Firm Profile > Chetcuti Cauchi Advocates > Valletta, Malta

Chetcuti Cauchi Advocates
120 ST URSULA STREET
VALLETTA, VLT 1236
Malta

Commercial, corporate and M&A Tier 2

Chetcuti Cauchi Advocates' team stands out for its 'expert knowledge' along with 'good commercial nous', and is further praised for its 'diligence and energy'. It acts for a broad spread of clients, including those from the wholesale manufacturing, IT and gaming industries. Highlights included advising on corporate restructurings for AltInvest Ltd and Stakers Ltd; acting for General Supreme Ltd in negotiations to develop and establish worldwide business ventures; providing ongoing business support to Accreda Limited and Arcus Management Ltd; and assisting a global real estate company with the execution and ratification of cross-border transactions for a property portfolio refinancing. Priscilla Mifsud ParkerCharlene Mifsud and Steve Muscat Azzopardi jointly head the team.

Practice head(s):

Priscilla Mifsud Parker, Charlene Mifsud, Steve Muscat Azzopardi

Testimonials

I worked alongside CC on a new financing transaction for a mutual client, with CC being responsible for the Maltese law elements of the transaction. CC showed good commercial nous in their review of the English law finance documents that pertained to the Maltese company. They also displayed an expert knowledge of the requirements and processes of the Maltese company’s registry, as filings with, and documentation from, the registry became a critical path item for completion of the transaction.’

I was impressed with the diligence and energy of the CC team – they were tenacious in chasing down all outstanding items on the Maltese side of the transaction, and kept in close contact with me and our mutual client at all stages of the transaction. They ascribed a large team to the transaction, which ensured that someone was always contactable, whether by email or phone. Dr Christine Sammut and Dr Dario Azzopardi were the standout team members.’

Key clients

GRS Holding Ltd

AltInvest Ltd

General Supreme Ltd

Camel Brand Co. Ltd

Stakers Ltd

Accreda Limited

Arcus Management Ltd

Global Real Estate Company

Bleu Digital Enterprises Ltd

Fintech Tier 2

The fintech practice at Chetcuti Cauchi Advocates regularly acts for payment service and virtual financial asset providers, and provides regulatory advice on DLT, ICOs or security token offerings. The team is headed by four lawyers: Priscilla Mifsud Parker and Silvana Zammit, who specialise in security token offerings and fintech start-ups respectively, Steve Muscat Azzopardi and Natasha Cachia. Highlights included assisting Umbrella International Services Ltd with the licensing process for an e-money institution, and advising Bleu Digital Enterprises on the set-up of a Maltese cryptocurrency exchange. Associate Nadja Calleja is 'a smart professional' who 'can generate new ideas'.

Practice head(s):

Priscilla Mifsud Parker, Silvana Zammit, Steve Muscat Azzopardi, Natasha Cachia

Testimonials

I’d mention Nadia Calleja who is a smart professional who can generate new ideas.’

Key clients

Umbrella International Services Ltd

Bleu Digital Enterprises Ltd

Paul Hastings LLP

STIS Group

Real estate Tier 2

The team at Chetcuti Cauchi Advocates is renowned for its 'high level of professionalism' and ability 'to work with different types of clients' across the real estate sector. Headed by Maria Chetcuti Cauchi, Charlene Mifsud and Silvana Zammit, who is 'ready to go the extra mile', the practice handles a range of work. Highlights included acting for a renowned international economist on purchasing a high-end property and assisting Miramar Holdings with the purchase of a retail outlet in Malta's main shopping district.

Practice head(s):

Maria Chetcuti Cauchi, Silvana Zammit, Charlene Mifsud

Testimonials

I think one of the most important strengths of the team is the high level of professionalism. I believe that this practice is able to work with different types of clients and is able, and takes the time, to understand what their clients need.’

I have worked with Dr. Silvana Zammit and apart from being very competent and thorough in her field of work, her calm professional expertise immediately put me at ease. She is reliable, trustworthy and ready to go the extra mile.’

Shipping Tier 2

The 'excellent' team at Chetcuti Cauchi Advocates stands out for its 'practical ideas'. It handles international vessel sales, purchases and registrations and also assists with the full range of yachting matters. The group handled a conveyancing case for Quickly Group Holding before the Malta Registry and advised on the takeover of a chartering business for Larimar Ltd. Practice head Silvana Zammit is 'patient and clear when the inevitable deal crunch time arrives', while Christine Sammut is a key name for high-value deals in the space.

Practice head(s):

Silvana Zammit

Testimonials

We worked together on a shipping financing transaction, acting on behalf of our lender client during the full redemption of an English law loan facility and the release of a Maltese law charge over a yacht. Chetcuti Cauchi Advocates were excellent with their time and commerciality. They offered practical ideas as to the completion and release processes, notwithstanding the nuances of Maltese law.’

Dr Christine Sammut was my main contact and she was always on hand to assist and render constructive commentary on the transaction, and she was forever patient and clear when the inevitable deal crunch time arrived which was greatly appreciated.’

Key clients

Piotr Trojanek

Monaco Boat Services (Riva)

Quickly Group Holding Ltd

Raghav Marine Holdings Ltd

T Shipping Ltd

WZ Yachting Ltd

Dot Yachting Ltd

Joelson Law

ELE Chartering Ltd

Mamy Chartering Ltd

Patrick Peeters

Ross Bangato

Concord Riva

Naviculam Chartering Ltd

ELE Chartering Ltd

Larimar Ltd

LMS Yachting Ltd

Banking, finance and capital markets Tier 3

Chetcuti Cauchi Advocates handles work across the banking and finance spectrum. The team assisted Umbrella International Services Ltd with obtaining an e-money institution licence from the Malta Financial Services Authority, and has extensive expertise advising clients on applications for general Maltese banking licences. Priscilla Mifsud Parker, who specialises in protecting high-value assets and reorganising complex financial structures, jointly heads the team with Natasha Cachia and Steve Muscat Azzopardi. Other areas of expertise include handling the set-up and regulation of security token offerings.

Practice head(s):

Priscilla Mifsud Parker, Natasha Cachia, Steve Muscat Azzopardi

Key clients

Umbrella International Services Ltd

Intellectual property Tier 3

The 'very responsive' team at Chetcuti Cauchi Advocates is 'meticulous' and 'ready to go the extra step' in its day-to-day work. Practice co-head Silvana Zammit assists multi-national clients with safeguarding their IP and asset protection matters, as well as filing patents with the European Patent Office and registering trade marks in Malta or abroad. The team assisted General Supreme with obtaining trade mark protection in the European Union and Asia and acted for Castellar in negotiations with third parties relating to a partial trade mark assignment. Associate Dario Azzopardi provides 'constant assistance at all levels' and co-head Charlene Mifsud is also noted.

Practice head(s):

Silvana Zammit, Charlene Mifsud

Testimonials

Very helpful and ready to go the extra step to review work in a pro-active manner.

The individuals we have worked with are young yet meticulous in their work, leading to detailed review of tasks at hand.

The team at Chetcuti Cauchi Advocates was very responsive to all the queries which our research had. They showed high professionalism in recommending the best exploitation route of our research results. The quality of the service they offered compares very well with the service offered by other firms.

I liaised with Dario Azzopardi. He showed constant assistance on all levels, in particular the legal and financial. To ensure that there are no misunderstandings, he always followed e-mail correspondence with a follow-up call.

Key clients

Altern Limited

Polinno Limited

General Supreme

Camel Brand Co. Ltd

Arcus Management Ltd

Accreda Limited

Castellar Holdings Ltd

IKEA Systems BV

K-Swiss

Beyond Attorneys at Law

Alternativa Platform Ltd

COHAUSZ & FLORACK

Sovereign Order of Saint John of Jerusalem (S.O.S.J.)

Kovári Patent and Trademark Attorneys’ LLC

Celier Aviation Ltd

Castellar Holdings Ltd

Seifert Systems Ltd

Marie Brizard Wine & Spirits France

ADJ Tuna Ltd

Goody’s – Everest Group of Companies

Zheijiang Guangyu Trademark Agency Co. Ltd

Joelson Wilson LLP

Zappy International Trading Ltd

Aqua Trust Services Malta Limited

Actio IP

D Young & Co LLP

Cooley (UK) LLP

Investment funds Tier 3

Practice co-head Priscilla Mifsud Parker  is the name to note at Chetcuti Cauchi Advocates, which predominantly acts for clients on collective investment schemes. Other areas of strength include advice on post-licensing matters, passporting issues in relation to sub-funds and the set up of fund platforms. The team has also noted an uptick in instructions related to the virtual asset fund market. Natasha Cachia and Steve Muscat Azzopardi are the other co-heads.

Practice head(s):

Priscilla Mifsud Parker, Natasha Cachia, Steve Muscat Azzopardi

The firm: Chetcuti Cauchi Advocates is one of the top-ranked firms throughout The Legal 500 Malta.  With offices in Malta’s legal and financial capital city, Valletta, as well as in Cyprus, London, Zurich and Hong Kong, the firm is recognised as key player offering legal, tax and corporate services.

Providing a full spectrum of in-house client-focused services, Chetcuti Cauchi Advocates advises high-net-worth individuals and their families, as well as both small and large corporations, with all their needs. The firm’s success in this area is notable as a result of its exponential growth and expansion across various emerging industries.  Despite its growth, now consisting of a team of over 170 people, the firm is dedicated to providing personalised services to its clients and being the go-to advisory firm for individuals seeking a first class service.

The firm enjoys sound management, a fresh outlook, and state-of-the-art practice management technology which was built in-house and with a client-centric advisory focus. Chetcuti Cauchi Advocates is well positioned to service clients ranging from high-net-worth individuals and families, owner-managed companies to Fortune 500 companies.

Areas of practice: Family and wealth: Chetcuti Cauchi helps HNW families structure their family wealth and business interests in a sustainable legal and tax-optimised manner. It also helps set up family investment and co-investment platforms and helps implement listing and exit strategies.

Residency and citizenship law: its immigration team assists people wishing to relocate and retire to Malta using the appropriate Malta programme, whether this involves the attainment of citizenship or through one of the current residency programmes.

Yachts, aircraft and art: Chetcuti Cauchi holds strong ties with surveyors, yacht management companies, financial institutions, insurance companies and banks which allow it to provide a one-stop-shop service from Malta. The main aim behind its art law team is to provide the artistic and creative industry with practical legal advice and assistance.

Tax: Chetcuti Cauchi’s tax advisory practice specialises exclusively in tax advisory matters. Its experience ranges from corporate and personal tax, property and value-added tax, through to e-commerce tax, energy tax, trusts and estate planning, investment funds tax and tax disputes.

Corporate law and corporate finance: the firm counsels clients in complex transactions including mergers, sales and purchases of shares and assets, tender offers, exchange offers, and leveraged buy-outs.

Gaming, IP and ICT law: its IP, ICT and gaming practice offers an all-inclusive and holistic service to its clients that is in line with clients’ intricate personal and business legal requirements.

Financial services: its specialist expertise and financial knowledge enables its advisors to provide results-driven commercial advice to financial entities on some of their most complex transactions and to help them address some of their most challenging business issues.

Corporate services: the firm provides full corporate tax services, company administrators, compliance services and training to companies setting up within Malta.

Property: its real estate lawyers and planning experts provide advice on residential, commercial, mixed and industrial real estate purchase and leasing. It also provides consulting services on residential, tourism and industrial real estate development.

Shipping and aviation: its specialised aviation team consists of legal advisors, accountants and tax specialists drawn from its transport, corporate and tax practices who have an unparalleled span and depth of knowledge in the transportation industries. Its consultants provide results-driven practical counsel to its aviation clients on some of their most elaborate and unique transactions.

Commercial: the firm always helps its clients to identify simple, practical solutions, and prefers to avoid costly and time-consuming litigation whenever possible. It understands that its clients need effective, commercially savvy legal advice.

Accounting: in the provision of an all-encompassing and multi-disciplinary service, Chetcuti Cauchi’s team skilfully handles management accounting, company administration, banking support, payroll and tax compliance services.

Department Name Email Telephone
Accounting Kenneth A Camilleri
Commercial Dr Silvana Zammit
Corporate and corporate finance Dr Maria Chetcuti-Cauchi
Corporate services Dr Priscilla Mifsud-Parker
Families and wealth Dr Priscilla Mifsud-Parker
Financial services Dr Maria Chetcuti-Cauchi
Gaming, IP and ICT Dr Silvana Zammit
Property Dr Silvana Zammit
Residency and citizenship Dr Jean Philippe Chetcuti
Shipping and aviation Dr Silvana Zammit
Tax Kenneth A Camilleri
Yachts, aircraft and art Dr Silvana Zammit
Photo Name Position Profile
Mr Kenneth Camilleri  photo Mr Kenneth Camilleri Director, Tax & Immigration | Senior Partner, Chetcuti Cauchi Advisors Ltd
Dr Jean Philippe Chetcuti  photo Dr Jean Philippe Chetcuti Partner
Dr Maria Chetcuti Cauchi  photo Dr Maria Chetcuti Cauchi Founding Partner
Dr Priscilla Mifsud Parker  photo Dr Priscilla Mifsud Parker Partner
Dr Silvana Zammit  photo Dr Silvana Zammit Partner
Number of lawyers : 20+
at this office : 16
Bulgarian
Chinese
Dutch
English
French
German
Greek
Italian
Latvian
Maltese
Polish
Russian
Slovakian
Ukrainian
MSI Global Alliance
Other offices : Cyprus
Other offices : London
Other offices : Zurich
Other offices : Hong Kong

Malta

A Mediterranean archipelago, the Maltese islands are located at the crossroads between Europe and North Africa. Long popular for beach holidays, the islands also offer prehistoric temples, fossil-studded cliffs and a history of extraordinary grandeur.

Over the years, the islands have served as a geographical vantage point to its many invaders, with architecture and traditions reflecting a wide range of influences. A bi-lingual nation, both English and Maltese are the official languages of the island state.

Back in 1994, Malta issued a series of laws aimed at making Malta attractive to the foreign investor, a strategy that bore great success. Prior to joining the European Union in 2004, Malta revamped its legislative framework to meet compliance with all prevailing EU directives and requirements. This, together with Malta integration of the region’s common currency, the Euro, continued to propel Malta’s economic success. Nonetheless, the sovereign country’s freedom of movement has been amplified upon becoming a member of the Schengen Area, enabling its citizens to move and travel freely to an additional twenty-six countries.

THE LEGAL SYSTEM

Malta has a hybrid legal system, as a result of both common and civil law influences. Malta’s EU membership binds it to transpose all EU directives into domestic law and to abide by regulations issued, and decisions taken, by any of the EU institutions.

THE ECONOMIC AND POLITICAL CLIMATE

Malta enjoys a stable and bi-partisan political scene, which is largely convergent on issues of national and economic importance. Being a parliamentary republic fully adherent to its non-alignment provisos, the country enjoys political neutrality in an international context. Indeed, Malta has very good relationships with its neighboring countries, both to the North and the South of the Mediterranean. It also benefits from a well-established network of bilateral and multi-lateral relationships across the globe.

As a crown colony, the country once relied heavily on British commerce for economic growth. However, that changed with Malta’s independence in 1964 when the foundations for a successful economy were laid down. In fact, the islands’ economy has been incredibly resilient even in times of financial turmoil. It was the only state, alongside Germany, to maintain economic growth during the financial crisis.

Over the past five years, Malta experienced increased economic activity and registered some of the highest GDP growth rates in Europe. In 2017, Malta’s GDP grew by 6.6% and registered a surplus of 3.9%. In 2018, GDP was expected to grow by more than 5% with the surplus estimated to be in the region of 1%. In 2019, Malta is set to remain one of the top performers in the European Union with a projected real GDP growth of 5%, much higher than the average 2.0% expected in the Eurozone.
Malta has additionally maintained a steady level of competitiveness, especially with regards to the cost of living, salaries and property. Whilst maintaining traditional sectors such as manufacturing and tourism, new economic sectors have emerged, namely financial services, iGaming and digital technology, as well as within the pharmaceutical industries. Political stability, and Malta’s economic performance, have resulted in a good quality of life, in turn attracting high levels of Foreign Direct Investment, as well as families and retirees choosing Malta as their place of residence.

BUSINESS ENVIRONMENT AND FDI

Malta is a well sought-after destination for businesses and investors who desire a business-ready European location. As a free-market economy, with no restrictions or legal prohibitions on FDI and no exchange controls, Malta benefits from few obstacles to trade and enterprise. The country does not impose any limitations on the inflow or outflow of funds although, business and trade dealings must be in line with EU and national legislation and regulations.

Alongside its booming economic climate, the islands possess a highly professional and multi-lingual workforce, and adopt a pro-business approach which not only encourages business, but is also attractive for new investment

In fact, in the first half of 2018, the level of foreign direct investment in Malta stood at €176.5 billion. This represents an increase of €8.6 billion over the corresponding period during the previous year. Financial and insurance activities contributed €166.4 billion representing 97.3% of the total stock of FDI in Malta.

MALTA’S SUCCESS STORIES

Malta has always been quick to legislate and to keep up with an ever-changing world and economic and social progress.  It recently implemented sound laws and regulations which, while considerate to the needs of the market, allow businesses to operate in a safe yet attractive environment. In turn, the Maltese legislator has molded Malta into an onshore jurisdiction which offers numerous cost-effective opportunities which continue to entice business to its shores.

AVIATION

Malta’s aviation industry is crucial to its development, as it is one of the main sectors responsible for the country’s substantial economic growth. Apart from being a hub for international commerce and travel throughout history, the island was considered as one of the most strategic geographical points during WWII. Throughout the years, we have seen many multinational companies relocate to Malta, such as Lufthansa Technik, VistaJet and EasyJet. Nonetheless, Malta has implemented the Highly Qualified Persons Rules, which have further attracted various aviation executives to relocate their businesses to our shores.

ART & CULTURAL PROPERTY

Malta’s promotion of its arts and culture is at full-speed, thanks to Valletta’s reign as the European City of Culture for 2018. Culture and art are now prevalent on the national agenda and have an immensely important role to play. Indeed, this industry is multi-faceted in nature and addresses the rights of a very wide range of individuals – dealing with artists, art collectors, auctioneers, museum curators and owners of art work, financiers or insurers. Subsequently, art and cultural property touch upon various legislations, including intellectual property laws and taxation laws.

RESIDENCY AND CITIZENSHIP SCHEMES

In 2013, amendments to the Maltese Citizenship Act were passed, allowing one to become a citizen of Malta, provided, of course, that the applicant satisfies the relative conditions of the said Act. These amendments provided for the LN of 2014, which kickstarted the Malta Individual Investor Programme (MIIP). The MIIP regulations provide for affluent persons of impeccable repute to be naturalized and to receive Maltese citizenship, by means of a contribution to the Maltese economy. Therefore, upon obtaining citizenship, the applicant would automatically acquire the status of a European Union citizen and obtain access to 160 visa-free destinations, including the USA.

FAMILIES AND WEALTH

The ever-growing influx of high-net-worth individuals heading to Malta to invest in the country’s extensive investment sectors brought on the demand for sustainable tax planning and legal considerations. Indeed, such a thriving and flourishing sector generally includes trusts law, foundations law and estate management. Malta’s legal system is more than well-catered to suit the needs of HNWs looking to achieve well-established succession, philanthropic and estate planning objectives.

FINANCIAL SERVICES

The Financial Services sector in Malta has grown exponentially in the past twenty-five years, as Malta sought to position itself as the jurisdiction of choice for businesses wanting to set up in a business-friendly EU jurisdiction which embraces innovation. The Malta Financial Services Authority (MFSA), which is the sole regulator for financial services in Malta, maintains a pro-business approach and an open-door policy which has led to the growth of the local capital markets, banking, insurance and investment services industries.

Despite the size of the jurisdiction, the local capital markets are steadily thriving and growing in size, liquidity and sophistication. The Malta Stock Exchange (MSE) offers various listing options for seasoned companies as well as small to medium enterprises seeking to raise finance.

The MSE plays host to numerous equity and debt transactions, providing facilities by means of which securities can be admitted to trading, and subsequently traded over a secure, well-regulated secondary market. There are various listing options through the MSE, namely the Official List, the Alternative Companies List, the Institutional Financial Securities Market, and Prospects – a multilateral trading facility aimed at small to medium enterprises and family businesses. Listing on the MSE main market is not only a cost-effective solution of raising finance, but also affords a European Passport, and the prestige and brand exposure that comes with being listed on a European capital market.

Whilst still relatively small, Malta also offers the possibility to set up securitization vehicles as an alternative means of raising finance.

Malta is also becoming an increasingly popular jurisdiction for investment services firms seeking to offer their services to persons in EU member states under the simplified passporting procedure. It is also gaining traction as a funds domicile, particularly through its home-grown hedge fund structure, the Professional Investor Fund, which itself has gained popularity for its flexibility. Malta also offers the possibility of setting up Alternative Investment Funds (AIFs) and Undertakings for Collective Investment in Transferable Securities (UCITS), as well as has recently set up a bespoke Notified AIF (NAIF) regime. The NAIF, which is a fully EU law-compliant product, provides a fast-track possibility of accessing the market within just 10 days, by shifting the burden of regulation onto the Fund Manager and allowing the fund to be notified to the MFSA.

The local banking and financial institution sector has also evolved from a handful of domestic banks into an industry which operates across all the EU Member States, set up as both ‘brick & mortar’, as well as online. The industry is experiencing renewed vigor since the advent of Fintech, which is reshaping the services which consumers are expecting from credit institutions, electronic money institutions and payment services providers.

Malta’s insurance sector is also steadily growing since Malta’s EU accession and now comprises commercial insurance companies carrying out both general and long-term business, subsidiaries of major international insurance and reinsurance undertakings, Affiliated Insurance Companies (Captives) and Insurance Management Companies. Malta has become a particularly attractive domicile for Captives and Protected Cell Companies and is increasingly being eyed as a potential domicile of choice by UK insurance companies seeking an EU domicile post-Brexit.

FINTECH AND BLOCKCHAIN

The Maltese Government is always on the lookout to excel in emerging industries and to convert the Island into specialized centers of excellence. Throughout 2017-2018, the Malta Financial Services Authority, together with stakeholders, drafted the first regulations of the disruptive technologies of blockchain and cryptocurrencies. Towards the end of 2018, three legislative instruments became effective in regulating cryptocurrencies, referring to   virtual financial assets and service providers, distributed ledger technologies, and innovative technology arrangements. A new regulatory authority called the Malta Digital Innovation Technology was also established. The new laws put Malta on the blockchain map with large renowned crypto-exchanges such as Binance, Coinvest and OKEx, as well as other international crypto-based companies, such as Yovo and Neufund, relocating headquarters or opening operations in Malta.

GAMING

The gaming industry in Malta has flourished in just a decade, making the islands the top European jurisdiction for operators. Malta has now become the foremost legal and operational infrastructure in the gaming industry, a success also synonymous with innovation, professionalism, regulation and trust. In 2018, the laws, rules and regulations governing gambling were complete overhauled in order to meet the needs of the ever-growing gaming presence in Malta. Moreover, the Malta Gaming Authority’s (MGA) role was expanded with further discretion in its compliance and enforcement functions, to better achieve regulatory objectives. To remain at the forefront of gaming laws and disruptive technologies, the MGA also launched a Sandbox Framework, pertaining to the use of Virtual Financial Assets (VFAs) and virtual tokens, as well as Innovative Technology Arrangements (ITAs) within the gaming industry as a means of payment for gaming services.

MARITIME

The island’s fate has always been linked to the sea. Due to its strategic location right in the center of the Mediterranean, alongside its deep and sheltered harbors, Malta has the advantage of being a thriving maritime base. In turn, the country has developed an avant-garde variety of integrated maritime services, complemented by numerous dependable marine facilities. Indeed, the Maltese Ship Registry has experienced steady growth over the years and is the 6th largest registry in the world.

Additionally, the Maltese flag is synonymous to a mature and safe jurisdiction with regard to the world of sailing. Vessels bearing the country’s flag are less susceptible to detainment and inspections at foreign harbors, as Malta’s flag belongs to the White List of the Paris and Tokyo MoU. Moreover, the country also offers cost-effective solutions for yacht owners and shipping companies, while at the same time provides state of the art services and infrastructure to a range of vessels. In the first quarter of 2019, the Commissioner for Revenue of Malta issued new guidelines in relation to the calculation of VAT on the leasing of yachts.

SETTING UP IN MALTA

CORPORATE VEHICLES

Business in Malta may be conducted through a number of different vehicles such as partnerships, sole proprietorships, branches of foreign companies, co-operatives, trusts, investment companies with varied share capital (SICAV), protected or incorporated cell companies. The most common vehicle is the limited liability company, whilst partnerships are also popular, although the latter are normally associated with the professional services sector. SICAVs are principally used in investment fund structures and incorporated or protected cell companies popular within the insurance sector.

In addition to the various structuring options, Malta offers an attractive tax regime for carrying out business or the holding of investments through Malta.

COMPANY FORMATION

The ease with which a company can be set up in Malta is a convenient feature of setting up a business here. Provided the requirements of Maltese law are complied with and the necessary due diligence procedures are carried out, a company can be incorporated in as little as 24 to 48 hours from the receipt of documentation.

ADVANTAGES OF SETTING UP IN MALTA

Malta is a popular and reputable destination for both start-ups and well-established businesses that wish to set up HQs, branches, or finance and investment companies in a European jurisdiction. Due to its pro-business approach, the islands are now home to some 70k companies, with 30% of them having been registered in the last 5 years.

As mentioned above, setting up in Malta is a relatively straightforward process. No licenses or permits are required, save for businesses operating within certain sensitive sectors such as pharma, gaming, finance, insurance and medical sectors.

A brief overview of the benefits which businesses in Malta can obtain through setting up in Malta are:

  • competitive set-up and operations costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • a favorable tax regime and an extensive double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

COMPANY TAXATION

Companies incorporated in Malta are deemed to be resident and domiciled in Malta and are therefore subject to tax on their worldwide income less permitted deductions at the corporate income tax rate of 35%. However, income or gains from qualifying investments may be exempt from tax in Malta under the participation exemption provisions.
Participation Exemption

Income or capital gains derived by Malta companies from qualifying “participating holdings” (PH) may be exempt from tax in Malta at the option of the company.

An investment qualifies as a PH where a Malta company is an equity shareholder in another company and:

(a) holds directly at least 5% (five percent) of the equity shares of such a company, which holding confers an entitlement to at least ten percent of any two of the following (“equity holding rights”): right to vote; profits available for distribution; and assets available for distribution on a winding up; or

(b) is entitled at its option to call for and acquire the entire balance of the equity shares not held by that equity shareholder company to the extent permitted by the law of the country in which the equity shares are held; or

(c) is entitled to first refusal in the event of the proposed disposal, redemption or cancellation of all equity shares of that company not held by that equity shareholder company; or

(d) is entitled to either sit on the Board or appoint a person to sit on the Board of that company as a director; or

(e) holds an investment representing a total value, as on the date or dates on which it was acquired, of a minimum of one million, one hundred and sixty-four thousand euro (€1,164,000) (or the equivalent sum in a foreign currency) and that investment is held for an uninterrupted period of not less than183 days; or

f) such shares are held for the furtherance of its own business and the holding is not held as trading stock for the purpose of a trade.

Equity shares refer to a holding of the share capital in a company which entitles the shareholder to at least any two of the following three rights: the right to vote, the right to profits available for distribution to shareholders and the right to assets available for distribution on a winding up of the company. Capital gains derived from the disposal of such PH may be exempt from tax in Malta. Where Malta holding companies receive dividend income from a participating holding, such income may also be exempt from tax in Malta provided that the company in which the PH is held falls within one of the following safe harbors:

  • it is resident or incorporated in the EU;
  • it is subject to any foreign tax at a rate of at least 15%; or
  • less than 50% of its income is derived from passive interest or royalties .

Where a PH does not fall within one of the safe harbors described above, a company may still opt for such income to be exempt from tax in Malta, if both anti-abuse conditions below are satisfied:

  • the equity shares held in the non-resident company do not represent a portfolio investment; and
  • the non-resident company or its passive interest or royalties have been subject to tax at a rate which is not less than 5%.

TAX REFUNDS

Where the participation exemption does not apply, upon receipt of a dividend, shareholders of a Malta company, or a foreign company which is resident in Malta for tax purposes, are entitled to a refund of all or part of the Malta tax paid at the level of the company on such income. The type and source of income received by the company must be considered when determining the amount of refund which may be claimed. Shareholders of companies that have a branch in Malta, who are in receipt of dividends out of branch profits subject to tax in Malta, are also eligible for the same tax refunds as shareholders of a Maltese company.

Full Imputation System

Malta operates a full imputation system of taxation whereby shareholders in receipt of dividends out of a Malta company receive a credit for the tax suffered at the company level, thus eliminating any further taxation being due on the dividend by the shareholder.

OPPORTUNITIES & FUTURE PROSPECTS

BREXIT

With the UK projected to leave the European Union by 2020, concerns regarding businesses which presently benefit from the EU market and its harmonization are on the rise. With regards to this, the UK financial services industry is weighing out the options related to the maintenance of passporting rights within the EU. Malta is well positioned to attract such business and offers the possibility of re-domiciling all manner of business and licensed financial services operators, including funds and asset managers, insurance operators, banking and electronic money institutions (EMI). Concerns related to Brexit aside, co-locating to Malta for operational aspects is an ideal prospect. Its favorable tax regime, historical and contemporary ties to the UK, the fluent use of the English language, laws based on common law equivalents, portfolio of fund options, and lastly, its stable financial services industry, all point towards a seamless integration.

PROPERTY MARKET

Malta’s tax regime has proven beneficial in many sectors and it undoubtedly features very prominently in the property market. Even despite the decade’s worth of global financial and political turmoil, Malta has continued to feature on the radar of investors interested in investing in Europe’s growing property market. The Maltese property rates, nonetheless, have remained relatively stable throughout the years.

Indeed, the tax regime alongside its favorable environmental climate, has attracted many to move their personal and business affairs to Malta or to invest in Malta. The country’s tax system protects both buyer and seller in property deals and has contributed to maintain the strength and perseverance of the Maltese property market, especially with relation to high-end properties. Moreover, residential prices in Malta saw a roughly 17% year-on-year increase from Q2 2017 to Q2 2018, putting the country in the lead worldwide in relation to house price rankings. In the first quarter of 2018 alone, residential prices had undergone a 3.6% average price increase.

The demand for property and steady price increments are nevertheless supported by a strong growth in disposable income, which continues to benefit from advantageous labor market conditions. Nevertheless, the fact that Malta has a low interest rate make it all the more attractive for investment. In turn, these factors continue to contribute to Malta’s exponential growth in lending for house purchases. Nonetheless, the increase in the foreign work force in Malta and, to a limited extent, the MIIP, have also been supporting demand for housing.

PROSPECTS FOR FAMILY BUSINESSES

Small-to-Medium Enterprises and family businesses lie at the heart of the Maltese economy and the Maltese government is aware of how crucial their contribution is. Intent on fostering the best possible thriving business environment, besides the implementation of a family business legislation which ultimately allows businesses that have a sound business plan to access financial support, the Malta Stock Exchange’s ‘Prospects MTF’ allows SMEs to access finance of between €1 to €8 million.

Therefore, SMEs can confidently seek access to funding without relinquishing ownership or control of their company, through the capital markets, traditionally associated with far higher levels of funding.

FINTECH, BLOCKCHAIN & ARTIFICIAL INTELLIGENCE HUB

Malta implemented groundbreaking legislation in the Blockchain or Distributed Ledger Technology (DLT) field in the shape of a trio of Acts that took force of law in 2018. The Malta Digital Innovation Authority Act (Cap. 591) sets out the basis for the creation of a digital authority, with the remit of regulating innovative technologies. The Innovative Technology Arrangements and Services Act (Cap. 592) sets out the legal basis under which the MDI will regulate such technologies, currently DLT platforms and smart contracts.
The Virtual Financial Assets Act (Cap. 590) regulates the launch of virtual financial assets (VFAs or cryptocurrencies) in or from Malta, as well as those providing services to VFAs, such as advisers, brokers, portfolio managers, or crypto exchanges. The VFA Regulations (S.L. 590.01) provide further guidance on how the act is to be applied in practice.
A national Artificial Intelligence (AI) taskforce has been set up with the vision of making Malta the ultimate AI launchpad, by creating an innovation sandbox and bringing together innovators, business angles, investors and users in a secure environment. No regulation has to date been announced, however the intention with technology with so many potential uses in different fields is for a light touch regime rather than a rigid approach that would stifle the necessary dynamism. The scope of both MDIA and ITAS are expected to include AI in the near future.

WHY MALTA CAN BE THE RIGHT JURISDICTION TO DO BUSINESS

Malta is a popular and reputable destination for start-ups and well-established businesses alike, who wish to set up or co-locate in Europe. Due to its long-standing pro-business approach, the islands are now home to over 70,000 international companies, with 30% of them being registered in the last 5 years.
As mentioned above, setting up operations in Malta is a relatively easy process. In general, no licenses or permits are required, save for businesses operating within certain sensitive sectors such as medical/pharma, gaming, financial services and aviation sectors. Convincingly, businesses in Malta can benefit from;

  • a competitive set-up and operational costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • 5% net effective corporate tax rates and an efficient double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

Interest or royalties are deemed to be passive when they are not derived directly or indirectly from a trade or business and where such interest or royalties have suffered foreign tax at a rate of less than 5%.

Chetcuti Cauchi Advocates Launch Dual Citizenship Report: European Region

Chetcuti Cauchi Advocates released a new report entitled ‘The Dual Citizenship Report’ which explores the treatment and legal status of dual citizenship in European Countries. To commemorate the launch of the report, the partners invited Hon. Prime Minister Joseph Muscat on the 27th September 2017, who signed the first physical copy of the report.