27Jun

BREXIT – the EU Passport Opportunity for Malta

27 June 2016 Acumum Legal & Advisory 4

BREXIT – Britain’s momentous decision to leave the European Union has put into question what rights will British nationals and companies located in Britain have in relation to the European market? In particular, there is doubt whether the passporting rights pursuant to European directives will continue to apply.

Following Brexit, Malta offers a number of advantages to individuals and companies looking for a secure and stable entry point into the European market.

Malta, a full EU member, has transposed all applicable EU directives into its domestic law, particularly in relation to the financial services sector, covering such areas as Funds, Investment Services, Pensions etc.

Added to which, Malta’s long term, special relationship with the UK, provides UK located individuals and businesses comfort in the face of the forthcoming Brexit changes.

Why Malta?

Full EU member
Malta’s long standing special relationship with England – the Maltese and British Governments are currently in talks to discuss bilateral arrangements
English is an official language
Malta’s corporate and commercial laws are based on English law and EU directives
EU and OECD recognised and compliant jurisdiction
EU financial services directives fully implemented
Tax and fiscal advantages – 5% effective corporate tax rate, reduced from 35% after application of tax refunds
Currency – Euro
Single, accessible regulator – Malta Financial Services Authority
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
Multilingual, knowledgeable workforce
Excellent communications infrastructure

What is ‘Passporting’?

Passporting is the exercise of the right (known as a single market passport, or single licence), available to a firm authorised under one of the EU single market directives to carry on activities in another EEA member state, on the basis of its home state authorisation. The activities can be conducted through a branch in the host member state (the right of establishment) or on a cross-border services basis without using an establishment in the host state (a services passport).

Single market directives
The single market directives are currently:

The Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD)
The CRD IV Directive (2013/36/EU), which repealed and recast the Banking Consolidation Directive (2006/48/EC) (BCD)
The Insurance Mediation Directive (2002/92/EC) (IMD)
The Markets in Financial Instruments Directive (2004/39/EC) (MiFID).
Mortgage Credit Directive (2014/17/EU) (MCD)
The Solvency II Directive (2009/138/EC), which repealed and recast the First Non-life Insurance Directive (73/239/EEC), Second Non-life Insurance Directive (88/357/EEC), Third Non-life Insurance Directive (92/49/EEC), Life Assurance Consolidation Directive (2002/83/EC) and the Reinsurance Directive (2005/68/EC)
The UCITS IV Directive (2009/65/EC), which repealed and recast the original UCITS Directive (85/611/EEC)

Which types of firms does Passporting apply to?

Alternative investment fund managers (AIFMs) under the AIFMD
Credit institutions (that is, banks and building societies) under the CRD IV Directive, as well as unauthorised subsidiaries of credit institutions (referred to in the CRD IV Directive as financial institutions) that fulfil certain criteria
Insurance undertakings and reinsurance undertakings under the Solvency II Directive
Insurance intermediaries under the IMD
Investment firms under MiFID
Management companies under the UCITS IV Directive.
Mortgage intermediaries under the MCD

More Information:

Financial Services, Insurance, Funds, Malta Trading Companies & Holding Companies, Highly Qualified Persons Programme

Malta Citizenship & Residency

About Acumum – Legal & Advisory

Acumum Legal & Advisory is a well-established set of multidisciplinary legal, tax and accounting firms located and managed in the tax efficient EU jurisdiction of Malta. It operates as a full service law firm with services including aviation, corporate formation, accounting, estate & wealth planning, taxation, intellectual property and more. The firm is overseen by Geraldine Noel, a British barrister – registered in Malta, working alongside an expert team of lawyers and accountants with extensive specialist commercial and private client expertise, particularly to an individual, corporate and family office clientèle.

07Nov

Malta EU Permanent Residency & Visa Rules For Non-EU Nationals

7 November 2015 Acumum Legal & Advisory 3

Malta EU Permanent Residency

The Malta Residence & Visa Programme Regulations have come into force via Legal Notice 288 of 2015 (Malta Residence & Visa Programme Regulations 2015), providing Malta EU permanent residency for non-EU nationals.

Applying to 3rd country nationals (non-EU/EEA/Swiss), the regulations set out new rules as to who may be entitled to a Residency Certificate conferring upon them and their dependants the right to reside, settle and stay indefinitely in Malta, provided that certain conditions are satisfied.

Upon approval the Residency Certificate will be reviewed annually for 5 years, then every 5 years thereafter, to ensure adherence to the regulations.

Qualification Conditions
To qualify for the Malta Residence Certificate, the main applicant must:

be a third country national and not a Maltese, EEA or Swiss national;
not be benefiting from any other Maltese tax or residency programme;
must be a fit and proper person.

Main applicant must attest via affidavit that he/she has:

€100,000 annual salary; or
€5000,0000 in assets

Financial Contribution – €30,000 contribution to the Maltese Government

Property – Rental: minimum annual rental payment has to be at least €12,000 if the immovable property is situated in Malta or €10,000 if in Gozo or in the south of Malta, OR, Purchase: minimum value must be €320,000 or if property is in the south of Malta or in Gozo, the minimum value can be €270,000

Investment – €250,000 in Malta for a minimum of 5 years.

Further Conditions
The main applicant must:

have a valid travel document for himself and his dependants;
have an ‘all-risks’ EU wide health insurance for himself and his dependants;
provide an affidavit stating that from the date of application he has EITHER an annual income of not less than €100,000 arising outside Malta, OR has capital of not less than €500,000.

Current beneficiaries of the Global Residence Programme are allowed to apply for the issuance of this Certificate, provided they satisfy all the additional eligibility requirements of these regulations.

Dependants

The rules establish that dependants must be:

a)the main applicant’s spouse in a monogamous marriage, or in another relationship having the same or a similar status to marriage;
b)a child, including an adopted child, of the main applicant or of his spouse who is less than 18 years of age;
c)a child of the main applicant, or of his spouse, between the age of 18 and 26 and is not married and not economically active;
d)a parent or grandparent of the main applicant or the spouse, who is not economically active;
e)a child of the main applicant or spouse, who is at least 18 years of age, and who has been certified by a recognised medical professional as having a disability in terms of the Equal Opportunities (Persons with Disability) Act and who is living with, and is fully supported by, the main applicant.

Submission of applications

A non-refundable administrative fee of €5,500 is to be paid upon application. Upon the applicant’s acceptance under the Malta Residence & Visa Programme Regulations and the issue of a Letter of Approval by Identity Malta, the €5,000 is deducted from the contribution of €30,000.

Applications, must be represented by a registered approved agent or an accredited person.

Geraldine Noel of Acumum – Legal & Advisory is an accredited agent of the Malta Individual Investor Programme (Maltese Citizenship), as well as a Registered Mandatory Agent for all Malta Residency Programmes.

07Nov

Family Office Conference 2015 – Acumum Invited To Attend

7 November 2015 Acumum Legal & Advisory 3

Acumum invited to attend Family Office Wealth

Management & Structuring Conference

Following last year’s innovative and excellent Family Office conference, Acumum’s Managing Partner has been invited again to attend this year’s Campden Wealth conference to be held in London on 21 and 22 April 2015.

This year’s conference theme is ‘Transparency, Transition and Communication’ and is expected to be as informative and practical as the Family Office event held in 2014.

From feedback obtained from participants, last year’s conference was undoubtedly a successful event, as the select advisers, speakers and members of various Family Offices were able to discuss pertinent topics ranging from effective, long – term organisation structuring, compliance issues, and the fraught process of advisory selection.

On the basis of Geraldine Noel’s participation in 2014, Geraldine has been invited to attend this year’s conference.

Acumum – Legal & Advisory, established in the tax and fiscal efficient jurisdiction of Malta can provide a range of services to single and multi Family Offices, including:

Legal, Compliance and Accounting Services
Net Worth Management
Risk Management
Tax and Structure Planning
Estate and Succession Planning
Philanthropic Planning
Governance and Education
Ongoing Management
Consolidated Reporting
Administrative Services
Referral Services
Adviser Coordination

If you are part of a or an adviser to a Family Office and you would like to discuss the needs of a particular or group of families, during the conference or at another time, kindly contact:

07Nov

Malta – Mexico Tax Treaty – Now In Force

7 November 2015 Acumum Legal & Advisory 3

Malta – Mexico Tax Treaty In Force

9th August 2014

The Malta-Mexico double tax treat provides for double taxation relief in relation to:

Mexico’s federal income tax and the business flat rate tax; and
Malta income tax.

The main features of this treaty are as follows:

Dividends – 0% withholding tax.
Interest arising in one Contracting States and paid to a resident of the other may be taxed in that other state and may also be taxed in the Contracting State in accordance with the laws of that State.

If the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed:

5% of the gross amount of the interest from loans granted by a bank;
10% of the gross amount of the interest in all other cases.

Royalties – the same rules apply as for interest, however if the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed: 10% gross of the royalties.

The Malta – Mexico double tax treaty with Mexico, following the Malta – Uruguay double tax treaty, signals Malta’s intention to strengthen economic relations with Latin American Countries, with the aim of concluding other similar agreements with countries of the same region.

About Acumum – Legal & Advisory

07Nov

Malta – Israel Tax Treaty – In Force

7 November 2015 Acumum Legal & Advisory 2

Malta – Israel Tax Treaty – Ratified: the double tax treaty between Malta and the State of Israel signed in Jerusalem on the 29th of July 2011 has been ratified by the Republic of Malta via Legal Notice 343 of 2013.

Malta – Israel Tax Treaty. For a full list of Malta’s tax treaties go here

The ratification of this treaty is expected to improve and facilitate the bilateral relations between these two States, allowing for:

Israeli investors to have a more tax efficient access to their investments in the European Union
Israeli inbound investors can access and utilize the Malta – Israeli double tax treaty to extract profits out of Israel in a tax efficient manner.

Based upon the OECD Model Convention and is applicable to residents who are residents of one or both of these two Contracting States and applied to:

Malta income and corporate tax, taxes imposed on gains from immovable property (in accordance with the Real Estate Taxation Law)
Israeli profit tax on financial institutions.

Benefits:

Restricts Israel to levy any withholding tax on dividends when such dividends are paid to a Malta resident company holding at least 10% of the share-capital of an Israeli resident company – applicable to withholding taxes applied to an Israeli Real Estate Investment Company, subject to the Maltese company holding at least 10% of the share-capital of the Israeli Real Estate Investment Company
Israel is also bound to withholding tax of no more than 5% on interest paid to a Maltese company
Royalty payments – no withholding by the State of Israel on royalty payments made by an Israeli company to a Maltese company

Malta’s Tax Law do not withhold any tax on outbound interest, dividends or royalties and when combined with Malta’s 100% tax exemption on certain intellectual property, the treaty can realise true tax efficiencies for Israeli companies, the use of a Malta trading or holding company could lead to significant tax advantages.

Malta Tax Treaties | Corporate & Company Formation | Malta Holding Companies Taxation

Aviation | Financial Services | Gaming | Intellectual Property

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

07Jan

USA – Malta Tax Treaty

7 January 2011 Acumum Legal & Advisory 4

USA – 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 USA – Malta Tax Treaty, 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 USA – Malta Tax Treaty 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 USA – Malta Tax Treaty, 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.

low tax

BREXIT – the EU Passport Opportunity for Malta

Malta EU Permanent Residency & Visa Rules For Non-EU Nationals

Malta EU Permanent Residency

Family Office Conference 2015 – Acumum Invited To Attend

Acumum invited to attend Family Office Wealth

Management & Structuring Conference

Malta – Mexico Tax Treaty – Now In Force

Malta – Mexico Tax Treaty In Force

9th August 2014

Malta – Israel Tax Treaty – In Force

USA – Malta Tax Treaty