A Country Programme Framework (CPF) Signed by Malta for 2018–2023

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Malta’s Country Programme Framework (CPF) for the period of 2018–2023 was signed by Natasha Meli Daudey, Ambassador and Resident Representative of Malta to the IAEA, and Dazhu Yang, IAEA Deputy Director General and Head of the Department of Technical Cooperation on the 10th of October 2018.

A CPF helps as a reference device for the medium-term preparation of technical cooperation between a Member State and the International Atomic Energy Agency (IAEA) and recognizes important areas where the allocation of nuclear technology and technical cooperation resources will be directed to support national development goals.

Malta has been an IAEA Member State since 1997. Its 2018–2023 CPF identifies four priority areas:

  • Human health;
  • Regulatory infrastructure;
  • Cultural heritage; and
  • Water and the environment.

Malta’s Growth Performance, Positive Outlook

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Standard and Poor’s Credit Rating agency has avowed Malta’s A-/A-2’ ratings with a positive outlook.

Malta’s robust and steady growth performance, the recurring current account surpluses driven by Malta’s large services exports, and the improving general government budgetary situation and fiscal management reflects the positive rating.

As per the reports the domestic banks are possessing a low loan-to-deposit ratio with high liquidity, making the financial services industry more stable and reliable.

Improvement in the government’s financial position, reduced general government debt relative to GDP, and several structural reforms undertaken to increase female participation in the labour market and reduce the country’s energy bill have not gone unnoticed rather acknowledged by Standard and Poor’s.

Some of the important contributors to growth includes significant investments in energy and logistics along with growth in other sectors like tourism and e-gaming will continue to fuel the progress in the coming years.

As per Standard and Poor’s, the growth in 2019 is expected to be moderate but will supersede that of peers at similar income levels and development stages.

The swift growth of new economic sectors and increase in government revenues have allowed the consolidation of public finances.

As per the Standard and Poor’s projections, the debt-to-GDP ratio will decline from a projected 47 per cent in 2018 to under 40 per cent in 2021 with recurrent fiscal surpluses.

Efforts to reform public-sector enterprises, reduce skill disparities, and improve the long-term sustainability of public finances will be implemented gradually, in conjunction with increased public investment to bridge infrastructure gaps.

Standard and Poor’s also acknowledges that macroeconomic policymaking will remain geared towards further fiscal consolidation.

 

 

Blockchain Consultancy and Application Certification Launch: MDIA

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The Malta Digital Innovation Authority (MDIA) has launched a consultation process, to start registering service providers and to certify blockchain applications.

The consultation process will be divided into four chapters.

The first chapter pertains to the System Auditor Guidelines which outline the requirements for Systems Auditors registered with the Authority to carry out audits on blockchain applications.

The second chapter is on Innovative Technology Arrangement Guidelines which sets out the requirements to certify DLT Platforms and Smart Contracts.

The third chapter consists of the Technical Administrator Guidelines and outlines the requirements for the entity responsible to maintain and oversee the Technology Arrangements to safeguard user protection.

Lastly, the fourth chapter relates to the Resident Agent Guidelines which obliges non-Maltese companies/individuals to engage a person residing in Malta for their operations.

The Chief Executive Officer for the Malta Digital Innovation Authority Stephen McCarty said that the guidelines will set out the proposed way of working and benchmarks for Systems Auditors, Technical Administrators, Resident Agents and for the certification of Innovate Technology Arrangements.

“Undoubtedly, the introduction of these guidelines will be another milestone in establishing Malta as the blockchain island”, said McCarty.

The MDIA has published the first set of documents for public consultation on Systems Auditor Guidelines. The consultation period is open to the public from the 18th of September till the 2nd October 2018 and interested parties are welcome to submit their feedback to the MDIA. The documents can be accessed at www.mdia.gov.mt.

Malta | Top Eurozone Performer

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According to a review by rating agency DBRS, Malta has been listed amongst the top countries with lowest unemployment rate and the top performer for economic growth in the eurozone.

In a Macroeconomic Update by DBRS covering Europe, Malta’s real GDP showed growth in the first six months, well above the average euro area rate of 2.3%.

The league table showing Malta topping the list for GDP growth in the first half of 2018

Malta has been ranked as the top eurozone performer with economic growth reaching the 5.7% mark in first half of 2018 along with Latvia and Slovenia with growth rates of 4.4% and 4.3% respectively.

Malta was also listed among the three countries with the lowest unemployment rate at 3.9% with Germany at 3.4% topping the list and Netherlands registered a rate par with Malta.

DBRS said growth in the euro area had “a weak start” to the year but remained steady. “Growth was driven by household consumption and gross fixed investment. By country, the top performers include Malta, Latvia, and Slovenia, while the underperformers include Italy, Belgium and France,” DBRS said.

European Central Bank (ECB) at its September policy meeting, revised its economic growth forecast for the eurozone in 2018 downwards to 2.0% from 2.1% following a revision from 2.4% at its June meeting because of rising external risks.

ECB also revised its projection for 2019 downward to 1.8% from 1.9%.

Companies Act (Register of Beneficial Owners) Regulations, 2017

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The implementation of the 4th Anti-Money Laundering Directive in Malta has brought with it the requirement to introduce a Register of Beneficial Owners as of 1stJanuary 2018. This brings with it new obligations for local companies, unless these are otherwise exempt for the following reasons:

  • Listed on a regulated market; and
  • All the registered shareholders of which are natural persons who are disclosed in the public records of the register of commercial partnerships maintained by the Registry of Companies.

 

A beneficial owner is defined as a shareholder or individual owning more than 25% of the company or exercising control. The main points set out by these new regulations are the following:

New companies being incorporated after the 1st of January 2018 are now obliged to provide a specific form indicating the details of the respective beneficial owners of the new company signed by two prospective directors (unless a sole director is proposed).

  • Existing companies incorporated before the 1st January 2018 undertaking a transfer of shares after 30 June 2018, shall use a specific form indicating the changes in beneficial owners of the company effected by such a share transfer.
  • Existing companies shall be obliged, after 30th June 2018, to inform the Registrar with the details of the beneficial owners of the company through a specific form. Such form shall be provided when the next anniversary of the company falls due after the end of June 2018, or when a share transfer is effected, whichever comes first.
  • All companies that fall under this regulation are obliged to hold an internal register of beneficial owners at the registered office or at a location as specified in the Memorandum & Articles of the company.
  • Strict and heavy fines are in force for those companies that do not comply with this regulation.
  • All officers, shareholders and beneficial owners of the company share equal responsibility and liability vis-à-vis imposed penalties.

 

Should you require further information or our assistance in this regard feel free to contact us on info@wahaat.com.

Gaming Act’s new legislative framework

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As penned in our previous news update, the Gaming Act’s new legislative framework (coming into force on the 1st of July 2018) includes various clarifications regarding the Malta Gaming Authority (MGA)’s strengthened supervisory role. Such improvements include the following:

  1. Games and providers which are licensed by a competent authority outside the EU/EEA but are visible on the same website as MGA-licensed operations, shall not be permissible in view of regulatory risks that may arise. Synonymously, wallet setups with non-EU/EEA licensed games offered on the same/different domain or sub-domain name, shall follow suit. Ultimately, games supplied by holders of a critical gaming supply license issued by the MGA or an equivalent authority within EU/EEA are the only operations allowed as part of the MGA-licensed gaming service, subject to no prejudice other MGA requirements.
  2. The MGA must be notified when the website of the MGA-licensed operation is used in connection with a foreign license – such a setup shall only be allowed where the MGA deems fit, having had regard to the regulatory objective.

In light of the above, the MGA shall prohibit MGA licensees from introducing new games not licensed in EU/EEA jurisdictions on websites connected with MGA-licensed gaming services. Adjustments may be made by the licensees until the 31st of December 2018.

Contact us on info@wahaat.com for more information.

Malta VAT Grouping

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Effective as from 1 June 2018, Legal Notice 162 of 2018 – Value Added Tax (Registration as a Single Taxable Person) Regulations, 2018 has introduced the concept of VAT grouping to Maltese VAT legislation applicable only to legal persons licenced or recognised by the Malta Financial Services Authority (MFSA) or the Malta Gaming Authority (MGA).

A VAT group may be formed between two or more legal persons which are established in Malta for VAT purposes subject to the satisfaction of the following criteria:

  • At least one of the applicants is a taxable person licenced by MFSA or MGA in terms of the Schedule to this regulation; and
  • Applicants must be bound by financial, economic and organisational links.

A VAT group is allocated a single VAT number and VAT numbers previously pertaining to the separate legal persons are cancelled. A VAT Group must nominate a Group Reporting Entity from within the group, which company will be responsible for VAT reporting and payment of VAT. All companies within the VAT Group are held jointly and severally liable for any amounts of VAT due and interest thereon by the Group.

Legal persons forming part of a VAT group are considered as a single taxable person and supplies amongst group members should be disregarded for VAT purposes. Furthermore, supplies made by any company within the group to a person outside the VAT Group will be deemed to be carried out by the Group Reporting Entity. A legal person forming part of a VAT Group is prohibited from joining another VAT Group and companies bound to each other by financial, organisational and economic links may only form part of the same VAT Group.

VAT grouping is not automatic and an application form should be filed online to form or join a VAT group. Together with the application form, evidence supporting the financial, economic and organisational links should also be filed. Furthermore, in order to join a VAT group, applicants must be compliant with both their income tax and VAT compliance obligations.

Apart from the administrative simplification, VAT grouping also offers other benefits in terms of having situations where one company within the group is awaiting a VAT refund and another company is in a VAT payable position. Nonetheless, due consideration must be taken when deciding on whether a group should opt for a VAT grouping position and also depending under which VAT registration type the group should be registered as this might have other consequences on input VAT deductibility. Our VAT team can assist you in your group’s VAT consideration and VAT grouping decisions.

Highly Qualified Persons (Amendment) Rules 2018

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The tax incentive provided by means of the highly qualified persons rules, originally issued in 2011 has now been extended by virtue of Legal Notice 141 of 2018 by adding selected employees in the Assisted Reproductive Technology Sector to the list of qualifying persons. As from the year of assessment 2018 highly qualified persons that occupy “eligible office” with the Office of the Chief Medical Officer to Government consisting in the following employment positions shall qualify for the special tax rate of 15% on their employment income.

(a)Embryologist;
(b)Responsible Person;
(c)Lead Quality Manager.

The Maltese Government is moving forward with the proposed framework for the regulation of DLT

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The Maltese Government is moving forward with the proposed framework for the regulation of DLT. This week, the second reading of the three bills took place in Parliament, such are entitled as follows:

  • The Malta Digital Innovation bill; (eventually MDA) embodies the establishment of the Malta Digital Innovation Authority which shall focus on the supervision and certification of DLT platforms and smart contracts;
  • The Technology Arrangements and Service Providers (TAS) bill, shall focus on the setting-up of a registration and certification mechanism for technology arrangements which voluntarily decide to register themselves; and
  • the Virtual Financial Assets (VFA) bill, shall regulate the offering of virtual financial assets, including the implementation of a bespoke financial instruments test.

 

The proposed framework is intended to provide further security to investors, platform developers, and issuers alike vis-à-vis the token offering at hand. This will eliminate the uncertainty underpinning the current cryptocurrencies market, rendering Malta a secure and stable place for business.

Opportunities in Malta: How to access the fastest growing economy in the European Union

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As the official concessionaire appointed by the Government of Malta to promote the Malta Residence and Visa Programme in the Middle East, earlier this month Wahaat hosted an exclusive event at the Capital Club in Dubai.

 

The event attracted a number of industry leaders who were keen to understand more about the opportunities Malta has to offer to foreign investors. A European state forming part of the Schenghen area, eurozone and is a member of the Commonwealth, Malta has an excellent track record when compared to other countries in the region boasting one of the highest GDP growth (6.6%) in the EU.

During their presentations, keynote speakers Ayman Sejiny | Special Envoy to the Prime Minister of Malta and Roderick Cutajar | CEO of the Malta Residency and Visa Agency, gave a thorough overview of the benefits the European island has to offer to investors wishing to explore the possibility of obtaining a second residency or citizenship in Malta.

More information about Malta are available online www.wahaat.com or by sending an email to info@wahaat.com.mt.