Malta has a flexible financial regulation and a really interesting tax regime for investors. Thus, it has become one of the most attractive Mediterranean financial centres. Malta is a member of the European Union since 2004 and introduced the Euro as the official currency on January 1, 2008. Due to its excellent environment and lifestyle, this country encourages companies and professionals to settle in it and, therefore, to take advantage of its tax benefits.
Malta's investment fund industry has been restructured and internationalized in recent years, becoming the most important industrial sector. This island offers a very effective tax regime, which avoids double taxation on taxable business profits distributed as dividends.
Malta's tax system is developed in compliance with the EU’s non-discrimination principles. That is to say, Malta gives a similar tax treatment to (i) tax residents, regardless their nationality, (ii) permanent establishments and (iii) companies operating in a EU State, regardless the residency of their shareholders.
Malta offers investors an advantageous environment for the development of business activities, either for the establishment of a sole-member company, a partnership, a limited liability company, a branch of a foreign company, a trust company, a cooperative or an investment company with variable share capital (hereinafter SICAV).
SICAVs are established in Malta as investment companies whose purpose is to raise funds and manage and invest these funds in securities or other financial instruments. They have become the island’s financial vehicle par excellence. It is governed by the Maltese Companies Act 1995; every company registered in Malta must establish its registered office on the island. Documentation regarding the Company's articles of incorporation and by-laws must be provided.
In the event that an investor with a fund in another EU country wants to transfer it to Malta, the investor must reregistrer and change the nationality of the fund, and therefore submitting it to the Maltese legal system.
Each Maltese investment fund has an ISIN Code, "International Securities Identification Numbering System", an identification number made up of 12 alphanumeric characters. This number identifies a transferable security internationally in a concrete and unique manner.
Providing the ISIN to the Bank speeds up and makes the procedures easier.
The main advantages of the establishment of a SICAV in Malta include the existence of a competitive fiscal regulation that allows innovation. The tax system is attractive and has signed Conventions with more than 70 countries to avoid double taxation and tax evasion.
Funds can be created in a short period of time, speeding up the deadlines for market launch. Likewise, the incorporation costs of these companies are lower than in other European countries, sometimes up to 50% lower.
All in all, a framework of transparency, efficiency and integrity of the investments is established, providing security to the investors. In addition, SICAVs may be structured through sub-funds, allowing the issuance of their own compartments. Fully independent and separate compartments can be created.
Furthermore, it should be pointed out that the establishment of the funds will be authorized by the MFSA, the Malta Financial Services Authority. It is the entity in charge of regulating financial services in Malta through the supervision of financial institutions, credits and investments. This body reviews and authorizes the projects, which, if approved, are governed by an extremely competitive tax regime since they are tax exempted.
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