a business-friendly environment. Malta continues to flourish as a hub for the financial services industry and therefore attracting more business to the island of Malta. A Malta-licensed Asset Manager has full access to the EU market in accordance with the Markets in Financial Instruments Directive (MiFID). It is able to operate through the establishment of a branch or on the basis of a cross-border provision of services. The licence may be passported upon notifying the Malta Financial Services Authority. Main benefits - Flexible structures for Asset Managers - The management of a collective investment scheme is vast - Malta’s attractive tax regime is extended to both UCITS and AIFs - Competitive regulatory fees and set-up requirements for Malta funds - Competitive corporate tax rates for Malta asset managers and Malta funds - Asset managers are also afforded a number of tax benefits For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Malta – A Strong Maritime Jurisdiction **Date:** 2017-11-29 **Category:** Maritime **URL:** https://zeta-financial.com/news/malta-a-strong-maritime-jurisdiction According to a recent review published by the UNCTAD, Malta ranked as sixth largest maritime flag in the ‘Review of Maritime Transport 2017’ publication on the leading flags of registration by tonnage. Malta is reputable for consistency in its efforts. It continues to rank as a strong and secure maritime jurisdiction with a great geographic position. The Maltese flag is known to Yacht Management companies, yacht owners and investors alike. Malta offers efficient corporate and tax benefits, also available to the shipping industry. We have recently seen an increase and fundamental importance given to safety at sea and also interest in the environmental issues caused by vessels. The local authority, Directorate for Merchant Shipping is pursuant to regulatory matters as well as compliance with international maritime conventions and agreements. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Coin Direct: Zeta Successfully Assisted with the Licencing of a Crypto Exchange in the Isle of Man **Date:** 2017-05-19 **Category:** Company Formation **URL:** https://zeta-financial.com/news/coin-direct-crypto-exchange-isle-of-man During 2016, Zeta assisted with the incorporation of Coin Direct Limited, a company incorporated in the Isle of Man on the 11th of August 2016, pursuant to section 15 (1) of the Companies Acts 1931 to 2004. The company, which operates in crypto-currency services, went on to being successfully registered under the Designated Businesses (Registration and Oversight) Act 2015 (“the Act”) in February 2017. The Designated Businesses Act requires that those undertaking designated business are registered with the Authority. Coin Direct Limited is listed under Safe Custody/Buy of the Designated Businesses official IOM Financial Services Register. As a designated business, its’ obligations are to comply with both the Act and Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 and it is subject to ongoing monitoring by the Isle of Man Regulator. Coin Direct recently launched their new website which you can visit by clicking here. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Securitisation Seminar in Malta **Date:** 2017-04-05 **Category:** Capital Markets **URL:** https://zeta-financial.com/news/securitisation-seminar-in-malta Zeta will once again be a sponsor of the second seminar on Securitisation, a follow-up to the highly successful first seminar organised by Azure Rock Partners held in September 2016. The seminar will take place at Villa Bologna in Attard on Wednesday, 10th May 2017. International experts will be presenting and discussing various aspects of Securitisation, highlighting trends in the European regulatory regime and focusing mainly on Investors’ perspectives, Insurance Linked Securities and Asset Backed Securities. The event will also include panel and discussion sessions and ample opportunity for networking. This event should be attended by local service providers who operate or want to operate in the Securitisation space. An opportunity to understand what Malta has to offer as a jurisdiction for Securitisation and also to meet and network with the main local players in the sector as well as highly competent operators from overseas. [View the event programme and register your interest (PDF)](https://media.wix.com/ugd/e0d04f_f4793f7a61d141049148fadf7f187bfc.pdf). For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Centralised Registers Pushing the Boundaries of Transparency **Date:** 2017-02-24 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/centralised-registers-pushing-the-boundaries-of-transparency The battle against money laundering and the funding of terrorism is far from over and regulators across the globe have expressed their concerns in the hope of creating unity in the fight against white collar crime. The key to doing so? Detection, prosecution and prevention. These three factors were at the forefront of the creation of European Directive 2015/849. By targeting the source of illicit profits, one will be in a position to shut down the generation of a criminal network. This is what the Directive seeks to implement. The Fourth European Union Anti-Money Laundering Directive has taken the corporate sector by storm and has shed new light on AML regulation and the importance of transparency in the corporate sphere. Member States were given a two year window to transpose the new legislation into national law and must do so by 27th June 2017. With the deadline fast approaching it is interesting to see how each jurisdiction has chosen to interpret and apply the new changes proposed by the Directive and do their part in the battle against tax evasion, money laundering and terrorist financing. This fight has been at the forefront of the Union’s agenda with the ultimate objective of harmonizing EU law with that of the United States to create an effective global compliance framework. The new Directive seeks to align the AML policies by implementing a risk-based approach, allowing decisions to be taken based on evidence to pre-empt the risks of money laundering and terrorist financing. Recent public scandal has only reiterated the need for increased corporate transparency in order to restore the people’s confidence in their governments. Citizens must be rest assured that a stricter approach is being taken to combating white collar crime and the only means of doing so is to give insight into the ultimate beneficial owners of large corporations. In light of this, the Union has made one of the most controversial and drastic decisions in favour of increased transparency; the implementation of a Register of Beneficial Ownership across the Member States. An ultimate beneficial owner or beneficiary (UBO) for the purpose of this register is deemed to be a natural person holding an interest, be it directly or indirectly, of more than 25% in a legal person. This interest may be a financial or controlling interest over more than 25% of the assets held in such an entity. Member States are now obliged to set up central registers that necessitate the disclosure of certain information on the beneficial ownership of corporations. Increasing the amount of data available that is used to identify beneficial owners will meet the requirements posed by the Financial Action Task Force to raise the level of transparency in the corporate sector. The idea is that national Financial Intelligence Units and other authorized entities will gain access to this register when carrying out their due diligence procedure. However, the wording of the Directive raises some doubt as to who is entitled to gain access to such private and confidential information. Article 30(5) of the Directive states that; Member States shall ensure that the information on the beneficial ownership is accessible in all cases to: (a) Competent authorities and FIUs, without any restriction; (b) Obliged entities, within the framework of customer due diligence in accordance with Chapter II; (c) Any person or organisation that can demonstrate a legitimate interest. Needless to say, dispute arises as to the interpretation of the term ‘legitimate interest’ as the Directive fails to shed light on its definition. It is clear that this was an attempt by the legislator to give Member States the freedom of interpretation to ensure that the term is understood within the context of that particular jurisdiction. Whether the term is construed in a narrow or wide manner will directly affect the extent of the Directive’s effectiveness in the realm of transparency. The subsequent sub-article gives Member States the option of making this register entirely public should they wish to do so. Seeing as Directives are only able to set minimum standards to allow room for interpretation, it is evident that the legislator has equipped Member States with the necessary legal tools to go one step further in the fight to create a more transparent world. In light of the fact that privacy and confidentiality are at the heart of the Trust and Fiduciary sector it comes as no surprise that practitioners are particularly concerned about the implementation of these centralized registers. The disclosure of this information may have devastating effects for individuals who have legitimate and understandable reasons for keeping their personal details private. The nature of these relationships is precisely to act as an identity shield for those individuals who would rather not disclose who they are for various reasons. Unfortunately, this gives rise to a number of individuals abusing of these legal tools. The danger is that by disclosing information on not only the settlors, but also the beneficiaries to Trust setups, the need for transparency will have an adverse reaction on one of the most economically profitable areas of business. There is a very delicate balance to be struck between the right to privacy on one hand, and the need for transparency on the other. Has the introduction of the centralized register crossed this fine line? Many argue that it has. However, the legislative leeway granted to each Member State is proof that the Union understands that this decision must be left to each government to take in line with their particular cultural contexts. It is yet to be seen how each Member State will interpret the contents of the Directive, however, those that have already transposed this law, have varied in their approach. In an attempt to combat the increase in fraudulent wire transfers, France has adopted a stricter approach in its regulatory framework. However, on October 21, 2016 the French Constitutional Court was faced with this first issue concerning the UBO Register. The Court came to the conclusion that the public registry, is in direct conflict with the French Constitution, and in particular, the right to privacy. As a result, the Court officially declared the register to be unconstitutional this removing its public accessibility. This is the first case of its kind and it will be interesting to see how this will play out going forward should more jurisdictions opt for a public register. The Courts may be facing a rapid increase in human rights disputes. The Court in this case made it a point that the only situation in which one may justify the invasion of an individual’s right to privacy is if it is effected within a lawful and proportionate ambit. In this case, the State failed to provide such justification. The Maltese legislator is currently working on transposing the Directive into domestic law to meet the imminent deadline. Despite the aura of uncertainty that still surrounds the way this will be implemented, it goes without saying that it will have an effect on the Financial Services sector in Malta; it is simply unclear as to what extent this will happen. The main concern at this point is how much information will be disclosed with regard to all parties of the Malta Trust as a substantial amount of information on corporate entities is already held with the Registrar of Companies. When defining who the beneficial owner is in these entities, we see that it includes not only the settlor but also the beneficiaries. This can have detrimental effects not from a confidentiality perspective but also on a personal security level. These setups require a great deal of discretion for a reason; and sometimes that reason is the safety of those for whom it is set up. The directive also states that information on the trustee, protector (if any) and any person having effective control over the trust must also be divulged. A cloud of uncertainty still surrounds the way in which the individual Member States will choose to interpret the wide provisions of the new Directive; particular when it comes to defining who may have a ‘legitimate interest’ and thus the key to unlocking a considerable amount of confidential information. The lack of consensus in this regard may lead to a fragmented legal framework being established across all Member States which may have an adverse effect on the objective of the Directive. The real question is how willing are we to sacrifice the individual right to privacy in order to achieve a fully transparent operational system? A public register will certainly cut administrative expenses but this may come at a very hefty cost; confidential information getting into the wrong hands. It is also advisable that legislators take a step back and truly consider the implications that may arise should the register be given public access. Will we simply be faced with an onslaught of constitutional proceedings in an attempt to safeguard one of the most fundamental human rights as we saw this year in France? It will certainly be interesting to see which of these two highly protected objectives of the EU will win when directly weighed against each other. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Cyprus and India: Tax Treaties **Date:** 2016-07-25 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/cyprus-and-india-tax-treaties Toward the end of June this year the Cyprus Finance Ministry announced that both India and Cyprus have completed negotiations on the bilateral tax treaty, which provides for source-based taxation of capital gains on share sale. The Ministry also revealed that the Double Taxation Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with regards to the tax on income between Cyprus and India had been concluded. In the same statement, the Ministry declared that the “agreement reached provides for source-based taxation for gains from the alienation of shares; investments undertaken prior to April 1, 2017 are grandfathered with the view that taxation of disposal of such shares at any future date remains with the contracting state of residence of the seller.” The result of the agreement means that Cyprus will no longer be listed as a notified jurisdictional area. Moreover, it also paves the way for more established trade links between the India and Cyprus, through upgrading the network of Double Tax Conventions which aim to attract further investment to Cyprus as well and to promote its standing in the world of international business. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## CIMA Reveals Deal with Gibraltar in Wake of Brexit **Date:** 2016-07-20 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/cima-reveals-deal-with-gibraltar-in-wake-of-brexit The Gibraltar Financial Services Commission (GFSC) has signed an agreement with the Cayman Islands Monetary Authority (Cima) on the oversight of alternative investment fund managers. The Cayman Islands Monetary Authority (CIMA) has signed a memorandum of understanding with the Gibraltar Financial Services Commission further to the UK’s recent referendum on leaving the European Union, the results of which impacted both territories. CIMA officials said the deal would pave the way for cooperation and exchange of information regarding firms under the Alternative Investment Fund Managers Directive (AIFMD). CIMA’s managing director Cindy Scotland, signed the deal on behalf of the authority and explained the reasoning behind it. Ms Scotland said that their continuous efforts to secure MOUs with a number of European counterparts is proving to be both satisfactory and fruitful. Europe is an important market for Cayman hedge funds. GFSC is now part of their list of European counterparts. Both jurisdictions are UK overseas territories that will be directly impacted by the Brexit vote. It is now yet to be seen what lies ahead for both territories as they await the outcomes of the UK and EU negotiations over all of their future dealings in Europe. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Family Trust Companies in Malta **Date:** 2016-07-20 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/family-trust-companies-in-malta Malta is an incredibly attractive location to establish a family wealth structure, with trusts and foundations being highly regulated by the Malta Financial Services Authority (MFSA). As a result of the Article 52(3), an amendment to the Trusts and Trustees Act, the Family Trusts Companies concept was born for property settled upon trust for the present and future generations. Family Trust Companies provide numerous potential for those who are looking for a tailored trust solution. Upon satisfying the prescribed legal requirements, without the need to obtain full authorisation, the Family Trust Company must still remain committed to applying for registration with the MFSA whilst being compliant with the body’s stringent conditions and regulations. To set up a Limited Liability Company, with regards to acting on behalf of a trustee, the following criteria must be maintained: - A maximum of five settlors; - At least three Directors on the Board (with at least one having experience with administration and trust law); - A Money Laundering Reporting Officer; - Limited acting as a trustee to specific settlors for the benefit of family members, in respect of the family estate. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## The Common Reporting Standard (CRS) **Date:** 2016-06-26 **Category:** Fiduciary **URL:** https://zeta-financial.com/news/the-common-reporting-standard-crs ## Be Prepared The Common Reporting Standard (CRS), developed and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. The CRS is an information exchange system released with the aim of combating cross border tax fraud and tax evasion using offshore financial accounts and that of reinforcing the protection of the proper functioning of tax structures. Influenced by the creation and subsequent implementation of the FATCA regime, the European and global community sought to create a reporting standard to clamp down on unreported and untaxed income through the implementation of the Common Reporting Standard (CRS). It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as a substantial amount of due diligence to be followed by financial institutions. The information to be reported is the account holder’s identity, date of birth, residence, tax identification number, account balance and value at year end, and any income, sale or CRS affects Financial Institutions (FIs). The Standard does present an extensive amount of operational and business challenges. Failure to comply with CRS, will result in a serious breach of the law and hefty fines. Entities classified as Financial Institutions, on whom the burden of reporting was placed, bear the same definition under both FATCA and CRS, and are defined as entities which are resident or have a branch in a participating Country, and are engaged in the provision of banking related business, providing custodial account services, brokers, providing services related to certain collective investment vehicles, providing trust or fiduciary services and certain insurance companies. Financial Institutions are required to understand what the implementation of the CRS entails, and take the necessary steps towards compliance. OECD have published a number of guides and handbook which includes commentaries, FAQs and other relevant information. Malta has been an early adopter of the implementation of OECD CRS. In the EU, provisions of CRS were introduced by the amended Directive on administrative cooperation (2014/107/EU amending 2011/16/EU). On 4 December 2015, Malta has implemented the Directive by publishing LN 384 and therefore officially introduced CRS to the local legal system The implementation deadline for EU Member States was the 1st of January 2016 and the first reporting deadline would be in 2017. There are 55 confirmed jurisdictions undertaking the first exchanges by 2017 and another 43 jurisdictions will undertake the first exchanges by 2018. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## Malta's Financial Services Sector GDP Almost Doubles Post-crisis – February 2013 **Date:** 2016-03-03 **Category:** Corporate Administration **URL:** https://zeta-financial.com/news/maltas-financial-services-sector-gdp-almost-doubles-post-crisis Malta has seen direct economic contribution by its Financial Services sector nearly double in the five year period ending in December 2012. This was also a time of significant instability in various jurisdictions especially in many EU countries. According to Malta Financial Services Authority chairman Joe Bannister, there was a considerable increase in employment in direct financial intermediary services up to around 9,000 from 6,200 at the end of 2008. Mr Bannister also remarked that this would equate to somewhat 6% of the working population of a little more than 150,000. Preliminary data from Malta’s National Statistics Office suggests that, the financial services sector was directly responsible for 8.5% of the Maltese economy’s GDP last year, up from 4.5% in 2008. That was the year that saw the collapse of New York-based Lehman Brothers, several of Iceland’s banks were placed in receivership, and also a number of UK banks were bailed out by the British government. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## MFSA Issues Consultation Document About UCITS V Directive **Date:** 2016-03-03 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsa-issues-consultation-document-about-ucits-v-directive The Malta Financial Services Authority (MFSA) issued a consultation document on the proposed transposition of the UCITS V Directive. This consultation document explains how the MFSA plans to transpose the provisions of the Directive. The new regulations introduced by UCITS V applies to custodians of UCITS, including entities acting as such. As a result, the tasks, delegation arrangement and liability of such entities arealso subject to these rules. In addition, the rules introduce general remuneration principles applicable to companies that manage UCITS. The Directive 2014/91/EU of the European Parliament and the Council, dated 23rd July 2014 (UCITS V) was published on the Official Journal of the European Union. This Directive amends Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to UCITS with respect to depository functions, remuneration policies and sanctions. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. --- ## MFSA's New Fund Structure to Strengthen Malta's Position as a Domicile of Choice **Date:** 2016-03-03 **Category:** Fund Formation **URL:** https://zeta-financial.com/news/mfsas-new-fund-structure-to-strengthen-maltas-position The Malta Financial Services Authority (MFSA) has unveiled a new framework for Alternative Investment Funds (AIFs) targeted at qualifying and professional investors. Under the framework, the MFSA will only have to be notified about new AIFs (Notified AIFs) and full-scope fund managers will have full responsibility for the governance of their fund. The Regulator (MFSA) have already confirmed that the notification process will take up to 10 business days. The MFSA are yet to publish a list of requirements as part of the notification process. The funds will not be authorised or approved by the regulator, in fact the MFSA will cease to provide ongoing supervision to Notified AIFs. An updated list of Notified AIFs will be provided on the MFSA’s website which the regulator considers to be in ‘good standing’. With the ever changing needs of the global financial services industry, this proves to be a positive development. For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com. ---