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Malta Schemes

 

Malta has developed significantly over the last two decades into a financial centre of excellence having established a specific fund regime to deal with the authorisation of collective investment schemes and fund managers in the Investment Services Act (ISA) of 1994. The ISA created opportunities within a strong regulatory framework encouraging the establishment of retail funds and local fund managers.

In 2000, the Malta Financial Services Authority (MFSA) enhanced their regulatory framework further with specific rules for non-retail funds and launched the Professional Investor Fund (PIF) with the intention of establishing Malta as a European hedge fund domicile. Malta also implemented the Undertakings for Collective Investment in Transferable Securities (UCITS) III regime upon accession to the European Union on the 1st May 2004, allowing both UCITS and non- UCITS funds to be registered.

Malta government policy is to be both economically competitive and internationally responsible which has resulted in the number of funds registered in Malta increasingly steadily since 2004. 

Political and Historical Background

Status: Republic that gained independence on the 21st September 1964 after intense negotiations with the United Kingdom, led by Prime Minister George Borg Olivier.

Under its 1964 constitution, Malta became a parliamentary democracy within the Commonwealth. Queen Elizabeth II was Malta's sovereign, and a governor general exercised executive authority on her behalf, while the actual direction and control of the government and the nation's affairs were in the hands of the cabinet under the leadership of a Maltese prime minister.

On December 13, 1974, the constitution was revised, and Malta became a republic within the Commonwealth, with executive authority vested in a Maltese president. The president is appointed by parliament. In turn, he generally appoints as prime minister the leader of the party that wins a majority of seats in a general election for the unicameral House of Representatives.

Malta adopted a policy of neutrality in 1980.

Malta joined the Exchange Rate Mechanism II (ERM-II) in 2005 to put itself on the path to enter the Eurozone, and in January 2008 it formally adopted the Euro as its official currency.

Parliament: Two parties dominate Malta's polarized and evenly divided politics--the Nationalist Party and the Malta Labor Party. In 2008 the Malta Labor Party renamed itself simply the Labor Party (Partit Laburista (PL)). Elections invariably generate a widespread voter turnout; in March 2008 the turnout was 93%. While the two main parties dominate, two other parties were on the ballot in 2008, Alternative Demokratika (Green Party) and Azzjoni Nazzjonali (National Action--which since then has altered its role from a political party to an organization); neither managed to secure a seat in parliament.

 

Leading Financial Centre

Corporate Tax: Charged on a worldwide basis at the normal corporate tax rate of 35% with significant tax refunds based on the imputation tax system presenting favourable tax planning opportunities.

Indirect Taxation: The majority of government income comes from VAT and other indirect taxes.

Personal Income Tax: Income tax rates and allowances are competitive. The highest band for Individual income tax liability is set at 35%

Double Tax Treaties: Malta has some 55 DTAs in place with a further 6 pending.

 

Other Maltese Statistics

Nationality: Maltese

Population: est. 405,000

Location: Malta is an archipelago in the central Mediterranean Sea (in its eastern basin), some 93 km (58 miles) south of the Italian island of Sicily.

Land Area: 316 sq. km. (122 sq. miles)

Official languages: The Maltese language (Maltese: Malti) is the constitutional national language of Malta. The Constitution also enshrines it as the country's official language, alongside English. Italian was the official language of Malta until 1934, when English and Maltese replaced it.

Currency: Euro

Time Zone: GMT +1

Capital: Valletta

National flag: two equal vertical stripes, white in the hoist and red in the fly, with a representation of the George Cross, edged with red, in the canton of the white stripe.