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Why Malta

International Investment Hosting Services

Overview

The Regulator

Taxation

As a jurisdiction, Malta offers various advantages and opportunities for the Fund Industry and this is reflected in the increasing number of Funds that are choosing Malta as their favorite domicile. For starters, Malta is located in the middle of the Mediterranean, giving an easy pathway to other financial centers. It also enjoys the full membership and the adoption of the Euro which have accentuated the island’s economic stability. The English language is Malta’s second language and is spoken with extreme proficiency within the industry.

On top of it being one of the most reputable onshore jurisdictions, Malta is also highly cost competitive. The living costs for expatriates are noticeably lower than the main business counterparts’ in Europe. Nevertheless, the incredible climate and easy and relaxed lifestyle make it an attractive location for several expatriates and their families who usually fall in love with the rich history it has to offer.

Although a small island, Malta’s financial legislative and regulatory systems are built on a solid yet flexible framework for business. Tourism, manufacturing, technology and finance are the largest industries on the island and the government ensures that the highest priority is given to these industries which are contributing to Malta’s continuously improving economy.

The Malta Financial Services Authority (MFSA) is the single regulator for the financial services industry in Malta and has been
influential in Malta’s development as a reputable financial center. It operates with the highest standards, and ensures that all
legislation, directives and policies are in line with EU law. The MFSA’s approach is to use its technical skills to help the
industry as a whole. This has proven to be of great success, particularly due to the availability and inclination of their staff to
engage into dialogue with all parties, including those who are potentially looking to set-up a structure in Malta. The MFSA
vigorously seeks to understand business needs and provide effective solutions.

As an EU jurisdiction with favorable tax rates, an excellent infrastructure and a pleasant Mediterranean climate, the
combination looks set for Malta to establish itself as the place for choice for businesses.

The dividend exemption rules attract groups to locate their holding companies in Malta. In fact, although service providers to
funds, such as fund administrators and fund management companies pay tax at the rate of 35%, upon a distribution of
dividends, the shareholder is entitled to claim tax refund which will reduce the effective tax to between 0% and 6.25%
(although the effective tax is generally 5%). There are no withholding taxes on dividend distributions or interest or royalty
payments to non-residents. Neither are there capital or net wealth taxes.

Senior expatriates working for a licensed entity may also benefit from a reduced tax rate of 15% on their employment
income.

Malta’s position as a domicile of choice for funds is boosted where a Fund is able to qualify for benefits under Malta’s 70-
plus double taxation treaties, reducing or eliminating withholding taxes by the source state.