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					        Malta
 An International Finance
Centre in the Mediterranean




                    June 2004
                                1
    First, quick resume of Malta
   3 islands at the heart of the Mediterranean
   90km from Sicily, 290km from North Africa
   398,985 people
   Mixed and open economy
   Wholly democratic and stable
   Neutral
   UN member
   EU member
   Services (48%) Production (37%) Public Services
    (15%) – GDP contribution
   Growing by around 2% a year
   Inflation stable at around 1.3%
   Employment 94.3%
   Bank base rate 3%
                                                      2
 So why should
    MALTA
be Your Choice?



                  3
    Benefits
 Economic and political stability
 EU Member
 Adaptable regulatory regime
 Local stock exchange
 Fast and simple incorporation process
 High standards of professional services
 Well educated workforce
 Excellent telecommunication facilities
 Attractive location with good air transport
  network
 Fees & other costs are very reasonable in
  international terms
                                                4
  Why you should
pack your bags and
bring your business
   over to Malta


                      5
What Makes us Different?
 A world leader in regulatory policy
 Modern legislation, modelled on EU lines
 The first European country to reach tax accord

  with the OECD
 We’ve renewed and refreshed all our finance
  sector laws since 1994
 Officially not a “tax haven”

 Playing a pivotal role with OECD in policy
  development
 Global best practice regulatory regime

 US IRS approvals for “Know your customer”

  procedures
  Greater confidence for you, your partners and
  your customers                                   6
What Makes us Different?
   Tax efficient for companies
   International Trading Company status
   Foreign Tax Accounts
   41 Double Tax Treaties
   Tax efficient for ex-pat staff
   Possibility of grants and other financial
    assistance


    There’s a danger your finance director might get excited
                                                               7
 And with regards to
  Double Taxation
    Treaties …..

     We have….

41 Double Taxation
Agreements in Force

                       8
Albania     Cyprus     India         Norway         Switzerland

Australia   Czech      Italy         Pakistan       Syrian Arab
            Republic                                Republic

Austria     Denmark    Korea         Poland         Tunisia

Barbados    Egypt      Latvia        Portugal       United
                                                    Kingdom
Belgium     Estonia    Lebanon       Romania        USA

Bulgaria    Finland    Libya         Slovakia

Canada      France     Luxembourg    Slovenia

China       Germany    Malaysia      South Africa

Croatia     Hungary    Netherlands   Sweden

                                                                  9
Double Taxation Agreements
 initiated or in negotiation
           Kuwait
          Lithuania
          Morocco
           Russia
          Singapore
          Thailand
           Turkey
           Ukraine
                               10
The EU Savings Tax
     Directive


                     11
    EU Savings Tax Directive
 The ultimate aim of the Savings Tax Directive is
  to enable savings income in the form of interest
  payments made in one Member State to
  beneficial owners who are individuals resident
  for tax purposes in another Member State to be
  made subject to effective taxation in accordance
  with the laws of the latter Member State.



                                                     12
    EU Savings Tax Directive
 Belgium, Luxembourg and Austria shall levy a
  withholding tax at a rate of 15 % during the first
  three years of the transitional period, 20 % for the
  subsequent three years and 35 % thereafter.
 Such Member States shall retain 25 % of their
  revenue and transfer 75 % of the revenue to the
  Member State of residence of the beneficial
  owner of the interest.

                                                     13
   And with regard to
International Companies


  How does Malta
    compare to
   Luxembourg?

                          14
Country                             Malta               Luxembourg
Type of Company                     ITC/ IHC            1990 Soparfi Holding

Common or Civil Law                 Civil               Civil
Jurisdiction
Time to Incorporate                 2 - 5 days          2 days


Taxation on foreign profits         Credits/ Refunds    Normal rates

Standard minimum paid up            Lm500 20% paid up   Euro 31,000
capital
Standard authorised share           Lm500               Euro 31,000
capital
Permitted currencies of capital     Any                 Any

Double Taxation Treaty Access       Yes                 Yes


Requirement to file accounts        Yes                 Yes

Requirement to file annual return   Yes                 Yes


Time Zone GMT +/-                   1                   1




                                                                               15
Country                           Malta              Luxembourg
Minimum no. of members            ITC – 1, IHC - 2   2

Minimum no. of directors/         1                  3
managers
Corporate directors/ managers     Yes                Yes
permitted
Local directors/ managers         No                 No
required
Company secretary required        Yes- local         No

Public record of directors/       Yes                Yes
managers
Public record of members          Yes                No

Location of directors/ managers   Anywhere           Anywhere
meetings
Location of members meetings      Anywhere           Anywhere

Telephone board/ managers         Yes                Yes
meetings permitted



                                                                  16
   And now ….
Here are some more
details about ITCs
and IHCs in Malta


                     17
International Trading Companies

  An international trading company is
   one that is engaged in trading
   activities carried out from Malta but
   not in Malta

  Trading activities should be carried
   out from Malta (but not in Malta) and,
   with persons who are not resident in
   Malta
                                            18
ITC
 An ITC is liable to Malta tax at the rate of
  35% on its adjusted profit like all other
  companies

 The fiscal benefits have been shifted
  from the company to the non-resident
  shareholder


                                             19
ITC
Upon distribution of profits a non-
resident shareholder is liable to tax at
27.5% and may claim a refund of 2/3 of
the tax paid by the company

Indeed the total tax paid in Malta by
the non-resident shareholder is at an
effective rate of 4.17%

                                           20
International Holding Companies
  A Maltese IHC may qualify to hold a
   participating holding in an overseas
   company

  A participating holding means a holding
   of at least 10% of the equity shares of a
   company not resident in Malta

  If the shareholding percentage is less
   than 10%, its shareholding may still
   qualify as a participating holding
                                               21
IHC
 Profits are taxed at the full rate of 35%

 Yet, the IHC enjoys a refund of full tax
  suffered when it distributes its dividend,
  provided it has a participating holding of at
  least 10%

 In addition, refunds of tax due to IHC must
  be effected within 14 days from the end of
  the month during which the dividend is paid
                                                  22
Who May Incorporate
A limited liability company may be registered
by the shareholders or their authorised agent.
In practice, a local firm of lawyers,
accountants or consultants is engaged to carry
out all necessary formalities
 Subscribers may be individuals or corporate.
Nominee shareholding is also permissible
through the services of a local nominee
company licensed by the Malta Financial
Services Centre
                                                 23
Shareholding

The     minimum      number    of
shareholders is normally two,
however     a   “single    member
company” may also be registered
under the Companies Act, 1995



                                    24
Directors and Secretary

   All companies must have at
   least one director and a
   secretary. The secretary must
   be an individual but no specific
   qualifications other than a
   general      competence     are
   required

                                      25
  Redomiciliation of Foreign
    Companies to Malta
 Recent changes to the law of Malta have
  introduced the concept of redomiciliation
  of foreign companies to Malta
 Companies that are incorporated outside of
  Malta may change their domicile to Malta
  under certain terms and conditions.


                                               26
   Redomiciliation of Foreign
     Companies to Malta
 Foreign companies that wish to register in Malta
  now need not wind up their foreign business and
  re-incorporate in Malta, but can move their
  domicile to Malta while the former company set-
  up remains in existence.
 An advantage is that foreign companies that
  redomicile to Malta can do so under the structure
  of the existing legislation for ITC, i.e. they can
  benefit from the very attractive tax advantages
  offered to ITC.
                                                       27
Thank you for
your attention



                 28
PKF FIDUCIARIES INTERNATIONAL LTD. MALTA
We will be glad to provide you with any consultation you
   may require to come out with a solution regarding
               The Savings Tax Directive

 Contact Person: Fiorella Parascandalo

 Tel: (00356) 21493041, 21484373
 Fax: (00356) 21484375
 E-mail:info@pkfmalta.com
 http: //www.pkfmalta.com
 http: //www.maltaconference.com

                                                           29

				
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