Choose Malta

In the wake of Brexit a large degree of uncertainty continues to ripple throughout the UK finance industry. Indeed, it is the first time a country has deferred from the European Union leaving economists throughout struggling to reach a consensus on how the UK’s economic future will unravel once Article 50 has been activated. The fog of mystery descends… and the two year period within which the EU and the UK will need to come up with an agreement that will delineate their new relationship is passing by quickly.

There is still ambiguity on how Brexit will affect a UK business and also when it comes to passporting rights to the EU. A number of UK businesses took up the decision to relocate completely to an EU domicile such as Malta whilst others have looked at the option of a part operation in Malta in order to keep passporting rights to the EU.

Relocating to Malta has many advantages. Apart from the favourable all year round climate, being in the heart of the Med, Malta offers a number of programmes which offer residency, citizenship and a special tax offer.

Malta retains its strong relations with the UK and this has been part of the reason many UK domiciled businesses have chosen to relocate to Malta . Both Governments are currently in talks to discuss bilateral arrangements

Rooted in English as its official business language, Malta’s warm summers and temperate winters have attracted a multi-national work force, providing instant access to a plethora of foreign speakers with their respective local knowledge. Even prior to Brexit’s vibrations businesses had been moving to Malta, attracted to the country’s appealing low tax rates, generous tax treaties coupled with the robust and stringent laws and regulations laid down by the Malta Financial Services Authority (MFSA). Moreover, Malta’s full EU membership promotes the ongoing passporting benefits and continued access to the veins of the EU market.

Malta Benefits

• Currency – Euro
• Has a business-friendly culture
• Malta’s corporate and commercial laws are based on English law and EU directives
• It is a compliant (compliant with what?)jurisdiction, EU and OECD recognised
• Malta has EU financial services directives fully implemented
• It offers a favourable tax regime, and several businesses incentives.
• Certain financial services sectors, such as funds, can achieve 0% tax on income and distribution
• Highly Qualified Persons Programme – 15% income tax cap on certain employees within financial services sector

Malta Financial Services Sector – CIS

Malta offers an array of Collective Investment Schemes. The Island is fast becoming the jurisdiction of choice when it comes to Fund structures which include:

Alternative Investment Funds (AIFs) – a Maltese fund that benefits from the possibility of EU passporting. Third party managed Scheme – managed by a full scope AIFM based in Malta. In terms of Rules, AIF may be offered to:

Professional Investors as defined by MiFID; Qualifying Investors (in case of new AIFs – apply new definition); Retail Investors

Notified AIFs – an innovate fund product offered in Malta which may be incorporated and market to investors within just 10 days, also an EU compliant fund and benefits from the possibility of EU passporting;

Professional Investor Funds – also referred to as PIFs, the Maltese hedge fund that does not fall under the AIFMD; this type of fund is extensively used for investment in non-traditional investments such as private equity, derivatives, real estate, etc. A PIF is an EU compliant fund.

Private Funds;

UCITS (retail funds); and

Recognised Incorporated Cell Companies – these are limited liability companies that can be issued with a Certificate of Recognition to provide administrative services to the following categories of Schemes:

Retail and non-retail funds; private funds; PIFs; AIFs and a NAIF

The Malta Financial Services Authority is continuously looking to create innovative solutions. A number of funds mentioned above are fully EU-compliant, the others benefit from the possibility of Passporting in the EU.

What is ‘Passporting’?

Passporting is the exercise of the right for an establishment registered in the European Economic Area (EEA) to do business in any other EEA state without needing further authorization.

Establishments based outside of the EEA often get authorized in one EEA state and then use its passporting rights to either open a company elsewhere in the EEA or provide cross-border services.

Passporting is valuable to multi-national companies because it eliminates a lot of red tape associated with gaining authorization from each individual country, this can end up being a lengthy and costly process for a business.

For more information on how Zeta can assist you please contact our Business Development department on bd@zeta-financial.com.