Insurance – Insolvency II

The MFSA has issued Insurance Rule 31 of 2013 which entered into force on 1 January, 2014. The scope of this new rule is to implement the four sets of guidelines published by EIOPA for the preparatory phase of the Solvency II regime.

Insurance Rule 31 of 2013 applies to (re)insurance undertakings whose head office is in Malta and which are authorised to carry on business in terms of the Insurance Business Act. These (re)insurance undertakings are required to adhere to:

1. The Guidelines on System of Governance;

2. The Guidelines on Forward Looking Assessment of Own Risks (based on the ORSA Principles);

3. The Guidelines on Submission of Information to National Competent Authorities; and

4. The Guidelines on Pre Application of Internal Models.

These guidelines are applicable from 1 January 2014 to 31 December 2015 during which the undertakings concerned are expected to illustrate that they are taking active steps towards adopting the relevant aspects of the Solvency II regulatory framework.

The Solvency II Directive is subject to a final approval by the Council of the EU and a plenary vote by the European Parliament, currently expected to be held in February 2014, before it can be implemented into European legislation. The expected timeline is for the Solvency II Directive to be fully operational from 1 January, 2016.



14 February, 2014 the Malta Financial Services Authority (MFSA) has updated its frequently asked questions (FAQs) on the Alternative Investment Fund Managers Directive (AIFMD) and Malta’s implementation of AIFMD.

Version 2 of the FAQs amends the Q&A by clarifying the passsporting of Markets in Financial Instruments Directive 2004/39/EC  (MiFID) services in accordance with the European Commission’s revised views in respect of MiFID 5 negotiations.

The MFSA has been accepting and replying to queries on Malta’s implementation of AIFMD since early 2013. These FAQs group up the most common queries faced by the Maltese regulator as well as the MFSA’s responses.

The FAQs are divided into a number of topics ranging from high-level queries such as applicable legislation to detailed guidance on the MFSA’s interpretation of common management and control.

The FAQs will continue to be updated.

14 February 2014 -FAQ_MFSA_AIFMD_MIFID


Acumum to attend Campden Family Office Wealth Management & Structuring Conference

campdenGeraldine Noel, Acumum’s Managing Partner will be attending the Campden Family Office Wealth Management & Structuring Conference.

Joao Verdades dos Santos, Partner, Portuguese & Luxembourg dual – qualified advocate, will also be attending.

Acumum is attending the conference due to their provision of editorial in the forthcoming FSC Wealth Directory on the benefits Malta can provide in relation to tax structuring of corporate and personal assets.

The Family Office Wealth Management & Structuring Conference is to be held on the 8 & 9 April 2014 in London.

Participants of the conference who should like to meet with Geraldine are asked to kindly email her via, or Joao via to set an appointment.

For further information about the conference please go to:


 Acumum – Legal & Advisory – Malta’s International Law Firm

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Malta Citizenship – Individual Investor Programme (IIP)

Malta Citizenship

Individual Investor Programme (IIP)

The Government of Malta has recently reached an agreement with the EU Commission on the Individual Investor Programme (IIP) which allows Malta to grant Maltese citizenship to foreign individuals and their families.

The new citizenship programme – Malta Individual Investor Programme – is aimed at high net worth individuals and families wishing to secure citizenship of an EU member state with high standards of living.

The IIP grants Maltese residency to suitable applicants who qualify under the strict due diligence standards and vetting process, and who make a significant contribution to the economic development of Malta via the National Development Fund established by the Government.

Eligible persons will be required to meet the following minimum requirements:

  • Contribute at least €650,000 to the Maltese National Development and Social Fund;
  • Hold a property in Malta (of a value of minimum €350,000 if purchased or annual payments of minimum €16,000 if rented) for a period of at least five years;
  • Invest at least €150,000 in local stocks, bonds, debentures, special purpose vehicles or other investments accepted by Identity Malta for a period of at least five years.

Individuals must satisfy a residency requirement of a minimum period of 12 months and will be subject to extensive due diligence checks, including a personal interview before naturalisation is granted.

Please see:

Malta Immigration

Malta Residency – 15% tax

Malta Citizenship

USA – Malta Tax Treaty

usa flagUSA Malta Tax Treaty: In Force – 1st January 2011

The Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income between the USA and Malta (‘Tax Treaty’) was signed by both countries in August 2008. Instruments of ratification were exchanged on 23 November 2010, following which it came into force on 1st January, 2011.
To read the Tax Treaty, please go here
Mainly based on the Organisation for Economic Cooperation and Development (‘OECD’) Model Tax Convention and the US Model Treaty, the Tax Treaty is intended to eliminate barriers to cross border trade and investment while preventing tax avoidance.
It is designed to ensure that US and Maltese citizens are taxed only once on their profits and income, and to limit withholding payments on dividends, royalties and other unearned income.
With respect to active income, generally in line with the OECD model articles, the US and Maltese authorities shall not tax business profits derived from sources within their countries by residents of the other country unless business activities by the foreign person or business constitute a permanent establishment. Furthermore, residents of one country providing services in the other also are not subject to tax in that country as long as their activities do not exceed specific minimums.
With respect to passive income, the Double Tax Agreement contains provisions dealing with reduced source-country withholding tax on dividend, interest, and royalty payments:
  • Cross-Border Dividend Payments: dividends paid by a resident of the United States which are beneficially owned by a resident of Malta are subject to source country taxation at a maximum rate of 15%. However, where the beneficial owner of the dividend directly owns 10% or more of the voting power of the payor, such rate is reduced to 5%. With respect to dividends paid by a resident of Malta which are beneficially owned by a resident of the United States, the tax charged by Malta on the gross amount of the dividends shall not exceed that Malta tax chargeable on the profits out of which the dividends are paid (there is generally no withholding tax on Malta-source dividends as a matter of Maltese domestic law). Furthermore, dividends paid by a resident of one Contracting State which are beneficially owned by a pension fund that is a resident of the other Contracting State are exempt from source country taxation, so long as such dividends are not derived from a trade or business carried on by the pension fund or through an associated enterprise.
  • Cross-Border Interest Payments: under the Double Tax Agreement, interest paid by a resident of one Contracting State which is beneficially owned by a resident of the other cntracting State is generally subject to source country taxation at a maximum rate of 10%. However, interest arising in the United States that is contingent interest which does not qualify as “portfolio interest” for U.S. federal income tax purposes may be subject to U.S. tax at a rate of 15%. In addition, interest that is an excess inclusion with respect to a residual interest in a Real Estate Mortgage Investment Conduit (REMIC) may be taxed by each Contracting State in accordance with its domestic law.
  • Cross-Border Royalty payments: the Double Tax Agreement limits the source country taxation of royalties arising in one Contracting State which are beneficially owned by a resident of the other Contracting State to 10%. The royalty concept extends to gains on alienation of qualifying intangible property to the extent that “such gain is contingent on the productivity, use or disposition of the property”.
Under the Double Taxation Agreement pensions and similar payments are generally taxable only in the residence state. Furthermore, the residence country generally has exclusive entitlement to tax gains on alienation of property. However, special rules apply in the case of for instance, transfers of immovable property, business property of a Permanent Establishment, containers or ships or aircraft used in international traffic.
For a company to qualify for treaty benefits, it must satisfy one of the Limitation of Benefit article tests, including a publicly traded test, an active trade or business test and an ownership and base erosion test.
The Double Tax Agreement also includes comprehensive and far reaching provisions allowing for full exchange of information between the US and Maltese revenue authorities.