Citizenship by Investment

Overview of citizenship by investment
programme:
The citizenship by investment programme
allows you and your immediate family the
opportunity to purchase a new nationality
in exchange for investing a significant sum of
money into the countries’ economy or other
specific assets. The process can be completed
quickly and easily and is completely legal.
Within as little as six months and without even
stepping foot in the country of choice, you can
be granted a fresh citizenship status that will
allow you to access parts of the world that were
previously restricted or completely unavailable.
In the wake of economic crisis and the expansion
of global business, many governments are
now opening their borders to the citizenship
by investment programme. Initially launched
in1984 by the tiny Caribbean islands of St Kitts
and Nevis, the programme has opened up
many pathways to Middle Eastern investors
seeking opportunities across Europe and
beyond. Recognising the success that has been
achieved, other countries are now following in
the footsteps of the Caribbean islands as they
too, search for new investors that can help
stabilize and develop their economies.
Although the programme is by no means a
new solution to encourage economic growth,
it is quickly becoming a favourable compromise
to satisfy the demands of both governments
searching for investment and individuals
wishing to take on a global citizenship status.
At first glance it may be unclear as to all the
major benefits to seeking global citizenship
through multiple nationalities, but there are
many advantages to be gained through what
can be a relatively simple process.
There are both humanitarian and financial
profit to be made through the citizenship by
investment programme. Proving to be especially
valuable to high net individuals who require
regular international business travel and those
from regions mired by turmoil.
Investment programmes are proving particularly
popular with citizens from the Middle East,
at last giving Arabs and Iranians the freedom
to move across International borders without
the complications they have faced in the past,
allowing regular travel at short notice and the
convince to travel visa free.
With a second passport restrictions on travel or
long delays due to jurisdictional issues can be
completely eradicated. For citizens of countries
where there is social or political unrest, access
to another passport can be especially vital when
making travel in and out, or around the country.
But not only is travel less complicated, most
importantly it is regarded to be much safer.
With a second passport
restrictions on travel or long
delays due to jurisdictional
issues can be completely
eradicated.
Business executives and high net citizens,
for whom international travel is imperative,
encountering complications and delays whilst
travelling can be costly. Citizenship and a
passport from small and peaceful countries such
as Antigua and Barbuda who have close ties with
the United Kingdom, and will not only allow an
individual and their immediate family members
to travel out of the country if required, but will
also act as a form of protection whilst travelling.
Of course, there are more than just safety
benefits to be had from joining an ever-growing
number of global citizens who enjoy
the freedom of dual nationality. Alternative
citizenship also offers individuals a whole host
of opportunities for reducing their taxation
profiles and with many countries now placing a
high tax levy on non-residents, tax planning has
become more important than ever before. Tax
breaks such as tax-free income and zero tax on
wealth, dependant on the country of citizenship,
increases options for international tax planning
and allows for more privacy with banking and
investments. In addition, because investors are
able to keep their original citizenship, and the
nature of the worlds ever changing economic
and political environment, investors shouldn’t
fail to recognize that obtaining a legal second
citizenship is a real opportunity for investment
into future generations.
Citizenship by investment programmes come in
all shapes and sizes, with each country placing
their own personal stamp on what is required to
become recognized as a citizen. These will often
include routes through business investment,
investment into a national development fund or
the purchase of real estate. Although all these
options will give investors legal citizenship, it is
only through real estate investment that they
will have the additional potential of generating
extra revenue with future capital gain.
Programmes can vary drastically, from the
relatively cheap St Kitts that requires a minimum
charity donation of $250,000 US dollars or a
$400,000 real estate investment. Right through
to the top end of the scale where individual
investors can expect to pay up to $5 million US
dollars in return for Australian citizenship and
government bonds.
For many countries investment alone is enough
to secure citizenship, however for others it is
just the beginning. While some require a term
of residency others will initiate background
checks and even cultural tests and interviews
before citizenship can be completed. These
extra procedures such as obligatory periods of
residence can also be accompanied by additional
tax revenue or the creation of employment
opportunities for nationals. However, in some
instances these residency periods can become
circumstantial if a significant investment is
agreed upon. In fact, most countries across
the globe will facilitate citizenship if the sum is
substantial enough to impact on the country’s
society, economy, sports or culture. This type of
investment can, at the countries discretion, lead
to the exclusion of other criteria, including that
of long-term residence.
With the right amount of investment and
negotiation it is possible to gain citizenship
wherever you require it, but without doubt,
some countries are much more stringent with
their laws and regulations. Nonetheless, if you’re
able to remove all the complexities and the
bureaucracy that is suppressing your business or
threatening the safety of your family, then surely
it’s worth taking the extra time to investigate
into the possibility of a second citizenship.
Citizenship Malta Citizenship by Investment by Investment
/ 4

Malta’s Individual Investor Programme
Maltese lawyer Dr Jean-Philippe Chetcuti describes his experience handling the first applications
under the MIIP. Dr Chetcuti was the first to be authorised by Government (Licence IIP 001) to represent
applicants filing for Maltese Citizenship by Investment.
Citizenship by Investment –
Programme with a Difference
The Malta Individual Investor Programme (MIIP) introduction was
motivated by the financial benefits economic passport systems have
generated in other countries, within and outside Europe.
The Maltese Citizenship by Investment Programme is intended to add to
the global citizenship menu an option that would have no comparison.
Firstly, it was the first programme that, for a pre-determined contribution
to a Maltese sovereign fund, would result in the attainment of European
citizenship within a year.
Secondly, Malta was seeking to build on its success in developing into
a top European finance centre as well as a centre for niche international
businesses in the online gaming, maritime and pharma sectors. Malta’s
aim was to emulate this success in emerging sectors such as aviation,
digital gaming, ICT and energy. In attracting high net worth investors
(HNWI), Malta was not reacting to economic difficulties but rather
to the untapped potential that was being unrolled by successive
administrations. It was hoped that, as the Island’s Prime Minister aptly
pronounced at the Programme’s announcement back in October 2013,
the MIIP would result in an importation of successful, entrepreneurial
genes and capital through a networking effect of HNWIs and families into
the local business scene.
Overview of the Malta Individual
Investor Programme
Malta Citizenship by Investment may be granted under an amendment
passed in November 2013 to the Maltese Citizenship Act, Chapter 188
of the Laws of Malta. These amendments provided the framework
for the enactment of LN 47 of 2014, the “Malta Individual Investor
Programme (MIIP) Rules. The MIIP Rules provide for affluent persons
of impeccable standing and repute to be naturalised and to receive
Maltese citizenship on the basis of a contribution to and investment in
Malta.
Consensus EU Endorsement
The launch of this programme elicited mixed reactions and as a result
parliamentary debate ensued both domestically and at European level.
For four months, the MIIP was scrutinized from a constitutional and
international law as well as a public sentiment perspective. The two
sides of Malta’s bicameral parliamentary system left and returned to
the negotiating table a good number of times before compromise was
reached early this year. Discussions revolved around the addition of the
approved investment as well as a property requirement.
The last remaining political factor to be overcome was the negative
sentiment expressed by the European Parliament weeks earlier. Not
having any legal jurisdiction on citizenship matters and keen to put
this matter behind it, the European Commission met a small Maltese
delegation and, within the day, hammered out the terms of Europe’s
first EU-approved Citizenship by Investment Programme, essentially by
introducing a one-year genuine link requirement.
Current Experience
Since the European Commission’s approval last February, Chetcuti Cauchi
has handled the very first applications for Citizenship by Investment in
Malta. Identity Malta has been very supportive in our first applications
and has demonstrated the importance and professionalism that was
promised by the government in their dealings with us as Accredited
Persons as well as our esteemed clients who ventured to be the first
candidates for the MIIP.
Some of our long-standing clients who have enjoyed Malta resident status
for a number of years shall obtain Maltese citizenship within six months
from the submission of their application, given that they will fully satisfy all
the onerous requirements of the MIIP including the residency requirement.
For those who have heavily invested in Malta over the years, who have
moved their centre of vital interests to Malta, and who have created jobs
and contributed to Malta’s better quality of living, the Maltese passport will
be an important recognition of their true affection to Malta.
Besides the various beneficial personal tax advantages, the MIIP promises
to be another success, joining the portfolio of successes that Malta has
under its belt in building what is a vibrant, sound and agile financial
services centre, that is disproportionate to Malta’s small size.
Eligibility for Malta Citizenship
n Fit and Proper - clean criminal conduct, in good health
n Non-refundable contribution of €650,000 to Government Fund
n Investment in Government Bonds €150,000 for 5 years
n Investment in Property min. €350,000 for 5 years OR Rental of
Property min. €16,000 for 5 years
n Evidence of Genuine Link with Malta for 1 Year
n Eligible Dependents include unmarried children up to 25 years old,
parents over 55 years
Benefits of Malta Citizenship
n Schengen Residence status for 1 yr prior to issue of passport, issued
on application.
n European Union member state
n 160 Visa-free destinations including US, UK
n Passport issued within 1 year
n Clear, objective rules for eligibility
Chetcuti Cauchi Advocates MALTA www.ccmalta.com/bac14 Malta Citizenship by Investment

Applying for Maltese Citizenship
Interview with Dr Jean-Philippe Chetcuti, tax
immigration law specialist approved by the Maltese
Government to handle citizenship applications.
Q: When was the programme introduced?
The Malta Citizenship by Investment Programme is the first EU approved
citizenship programme. The Malta Individual Investor Programme
(MIIP) was launched by the Maltese Government in September 2013.
This Programme allows for the granting of citizenship by investment to
individuals and their families who contribute and invest in the economic
and social development of Malta. Subject to a stringent vetting and
diligence process, including thorough background checks, the applicants
and their dependants are granted citizenship in exchange for such
contribution and investments.
Q: What is the Fit Proper Test?
Applicants must show they are in good standing and repute. The
Government of Malta is committed to the highest standard of due
diligence to ensure only deserving and reputable applicants are allowed
to proceed for the grant of Maltese citizenship.
A four-tier due diligence process is carried out directly by the Government
that will assess applicants and will process and approve applications at
various stages. Applicants must demonstrate a clean criminal record, with
checks being conducted with the International Criminal Court, INTERPOL
and various other authorities and sources. Applicants must provide a
police certificate which may be submitted subsequently to the submission
of the application but at all times prior to approval. Applicants must also
show they do not suffer from a contagious disease.
Q: What sort of investment must be made?
To qualify the main applicant is required to contribute at least €650,000
to Malta. Spouses and unmarried children under 25 are required
to contribute €25,000; unmarried children between 18 and 25 and
dependent parents over 55 must contribute €50,000 each.
Of this contribution, 70% will go into the Government Fund to finance
educational, health and social projects. The remainder goes to the
consolidated fund.
In addition, applicants are required to make an investment in
government bonds of at least €150,000. They must also buy property
of at least €350,000 or rent property for at least €16,000 p.a., all for a
minimum of five years.
Dr Jean-Philippe Chetcuti
n Partner, Chetcuti Cauchi Advocates
n Advisor to HNWIs their advisors
n Chairman, STEP Society of Trust Estate
Practitioners
n Co-founder, Secretary, Malta Association of
Family Enterprise
Q: Is any minimum physical presence required?
Malta is the only Citizenship by Investment Program that enjoys European
Union approval. The basis for this endorsement by the European
Commission was the introduction of a ‘genuine link’ requirement, often
referred to as a 1 year residence requirement. The main applicant kicks
off this one year residence period by visiting Malta ASAP to formally
take up residence. This requirement is met in a combination of physical
presence, and other factors like membership of clubs and professional
associations, local philanthropy, any business activity in Malta. As an
Approved Agent, I guide applicants in proposing their scheme of
residence and present it to Identity Malta early in the application process
to secure advance written approval from Identity Malta. Persons already
resident one year prior to IIP approval already satisfy this requirement.
Q: What is the tax treatment of new citizens under the
programme?
The basis for taxation under the Maltese tax system is based on domicile
and residence – not citizenship. The grant of Maltese citizenship to a non-domiciliary
of Malta does not, of itself, cause the beneficiary to acquire a
new domicile of choice in Malta. Residence for tax purposes is established
by demonstrating an intention to reside in Malta indefinitely and definitely
on the basis of a day count of 183 days. A citizenship applicant who
satisfies the genuine link test is fiscally resident in the first year of residence
and potentially in subsequent years, according to the outcome of the pre-immigration
tax planning exercise I carry out with clients.
Tax residents of Malta who are not domiciled in Malta are taxable on a
remittance basis. Accordingly, non-doms who are resident in Malta are not
taxable on foreign source income not received in Malta, nor on any capital
gains arising outside Malta whether remitted or not. Tax is due only on a
sources basis on income and capital gains arising in Malta. A non-resident
citizen of Malta is only taxable in Malta on Malta source income.
With regards to the sale of property, after the lapse of the obligatory 5
year period, property in Malta can be sold completely exempt from tax
if such property is held for a period of 3 years as the resident’s sole and
ordinary residence. If sold before the lapse of 3 years, a final property tax
of 12% is chargeable on the selling price.
Other tax considerations include:
n No inheritance or death taxes n No estate duty n No net worth or
wealth taxes n No municipal taxes, rates or real estate taxes
Dr Jean-Philippe Chetcuti with the Prime Minister Dr Joseph Muscat
after addressing the Global Residence Citizenship Forum, Malta in
May 2014
n Accredited in Malta with Licence No. IIP 001
n Top-tier firm of lawyers, tax advisors, accountants and company
formation agents
n Law firm bound by professional secrecy: lawyer-client privilege
n 100% success rate in citizenship residence applications

Residency in European Malta
1. Malta offers…
In the last two decades Malta has experienced a growing reputation as a
high quality living destination and a tax-efficient residence solution in the
European Union.
The Republic of Malta consists of Malta, Gozo and Comino and two small
uninhabited islands, and is situated in the middle of the Mediterranean Sea.
The island’s natural scenic wealth, its colourful culture and heritage,
political stability and the friendliness of its people have made Malta
a unique and possibly one of the best jurisdictions to live in. Malta
has been praised for its charming atmosphere, and for offering a safe
environment. Indeed, InternationalLiving.com 2014 has described Malta
as being the “easiest place to integrate” and having a “Great Quality of Life”.
In addition, Malta has affirmed its place as one of the European Union’s best
performers in the 28th edition of the Internal Market Scoreboard and Malta’s
banks have been ranked amongst the top 5 soundest banks in the world.
2. Malta Global Residence Programme
(non-EU Nationals)
The Malta Global Residence Programme (GRP) builds on the success
of Malta’s reputation in attracting expatriates seeking an alternative
residence base in a warm Mediterranean Island in the European Union.
Malta’s membership and full implementation of the Schengen Area
Treaty offer further attraction on the basis of the ease of travel within
the Schengen Area enjoyed by holders of the Malta Global Residence
Programme permit.
2.1 Applicability
The GRP Rules 2013 are designed to attract non-EU nationals to take up
residence in Malta. The scheme is especially attractive to retirees, authors,
intellectuals and international consultants or simply persons seeking to
establish an alternative residence that suits their lifestyle and tax profile.
The aim of the Malta Global Residence Programme is to formally
recognise as tax resident for Maltese tax purposes those foreign nationals
satisfying the eligibility criteria of the Malta Global Residence Programme.
The Maltese Residence Programme requires that an economically self-sufficient
residence candidate maintains a permanent address in Malta in
the form of residential property purchased or rented in Malta or Gozo.
2.2 Benefits
The programme offers a number of benefits to foreigners choosing to
settle in Malta, including tax advantages:
GRP: Malta Tax Summary:
Basis of Taxation Local Source,
Remittance
Tax Rate for Foreign Source Income remitted to Malta 15%
Tax on Capital Gains outside Malta Nil
Tax Rate for Local Personal, Business, Investment Income 35%
Minimum tax (per family) €15,000
Taxation per dependent Nil
Double Tax Treaty Relief applicable
Taxation per dependent Nil
Tax Residence Certificate Process
available
Inheritance Tax None
2.3 Eligibility
Applications under the Malta Global Residence Programme are open to
non-EU, non-EEA and non-Swiss nationals. One application can include
the main applicant as his spouse, financially dependent ascendants and
other non-family members and dependent relatives that are shown to
be bona fide members of the household. Children under the age of 25
are automatically eligible for inclusion. Applicants must demonstrate
their financial self-sufficiency and must be in possession of valid sickness
insurance cover.
Within 12 months of taking up residence under the Malta Global
Residence Programme, the residence permit holder needs to comply with
the requirement of acquiring or renting property in Malta. Residence
candidates are required to demonstrate that an address is available
to them in Malta by buying or renting property in Malta. Candidates
for the residence programme need to meet minimum property value
requirements at €275,000 for property in Malta and €220,000 for property
in Gozo and the Southern Region of Malta. Candidates have the option
to rent property in Malta at €9,600 or property in Gozo and the Southern
Region of Malta at €8,750 in annual rent.
Applications are to be processed via Mandataries authorised by the
Maltese Government to handle application process and act as liaisons
between the applicant and the Maltese authorities.
2.4 The Residence Programme Rules (EU Nationals)
The Malta Residence Programme Rules, 2014 create a special tax
programme designed to attract foreign EU nationals to take up residence
in Malta. Benefits for applicants taking up residence in Malta under
this new programme include a special and favourable tax status and
treatment as follows:
n A flat rate of 15% tax on all income received in Malta arising from
overseas;
n No Malta tax chargeable on income arising outside Malta which is
not received in Malta;
n No Malta tax is chargeable on capital gains realised outside Malta
even if these are received in Malta.
3. Highly Qualified Persons Rules
Malta has also introduced an attractive 15% flat rate of tax for individuals
working in the financial services, aviation and gaming sectors who can
meet a number of requirements specified in the relevant legal notice. The
Highly Qualified Persons Rules 2011 were introduced in response to the
growth which the financial services, aviation, online gambling and digital
gaming sectors presented in Malta. Individuals employed in Malta under
a “qualifying contract of employment” to perform activity in relation to an
“eligible office can apply and benefit from this capped rate of taxation.
Country Highlights
n Population: approx 430,000 Size: 27 x 14.5Km = 316Km2
n Average Temp: 12 °C Winter; 31 °C Summer; Sun 300 days/yr
n European Union: member since 2004
n Schengen Area Treaty: Fully implemented in 2007 (visa free
movement area)
n Currency: €uro 2008: Joined the €uroZone

Doing Business in Malta
1. About Malta
The Maltese economy is very open to reputable foreign direct investment,
with the prevailing approach being constructive, positive and flexible.
Government, financial institutions, professional services companies and
prospective local partners and service providers all contribute towards
attracting good quality investment and in establishing Malta as a reputable
centre for international finance. Malta’s unique legal framework, solid
incentives and excellent human resources have all contributed in dubbing
the island as a prime centre for doing business.
All this, coupled to Malta’s stable political environment as well as the
positive manner in which the island rode the 2008-2009 financial crisis,
position the island as a worthy contender in the selection of destinations
for setting up operations.
2. Investment Environment
With its geographical location being in the centre of the North African
and European trading routes, Malta is a very attractive destination for
industrial investment. Adequate human capital, including specialised
personnel in industries such as aviation, pharma (Malta adopted a very
favourable Roche-Bolar exemption in its patent law), and ICT, and political
stability are some of the Island’s most important offerings.
2.1 Manufacturing
The manufacturing industry is quite robust and currently contributes
approximately 13% towards Gross Value Added (GVA). Vision 2020 lists
target sectors as including electronics, pharmaceuticals, healthcare,
plastics, rubber, aircraft maintenance and other similar relatively capital-intensive
areas generating a higher value added per employee.
2.2 Financial Services
In the last two decades this sector’s significance to the Maltese economy
has increased exponentially. This was mainly attributed to consecutive
administrations’ target to place Malta as a centre for excellence in
investment services. Emphasis is placed on insurance, administrative
operations for investment services and funds, corporate and fiduciary
services, software development, e-commerce, call centres, distance
learning, international reservation systems and electronic exchanges. The
financial and insurance services sector contributes about 8.5% of Malta’s
GVA and the Government is committed to double its contribution by 2015.
2.3 Tourism
Attributable to Malta’s climate and temperate seasons, tourism remains
another strong pillar of the Maltese economy, contributing approximately
20% of GDP. The current focus is to baptise Malta as a centre for elite
tourism and a luxury destination. The last years have seen an increase
in yacht marinas, investment in the Grand Harbour cruise liner terminal
project and large scale residential and commercial projects such as
Portomaso, Tigné Point, Manoel Island and Cottonera.
3. Investment Incentives
Since the late 1950s Malta has presented various types of incentives
promoting industrial activity. Initially these focused on creating a new
basis for Malta’s economic activity once it no longer served as a British
and NATO naval base with the main focus being. The main attractions
were tax holidays and low labour costs. However the type and focus of
the incentives have changed along the years to be in line with local and
international developments.
Incentives are available under the new Malta Enterprise Act (MEA) and
the Business Promotion Act (BPA). These include soft loans, investment
allowances, training grants, tax incentives and the provision of ready built
specialized factory space.
The Malta Enterprise Corporation is an autonomous government agency.
The granting of incentives is subject its approval. In assessing a proposal,
viability, processes, amount of capital investment, sources of finance and
employment to be generated are all factors that are assessed.
Incentives currently available include:
n Investment Aid Tax Credits
n Small and Medium Enterprises Development Incentives
n Business and Competitive Development Incentives
n Aid for access to finance
n Aid to train and educate staff
n Research and Development Aid
4. Corporate Tax
Malta benefits from the single imputation system that avoids double
taxation on companies and shareholders respectively. With a corporate
tax rate of 35%, individual shareholders end up receiving a refund of
6/7th on any tax paid in Malta upon distribution of dividends. This makes
the effective rate of tax in Malta at 5%.
5. Tax Credits
Investment Aid Tax Credits are intended to sustain the regional industrial
and economic development of Malta. This measure facilitates initial
investments by encouraging the setting up of new establishments and
the expansion and development of existing businesses.
These incentive guidelines have entered into effect from 1st July 2014 and
unless reviewed or updated shall remain in force until 31st December 2020.
The incentive may be reviewed in line with any revisions of the relevant
State Aid regulations or in view of any national policy requirements.
6. Double Taxation Agreements
Vaunting agreements with more than 65 countries, Malta presents a
sound treaty network that ensures profits generated in Malta are either
exempt from tax in the country of residence of the investor, or that
such a country will provide a tax credit for the Malta tax spared as a
consequence of the incentives Malta provides. Agreements with another
15 countries are currently being finalised.
7. Taxation of Royalty Income
The incentive gives fiscal benefits to persons (individuals and enterprises)
that own the rights to patented intellectual property and are receiving
income in the form of royalties.
The objective of this initiative is to encourage researchers to exploit
intellectual property in Malta through the licensing of patented
knowledge. The scheme should also encourage investment in research
and knowledge creation and exploitation of intellectual property.
Jurisdiction Highlights
n GDP Growth: 2013: 2.4%
n Effective Company Tax Rate: 0-5-10%*
n Social Security Cost: 10%
n Withholding Taxes, Dividend Taxes, Wealth Taxes, Exit Taxes: None
n Main Industries: Financial Services, Shipping, Yachting, i-Gaming
Software, Pharma
n Emerging Sectors: Aviation, Digital Games, Film, Alternative
Energy, Bio-technology and Life-sciences

Wealth Management in Malta
Thanks to its EU membership, its long history of political stability, sound
regulation, well capitalized banks, English speaking workforce and
strategic geographical location, Malta has over the last two decades
firmly established itself as one of the foremost European wealth
management jurisdictions. Testament to this is the stunning growth
that Malta has achieved in a number of sectors, including financial
services, digital games and pharmaceuticals, none of which would have
been possible if Malta did not possess a strong wealth management
infrastructure.
1. Trusts
A little known fact about Malta is that its legislation is a hybrid of
continental law and common law, with civil matters generally following
continental legal principles and commercial matters following common
law ideas. Malta’s trust legislation is one of the clearest artefacts of this
hybridization, bringing to the Maltese legal regime the flexibility that
is associated with the archetypical common law wealth management
instrument. Of particular interest is the fact that Maltese law allows
a licensed trustee to irrevocably elect to have the trust treated as a
company ordinarily resident and domiciled in Malta for tax purposes.
2. Foundations
Another wealth management instrument which is permissible under
Maltese law is the Foundation. Foundations are somewhat similar to a
trust, in that like a trust they allow the owner of an asset to establish a
non-commercial structure for the holding of assets or the pursuit of a
particular purpose. However foundations differ from trusts in a number
of significant ways. Most important, the establishment of a foundation
through the appropriate procedure leads to the incorporation of the
foundation as a separate legal person. This differs from the settlement of
a trust, where no separate legal person is formed. Foundations can either
opt to be taxed as though there were companies, or else can opt to be
taxed as though they were a trust. Maltese law permits foundations to
be established with a ring-fenced ‘segregated cell’ structure (similar to
umbrella structures common in the funds sector). Foundations can also
be converted from an existing trust and vice-versa.
3. Holding Companies
Holding companies are a simple, well-understood and easy to establish
vehicles. In Malta, holding companies can be set up in order to hold
shares and securities and business assets in any form such as real estate,
fixed assets, aircraft, investments, bank accounts and intellectual property
as well as personal assets including any luxury items such as yachts,
residential property, works of art. Although there is no specific holding
company regime, the domestic tax treatment afforded to the different
types of income received by such companies as well as the participation
exemption regime introduced in 2007 make the setting up of Malta
holding companies a very attractive option and an excellent conduit to
and from the EU. Significantly, Income or capital gains derived by Malta
companies from qualifying participating holdings may be exempt from
tax in Malta. There are a number of alternate criteria which can result in a
holding being deemed to be a ‘qualifying participating holding’, the most
common of which being where the holding is of at least 10 percent of
the equity shares of a company.
4. Fund Management
Since joining the EU in 2004, Malta has enjoyed significant growth as
a funds domicile, which has in turn enable the jurisdiction to develop
a growing fund management sector. A number of factors have
contributed to Malta’s growth in the sector. Some are general factors
that have broadly contributed to the growth of the wealth management
industry in Malta, while others are more industry specific, such as the
approachability of the regulator, Malta’s speediness in implementing
sophisticated EU legislation, and the availability of a variety of fund
structures that can cater for a broad spectrum of strategies. Malta’s funds
regime in fact caters for passportable, retail-friendly UCITS schemes, small,
privately held private collective investment schemes, as well as the more
institutionally oriented alternative and professional investor funds.
5. Sharia Compliant Finance
Sharia finance is one of the financial world’s faster growing sectors,
allowing many to access forms of finance that respect their religious
and ethical beliefs. Malta has clearly signalled its openness for
sharia compliant financial services; in 2008 the Malta Financial
Services Authority (MFSA) underwent a consultation process on the
implementation of Islamic financial principles in Malta law, and in 2010
MFSA issued guidance on the set-up of Sharia compliant funds under
Maltese law. The guidelines require Sharia compliant funds to establish
a Sharia advisor board which is composed of at least two internationally
recognised Islamic Sharia Scholars to ensure that the fund meets Sharia
compliance standards in the management of its assets. Members of the
Sharia advisory board are required to be independent of the manager.
The role of the Sharia advisory board is that of providing guidance to
the fund on the steps to be followed in order to comply with Sharia
principles, to approve investment strategies and methodologies prior to
launch and generally to oversee the fund’s relationships and behaviour
from a Sharia perspective.
n Bank Deposits: €40.2bn
n World Ranking of Banks by Soundness: 13th (WEF 2013)
n Collective Investment Funds: 620
n Fiduciary Licences: 133
n Captives Cells: 18

Citizenship by Investment

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