divider

TAXATION OF INVESTMENT FIRMS

separator

Fund managers, administrators, custodians, investment advisors and other investment firms may benefit from various tax incentives under Maltese law designed to support the financial services industry, including:

  • The Maltese system of corporate taxation applicable to holding and trading companies generally (including the participation exemption and the tax refund system) applies also to these fund service providers and investment firms. This system of taxation, coupled with Malta’s extensive portfolio of double taxation agreements, affords excellent efficient tax planning and structuring opportunities for these firms. Please see link ‘Taxation of Maltese Companies’;

  • Acquisitions or disposals of securities by (i.e. securities held by), or of securities issued by (i.e. securities held by shareholders or investors of) fund managers, administrators, investment advisors and custodians of collective investment schemes which hold an investment services licence to provide such services issued under the Investment Services Act and companies owned and controlled as to more than 50% by non-Maltese residents and having the majority of their business interests outside Malta, are exempt from stamp duty;

  • The supply of services consisting of the management of a Maltese licensed collective investment scheme, are exempt without credit, irrespective of the place from where these supplies originate, provided that these services are limited to those activities that are specific to and essential for the core activity of the scheme. This exemption (without credit) is interpreted quite flexibly, to the extent allowed by its terms, to include various fund administration services and services related to investment selection and market research;

  • Special tax rates (15% flat rate) on employment income of at least €75,000 (adjusted in accordance with the Retail Price Index since 2011) of certain non-Malta domiciled or ordinarily resident ‘Highly Qualified Persons’ holding specified senior employment posts with Malta financial services licensed companies and certain other entities. This is designed to attract more foreign investment and specialised skills to Malta in the relevant industries; and

  • A tax exemption for 10 years on a number of specific items of expenditure (e.g. removal costs in respect of relocation to or from Malta, accommodation expenses, travel costs in respect of visits to or from Malta, provision of a car for personal use, a subvention of up to €600 per calendar month, medical expenses and medical insurance, school fees in respect of children) incurred by a Maltese licensed investment services or insurance company in favour of an investment services expatriate or insurance expatriate employed by it (who is not ordinarily resident and not domiciled in Malta and was not resident in Malta for a minimum period of 3 years immediately preceding such employment and provided during the said 3 years he was engaged on a full time basis in a similar position outside Malta.