Archive for October, 2009

My Second Home is My Castle in Malta – Article by Ron & Alexandra Siegel of Napa Consultants, International

October 26, 2009

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Most vacation home buyers associate the island lifestyle with white sand beaches, tropical climate and also the escape from civilization. For those of you who would rather immerse yourselves in an island experience that is also rich in history and culture with year-round temperate climate, consider the Mediterranean island country of Malta for your next home.

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Centrally located at the very heart of the Mediterranean Sea, just below Sicily, Malta is easily accessible from all major European and North African cites. A member of the European Union, Malta, with its relatively low cost of living,  genuinely friendly people who speak English as one of two official languages, is politically stable, and is also one of the safest places in the area.

For  sports enthusiasts, Malta has it all, from country club sports such as golf, tennis and squash, to water sports including world class scuba diving, water skiing, windsurfing and sailing, to mountain biking and hiking among ancient ruins. The variety of cultural experiences such as a carnival that dates back to the 16th century,  the world’s most successful Kung Fu show, music, dance and theatrical events, set Malta  apart, not just as a wonderful island to visit, but also great place to live.

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Malta also enjoys a stable property market with outstanding tax advantages for foreign buyers. An exemplary Maltese property currently on market is an impressive castle built in the early 1900’s. It is one of the architectural jewels of Rabat in Malta the other major island of the Maltese archipelago. The castle lies at the edge of an elevated plateau with spectacular 360 degree views from all four towers. It is surrounded by approximately 13,500 square meters of beautifully landscaped gardens and is enclosed within high protective walls. Complimenting this castle is a beautiful private chapel—the Rotunda church of St. Maria—that can be seen from miles away.

According to Carl Peralta of 77 Great Estates, “Malta is the Mediterranean’s best kept secret; why wouldn’t someone like living in Malta? It is safe & small therefore proximity to beaches & work/schools is an advantage. Everyone speaks English and schools including University enjoy an extremely high level of education ideal for kids. Foreigners find it easy to purchase real estate in Malta”

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Carl Peralta

To learn more about the Castle and other extraordinary Maltese properties,  plus the tax advantages of owning a second home in Malta, contact Carl Peralta: carl@77GreatEstates.com .

Carl Peralta is a member of the LOL Team of Experts & Discussion Leaders.  Please introduce yourself to Carl and comment on his discussion at LOL on Linked In.

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com.

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Incentives for foreigners to invest in immovable property through Malta

October 19, 2009

Although there are not any specific tax incentives relating to   an investment in immovable property in Malta – whereby such  investment would be due to the stability of such property’s value and as a good medium to a long term investment – there might be various tax incentives for Malta companies set up to hold immovable property outside of Malta, usually through a company in such country.  

 Whereas any income or gains from immovable property, and the company holding it, tend to usually be taxed in accordance with the domestic law in that country – lex situs – (although exceptions do apply), where a Malta company holds at least 10% of the equity shares in such foreign company – alternative other conditions can be satisfied where such a 10% equity holding are not achieved, such as €1.1m investment – such holding would be considered a ‘participating holding’ in terms of Malta law.  Where the Malta company receives income from such ‘participating holding’ or gains from the disposal of shares in such participating holding, such profits will stand to be exempt at the level of the Malta company.  Furthermore any subsequent dividend distribution to shareholders wherever they may be situated will not be taxed further in Malta – no withholding tax in terms of Malta law.  This might creates an interesting manner in which to hold immovable property indirectly through a Malta company for investors around the world.

 Other specific tax planning opportunities have in the past worked, for example with immovable property in Portugal.  These can be considered on a case-by-case basis.  One may look into setting up property funds in Malta, again for the purpose of allowing foreign investment in immovable property around the world.

 The above information is merely generic and does not constitute specific financial, tax or legal advice.  We suggest that each case scenario be discussed individually.  

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com.

$8-million Malta-flagged luxury yacht graces Genoa boat show – Article in The Times of Malta of 09th October 2009, by Enrico Gurioli

October 15, 2009

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The interior of the elegant $8-million luxury yacht Zarina, which flies the Maltese flag. The yacht is presently on display at the Genoa boat show and is expected in Grand Harbour, Valletta, Malta on Wednesday.

One of the most beautiful vessels adorning the Mediterranean will be berthing in the Grand Harbour, Valletta, Malta  probably on Wednesday.

She is called Zarina and is perhaps one of the most prestigious and elegant super yachts on display at the 49° Salone Internazionale della Nautica di Genova, or the Genoa boat show. And it carries a Maltese flag.

Undoubtedly, it is the most “marine” boat among a category of vessels, some of which are so excessively showy they veer towards bad taste and the violation of the most basic law of life at sea.

She is almost 107 feet long and 24 feet wide with a capacity of 4,000 gallons. She was designed and built in Taiwan by President Yachts. The company’s workers followed the precise specifications of the Maltese owner who, according to Christer Lundquist of Eagle Marine, the Swedish society that represents the shipyard in Europe, contributed through his experience to the creation of space on the graceful vessel.

Zarina will leave Genoa as soon as the boat show wraps up on Sunday and, weather permitting, she should reach Malta in little over three days.

Once in Grand Harbour, the owner’s guests will be able to enjoy the boat’s interior conceptualised to guarantee conviviality and privacy. For obvious reasons, the profession of the Maltese owner has been kept secret by the men at Eagle Marine but, judging by the interior design – through the choice of furnishings and through the pictures of various locations on the Maltese archipelago – it was not difficult to perceive that Maltese “culture” forms an integral part of the vessel’s style.

Apart from that, what is most striking is the refined thought in the allocation and projection of space for life on board with an excellent and spacious environment for the guests’ cabins while the kitchen is at the centre of the boat.

TV monitors in the common areas have been excluded, almost religiously, as if to encourage socialisation and avoid the invasive presence of TV personalities.

Standing on board, one realises the wise handling of the manoeuvring area destined for the activities of the captain and his crew, which seem separate from those of the management and ownership of the yacht, as if to underline that the host and his guests are the only tenants on board.

The cost of this super yacht is estimated at about $7,900,000, a figure that is considered by the experts at Genoa as a very competitive price for a boat completely built of composite material and decked out with furnishings of high artisanship.

Like every year for almost 50 years now, the Genoa boat show tells of life on pleasure craft in the Mediterranean. Still, it is not exaggerated to sustain that the Zarina is one of the most beautiful vessels berthed at the quays of the boat show to then arrive in Malta. This is what I’d call elegant cruising with a taste of the Mediterranean Sea.

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com.

Use of a Malta Based Holding Company to Own Real Estate in Portugal

October 7, 2009

At the end of 2003 the Portuguese Government amended the tax rates on immoveable assets held in Portugal. This was directed against properties held by entities defined as being offshore. A Portuguese list exists, which details the jurisdictions classified as being offshore.

The Option of Malta

Many property owners have taken the opportunity to restructure the ownership of their properties to jurisdictions not on the Portuguese list of offshore centres. One such jurisdiction is Malta, which, since joining the European Union in 2004, has emerged as a popular jurisdiction for holding property in Portugal.

Taxes Payable by “Offshore” Jurisdictions

A number of additional taxes are payable if a Portuguese property is acquired through a jurisdiction on the list of offshore centres:

  • A property transfer tax at a flat rate of 8% is payable on properties acquired after 2006. This property transfer tax applies to the acquisition value, or the registered value, whichever is greater.
  • Property municipal taxes are payable at the higher rate of 1%. These taxes are liable on an annual basis.
  • Properties held by companies on the offshore list are subject to a 15% withholding tax on deemed gross rental income. This is based on 1/15th of the property’s tax value, as calculated by the Tax Authorities.

Taxes Payable using a Malta Company to hold Portuguese Property

Malta is not on the Portuguese list of offshore jurisdictions and therefore Malta companies pay the standard property transfer tax and the standard municipal property tax:

  • Property transfer taxes in Portugal vary from 0% to 6.5% depending on the property’s value.
  • Property municipal taxes are based on the property’s value as calculated by the Tax Authorities and range from 0.2% to 0.7% for urban properties. The rate for rural properties is 0.8%. This municipal tax is payable annually.
  • Withholding tax is not payable as there is no deemed rental income charge for a Malta company holding Portuguese property.

 Another potential liability to consider is capital gains tax. If a Malta company sells Portuguese property, the capital gain generated will be taxed at a 25% rate. If, however, shares in the Malta company are sold, there will be no capital gain and therefore no taxation will be generated in Portugal.

Company Migration to Malta

Companies registered in offshore listed jurisdictions are able to migrate to Malta. This assumes that the laws of the country where the company is domiciled permit such a migration.

Example of a Typical Company Structure Migrating to Malta

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Additional Information

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77greatestates or info@77GreatEstates.com.

The Case Study below illustrates the types of tax saving that can be achieved through the use of a Malta company for holding property in Portugal, as opposed to the holding of property by a jurisdiction on the Portuguese list of offshore jurisdictions.

Case Study

The case study below details two scenarios.

  • At the date of purchase the property was valued at €1,000,000, it was held for a 5 year period and then sold for €1,100,000.
  • The first scenario illustrates the property being held by a BVI Company and the second scenario by a Malta Company. In each scenario, the sale of the property is achieved through the sale of shares in the respective company.

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TOTAL SAVING

Over a period of five years a tax saving of €95,000 can be achieved through the use of a Malta company as opposed to a BVI company, or a company from another jurisdiction listed as an offshore jurisdiction by the authorities in Portugal.

Malta: The Tax Regime, Double Taxation Treaties and Double Taxation Relief

October 6, 2009

In assessing the tax efficiency of a jurisdiction, the following factors need to be taken into consideration:

  • The tax rate on income in the home jurisdiction
  • Withholding taxes suffered on income paid from one jurisdiction to the home jurisdiction
  • Double taxation relief given in the home jurisdiction for taxes paid elsewhere
  • Withholding taxes on subsequent dividends from the home jurisdiction

The Maltese Tax Refund System and the Effective Tax Rate

Companies operating in Malta are subject to a corporate tax rate of 35%. However, shareholders enjoy low effective rates of Maltese tax as Malta’s full imputation system of taxation allows generous unilateral relief and tax refunds on the distribution of profits:

Trading Income – Shareholders can apply for a tax refund of 6/7ths of the tax paid by the company on those trading profits that have been used to pay a dividend. This results in an effective Maltese tax rate of 5% on trading income.

Passive Income – Where profits are derived from passive income (ie. interest and royalties) the tax refund to the shareholder is 5/7ths of the tax paid by the Maltese company. This results in an effective Maltese tax rate of 10% on passive income.

Where the Maltese company has obtained double taxation relief on the foreign passive income the tax refund to the shareholder is 2/3rds of the tax paid by the Maltese company.

Participating Holding Exemption

The participating holding exemption, exempts the dividends and capital gains derived from a participating holding in a non-resident company, from income tax.

To qualify as a participating holding, the shareholding of the Maltese company in the foreign company must satisfy at least one of the following conditions:

  • The holding is 10% or more of the equity capital of the foreign company or
  • The holding is a substantial equity investment of at least €1,164,000 and the holding is held for an uninterrupted period of at least 183 days or
  • The Maltese company:
    • Holds at least 1 equity share and has an option over the balance or
    • Holds at least 1 equity share and has power to appoint a director

Double Tax Relief for Maltese Companies

Maltese companies enjoy exemption from or reduced withholding taxes on income paid from another jurisdiction.

Income received from foreign sources may have been liable to foreign taxes and may also be subject to withholding taxes. Mitigation of these taxes can be obtained by claiming unilateral relief.

Foreign tax suffered, is allowed as a tax credit against the tax chargeable in Malta. The credit allowed must not exceed the total tax liability in Malta and to claim the unilateral relief the company must demonstrate that:

  • The income arose from a foreign source
  • The income was subject to foreign tax
  • The amount of the foreign tax suffered

Flat Rate Foreign Income Tax Credit

An alternative option to claiming double tax relief, is to claim a flat rate foreign income tax credit.

The flat rate foreign tax credit is calculated at 25% of the foreign income or gain before allowable expenses.

The net foreign income received, plus the tax credit, less allowable expenses, is then subject to Maltese income tax at 35% with relief for the deemed credit (up to a maximum of 85% of the Maltese tax payable). An example is provided below:

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The effective tax rate on net income after expenses is therefore 13.38%.

On distribution of the profits, the shareholder can claim a 2/3rds tax refund on the tax suffered by the Maltese company, effectively reducing the overall tax rate even further.

Tax Treaty and EU Directive Relief

Malta has an extensive network of double taxation treaties. A list of Malta’s double tax treaties is detailed in the Appendix below. As a full member of the EU, Malta has access to the benefits of the EU Parent Subsidiary Directive and the EU Interest and Royalty Directive.

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For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com.

More than you can ask and imagine

October 6, 2009

More than you can ask and imagine (Eph 3:20)

As part of its corporate responsibility, 77 Great Estates supported “Tabgha Foundation” which comprises Youth Fellowship and the Cenacolo Community.  Moreover, it advertised on Floriana FC’s nursery calendar in order to support such a prestigious football club together with its talented youngsters.

77 Great Estates encourages you to support persons in need.

For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77greatestates or info@77GreatEstates.com

VisitMalta – official tourism website for Malta

October 6, 2009

VisitMalta is the official tourism website for Malta, Gozo and Comino.  You will find information on various topics listed hereunder including Malta’s events such as annual festivals & traditions, an events’ calendar and an option to register your event.

 

  What to See & Do
 
In Malta, you’ll explore 7000 years of history yet live passionately in the present. You’ll span the millennia with an astonishing array of things to discover. And wherever you go, the Islands’ scenery and architecture provide a spectacular backdrop. The colours are striking, honey-coloured stone against the deepest of Mediterranean blues.The Maltese Islands have been described as one big open-air museum. What makes them unique is that so much of their past is visible today. Delve into the Islands’ mysterious prehistory, retrace the footsteps of St Paul or see where the Knights of St John defended Christendom.Malta is holidaying as the mood takes you.   And with near year-round sun, you can indulge in outdoor living at its best.In just 48 hours and a kilometre or two, you can try a new sport, laze on an island cruise and tour the most important historic sites, and still have time to join in the nightlife. That’s the real advantage of a stay here.The Islands offer plenty of specialist holidays for those seeking to learn a new skill, discover history or get fit. If you’re interested in sports, we cater as much for the seasoned enthusiast as the casual first-timer. Malta has wellness and spa facilities at the luxury hotels and club resorts.  Sea and land lend themselves to activities from rock-climbing to gentle rambling.For a tempo and scene change from Malta itself, hop to the sister islands of Gozo and Comino. Here, you’ll holiday within a holiday and at the most relaxed of Mediterranean paces.

 

 

Useful Information

 
Do I need a visa to visit Malta? Is driving in Malta on the left or on the right?  Answers to these and many other questions can be found in this section, together with travel tips, currency and bank information and much more. All those little details that put your mind at rest before you travel, as well as information you may need while you’re here.

Accessibility
 
Buying Property
 
 Currency & Banks 
 
General Info
 
Getting Here
 
 Health 
 
STAR Awards
 
 Tour Operators 
 
 Tourist Guides 
 
Transport
 
 Useful Numbers 
 
 Visa 

 

  Business Travel
 
Not many destinations have thousands of years’ experience as a meeting place.   But the Maltese Islands have played host to everyone from St Paul to latter-day presidents and from EU conferences to small groups.  Whatever the size, formality or informality of your event, Malta has the expertise and venues to suit.The Islands offer a variety of magnificent castles, palazzos and forts as function venues.  Other special settings include theme parks, village squares, luxury yachts and exclusive sea-front facilities.State-of-the-art conference hotels or venues are available for any size of event, and include the 16th century Mediterranean Conference Centre, once considered the most advanced hospital in Europe.  We can easily host gatherings of well over a thousand.The Islands are not only a place to meet, but also an ideal location in which to do business. 

 

  Language Learning
 
A twist of fate and 160 years of history gave the Islands its legacy of English.  That, together with an excellent climate and the option to turn learning into a holiday, make Malta ideal for studying English.Apart from life in the classroom, you’ll have plenty of opportunity to practise the living language.  Malta is one of only a few truly bilingual countries.  English language newspapers, books and magazines are sold everywhere, and much of the Islands’ cultural programme is in English.You’ll have two holidays in one: language learning and a Mediterranean experience.  Here, you’ll find that warm, southern hospitality blends perfectly with Anglo-Saxon traditions to create a charm unique to the Islands.Enjoy a backdrop of unrivalled weather, stunning scenery and all sorts of activities from sports to cultural tours.  All language schools organise extra-curricula programmes to help you make more of your stay by getting to know the country and its people.

 

 

Gozo & Comino

 
Some beautiful treasures are waiting to be discovered…Find out about the Sister Islands of Gozo and Comino, about how easy it is Getting There and Getting Around, about the choice of accommodation available Where To Stay (from Hotels to Farmhouses. read about What To See and Do, check out useful information about Services and Contacts and don’t forget to visit the Gallery. A good place to start is probably the Interactive Map

   
   

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For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77greatestates or info@77GreatEstates.com

FinanceMalta

October 6, 2009

Malta today is internationally recognised as a brand denoting excellence in financial services. It offers an attractive cost- and tax-efficient base for financial services’ operators looking for an EU-compliant, yet flexible domicile.

FinanceMalta has come on the scene at a critical time, just as Malta is entering the Eurozone. The financial services sector is now a major force in the country’s economy, and Malta has some significant strengths to offer the industry: a well-trained, motivated workforce; a low-cost environment and an advantageous tax regime backed up by over forty double taxation agreements. To these, we can add a world-class ICT infrastructure, English as an official language, an enviable climate and our strategic location.

Above all, we offer a single, supervisory body, the Malta Financial Services Authority, which ensures full compliance with EU regulations but, at the same time, is able to act with speed, flexibility and the minimum of bureaucracy.

FinanceMalta’s main aim is to promote the Islands’ financial services brand, both within, as well as outside, our shores. We bring together and harness the resources of the industry, the regulator and government to ensure that Malta maintains a modern and effective legal, regulatory and fiscal framework in which our financial services can continue to grow and prosper.

We welcome you to share in our success.  Do use our resources and feel free to contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77greatestates or info@77GreatEstates.com.