Government of Malta - Investment Registration Scheme

Friday, October 17th, 2014

Legal Notice 256 of 2014 published on 22 July brought into force the 2014 Investment Registration Scheme. Furthermore, Legal Notice 382 of 2014 published on 17 October brought into force a number of amendments to the regulations.

Overview

The purpose of the Investment Registration Scheme 2014 is to provide individuals and companies resident in Malta with the opportunity to regularise their position under the Income Tax Act in respect of their holdings of eligible assets which were derived from income (including capital gains) that had not been duly declared to the tax authorities.

Eligible Assets

The Investment Registration Scheme applies to the following eligible assets that were held on 4 November 2013 and are still held on registration date:

  • deposits held with credit institutions licensed in Malta or abroad, irrespective of the currency of denomination;
  • Malta Government securities (bonds and Treasury bills);
  • securities issued by foreign governments or supranational organisations;
  • corporate bonds, equities or other debt instruments of a company registered or incorporated in Malta or any other reputable jurisdiction;
  • precious metal bullion;
  • units in a Collective Investment Scheme issued by a scheme duly licensed in Malta or abroad;
  • life and annuity long term insurance policies, whether index-linked or not, issued by a scheme or insurance companies licensed in Malta or abroad;
  • warrants, options, futures and other derivatives as well as any financial instrument entered into, in Malta or abroad, for investment purposes;
  • shareholder loans or other advances extended to companies registered in Malta or any other reputable jurisdiction;
  • immovable property situated in Malta or abroad;
  • other assets: persons who on 4 November 2013 held assets that do not qualify as eligible assets or where they do not have documentary evidence that they held assets on 4 November 2013, will be able to register under the Scheme provided that they liquidate such assets and deposit the proceeds in a one-year fixed account with a local bank. Such fixed deposit account will become eligible for registration.

Registration shall also apply to those eligible assets which were held on 4 November 2013 and were switched into other eligible assets before registration date.

Eligible assets which are held by a fiduciary (such as a nominee or trust) on behalf of or at the request of the applicant may also be registered under the scheme.

Information on Source of Funds or Assets

The scheme requires all applicants to clearly demonstrate the source of funds and/or assets being registered. In this respect, applicants will be required to provide ALL of the following:

  • detailed information on the source of funds, i.e. the transaction or economic activity from which the funds and/or assets being registered had been generated/acquired;
  • sufficient documentary evidence (in original) to confirm the source of funds and/or assets. Registrations cannot be processed if sufficient documentary evidence is not made available;
  • information and supporting documentary evidence on the current location of such funds and/or assets;
  • complete and sign a declaration in relation to source of funds and/or assets;

Registration Fees

The scheme is subject to a one-time fee of:

  • 7.5% of original cost on date of purchase in the case of immovable property.
  • 7.5% of the current market value in the case of all other eligible assets. If documentary evidence is provided evidencing that the acquisition cost exceeded the current market price, the applicant may opt, at his discretion, to register the assets at the acquisition cost instead of the current market price.
  • 7.5% of the value of the other assets converted into a fixed deposit.
  • 5% in the case of immovable property and other eligible assets held abroad on 4 November 2013 and are still held abroad on date of registration if the applicant makes an irrevocable commitment to repatriate the relative proceeds within two weeks after date of registration and to invest such funds in locally listed securities or in deposits with domestic credit institutions. Furthermore, the applicant must undertake that the repatriated assets will be retained locally for at least three years after date of registration.

Other Fees

An administrative fee is also applicable and chargeable depending on the nature and complexity of the case and the eligible assets being registered.

Closing Date

30 November 2014

Downloads

Legal Notice 256 of 2014

Legal Notice 382 of 2014

Brochure – Central Bank of Malta

Frequently Asked Questions – Central Bank of Malta

Guidance Notes – Financial Intelligence Analysis Unit

Newspaper Article

For any clarifications, please send an email to info@rizzofarrugia.com or contact us on +356 2258 3000.

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