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MALTA NEWSLETTERJanuary 2016

www.alterDomus.com

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Disclaimer: Please note that this Update is not intended as a complete study on all applicable legislation nor has it

been written with a view to providing legal advice

on any matter.

Edited January 2016

GENERAL TOPICS

Alter Domus Celebrates its 5th Anniversary in Malta ...................................03

Changes in the Accounting Directive ............................................................03

Double Taxation Treaties .............................................................................. 04

Budget 2016 ....................................................................................................04

The MFSA revises the Personal Questionnaire ............................................ 05

Outcome of the thematic reviews carried out by the MFSA on Collective Investment Schemes and Fund Managers in relation to Governance, Compliance and Risk Management .............................................................. 05

OTHER NEWS

Business Office Services International expands to Malta .............................06

CONTACT

Contact ............................................................................................................ 07

AGENDA

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GENERAL TOPICS

1. Alter Domus Celebrates its 5th Anniversary in Malta On October 22nd, 2015, Alter Domus Malta hosted a splendid cocktail soirée in honour of the five year anniversary and relocation to a brand new office. The keynote speaker for the event was the Minister for Finance, Prof. Edward Scicluna. In his speech, the Minister said that, “Malta has reached the required standards that allow international companies in any sector, but particularly in the financial services sector, to be based here and be serviced by highly-qualified and highly-experienced professionals.”

“The reason many companies that used to operate in North Africa and the Middle East are now basing themselves in Malta is not just the fact that we offer economic and political stability, but also because here they can obtain the services of high-calibre professionals and firms in the financial, accountancy, IT and legal spheres,” the Minister

said. “Malta has become an ideal place from where companies can operate, and this is attracting all forms of investment to the country.”

On his part, Alter Domus Group’s Deputy Chairman, Mr René Beltjens, said that after five years of operations in Malta, the company is even more convinced that it pays to continue to do business here and that there is potential to grow.

Small entities Medium-sized entities Large entities

Balance sheet total €4,000,000 €4,000,000 -

€20,000,000

> €20,000,000

Revenue total €8,000,000 €8,000,000 -

€40,000,000

> €40,000,000

Number of employees 50 250 > 250

2. Changes in the Accounting Directive Directive 2013/34/EU was published in the EU Official Journal on the 29th of June, 2013. The aim of this directive is to ensure comparability between financial statements of entities registered in different EU member states.

Locally, the requirements of this directive were transposed in Legal Notice 289 of 2015 entitled Accountancy Profession (General Accounting

Principles for Small and Medium-Sized Entities) Regulations, 2015, and in the Companies Act and will apply to financial reporting periods beginning on or after January 1st, 2016.

General Accounting Principles for Small and Medium-Sized Entities (“GAPSME”) which were introduced through the above mentioned legal notice are applicable by default (unless the shareholder requests otherwise), to small and medium-sized entities. These are entities which exceed two out of the following three criteria for two consecutive financial periods:

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GENERAL TOPICS

Amongst other things, the introduction of GAPSME, will simplify the accounting requirements of entities qualifying as small and medium-sized entities. Examples of such simplifications includes cost accounting instead of fair value with respect to certain financial assets.

Companies qualifying as small entities, will amongst other things, be able to submit audited financial statements which are composed of a balance sheet, an income statement and notes to the financial statements.

In addition to the above, medium-sized entities will be required to prepare a statement of changes in equity and a cash flow statement.

Furthermore, the Companies Act has been modified with respect to the following items:

• abridged accounts no longer possible (given the introduction of simpler and shorter financial statements as mentioned above);

• small companies need not prepare directors’ report;

• small and private exempt companies need not file profit & loss account;

• removal of the financial holding company exemption;

• removal of extension of period allowed for laying accounts before general meeting; and

• changes to rules regarding the profits available for distribution.

3. Double Taxation Treaties On the 10th of November 2015, the double taxation treaty entered between Malta and the Republic of Mauritius came into force.

On the 18th of November 2015, Malta signed a double taxation treaty with the Kingdom of the Netherlands, in respect of Curacao.

4. Budget 2016 The following are some interesting items, proposed during the Budget Speech for 2016:

• Coaches and players of any sport will benefit from a reduced income tax rate of 7.5%.

• A donation to the arts will be considered deductible at 150% of the amount donated.

• Businesses that purchase hybrid or electric vehicles may claim a wear and tear allowance amounting to 50% of the purchase price in the year of acquisition.

• Wear and tear allowances previously restricted to industrial buildings, hotels and car parks will be available for office buildings.

• The option of applying for the final 15% tax rate on gross rental income will be extended to commercial property. This option is not available to intra group rent arrangements.

• As from 1 January 2016, the final tax rate on transfers of regenerated immovable property situated in Urban Conservation Areas will be reduced from 8% to 5% of the transfer value.

• The Micro Invest Scheme will be extended to provide a maximum tax credit of €50,000 to self-employed women and businesses that are majority owned by women.

• A tax credit to facilitate research and innovation will be granted to enterprises employing individuals with a doctorate or reading for a doctorate in science, ICT, or engineering. Such enterprises will be eligible to a maximum tax credit of €10,000, to the extent that such period of employment is at least of 12 months.

• Companies may qualify for either a tax credit or a grant for the ‘knowledge transfer’ between employees. The incentive is intended to transfer skills from existing employees to new employees.

• The introduction of fiscal consolidation will allow a group of companies owned by the same persons, to compute taxable income on a consolidated basis as if it were a single company.

5. The MFSA revises the Personal Questionnaire

The MFSA has issued a revised version of the Personal Questionnaire (“PQ”) effective as of December 1st, 2015 and also revised the respective MFSA Rules, removing the 21 day limit for the approval of directors, senior managers, compliance officers and money laundering reporting officers.

The revised PQ now includes a checklist of the documentation which must be submitted to the Authority and includes additional sections which are used by the MFSA to collate the necessary information for the due diligence process and which should make the review process more efficient.

6. Outcome of the thematic reviews carried out by the MFSA on Collective Investment Schemes and Fund Managers in relation to Governance, Compliance and Risk Management During 2014 and 2015, the MFSA conducted 21 thematic reviews in relation to governance, compliance and risk management through focused visits at the offices of a number of collective investment schemes and fund managers. The purpose was to verify the extent to which the selected licence holders had the relevant procedures in place and the extent to which they were actually being complied with.

The document compiled by the MFSA lists the common findings of these 21 visits in order to encourage licence holders to avoid common pitfalls in relation to lack of observance of regulatory and compliance standards.

The main common findings related to:

1. Conflict of Interest – Policy, register and relevant disclosures;

2. Proceedings at Board of Directors Meetings;

3. Keeping relevant breaches registers and reporting;

4. Disclosure and Transparency requirements; and

5. Policies, Manual and relevant procedures.

Copy of the Authority’s letter can be found on the website of the MFSA.

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GENERAL TOPICS

MALTA NEWSLETTER - January 2016

06MALTA NEWSLETTER - January 2016

Business Office Services International expands to Malta

OTHER NEWS

Business Office Services has recently opened a newly constructed state-of-the-art business centre, ideally located along the Mrieħel Bypass in Malta, providing high quality office space to local and international clients supported by an entire suite of business services. The offices were officially inaugurated on the 2 December 2015.

Vision Exchange Building • Territorials Street • Mriehel BKR 3000 • Malta

T + 356 2014 5300 • F + 356 2014 5999

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FUNDS EUROPE AWARDS

2013, 2014 & 2015

EUROPEANSPECIALISTADMINISTRATORWINNER

Alter Domus is a leading European provider of Fund and Corporate Services dedicated to international private equity & infrastructure houses, real estate firms, multinationals, private clients and private debt managers. Our vertically integrated approach offers tailor-made administration solutions across the entire value chain of investment structures, from fund level down to local Special Purpose Vehicles.

Founded in Luxembourg in 2003, Alter Domus has continually expanded its global service offer and today counts 30 offices and desks across five continents. This international network enables clients to benefit globally from the expertise of more than 850 experienced professionals active in fund administration, corporate secretarial, accounting, consolidation, tax and legal compliance and debt administration services.

We are proud to serve 9 of the 10 largest private equity & infrastructure houses, 7 of the 10 largest real estate firms in the world and 3 of the 10 largest private debt managers in the world.

MALTA

CHRIS CASAPINTACountry Executive Malta+356 22 05 1000Chris.Casapinta@alterDomus.com

www.alterDomus.com