XXXIV tal-1988

·e.\

M A LTA INTE KN A TIO N A L B USINESS A CTIVITIES ACT . 1988

Ar ..... n~cmcnl nfs.. ... ·!ionx

1'REU ~'1 I NARY

Se,'lion

, I. Shorl

Illle- allll

('onunenc~m('nl

I Illc'rprdal" ,,1

1'A RT I -

T H E M I'\L T A I NTE RN " T1 0N AL BUSINESS AUT HOK ITY

., .

ESla hlis hmc"nl ,If I h~ A u Ilwril),

...

FurK'lion,,,flhe Au thoril)'

-' .

[) i ~!ri hutiun "f Ihe dUlies of Ihe ,\ nlhori I)'

C"m p'" i! i"n of I h~ Board of Governors

(1.

r-.kdinllS of Ih~ I3naru ,'f Governors

7. C OIllp')s;lion of EX <"(uliv(' Cmnrniu""

X.

The eXl'cuti,'(' and " 11",, staff nf the Authorily

':I.

I ( ~.

Le gal anu juu icial represe nlaTio n or rhe A U I h"ril~

11. C"nfiuemialoty

I ~ ,

Manner "f exercise of function, Ill" the Authorit"

1.'\ ,

Capital anu linancia l provis;,,,I,

I...

Est; ma tes and <'xjl<:ndit urc

I~ .

P" ..... ersofthe ,\uIIHlril\'

AJ\'ances IlV the Governn1l'nt

16. D.·term inatl"n anu al loc~t i on of pmfih

17. IX.

F;nancialwar

Auuit

[':I.

Annu,,1 ;!CCOUnh

~tl ,

21 ,

Exemptions fmm laxn

PART [[ - O FFSHORE COMPANIES

M cani ng "f offshore comp,mies

~J ,

TYjl<:s of offshore com panies

..

Rcgist rat ion of offshore companies

~ ,

R"gi~tr'lI iull und unlluul fe",

~:;.

~O. Compa ny ceasing 10 ht.' an c)ffsh"r~ c,)mpu ny for ,lIegal uCI;' illC"

17 . App lical ion o f the Commacial Part ntl'lhips OrJina ncc . I%~

. ::x. A pplicm ion of Ih~ Bun k ing Ad . 1970 10 h,,,, k ing ,,[[,h, ne c, ""11'''' ie'

2':1. Applicalion of lhe In suranc~ Business ACI . I')SI 10 i n'~Ir:'n .. e on,I""e

cmnpamcs

."\0. E ~lenl of "ppi ication of thc Income T~x Act . I !)"S 1<' "ff,hM" companlC'

31. E ~enlption from deal h and .1011"1,,)11 dUI,,·,

32. E~empl;on from slamp dulin

.U. Exemptions from exch" l1!!e c,mrrol. ~"'h'"" dU!, anu ,,,,-'i,,: ,~cllri!l

coni ri t>u I ions

Declaratioll in heu "r lax r~ t llrn

Special remedies r"r undisclnsed sl1;"cl1"l<.Icr' or d ir,",CIM' "r n"n-rr"dil\~

"ff~h"re cumpanks

.16, Exemption from prccautionarv and C .(eCIIl iw ,"Ch

37. Sccu ri l y to he given in cnlain CaSt.·S

i\

38. Confidelllia.ilyon maners relaling loorfmre companies

39. COlllinuancc of companies

40. Non-rc~iUcnl direclors and employl"1:S of offshore companies

41. E~empliOllS ;mJ privileges oplion

I'ART Ill - NOM INEE COMP ANIES

42. Nominee companies and condilions for Ihe formalion Ihereof

43. Warranl 10 funclion as nominee compa ny

44. N(){ificalion of manges

45 .

l{enxalion of warralll

46. Functions of a nominee company

47. Dut iCll of nominee companies

Position of directors and officers of nominec companies

~.

49. Othcr dutieS of nominee companies as secretary of offshore cornpa ny

50. Penalties for false stalcmCIllS. declar:llions elC.

51. Winding up of nom in ee oomp.1lties

PART IV -GENERAL PROV ISIONS

52. Po"'er 10 make regulations Of" rules

53. Guarnnlee of e~cmplions

54. Criminal prorecdings

55. Amendmenl of the Commercial Partnerships Ordinance. 1962

SCHEDULES

Fl RST SCH EDULE - Fees payable by offshore companies

SECO:-':D SCHEDULE - Declaration in lie u of tax return in respect of a non· trading

offshore company

I assent.

(L.S.)

PA U L X U EREB

Acting President

2nd December. 1988

ACT No. XXXIV or 1988

AN ACT 10 e510blish On A l!Ihorily for Imernafio,,,, / Finwlcio/ and

Trading A crh'ities fro m wilhin Mal/a. 10 regiE/ale sllch oClivitit'S olld

/0 provide for mal/US a/lcillary or incidema/therelO or COll/wc/ed

therewith.

BE IT ENACTED by the President. by and with the advice and

consent of the House of Represe nta tives, in this present Parliament

assembled. a nd by the authority of the sa me, as folJows:-

Preliminary

I . ( I ) This Act may be cited as the Malta In temational Business

Activities Act. 1988.

(2) This Act ,hall come into force on such date as the

M inister responsible for the International Bu.iness Activiti es may by

notice in the Gazett e appoint. and diffeTent dates may be so appointed

fOT di fferem provisions or different purposes of this Act.

Section 34

Declaration in lieu of Tax Return in resp«l of a Non-Trading Offshore Company

Declaration by the Sole Director/Secretary of a Non-Trading Offshore Company

in Lieu of a Return of Income and of Capital Assets under the lnoome Tax Act , 1948.

Year of Assessment

We ..............

. ..... . ....... and .............. ..... .. ... ... .. .

two of the directors of .........

. ........................ , ' .... , .... .

the nominee company which is the sole director/secretary of ................... .

................................. . ............................ , a non trading

offshore company registered under the Malta International Business Activities Act,

1988 (hereinafter referred \0 as "the Act" ) do solemnly and sincerely declare that we

have ascertained to the best of our ability that the said offshore company satisfies all the

conditions requircd by the Act in order that it may remain a non-trading offshore

company and have the income referred to in subsection (3) of section 30 of the Act not

chargeable to tax as provided in that se<:tion, and that oonsequently

(a) thc said o ffshore company is exempt from the payment of income tax for

the year of assessment ......... ,

(b) the members of the said oompany are all persons qualified to hold shares

in the company and no person other than a qualified person has an interest in or

otherwise has voting or other controlling power in the oornpany;

A

46'

(c) the said company does not stand to lose any of the rights, exemptions and

other privileges granted by the Act for any reason whatsoever.

We make this declaration in full knowledge of the penalties established by the Act

for incorrect o r false declarations.

Signature .................. .

I.D .CardNo ...... ....•• • ... . .. ....... .•• • .......... .. .•• • . ..............•

Profession ....... , ..................... .. .... ............•... .. . ... . .. .

Address ................. . ... .. .. ... ...... .. "

. .

. .

.

Dated

Passed by the House of Representatives al Sitting No. 158 of the 2nd November.

1988. LAWRENCE G ONZI

Speilker

P . MUSCAT TERRIBILE

Clerk /0 The House of Represl'nt{Jtives

r..bI;.NJ by!h, v."."..um of '"f~

K."Jio

lppubbhhl ",jd.Dipanim<nl '"' l·lnfOfm.aZZjoni _ K."ilj.

Mitl>ul~ O.l.tomperijo .. I-(;vcm _ Primca '" w Go,-"""",", p,u,""E P,m

( I)

In this Act , unless the contex t o therwise requires: -

··the AU!horit y~ means the Malta Internat ional Business

Authority established by section J of this Act ;

'·the Board" or ··Board of Governors" mea ns the Board of

Governors of the Authority esta bl ished by section s 5 ,,"d 6 of this

Act ;

"body of persons~ means any company, fellowohip . socie ty OT

ot her association of persons. whether vested with legal personality

or nOI;

"captive insura nce offshore company" is an insuran~ offshore

company which restricts its bus iness of insurance to rish

originating with companies being members of a grou p of

C<Jmpanies, of which it is itself a member, and having onc parcm or

holding company or with companies who arc thc sole shareholders

of the insurance offshore company and their subsidia ries, and

includes a company which is rCC<Jgnised by thc Authority as a

captive insurance offshore co mpany;

"the Committee" or "the Executive Committcc" means the

E~ccutive Committee of the Authority established by scctions 5

and80fthisAct

"company" means a limited liability company duly formcd and

registered under the law for the time be ing in force in Malta, and

includcs a similar body corporate incorporated or registered

abroad

"the Court" means the Second HaJJ of thc Civil Court;

"foreign currency" mcans convertible forcign currcncy and

includes the European Currency Unit or ECU;

"intcrnational business act ivity" means an offshorc act ivity

"Ministcr" mcans thc Minister rcsponsihle for international

husiness ~ctivities;

"nominee company" means a compa ny authorised to perform

the functions of a nomincc company under section 43 of this Act;

"offshore activity" means (lily husiness or other activity carried

on from Malta in a foreign currency by pcrsons and with persons

not resident in Malta or with another offshore company or with an

offshore trust

Provided that the management or servicing of an offshore

company by another company shall not be an offshore activ ity

except where the activity consists in the management o f captive

insurance offs hore compan ies caused to be formed and registered

in Malta for the purposes of this Act by the compa ny managing

them and arc so rcgistered

Provided furthe r that business which may lawfully be carried

on by a person resident in Malta with a foreig n ban k may, with Ihe

approval of the Authority, be carried on with a ban ki n~ offshore

ove rseas company or a ba nking offshore subsidiary compan y, and

any business so done shall be an offshore activity;

"ofhhore company" has the meani ng assigned to it by section

22 of this Act: and "banking offshore company", "insurance

offshore company", "general trading offshore company" and "non-

trading offshore company" have fhe mea ning rcspeetive ly assigned

to thcm by section 23 of this Act;

"offshore local company" has the meaning assigned to it by

subsection (5) of section 22 of this Act;

~offshore oversea company'· has the meaning assigned 10 it by

subsection (3) of section 22 of this Act;

"offshore subsid iary company'· has the meaning assigned to it

by subsection (4) of sectio n 22 of this Act;

··offshore trust" has the meaning assigned to it by thc Offshore

Trusts Act. 1988;

··oversea compa ny" has the meaning assigned to it by sect ion

176 of the Commerci;!1 Partne rships Ordinance. 1962;

··person·· includes a body of persons;

··prescribed·· means prescribed by regulations made under this

Act;

··propocrty·· means property of any kind or description.

whether movable or immovable. personal or real. and wherever

situated;

··q uali fied person". in relation to a shareholder of or to a

person having an interest in an offshore company. means a person

not resident in Malta and references 10 a person qualified 10 be a

shareho lder Or pocrson having an interest as aforesaid shall be

construed accordingly;

"register·' includes any kind of record;

" Regi strar" means the Regist rar of Partnerships;

~resident in Malta·' means

(a) in the case of an individual. a pocrson who is either

ordinarily resident in Malta o r is domiciled in Malta

(b) in the case o f a body of persons. any such body as is

formed and registered in Malta. orwh ieh has its principal place

of business in Ma lta. or which is controlled. directly or

indirectly by a person Or persons resident in Malt a

Provided that an individual who resides ordinarily in

Malta and is so entitled 10 reside by virtue of a residence

pennit issued under the Immigration Act. 1970. and the

dependants of such ocrson. shall be deemed not 10 be resident

in Malta for the purposes of this Act

Provided further that for the purposes of this Act a

company which is itself an offshore company shall be deemed

not to be resident in Malta.

(2) Any reference in Ihis Act 10 any lawor provision thereof.

shall be construed as a reference to that law Or provision as from time to

time in force and shall include a reference 10 any eTlilctme nt replacing

such law or provision. and to any subsidiary legislation made

thereunder.

Words and I'xprl'ssions used in this Act with referencl' to

(3)

another taw shall . so far as nece ssary to give effect to thi s Act and

consistent ly with the provisions thereof. have the same meaning as they

have in the taw wIth referl'nce to which they arc used in this Act.

(4) Any reference in this Act to a criminal offe nce Act XVII

committed abroad. or againstthl' law of a country other than Malta. or 0/ tons.

to an act which if committed in Malta would be a crimina l offence

against the law of Malta. shall be construed as limited to offences which

arl' extraditable for the pUTJ"XlSCS of scction 5 of the Extradit ion Act.

1978. (5) In this Act and in any regulations made therl'u ndl'r . if

thcre is any connic! between the English and Ma ltese text. the English

text sha ll prevail.

PART J

TiU' Malta InternatiQnal Business AwllQrily

KOnli)iet annwiili.

(I) There shall be an authority. to be called the Malta &labti.hm<n,

International Business Authority.

(2) Th e Authority shall be a bodycorpora!e having a dist inct

legal personality and capable of enteri ng i nto contracts. of acquiring and

disposing of properly of any kind for the purposcs of its functions under

this Act. of sui ng and being sued. and of doing ail such things and

entering into all transactions as arc incidental or cond ucive to the

I' xl'rl'isl' Or pe rformance of illly of its functions aforesaid.

(I) Without prejudice to any other power or function Fu"",;"'"

conferred on it by this Act or by any other law. it shall be the function of

the Authority -

(a)

to promote Malta as a centre for offshore activities

(b)

to assist bodies corporate and other entities and persons

to l"stablish offshore activit ies from within Maha

(c)

to assess and evaluJle any proposed trading offshore ac·

tivlty

(d) to monitor and supe rvi se offshore activities to ensure

that they arc performed according to law and in particular tllattlley

arc not carried out in such areasor man"l'r as to serve the purposes

of illicit activities. whether in Malta or abroad. or otherwise to be

detrimental to the interests of Malta

(e) 10 adv;"e the Government gener~lIy on ,my of the

matters mentioned in the forl'going paragraphs of this section.

(!) The AUlhorily ,hall. notwithstanding any OIher law. be

lhc centre anti the channel wherein and throug.h which all Minimic> and

Departments of Government and all bodies or other aUlhoritie,

established by law. shall act in all matters. and in the exercise of alltllcir

powers, wilh respect \0 all offshore acti~ilies regulated by this Act and

with respect to bodies and other persons who are registered. or who

seck to be registered. for that purpose under Ihis Act. as well as thc

centre and the channel through which any such body or other person

shall apply for and obtai n any permit. licence or olher authorisation, or.

a ny other thing they may require and through which. they shall

communicate with any o f the authorities aforesaid. In particular. but

without prejudice to the generality of Ihe aforesaid. any investigation.

inspection. or olher similar act which any such authority may dcem

expedielll to have carried out and any information such authority may

require. for the purposes of any of its functions unde r the law. wilh

respect 10 any offshore activily or body or person carrying OUI such

activity. shall be carried out or obtained Ihrough the Authority.

(3) It shall be the duty of Ihe Authorily 10 carry out Ihe

functions conferred on it by subsection (2) of this section promptly and

efficiently: and it shall be the particular duty of the Board of Governors

to ensure Ihal any act or thing to be done by the Executive Commillee

by virtue of the subsection aforesaid is done to the satisfaction of the

minist ry, department. body orother authority for which il is required 10

aCI ; and if such authority is nOI so satisfied, or shows some other jusl

cause, the function and powers thereof shall, with the approval of the

Cabinet. be exercised directly by the aUlhority concerned in any maner

and in such manner as may be so appro\'ed.

S, (I) The Authority shall consist of a Board of Governors and

an Executive Commiltee .

(2) The Board of Governors shaH be responsible for the

policy to be adopteJ by the Authority and to be executed and pursued

by the Executive Committee and to ensure that the Commiltee carries

oUlthose functions accordingly. In determining such policies the Board

shall follow such policy guidelines as may be set out by Government,

The Board shall also be reponsible for advising the Gove rnmem as

provided in paragraph (d) of subsection (I) of section 4 of this Act. for

advising the Minister under section 52 of this Act and for the grant of

any warrant of recognition under this Act.

(3) The Executive Commillee shall be responsible for the

execution of the policy established by the Board and for carrying out all

the functions of the Authority not allributed by th is Act to the Board in

accordance wi th that policy and subject to the general supervision of the

Board.

(4) Neither the Board of Governors nor any iodividual

member or members thereof shall have access to any information in the

possession or under the contro l o f the Authority relating to any person

carrying on offshore activities under the provisions of this Act. Subjecl

to the aforesaid. it sha ll be the dUly of the Executive Comm itlee to

provide the Board with all such information as the Board may require

for the proper performance of its functions. and in particular of its duty

to ensu re that its policies arc being properly carried out.

(I) The Board ofGo~erno", shall oonsist of a Chairma n. who

shall also be the President of the Authority. and such number of other

members as may from time to time be appointed of wltom

(a) two shall be senior public officers perform ing duties in

the Ministry responsible for international busine,,-' activities, and in

the Ministry responsible for finance, respectively;

one shall be a ~ni"r "fficcrofthe Central Bank ,,[Malta;

(b)

"d

(c) not more than three shall be selected from among

persons who ha~e distingu ished themselves in business, industrial

re lations, financial activities, the professions, the public service or

academic affairs,

(2) All the members of the Board referred to in subsection

(I) of this section, shall be appointed by the Prime Minister,

(3) The members of the Board shall, unless their

appointment terminates earlier, hold office for such term. being nOI

more than five years, as may be speeified in the letter of appointment,

and shall be eligible for re·appointment.

(4) A person shall not be qualified to be appointed , or to

hold office as. a member of the Board if he-

(a)

is legally incapacitated ; or

(b) has been declared bankrupt or has made a composition

or arrangement witlt his creditors; or

(e) has been convicted of a crime affeeting publie trust or

theft or fraud or of knowingly receiving property obtained by theft

or fraud; or

(d)

has heen convicted of an offence against this Aet.

(5) A member of the Board may be relieved of office by the

Prime Minister on the ground of inability to perform the funct ions of Itis

office, wltether due to infirm ity of mind or of body. or to any othe r

cause, or of misbehaviour; and for the purposes of tltis subsection

repeated and unjust ified non·attendance of Board meetings may be

deemed to amount to misbehaviour.

(6) A member of the Board may also resign from office by

lener addressed to the Prime Minister.

(I) The Board of Governors shall meel as often as may be Meetings

necessary or expedient, but in no case less frequently than once eve ry

three months. The mee tings sltall be called hy the Chairman either on

his own in it iative or at the request of any {WO of the other members.

(2) The Board shall not act unless 3 quorum oonsistingof not

less th;," four members is present.

(3) The meetings of the Board shall be chaired by the

Chairman or, in his absencc. by a member clected for the particular

meeting by th e ot her members present at that meeting.

(4) Th e decisionsofthe Board shall be taken by a majori tyof

the votes of the membep; present and voting; and in the case of an

equality of votes the member presiding at the meeting shall have and

exercise a second or casting vote.

(5) The Chief Executive and the Deputy Chief Executive of

the Authori ty shall be en titled to allend the meetings of the Board and

to take part in the discussions. but 5hall have no vote.

(6) Any vacancy amo ng the members of the Board, and any

participation Ih ereln by a perwn not entitled so to do. shall not

invalidate the proceedings of the Board .

(7) Subject to the foregoing provisions of this section the

Board may regulate its own proceedings.

(1) The Executive Commitlec of the AudlOrity shall oonsist

01-

(a) the Chief Executive of the Authority. who shall also be

Chairman of the Execu ti ve Comm itt ee;

(b)

the Dcputy Chid Executive of thc Authority; and

(c) nol more than three other membep; as may be appointed

by the Board of Governors from among senior officep; of the

Authority.

(2)

The provisions of section 7 of this Act shall. in so far as

applicable. apply 10 the meetings of the Commil1ee as they apply to the

meetings of the Board. except thal the quorum for the meetings of th e

Commil1ee shall be three members.

(3) Thcre shall also be a secretary 10 the Committee.

appointed by the Committee with the approval of the Board. who shall

also act as Secretary 10 the Board. [I shall be the dUly of Ihe secretary 10

make the necessary preparations for the meetings of the Board and of

the Commine.: and to keep minutes of those meetings.

(I) Th.: Chief E~ecut;ve and the Deputy Chief Executive of

the Authority shall be appointed by the Board of Governors.

(2) The other officers and staff of the AUlhority shall be

appoint"d Or rCl"Tuitcd by the Ex.:cutivc Committee un such teons and

conditions. and in such numbers as the Committee may with the

approval of the Board determine

Provided that until the Executive Committee is con~tituted

such appoi ntments o r recruitment sh~11 be made by the Chief Executive

with the approval of the Board.

(3) The provisions of subsection (2) of section 40 of this Act

shall apply 10 any pe rson on the staff of the Au thority. or otherwise

employed by it, who is nOt do micilcd in Ma lta. or if so domiciled, is nOt

ordinarily reside nt in Malta, as they apply to employees of offshore

compan ies.

(I) The legal and judicial representat ion of the Authori ty upt .. d ju6jciot

shall vest in the Chief Executive

Provided thatthc Committee may appoint a nyone or more of

its officer.; or servants to appear in the name and on be half of the

Authority in any judicial proceedings or in any act . contract. instrument

Or other document.

(2) Any document purporti ng to be made or issued by the

Authority and to be signed by the Chief Executive shall be received in

evidence and shall, until the contrary is proved. be deemed to be made

or issued by the Authority.

11 , (I) Thc Authority shall deal with all documcms and other ConIidt",uU'Y_

information in its possession orunder its control. orothcrwise coming to

its notice. concerning pe rson~ lawfully carrying on offs hore activities

unde r this Act. and all matters and things relating to such persons

concerning their o ffshore activi ties. as secret and confiden tial, a nd shall

nOI seek to identify the individ ual~orother persons having an interest in

such lawful activities.

(2) The obligations imposed on the Authority by subsection

(1) of this section shall eXlend 10 all the me mbe rs of the Board of

Governor.; and of the Ex c<;u tive Committee and to all officer.; and

servams of the Authority; and the provisions of section 38 of this ACI

shall. without prejudice to the generality thereof, apply to each and

everyone of such persons.

(3) Except as may be essemially required for the purposes of

this Act or as is permitted thereunder, no mcmber. officer or servanl as

aforesaid shall be required to produce or divulge to any court, tribunal.

board. committee of inquiry or other authority any document.

information or othcr maller coming to his notice. or being in his

possession or control for any reason whatsoever, which he is 10 treal as

secret and confiden tial under Ihis >cclion .

12, (I) In the e x.:rcise of its functions under this ACI. and in Manne,oI'

particular in carrying out a ny investigation to ensure that the provisions .,.rciJc 01'

of Ihis Act are being observed. or that no unlawful activilies are being ~­

carried on. abetted or encouraged. or that any exempti on o r other A~tlIori'1 '

privilege granted is not being abused. the Authority shall use such

di>eretion as is compatible with its dUly of confidentiality; but subject to

the above. the Authority shall have JX)wer to do all such things and

require such inform at ion as is necessary for the purposes of its

functions.

(2) If in carrying ou! any investigation as is mentioned in

subsection (I) o f this section , the Authority finds that the in vestigat ions

cannot be properly made unJeS-5 information is obtained as to

individuals. activiti es and othe r tran sact io nsor maH ers which need to be

treated as confidential. the Authority shaH cause such investigat ions to

be conducled by the Courl of Appeal in camera underan oath of secrecy

taken by the judges constituting Ihat Court be fore the investigation is

oomm enced: and the Court of Appeal shaH, with due urgency, carry oul

such investigations and mak e a report on its fi nd ings to the AUlhority.

revealing onl y such facts. persons or other malleTS. as its findi ngs show

to be in oo ntravention of, or tu have oont rave n",d . the provi~ions of this

Act, or 10 be or to have commi lled a criminal offence. wh eth er in Malta

or abroad , or which would be a criminal o ffe nce if committed in Mal ta.

toget her with such materi al as will enable the authorities in Malta to

take Ihe opproprime steps in Ihe circum~l!lnces: and for the purpooes of

any such action, anyt hing disclosed by the Court of Appea l as aforesaid

shall cease to be con fidential and may be treated by the said authorities

accordingly.

(3) In th e exercise of its funclions under this sectio n the

Coun of Appeal shall have all the powns of Ihal coun in ils ordinary

jurisdiclion.

( I) A sum nO! exceeding five hundred thousand liri. wh ich

amount shaH co nst itute the initial capital orthe Authority, shall be paid

by [he Government to th e Authorily out o flhe Conwlidated Fund. and

Ihis without fun her appropriation other th an this Act, by warrant under

the hand of the MiniSle r responsible for finance authorising the

Accountam Genera l to make such payment

Provided thal only an amou nt of two hundred thousand liri

sha ll become payable o n the comi ng into force of this Act and the

balance shaH be paid as and when req uired by the Authority.

(2)

The revenue of the Authority shaH consist of

(a) income from registration and other fees payable unde r

this Act

(b) fems. imerests and profits accruing fmm property.

deposits and oth er asseh of the Au thority;

(c)

any ot her money receivable or received by the Authori ty.

(I) The Executive Commiuee sha ll cause to be prepared in

respect of each financial year and shall not later than six wee ks after the

end of the previous year adopt estimates of the ,ncome and cxpenditure

of Ihe Authority for Ih ,n financial year

Provided that the estimates for the first financial yea r o f the

Authority shall be prepared and adoptcd within such time as the

Minister may by notice in writing to the Authority specify.

(2) In the preparation of sueh estimates the Authority shilll

endeavo ur to ensure that the total revenues of the Authority are at least

sufficient to meet all sums properly chargeable to its income and

cxpenditure account, including, but without prejudice to thc gene rality

of that expression, depreciation.

(3) The estimates shall be made out in such form and shall

contain such information and such comparisons with previous years as

the Board may direct.

(4) A copy of the estimates shall, upon their adoption by the

Executive Committee be sent forthwith to the Board.

(5) The Board sha ll not later than four weeks lIfter the

receipt of the estimates approve the same with or without amendments.

(6) No e~penditure sha ll be milde or incurred by the

Authority unless it has been approved by the Board in accordance with

subsection (5) of this section

Provided that until the estimates are approved by the Board .

the Authority may make or incur expenditure not exceeding the

expenditure made or incurred during the corresponding period of the

immediately preceding year

Provided fu rther that this subsection shall not apply in the firsl

financial year of the Authority until the est imates for that year arc

approved by the Board.

(7) Notwithstanding the provisions of suhsection (6) of this

section if in respect of any financial year, it is found tha t the amount

approved by the Board is nOI sufficient or a need has arisen for

expenditure for a purpose not provided for in the estimates, the

Executive Committee may adopt supplementary estimates for approval

by the Board and, in any such case the provisions of this Act applicab le

to the estimates shall as near as practicable apply to supplementary

estimates.

(1)

The Authority may

(a)

hold accounts with any ban k

(b) invest any of its liquid assets in short and medium te rm

first class securities as approved by the Boa rd;

(c) ilcquire, purchase, lea.'IC or dispose o f any movable or im-

movable property required for the cond uct of its business or for any

purposes ancillary or incide ntal to the performance of its functions

under this Act.

(2) For the purpose of ca rrying oUl any of its functions under

this Act, the Authority may. with th.: approval in writing of the Minister

given after consultation with the Minister responsible for finance,

borrow or raise money in sue t. manner, from such person. body or

authority. and under sucll te rms and conditions as the Minister. after

consultation as aforesaid, may in writing approve.

The Minister responsibl e for fina nce may. after

consultation with the Minister, make advances to the Authority of such

sums as he may agree to be required by the Authority for carrying out

any of its functions under this Act . and may make such advances on such

tenns and conditions as he may, after consultation as aforesaid. deem

appropriate. Any such advances may be made by the Minister

responsible for finance Qut of the Consolidated Fund. and withuut

fun her appropriation other than the Act. by warrant under his hand

aUlhorising [he Accountant General to make such advances,

11. (I) The Authority may establish a Reserve Fund to which

may be appropriated surplus funds arising from its Income ~nd

Expenditu re Account provided the said fund does not e~cced at any

time the initial ca pital of [he Authority paid to it ,mder sect ion 130fthis

Act.

(2) The surplus funds of the Authority for each financial year

shall be determined after meeting all current expenditure for that year

and after making such provi~tons, including provisions for

contingencies. as it dee ms fit. and the appropriation referred to in sub·

section (1) of this section.

(3) After the allocations referred to in subsections (1) and

(2) of this section have been made. the remainder of the surplus funds

shall be paid to the Government.

The financial year of the Authority shall begin on the first day

of January and cnd on the thirty first day o f December

Provided that the first fina ncial year shall begin at the date of

commencement of this Act and shall end on the thirty first da y of

Dece mbe r of the followi ng year.

The accoums of the Authority shall be audited by auditors

appointed by the Board from among persons who are qualified to be

appointed as auditors of a comp;!ny under the law for the time being in

(orce in Malta. as if the Authority were such a (·o mpany.

A"n",I ""","",,_

ZO. (l) The Hoard shall. as soo n as may be but not later than

Ihrec months after the close of eac h financial year. transmit to

Parliament through the Minister

(a)

a copy of the a nnual accounts certified oy the auditors

(b)

a report on ils operations during Ihe year_

ZI. The Authortly shall be exe mpted from any liabil it y for the

pa yment of incom e ta~ and dUly on docu ments under any la"" for Ille

lime being in force.

PART 11

Offshore Companies

Eicnzjon i mil-taxxi,

TAQSI MA II - KUM PAN N[JI OFFSHORE

(I) An offshore company is a company in which all the M< ~ "jngof

general conditions set out in subsection (2) of thi s section and any off.."".

special conditions applicablo.< to the particular type uf offshoro.< com pany. oompan"""

in particular those set out in section 23 of th is Act, concur. or is a

company to which subsectio n (3) or subsection (4) or subsection (5) of

this section applies; and any such company shall remain an of~hore

company only if. and for so long as, the said ge ne ral and special

cond itions continue to be satisfied or the said subsections (3). (4) or (S)

continue to apply. as the case may be.

(2) The general conditions referred to in subsection (1) of

this section arc that the company -

(a) is a private company formed and registcred under the law

for the time be ing in force in Malta;

(b) has its ohjects expressly limiied to offshore activities and

to such other acts only as arc necessary for its operations from

Malta;

(c) does not own or otherwise hold, except on lease and for

the purpose of its operations from Malta . any immovable property

situated in Malta and does nOt own or otherwise hold any movable

property situated in Malta other than deposits in bank account s.

furniture. equipmen t, material. documents and other property

n:asonably n:quired by it for its operations from Malta

Provided that an offshore company which is exclusively or

mainly a holding company may hold shares in or dcbentures of a

company formed and registered in Malta if the lauer company is

wholly owned by persons not resident in Malta. has as ih main

objects the manufacture or pr()(:essing of goods in Malta a nd is a

subsidiary of the said hold ing company

(d) has no parI of its capital or voting rights. or other

controlling power, whether directly or indirectly. owned. held or

exercisable by. or vested in. any person residen t in Malta;

(e) has no person other than a nominee company as the

nominee of any person who is th e effective holder of any of its

shares or debentures;

en

has a nomi nee company eit her as its sole dircctoror as its

secretary

Provided that a company of imcrnational repute, recognised

as such by the Authority. being a manager of a capti~e insurance

offshore company or a captivc insurance offshore company, may be

exempted by the Authority from complying with the provisions of

this paragraph;

(g) is registcred with the Authority as an offshore company

under this Aet and a certificate of regi st ration is issued to It by the

Authority

(h) pays the registration and annual fees applicable to it

when due.

(3) This suhsection applies to an oversea company wmch -

(a) is a bank or a banking institutio n. or an insurance

company. of international standing and repute and recognised as

such bv the Authority

(b) intend,. if registe red under this Act. to establish. and

does so establi sh a branch in Mal ta exclusively for offshore

acti~ities. and such other acti~ities only which arc necessary for its

operation~ from Malta, and at all ti mes cffecti~ely limits its

operations accordi ngly;

(c) does nOI own or olherwis.e hold or control any property

situated in Malt a excepl as provided in paragraph (c) of subsection

(2) of I his section

(d) is registered wi th the Authori ty as an offshore com pa ny

under this Act and a certificate of registration is issued to it by tbe

Autbority

(c) pays tbe registration and annual fces applicable to it

when due

and such a company is in this ACI referred to as an "offshore oversea

company".

(4) This subsection applies to a private company which-

(a) is formed and registe red under the laws forthe time being

In force in Malta for Ihe purpose of carrying on e xcl usively the

business of ban king as a ban king offshore company or the business

o f insurance as an in~urance offshore company . 3S the case may be;

(b) is a subsidary of a bank or a banking inst itution. or of an

insurance company. as the case may be . o f international stand ing

and repute. and recognised as such by Ihe Authority. provided the

rmme of the subsidiary company includes the name of the holding

company

(c) has a name which on {he face of it shows clearly that it is a

subsidiary of its 1l0lding company. and is acceplable as such by Ihe

Authority;

(d) Ilas no part of its capital or voting rights . or other

controlling power. wllether directly or indirectly owned. held or

exercis.eable by. or vested in. any person resident in Malta

Provided that this condition shall in the ca!;C of a company

existing before the commencement of this Act and licensed to carry

on thc business of banking under the Banki ng Act. 1970. be

deemed to be satisfied notwithstanding tha! pan of its capital.

being not more tllan twenty per cent thereof. is owned or held by a

person resident in Malta .

(cl does nOI own or otherwise hold or control any properly

situated in Malta except as provided in p;.ragraph (c) of subsection

(2) of this section;

(f) is registered with the Authority as an offshore company

and a certific .. te of registration is issued to it by the Autllority;

(g) pays Ihe registration and annual fees applicable to it "

when due;

and sucll.~ company is in this Act referred 10 as an "offshore >ubsidiary

company .

(5)

This subsection applies 10 a private company which-

(a) is formed and registe red under the law for the time being

in force in Malta. for the pu rpose of carrying on exclusively the

business of banking as a ban king offshore company or the business

of insurance as an insurance offshore company ,as the case may be;

(b) is a subsid iary of a company fonned and registered under

the law for the time being in force in Ma lta which is itselfin the case

of a company formed 10 carry on the business of banking, licensed

to carry o n Ihat business under the Banking Act. 1970 and, in the

case of a company formed to carry on the business of insuran ce,

licensed to carry on that business as principal under the Insurance

Business Act, 1981;

(cl has no part of its capi tal or voti ng tights, o r ot her

contro lling power, whether directly or indirectly owned, held or

e xercisable by, or vested in, a ny other person resident in Ma lta

Provided th at onc person resident in Malt a may hold such

numherofshares in the company asdo not exceed in the aggre-

gate onc thousand liri in nomina l value or onc per cent of the

share capital of th~ company. whichever is the smalle r number

of shares, if he is so authorised by the Minister responsible for

financ(';

(d) has the permission of the Minister responsihle for

fi nance, for the purpose of exchange coOlro l, to operate as a

ban king offshore company or as an insurance offshore company, as

the case may require;

(e) is registered with the Au thority as an offshore company,

and a certificate of registration is issued 10 it by the Authotity;

(f)

pays the registration and ann ual fees applicable to it when

due

and such a company is in this Act referred to as an "offshore local com-

pany".

(6) For the purpose of this section any shares or stoc k In a

compa ny or other body corporate registe red or in corporated abroad

which is quoted on a foreign stock exchange shall not be taken into ac-

count in determining whethe r a company is an offshore com pan y,

(7) Wi thout prejudice to any other provision of this Act or of

lhe Exchange Control Act, 1972, and to any other consequences "'",XUXofl'm

thereunde r. if a perso n resident in Malta has a n interest in a com pan y

registered as an offshore company under this Act and that interest is

such that the company should not have heen so registered or ceases to be

an offshore company by virtue of subsection ( I) of this section, such

person shall he guilty of an offence against the Exchange Con trol Act,

1972, by reason only of having such an interest and shall be li able on

con viction to the punishments established by section 41 of that Act.

(I) An offshore company may be eithe r a trading or a non- Typosol

"IW..,...

trading offshore company.

oomp.n;" •.

(2) A trading offshor(' company may be a bank ing offshore

company, or an insurance offshore company or a general trading

offshore company ,

(3) A banking offshor~ <;ompany is an offshore compa ny

which expressly restricts its objects to the business of ban king or is an

off~horc oversea or an offshore subsidiary company to which subsection

(3) or subsection (4) of section 22 of this Act applies or is an offshore

local company, and in any case limits ;ls operations from Malta 10 the

busi ness of bank ing ; and an illsurance offshore company is an offshore

company which expressly restricts its objects \0 the business of

insuranL~ or is an offshore oversea or an offshoTt.' subsidiary company 10

which subsection (3) or subsection (4) of section 220fthis Act appliesor

is an offshore local company and in any case restricts its operations from

Malta to the business of insurance.

(4) For the purposes of Ihis A~I the expressions ·'business of

ban king" and "business of insurance" have the meaning respectively

assigned to them by section 2 of the Banking Act. 1970 and by section 2

of the Insurance Business Act. 1981 .

(5) A general trading offshore company may have as its

object any trade or business ot he r tha n the business of bankillg and of

Insurance.

(6) A non -trading offshore company is an offshore company

which expressly limits its objects to the ownership. management and

ad ministration of property of any kind. ot her than propeny which it

cannot own or otherwise hold undcr paragraph (c) of subsection (2) of

section 22 of this Act, and to ma tters incidental or ancillary thereto

Provided that where thc property of the company consists of a

ship or ships registered in Malta. the company shall nOI cease to be a

non-trading offshore company by reason only that it operates such

ships

Provided further that where the property owned by, managed

or ad min istered by. an offshore company includes a collective invest-

ment. that is to say assets derived from investments made by, or on be-

half or for the benefit of persons, who do not have the day-to-day oon-

trol over thc management or administration thereof. other than assets

held fort he purposes of a pension. provident or sim ilar fund accepted as

such by the Au thority. such a company shall not be a non-trading

offshorc companv.

(I) Every offshore company shall be registered with lhe

Authority and shall not be capable of commcncing business unless and

unt il it is so registered and a certificate of registration is issued to it by

the Authority.

(2) Thc registration of an offshore company. o ther than an

offshore oversea company, shall be preceded by the delivery to the

Authority of a certified copy of the memorandum of association of the

company and of its articles. if any, and the delivery or provisions of such

othe r certificates. documents or infonnation as may be required by the

Authority with respect to Ille particular type of offshore company that

appl ies fo r registration, together with an application for such

registration in the prescribed form or such other fonn as the Authority

may accept

Provided t hat in the case of a non-trading company. thereshaU

only be delivered with the applicat ion a copy or the memorandum and

articles. if any. of the company and a declaration by the nominee

company acting as its sole di rector or secretary, certifying that the

company satisfies all the conditions of this Act to enable it to be

registered as an offshore comp3ny.

(3) The registration of an offshore oversea company shall be

preceded by an application to the Authority in the prescribed fonn or in

a form acceptable to the Authori ty and giving such information and

other details. in particular as to the manner and e xt ent it in tends to

opera te from Malta. as may be prescribed Or as the Authority ma}

require.

(4) No twithstanding anything contained in the other

provisions of this Act

(a ) a company shall not be registered asa banking offshore

company or an insurance offshore company unless the Authority is

satisfied th at the company is capab le of properly conducting and

supporting the busi ness to be carried on. that it has the fi nancia l

resources for such purpose and that it will keep such resources in

assets and maintain whe re appropria te margins of solve ncy. as arc

normally acceptable;

(b) a company whose bus iness is. or includes, the

management of captive insurance offshore companies shall not be

registered as an offshore company unless the company proves to

the satisfaction of the Au thority that it has sufficie nt specia l

knowledge and practical experience of insurance business so to act

and th at it is properly and adequate ly insured against its li abi lities

for neglige nce and misfeasanee in the co nduct of its affairs: and any

such company sha ll cease to be a n offshore company if it is at any

lime not so insured for a period e xceeding one month o r the

Authority is satisfied that the compa ny has ceased to have the

knowledge and eJtpe rience aforesaid.

(5) On being sat isfied that all the requirements of this Act for

the eJtistencc of the particular Iype of offshore com pany in respect of

which the applicat ion is made have been met. and that the company may

ot herwise be prope rly registered. and on ascerta inin g that the

appropriate [cc has been paid. the Authority shall register the compa ny

as an offshore company. indicating its type. and issue a certificate of

regiMra tion accordingly_

(6) Th e Authority sh .. 1I keep a register of all compa nies

registered with it unde r this sect ion. distinguishing between the various

types of compan ies. an d shall enter in such register all changes notified

to il and all such othe r matters as are relevant to such co mpanies.

(7) Where a company ceases to be an offshore com pany

under any of the provisions of this Act. the A uthority shaH strike the

name of that company off its register and the company shall thereupon

cease to be regi~tered with the Authori ty

Provided that a ll eJtemplio ns. pr;vileg.:s or other benefils

granted or allowed by any of the provisions of this Act to offshore

companies and their directors or em ployees shall cease to have effect

immediately the company ceases to be an offshorc company.

(8) The Authorityshall once e~ery three months. cause 10 be

published in the Gazette and in a local rlCwspaper publi,hed in the English

language the name of every company which il registered as an offshore

company during the previous three months and !hall also pub~sh as aforesaid

the name 0\ every company whose name has been struck off the said

register during the same period _ The Authorityshall, moreover, publish

as aforesaid, aod root later than the thiny-lirst day of January of each year

a list of all the companies registered with it as offshon' companies as on

the thirty-first day of December of the previous year.

(\) The fees payable for the registration of an offshore

rompany and the fees payable annually thereafter Shall be th ose set out

in the first schedule of this Act. The annual fee shall be payable upon

each anniversary of the company's registration.

(2) A company shall cease to be an offshore company if the

annual fee appropriate to that company is not paid with in one month

from the date on which it is due

Provided that t his subsection shall be deemed not to h~ve had

effect if a sum equal toone hundred and fifty per cent of the amo unt due

by way of annual fee is paid to the Authority not late r than six months

from the date 00 which such fee w~s due.

(I) Without prejudice to the provision s of sections 22and 25

of this Act, a company shall cease to be an offshore company if it has

income accruing 10 it or derived by it which originates from any

transaction , operation or o ther activity which is a criminal offence

ag~inst the law of Malta or would be suc h an offence if carried out in

Malta , or has received or has in its possession or control money or

other property the receipt. ownership, possession orcontrol of which is.

or would be, such an offence ~s aforesaid.

(2) All income, money or other property as is referred to in

subsection ( I ) of this section shall be liable to se izu re and shall be

forfeited in favour of the Governme nt and bewme its property

absolutely .

27, (I) The Commercial Partnership Ordinance . 1%2

(hereinafter in this section referred to as " thc Ordinance" ) shall, wilh

respect to an offshore company, have effect subject to the following

provisions of this SC('!ioo as applied eithcr gencrallyoTto a particular or to

panicular types of offshore companies; and for the purIX'SC of this

section the e~pression " offshore company" includes a company in

formation which when registered under thi s ACI will be an offshorc

company.

(2) Section 5 of the Ordina ncc sha ll not apply.

(3) Section 68 of the Ordinance shall apply subject 10

thc following provisions of this subsection:-

(a) paragraph (a) thereof sha ll apply to a non-trading

offshore company as if there were added thereto the following

proviso:-

" Provided tha! the memorandum may be subscribed by a

nominee compan y or companies as nominees of persons q ualified

to hold sh ares in the company but only if the me mo randum

contains a declaration by the nominee company or companies

subscribing th e memorandum that all the persons for whom they

are acting are persons qualified to hold shares in the company";

(b) paragrapb (e) thereof shall be construed as requiring the

share capital of the company to be expressed and paid in a foreign

cu rrency and 10 be d ivided illlo shares accordingly;

(c) paragraph (f) thereof shall apply to a non -trading

offsbore company as if there were added thereto the following

prov,so:-

" Provided that the memorandum may state the name and

surname of o nly one or more of the fi rst directoTS of the compa ny

and in any such case. and until the na me of the otherdireclOTSofthe

company holding office from time to time is disclosed, the

provisions o f this Ordinance shall apply as if the director or

directors whose name is disclosed we re the only director or

directors of the company";

(d) the section shall app ly as if the memo randum was further

required to state the name of the first nominee company that will

act as secretary of the offshore company whenever such company is

req uired 10 have such a secretary in accordance with subsection (2)

of section 22 of this Act.

(4) Section 70 of th e Ordinance shall apply subject to th e

limitations conta in ed in the foregoing sections of this Part of thi s Act

relative 10 the objects of an offshore company.

(5)

Section 74 of the Ord inance shall apply as if it further

required:-

(a) th e company to be registered with the Authority under

this Act before it is capab le of commencing business; and

(b) the Registrar to state in the ce rtificate issued by him that

the company is only so capable of commencing business

Provided that in respect of a company to which the proviso to

paragraph (d) of subsection (4) of section 22 of this Act applies,

section 74 of th e Ordinance shall apply as if it furthe( required on ly

th at the company be registered under this Act before it iscapableof

continuing business as an offshore company under this Act .

(6) Section 77 of the Ordinance shall not be construed as

preventing, or postponing the effect o f, the reduction of the share

capital of a non-trading offshore com pany by the redemption of fully

paid up s hares against the paymcnI by the company to the holder

thereof of an amount equal 10 the net asset value of such shares: and the

redemption of such. shares as aforesaid may fake place if the followi ng

conditions co ncur -

(a) the memorandu m ~nd articles of the company are

observed and com plied with.

(b) the company will, afte r the redemption. be in a position

to meet its liabi lities

(c) the value of t he unredeemed shares is 001 impaired as a

result of the redemption; and

(d)

the shares, once redeemed, do not carry any vOI ing or

other rights unless and until they are re·issued.

(7) Section 102 of the Ordinance shall apply as if there were

added thereto the following proviso:-

"Provided further that the articles of associationofa non -trading

offshore company may provide for the transfe r of any share in or

debenture oflhe company in any manner stated in the articles, and may

also provide for the transfer. in su(:h manner and under such conditions

as may be set out in the articles. of any share in or debenture of the

company after. or having effect after. the de3th of a share or debenture

holder; and any such transfe r shall be ~alid and effective and ~hall be

acted upon by the company. nOlwithstanding the provisions of any other

law o f Malta or of any persona l [aw otherwise applicab[e".

(8) Section 128 of the Ordinance shall apply to the secretary

of an offshore company as if references to directors includcd refcrences

to the secre tary of the company.

(9)

The provisions of -

(a)

paragraph (b) o f section 126. and

(b) sub-paragraph (iil and (iii)ofparagraph (a) of subsection

(I) ohection 140 of the Ordinance.

shaH not apply to an offshore company; and the provisions of sections

139. 141. 143 and 144 of the O rdinance shall not apply to a non-trading

offshore company.

(10) The provisions of the Ordinance applicable to the

winding up of a company shallapp[y subject to the following provisions

of th is sect ion:-

(a) whcre the company has as its last sole director or as its

last secretary a nominee company, that nominee company shall be

appointed as its liquidator. but shall be liable to be removed from

office and substituted in the same ma nner and circumstances as any

other liquidator; and

(b) where the liqu idator of the company is the nommee

company as aforesaid al the time when the company is fi nally

wound up -

(i) a statement by the liquidat or llial the affairs of the

company have been fully wOllnd up wilh the approval of the

company in general meeting may be delivered to the Registrar

in lieu orlhc acrounts and return s mentioned in sect ion 158 of

the Ordinance. and in any such case the provisions of that

section shall apply 3cwrdingly.

(ii) all the books and documents of Ihe company shall,

notwithstanding the provisions of the Ordinance, be retained

by the liquidator who shall keep them for a pe riod of five years

after the date on which Ihe company is struck off the register.

(1 1) Section 191 of the Ordinance shall be construed as

requi ring the Registrar to keep the books in respect of offshore

companies sereTa1e from those kept in res~cl of other companies.

(i2) In respect of an offshore company which has ceased to

be such a oompan~ under any of the provisions of this Act , the

Ordinance shall appl y as ifit further provided that, notwithstanding any

other of its provisions -

(a) the compan~ shall be dissolved immedialely the

company ceases to be an offshore co mpany

(b) all the powers and functions given by the Ordinance to

the compan~ in general meeting or to its directors, including, but

without prejudice to the generality of the foregoing, the

appoint ment and remova l of the liquidator, shall vest in a nd be

exercisable b~ the Authorit~. and the duties of the liquidator shall

be construed accord ingly .

Apphkaujolli ta ' I-Ordinanza ta' 1-1 %1 dwar Sotjclajict Kummcrcjali.

(I) The Banki ng Act. 1970 (in th is section referred to as Apphcotionof

=.

"the A(.1") ,hall apply with respect to a banking offshore company ,IIeB.nk;n,:""'.

subject to the following provisions of this section.

(2) Paragraph (a) of subsection (6) of section 4 of the Act

shall appl~ as if it required th e Minister therein referred to, to act after

he has received a recommendatio n from the Authorit~ and paragraphs

(b) and (c) thereof shall not apply .

(3) Section 5 o f the Act, other than subsections (I) and (5)

thereof. shall not appl~ , and the said subsectio ns (I) and (5) shall not

appl~ to a ban king offshore oversea company.

(4) Paragraph (b) of subsection (I) of section 6 of the Act

shall not apply. and subsection (2) of that section shall be construed

acoordingl~ .

(5) Section 7 of the Act shall appl~ as foUows:-

(a) paragraph (a) thereof shall apply whether or not the

offshore company is a commercial bank and shall be construed as

requi rin g the company to have a paid up share capital of not less

than one million and five hundred thousand United Slates doll ars,

or its equivalent in an~ other foreign currency: and

(b) paragraph (b) thereofshall not apply.

(6)

Sections9and 11 of the Act shall not apply.

(7) Sections 12 and 13 of the Act shall not apply to a banking

offshore oversea company or to a banking offshore subsidiary compan~.

(8) Paragraph (b) of subsection (I) of section 19. and section

22 of the Act shall not apply .

(I) The Insurance Busi ness Act, 1981 (in this section

referred 10 as "Ihe Act") shall apply with respect 10 an insurance

offshore company subject to the following provisions of this sect ion .

(2)

Subsection (3) of section 3 oflhe Act shall nOl apply.

(3) Section 5 of the Act shall apply subject \0 the following

provisions of this subsection:-

(a) paragraph (a) of subsection (1) thereof shall apply as if

for the sum of two million liT; there were substituted -

(i) in the case of a captive insurance offshore company,

the sum of two hundred and fifty thousand United States

dollars . or its equivalent in any other foreign currency; and

(ii) in the case of any other insurance offshore company,

the sum of seven hundred and fifty thousand United States

dollars, or its equivalent in any other foreign currency;

(b) paragraph (b) of ~ubsection (1) thereof ,hall nOI"app!y

(c) paragraph (a) of subsection (3) thereof shall apply as if it

required the Minister the rein referred to act afte r he has received a

recommendation from the Authority; and

(d)

paragraph (b) of subsection (3) thereof ,hall not apply_

(4) Subsection (I) of section 60f1he Act shall not apply 10 an

insurance offshore oversell company, or to an insurance offshore

subsidiary company; subsection (3) of that section shall apply 10 an

insurance offshore oversea company. or 10 an insumnce offsho re

subsidiary company to the extent only of requiring il to give the

informa tion therein referred to; and subsect ion (5) of that section shall

apply to the exte nt it is applicable in view of tbe foregoing provisions of

this subsection.

(5} Subsections (2) and (4) of section 6, section IS and

section 26 of the Act shall not apply.

(6) Sections 8, 9, 10, I I, 12, 13 and 14 of the Act shall not

apply to an insu rance offshore oversea compa ny or to an insurance

offshore subsidiary company.

(7) Paragraphs (b) and (c) of subsection (I) and paragraphs

(b) and (c) of subsection (2) of section 16 of the Act shall not apply.

(I) The Income Tax Act. 1948 (in this section referred to as

"the Ae!" ) and any cnactment replacing tbat law. shall apply to trading

offshore companies subject 10 the provisions of subsections (2) and (3)

of this section.

(2) The tax payable by a tradingoffshorccompany shall be at

tile rate of five per cent on the chargeable income of the company. and

no tax shall be chargeable on -

(a) any dividend (including any deemed distribution of

dividend) distributed by such company

(b) any inte rest or other income paid by such a company to

any person who is not resident in Malta

Providcrlthat. this subsection. in so far as it exempts the income

referred to in paragraphs (a) and (b) thereof. shall not apply to an

off~ hore local company

I'rovided funher that the tax payable as provided in this subsection

shall not be reduced whether by way of double taxation rel ief or

otherwise, and no se t·off or eredit shall be madc or allowed in

respect of such tax in favour of any shareholder or other person to

whom a dividend or other payment exempt from tax under this

subsection may be due, or is paid or made .

(3) Thc tax payable as providcd in subsection (2) of this

section shall be charged on the income as declared in the return of

income furnished by the company to th e Commissioner of Inland

Rcvenue under the Act , and the Commissioner shall. no twith standing

the pro~isions of that Act . accept the return as correct and complete,

unless he has good reason to belie~e otherwise a nd can prove such belief

to the satisfaction of the Board of Special Commissioners and in any

such case heshall act as provided in subsection (2) and (3) of section 4 of

this Act before the matter is referred to the said Board for its decision.

(4) No tax shall be chargeable under Ihe Act. or under any

e nactment replacing that law. on -

(a) the income accrumg to or derived by a non-trading

offshore company

(b) any di~idcnd (including any deemed distribu tion of

d ividend) distributed by such company;

(c) any in terestor other income paid by such company toany

pe rson who is not resident in Malta where such interest or other

income is paid out of profits exempt as aforesaid.

(5) Notwithstanding anything coll1ai ned in the foregoing

provisions of this section any tax deducted from any dividend or inte rest

payable in respect of shares or debentures of a subsidiary company as is

referred to in Ihe proviso to paragT3ph (e) of subseelion (2)ofseClion 22

of Ihis Act , shall not be refundabl e or otherwise be liable to be set off

against tax.

(6) An offshore company shall be exempt from th e

requirements of section 37 A of the Ac!.

(1) No shareholder. debenture holder. depositor or other

person intercsted in an offshore company shall be required to make

or furnish any return that could otherwise be due. o r be !awfu!ly

required. to be made or furnished for th e purposes of the Act in respect

thereof.

(8) Without prejudice to the generality of the provisions of

section 38 of [his Act, all proceedings before the Board of Special

Commissioners or of the Court of Appeal for the purposes o f the Act

shall be held in camera and the requirements of confident iality imposed

by that section shall be observed in, and with respect to such

proceedings, except to Ihe extent that it may be necessary 10 act

othclVo';sc for the proper conduct of those proceedings.

(9) In respect of offshore companies. section 68A of th e Act

shall apply as if immediately after the proviso to subsection (I) thereof

there was inserted the following proviso

"Provided fUfth er that the provisions of the Malta

International Business Activities Act, 1988. shall prevail over the

provisions of this subsection and of any arrangements made as

aforesaid".

No dUly shall be chargeable under the Death and Donation

Duty Act. 1973. or under any enactment replacing that law. on -

(a)

any share in or debenture of an offshore company;

(b) any money orothcr propenyplaced with such acompany

on deposit or other titl e;

(c) any payment due to or made by any such company.

where sueh share. debenture. moncy. propenyor payment is comprised

in a chargeable transmission under the said Act and the person in

whose favour the transmission takes place is a person not domiciled

in Malta.

No duty shall be chargeable under the Duty on Documents

Act , \981 . or under any enactment replacing that law. on any document

relating to any transaction or other act of an offshore company, or to

any share, stock or other property thereof. other than the sale or

transfer , where permissible under th is Act, of any property 10 a person

resident in Malta.

(I ) Subject to provisions of subsection (7) of section 22 of this

Act. the Exchange COnlrol Act. 1972 and any cnactmc nt replacing Iha!

law shall nOI apply 10 any malterrelaling 10 the formation of an offshore

company or 10 any Iransaction or operation of or relati ng to an offshore

company. or any of its shares or debentures. Olhcr Ihan lransactions or

operations carried ou t with a person resident in Malta.

(2) Furniture. equipment and otber material required by an

offs hore company and imported into Malta for its own use and purpose.

and the used personal belonging of any officer or employee of the

company. nOI resident in Malta. imported into Malta nOI later Ihan

six months from the firsl taking up residence in Malta. may be so

imported free of customs duty

Provided that duty shall be payable on any thing importe d

free of duty under this subsection if and when such thing is sold,

assigned or othclwise transferred to a person resident in Malta.

(3) Pcrwn, not resident in Malta who are officers or

employees of an offshore company. and the company in respect of

such officer.; and employees. shall be entitled \0 be exempt from the

provisions of the Socia l Security Act. 1987. and of any enactmem Act x of 1<JIl7.

replacing that law,

(4) The foregoing provisio ns of this section shall apply only

in respect of transact ions. opera tions. things and persons that arc

relevant and necessary to t he pl.l rposes for which an offshore company

is constituted. or to its management or administration .

(I) Whcre a declaration in the form set 01.11 in the Second D«1.,. tion;n h".

Schedule (0 Ihis Act has been submiued 10 t he Com missioner of I nland of la> ',,'um

Re venue by a nominee company acting as the sole director or secretary

of an non-trading offshore company , neit her the offshore company nor

any other person having an interest in such company shall be required

to make or furnish any return. information or other det aiLs that could

otllerwise be due Or be lawfully required to be made or furnished for

thc purposes of the Lncome Tax Act. 1948.

(2) Where properly is by this r art of this Act exempt from

the duty payable under the Death and Donation Duty Act. 1973 no

return of the said properly shall be required to be made under the said

Act nor of the relative chargeable transmission. if the tra nsmission

comprises no other property and no person residcnt in Malta benefits

under the transmission; and where the tT;Lnsmission comprises other

property or a person as aforesaid benefits thereunder. the return may

be limited to the property liable 10 duty .

(I) A person who has practised as an advocate for not less Sp«iol Kmcd""

than seven uninterrupted years may. on behalf. bUI without disclosing for un<li1doooed

-.

the name of. any person or persons wllom he declares to be a .....

dinaor> 01

shareholder or shareholde rs, or a director or direcloN. of a non'lrading non.Lradi",

offshore company. eilher in thei r capacity as sueh or as represeming

the req uired majority of Ihe company in general meeti ng or of the """'fW';«.

board of directors for the approval of resolutions or othe r decisions in

respecI of any maner wilhin their compelence .. nd po wers. apply 10 the

Court req uesting any order or d irective from Ihe Court wh ich he may

consider necessary or npedient: and Ihe Court, after hearing any known

sha,eholde r or director of the company and the nominee company

acting as director or secretary thereoL and e ~amining such other

evidence as Lt may deem appropriate in Ille circu mstances . may . if il

thinks fi l. make wch order or give such directive as in its op inion the

circumstances warrant ,

(2) Any order or directi"e of the Court under this section

shall have the same validily and effecl as an appropriate resolution

ta ken by the comp .. ny in general mee ting or a decision of the board

of di reelor> as tile Court may direct: and any such order or d irective

may nOI be revoked or alte red except by the Court on an application

filed by the original applicam, or hy :0 pe roon having the same

qualifications and acting as the original applicant. or by ~ny other

peTS<.m imerested

(3) The proceedings under this 5ection, olher th~n the order

or directive of the COlIM and such paris of th e proceedings ao the Coun

may deem essential 10 disclose, shall , together wi th a ny document or

other information produced or given a nd any evidence heard for th e

purposes of such proceedings, be kepI secre t and confidential by every

person concerned Of conneded with the sa id proceedings as well as

by an other person to whose notice any such matter may come a nd

the reoordsof such proceedingssball be kepI under the personal custody

of the Registrar of the Court; a nd the provisio ns of section 38 of this

Act shall, wi thout prejudice to the generality o f the provisions the reof.

apply to every person who divulges or attempts !odivulge 10 ally person

any matter which. is by this section to be ke pt !;Ccret and confide ntial.

(\ ) No share in or debenture of. and no dividend or othe r

payment due by, an offshore company. and, except for the purpose,

or in execution of, a judgement given in pursuance of any action

men tioned in subsection (3) of this section. no propcny of allY killd

belonging to such company, shall be subject to any precautionary or

executive act or warran t as is mentioned in the Code of Organisation

and Civil Procedure.

(2) No director or other officer of any offshore company.

and no person being a member of o r having an interest in any such

company, sha ll be subject to any precautionary or execu tive act or

warrant as aforesaid in respect of any obliga tion or other liability of

the company

Provided th at this subsection shall not apply to a nominee

company in respect of any obligation or liability arising from any of

the provisions of this Act.

(3)

The action referred to in subsection (I) of this !;Cction

is eithe r -

(a) an action for the enforcement of an obligation or other

liability of the company: or

(b) an acriol! for the recovery of any propeny acquired or

held by the company. or othe rwi se in its possession or control.

and originating from any transaction. operation or activity referred

to in subsection (I) of !;Cction 26 of this Act.

(4) Notwithstandi ng th e foregoing provisions o f this !;Cction

no WllTrant or other a~1 ~h al1 be issued by the court unless the applicant

first satisfies the court that the warrant or other act may be issucd

under thi s !;Cction.

Wh ere an offshore company is a plaintiff in any action or

other judicial proceedings. the court before which the proceedings are

taken may. at th e request of the defendant and if it is sa tisfied that

the company may not be in a position to pay the costs of the defenda nt

if the!;C should be awarded in favour of the defendant. require the

plaintiff to make such deposit by way o f !;Ccurity for COSts as it may

deem sufficient for the pu rpose . and may stay proceedings until the

security is given.

(I) The transactions and activities of an offshore company CoIIlldenti&!i1y on

are of a secret and confide ntial nature and. except as otherwise provided ... It<n ,d • .m, to

by this Act. shall be so treated for all purposes, ineluding purposes of of&bore rompo. .....

law. and shall continue to be so treated even after the company has

ceased to be an offshore company or has been struck off the register.

(2) Accordingly, save as may be essentially re;quired for the

normal conduct of the affaiI1l of an offshore company or as may be

essentially required for the purposes of this Act or is permitted

thereunder

(a) no person shall at any time communicate or divulge any

document, infonnation or ot her matter relating to an offshore

company, except 10 an officer or member of that company entitled

to receive such communication, document or information;

(b) no person shall at any time be required to produce or

divulge 10 any court, tribunal. board, committee of inquiry or

other authority any document, information or other matter coming

to his notice or being in his possession or under his control for

any reason whatsoever , if such document, infonnation or matter

relates to an offshore company.

(3) Any per;on who , save as e~cepted by subsection (2) of

this section. al any time communicates or divulges. or attempts to

communicate or divulge, any document, information or other matter

relating to an offshore company ~

(a) sh all be guilty of an offence and shall be liable on

conviction 10 a fine (multa) of nOI less than one thousand and not

more than five thousand liri, or to imprisonment for a term not

exceeding two yeaI1l. or to both such fine and imprisonmen t;

(b) shall pay to the company a penalty of not less than one

thousand and not more than ten thousand lin as the court

convicting such person may determine and order; such sum being

recove rable as a civil debt, the order of the court being an executive

title by virtue of this section for the purpose of such recovery.

(4) The provisions of this section shall be without prejudice

to any other action that may be competent to the compa ny under any

other law.

(1 )

Subject to the following provisions of th is seetion:-

(a) a body corporate, formed and incorporated or registered

in a country other than Malta. which issimilarin nature to a private

company as known under the laws of Malta and which WOUld, if

were such a co mpany. q ua hty to be registered as an offshon

company under this Act, may be continued as an offshore company

under the Commercial Partnerships Ordinance, 1962, and under

this Act; and

(b) an offshore company registered under this Act may be

continued as a body corporate incorporated or registe red under

the laws of a country other than Malta.

In either case by complying with the following provisionsofth isscct ion;

and the aforesaid Commercial Partnerships Ordi nance, 1%2. shall. in

respect of such bodies corporate or offshore compa nies. ha ,·c effect

accordingly.

(2) Continuance as a foresaid may only take place if it is

within the power of such body or offshore company so to continue and

thc continuance is a pproved -

(a) in the case of a foreign body desiring to continue as an

offshore company undcr this Ac\, in such manner, by such

constituted body a nd with such majority as would be the

equivalent. under the laws of the country of its incorporation or

registralion and according to the instrument whereby it is

conslituted. of an e ~lraordinary resolution under the laws of Malta

>od

(b) in Ihe case of an offshore company desiring to continue

under a fore ign jurisdiction, by an extraordinary resolution of the

company.

(3) Where continuance as afores;.id e ntitles or requires the

body corporate or offshore company. as Ihe case may be. TO redeem

the inlerest of dissenting pe rsons whose approval is required. such

interest may be rC<.h:emed on such terms as may be agreed or as the

courts in Malta may. demand of cilhcr party. establish.

(4) Thc continuance of a foreign body co rpora te as an

offshore company in Malta shall be effected by an instrumen l of

continuancc contai ning. in addition to the declaraTions rclating to the

cOnTinuancc. the cqu ivalcnt of a mcmorandum a nd arTiclcs of a private

company as is requi red by th is Act in order ThaT a company may he

registered as an offshorc company undcr this ACT in accordance wilh

The type of offshore com pany in which;t is to be conT inued , and showing

on the face of it that the conti n u~nce has been approved as provided

in subsect ion (2) of this section.

(5) The deli very of Ihe inSTrument of continuance to the

RcgisTrar shall. for all purposes of the Commercial Partnerships

O rdinance. 1%2. Ix' equivalent to the delivcry of Ih('" memorandum

and articks of a company as if it wer('" a company to be registered

under Ihis A,·t: ~nd the Regist rar shall neat it ~ccordingly.

(6) Upon its registration as prov id('"d in suhsection (5) of

Ih is sect ion. and ils r('"gimation under t his Act. the hod)' corporate shall

cease to be a body corporate under its previous jurisdiCTion and shall

continue its corporate cxislancc. and rctmn all .ts assets. ri"hts

and liabilities as a company otherwise re~istered under Ihe Ordina n('e

aforesaid and thi s Act. und such ~'Ont i nuance shall have dCcct

nOlwilhstandinganything cont ained in the law of its former juriSdiction .

(7) The continuance of an offshore company "s a body

corporaTe under a foreign Ju risdiction shall not lake plac('" unless -

(i) such continuance (or ~imilar process. including

conversion) is permitted by Ihe \"w of slIch foreign Jur;'di.lion

and in accordance "'ith such provisions thereof as may bring aoout

such continuance (or similar process): and

(ii) such continuance (o r similar process) will operate the

con tinuation of lhe corporate existence o f the offshore company

as, or its conversion into, a body corporate which will continue

to retain or will succeed to all the assets, rights and liabilities of

the offshore company.

(8) Notwithstanding the foregoing provisions of this !;Cetion

an offs hore company shall not cease to be a company subject to Maltese

jurisdiction until the Registrar has received notice in writing of the

continuance (or other process) made as aforesaid and unless and until,

being satisfied that the requirements of this section have been complied

with. he has registered such continuance and has, in consequence

thereof and by virtue of this section, struck the name of the company

off the register.

(I) A trading offs hore company shall be entitled to employ ~OIl"_n'

an individual, named by it, and for such purpose to require that a dilUl"", .Dd

licence be granted to him under the Immigration Act, 1970; and such olfillof. companieo

right shall be exercisable for as long as the company is registered as

an offshore company with the Authority.

(2) Where an individual who is not domiciled in Malta or

who , if so dom iciled. is not ordinarily resident therein , is a director or

employee of an offshore company. his income shall be charged at the

rates contemplated in the Income Tax Act. 1948. so however that any

rate of t<u in excess of 30 cents on every Maltese lira shall be reduced

to 30 cents

Provided that th e tax payable by an individual as aforesaid

shall not be less than Lml(O) per annum , or pro rata to that sum for

the period of the year he was a director or so employed, unless the

amount payable by such individual but for the provisions of this section

is a smaller amount, in which case only such smaller amount shall be

payable.

( I) The exemptions. privileges and other benefits granted c..mption . . Dd

or allowed by any of the provisions of this Act to offshore companies priYik, .. option.

and theirdiret:torsoremployees are so granted or allowed subjeC110 the

option of the person in whose favour they are so granted or allowed not

to benefit therdrom.

(2) Such option shall be exercised by notice in writing to Ihe

Authority indicating the exemptions, privileges or benefits waived: and

any such waiver shall be indefinite and irrevocable in respeCI thereof .

PA RT III

Nominee Companies

(I) Subject to th e provisions of this Act, any two or more ~omi ....

persons associated for the purpose of performing the functions of a """'paD;"

nominee company with respect to offshore companies may. by forming 'hoe IoImatioo

a company under the law for the time being in force in Malta, and

complying with the conditions of Ihis Act with respect to the formation

of a nominee company, form a nominee company.

(2)

The condi tions for the formation of a nominee company

3re that-

(a)

the company is a private company;

(b) the objects of the compan y are expressly lim ited \0 acting

as a nominee company with respect \0 offshore companies for the

purposes of this Act, and to matters ancillary or incidentalthere!o

Provided that where a nominee company is established also

to act as trustee of an offshore trust, its objects may also include

such purpose;

the nameofthe companyinctudes the word ~Nominee";

(c)

(d) Ihe issued share capital of the company is not less than

five thousand liri

(e) the share capital of the company, and any voting or

controlling power therein, is, neither directly nor indirectly.

owned, held or exercisable by. or vested in, a person not resident

in Malta in an amount exceeding in the aggregate forty percent

(f) the directors of the company are not less than three, of

whom al leastlwo are Maltese citixens resident in Malta. who. for

an uninterrupted period of five years, have been any of the

following

liJ a person holding the warram of advocate under the

Code of Organisation and Qvil Procedure ; or

(ii) a person holding the warrant of" certified public

accountant or a certified public accountant and auditor under

the Acroumancy Profession Act. 1979: or

(iii) an associale Or fellow of the Chartered Institute of

Banker.; or of the Institute of Chartered Secretaries and

Administrators or of the Chartered Insurance Institute of th e

United Kingdom or a member of such other institute or ,

similar body recogn ised by the Authority for th e purposes of

this section: or

. .

(iv) a person who has served as a public officer in a

grade nOt below that of assistant head of departm ... nt. or in

an equivalent position with a statutory body. or is otherwise

recognised by the Authority as a person comparable to any

of the persons aforesaid

tg) no person who has been convicted of an offence against

the provisions of this Act has any direct Or indirect interest in the

company or is a member or director thereof. and no pcr.;on who.

under any other law. is not qualified to be a dire ... tor of a company

has such an IIItcrest or is 3 member as aforesaid.

(1) A nominee company may nOI function. and shal l not

be tre:lted as such for the purposes of Ihis Act. unless it is in possession

of;. warrant issued by the Authority and currently in force authorising

it to function"s such for the purposes of this Ad.

(2) For the purpose of obtaining a warrant from the

Authority, th e company shall submit to the Authority a certified copy

of its memorandum of association and of its articles, if any, togethe r

with details conce rni ng the directors; and on being satisfied that the

requireme nts of this Act and of any rules or regulations made

thereunder, a re full~ met and that the appropriate fee has been paid ,

the Authorit~ shall issue a warrant au thorising it 10 function for the

purposes of this Ac\.

(3) The Authority shall keep a register of all companies to

which a warrant has been iss ued under this Act, and enter the rein any

change or uther maller relevant to that company, in particular an

indication of the directors and secre taries of the company, and any

change there in . The Authority shall al so cause from time to time 10

be published in the Gazette a list of all the com panies currently in

possession of a warrant under Ihis section ,

(4) The fee payable for the issue of a warrant under this

section shall be two hundred and fift~ liri for the first issue of such

warrant and thereafter there shall be paid an ann ual registration fee

of tv" o hundred and fift~ liri payable not later than the cnd of January

of each succeeding yea r,

44, A nominee compan y shall notif~ th e Authorit~ of an~ change Notili<atio.

in its memorandum or articles of associati on and of any change among of"""""",

its di rectors and any such change shaH not have effect unless and until

they are so notified.

45, A warran t issued to a compan~ under section 43 of this Act R.><>WioD

sha ll be revocable by the Authority _

orWorr&ll',

(a) if there is such a change in the circumstances of the

company that, had they existed before the iss ue of the warrant,

such warrant would not have been issued;

(b) if the company cont ravenes any of the provisions of this

Act and the contraven tion is cons idered by the Authority se rious

enough to justif~ the revocation of the wa rrant;

(c)

if the co mpany fails to pa y the annual fee wh en due

Provided that the Authority shall not revoke a warrant unless

it has first given the compan~ the reasons why the warrant might

be revoked and the opportunity of making representations and

explaining any fact which is alleged against it; and the Auth ority

ma~ also, whenever the act or defau lt is capable of remed~, allow

the company to take remedial actio n within such time and subject

to such condi tions th e Authori!y may think fit.

46, (1) A nominee company shall have functio ns solely in Funaionsof .

connection with and for the purposes of this Act or for the purposes ,.".,.; .... """",""f-

of the Offshore Trusts Act , ]988, or both such purposes, and such

other functions as are ancillar~ or incidental thereto _

(2) A non -trading offshore com pany may be registered with

the Authority unde r Ihis Act onl~ through the agency of a nominee

company alllhorised to act as such with respect to such a company;

and a nominee company. whether as sole director or as secretary of a

non-trading offshore company sha!l. whether alone or as may otherwise

be provided in the articles of the company. have the legal and judicial

representatiQn Qf the company.

(1)

In additiQn to their duties as a director or secretary of

"""" ... """'1"'"'<'. an offshQre company, as the case may be, a nominee cQmpany sha!i

be responsible tQ the Authority for ensuring that the provisions of this

Act are duly complied with and observed in relation to or by the

offshore company of which it is the sole director or secretary.

(2) A nom inee company shall have the duty to taKe such

steps or other actions as may be in its power to ensure the observance

of the law as aforesaid and to notify the Authority, without delay , of

any act or defaull. in relatiQn to Qr by the offshore company of which

i1 is the sole direetor or secreta ry, which is in contravention of any of

the provisions of thi s Act Qr is Qtherwise a criminal Qffence under the

laws of Malta or wQuld have been such an Qffence if it h~d been

committed in Malta.

(3) A nominee company shall also have the duty tQ ascertain

thac the exemptiQns granted by this Act tQ any QffshQre compa ny as

afQresaid are properly due and that nQ ci rcumstance exists which wQuld

render those exemptions inapplicable; and tQ report IQ the AuthQrity

ary fact Qr circumstance Qf wh ich it is aware and which WQuld render

any such exemption inapplicable or any tax or duty otherwise payable.

(4) A nQminee CQmpany shall. mQreover. make Qut and

deliver. not later than th e end of Janu ary of e ach year. a report to the

AlIIhQrity signed by tWQ directQrs Qf the CQmpany and made Qut in

respect Qf the preceding year. stating that the cQmpany has ascertained

tQ the best Qf its ability that the QffshQre cQmpany Qf which it is the

sole directQr or the secretary satisfied all the conditions required by

this Act fQr the company to remain an offshore company and that no

circumstance ex ists which would rendcr the exemptions and other

privileges granted by this Act inapplicable in respect of that company.

Where by this Act or by any other law an obligation or duty

is due to be fulfilled. complied with or observed by a nominee company

I>DII1inte """' ........ as sole director or secretary Qf an offshQre company, that obligation

or duty shall also be due to be fu lfilled, complied with or observed by

each and every director or other officer of the no min ee oompany. as

the case may be; and every such director o r olher officer;

(a) shall be personally liable. jointly and severally with the

other direetors and officers and with the company. for any failure

or default Qr any act dQne in contravention of any provision of

law in respect of the obligation and duties aforesaid; and

(b) whe re the failure. default or act as aforesaid is a criminal

offence. shall be liable Qn conviction to the penalties cstablished

for such offence.

(I) Where a nominee company is the secretary of an Other duties o!

offshore company, it shall be responsible jointly and severally with the no..un... """PlDies

0-.

directors of the company for the performance o f all the duties of those .. .I«Tflory

directors with respect to th e preparation , filing or submission of any

return, stateme nt. dedaration or othe r matter required by any

provision of law, a nd for the observance of any duty of the directors

to furnish any information that may lawfully be required from them.

(2) Where a nominee company is the sole director of a non·

trading offshore \-'{)mpany or its secretary. it shall. without prejudice

10 any other duty to which it may be liable

(a) keep a record of all the effective shareholders. debenture

holders and directors of the company, whether disclosed or not,

115 well as of all relevant changes therein;

(b) provide the members of the company with such

information as may be necessary to show them the true position

of the affa irs of the com pany, and in particular with any

information that could rcasonably be expected to affect that

position.

(3) If a nominee company resigns, or is removed from office,

whcther as sole director or as secretary of an offshore company. it

s/mU without delay repon that fau to the Authority, and when such rc:f.ignation

or removal is due to any serious irregularity committed by or in relation

to the company or any of its directors, the nominee company shall

make a report to the Authority Slating the facts as known to i1.

(4) A nominee company shall without delay also notify the

Authority in writing whenever it is of the opinion Ihal an offshore

company of which it is or has been the last sole director or secretary has

been abandoned or has no directors in office.

If a nominee company or any dire>:lor or officer thereof. Pen.ltie<fo.-

f.i>e"a~.""'n .. ,

wilfully or negligently

<le<lonuo .... 'c.

(a) makes 3n incorrect or false statement or declaration. or

any falst" or ;n t'l)TTeCt entry in a relUrn. declaration or statement.

mad.:. p'.:pared or submitted for any of the purposes. or in

pursuancc. of any of the provisions of this Act: or

(bl gives any incorrect or false information or answer in

con nection ",ilh or in pursuance of any such provision; Or

(c) prepares or maintains any incorrect or false records or

documents. or aids or ahet, any olher person 10 do so,

the company . and every director or othcr officer thereof. shall be guilty

of an offe nce and shall be liable on conviction toa fine (mu/la) of not less

than one thous.and and nO! more than ten thousand liri, or to

imprisonment for a lenTJ nOI exceeding three years. or to both such fine

and imprisonment.

(I) When a nominee company has been dissolved;1 shall Winding"po!

cease to act as sole direclor or secrclarv • of an offshore company and the oomlW'

dircclOrs thereof sh.all before relinquish.ing such office bring the facts to

the notice of the companies of which the nominee compan y is the sole

director or secretary; and as soon as a liquidator is appoi nted he shall -

(a) without delay inform the Auth ority of the fact that Ihe

company is bei ng wo und up a nd of hi s appointment as li quidator ;

( b) ascertain that tbe Authority has full details of the

offshore companies of which. Ihe company being wound up is a

director or secretary. as the case may be;

(c) do all that may be necessary, or which the Authority may

require or direct, for the purposes of any of the provisions of this

Act ;

(d) refrain from finally winding up the com pany until

approval has been given by the Authority for such final winding up.

(2) Every person who fails to com ply with any of the

provisions of this section shall be liable. on conviction to a fine (mu/la) of

oot less than o ne hundred and not more than five hundred liri .

(3) Whe re a nominee company is dissolved. th e

liquida torshallnot be appoin ted except with the wrinen approval of the

Authority: and the Authority shall , moreove r. have the power to

appoin t. remove or repla~ the liquidator.

(4) Notwithstanding the provisions o f the Commercial

Partne rships O rdinance. 1962, the books and documents of a nominee

com pany that has been wound up shall be retained by tho liquidato rwllo

s ha ll keep them for a pe riod of five year.; after the date on which Ihe

com pany is struck o ff th e register and shaH lhen be destroyed.

PA RT IV

General Provisions

(\) The Mi nister may . on the advice oflhe Authority, make

regulations o r roles for the better carrying out of any of the proVISions of

th is Act, and may , in particular, but without prejudice to the generality

of the foregoing, hy any sueh regulations or rules

(a) provide for the returns . statements. and notices to be

made or given for any of the purposes of this Act, and the form and

contents thereof;

(b) regulate the cond uct, duties and other obligations of

nominee companies, including the returns, statements and other

information they are to submit to t he Aut hority , and estab lish the

maximum amount which , notwithstanding any provision of this

Act, may be charged as fees by such companies;

(c) exe mpt, or provide for the exemption of. any class or

classes of banking or insurance offshore compan ies from any of the

provisions of the Banking Act, 1970 or of the (ll5urance Business

Act. 1981. as the case may require, subject to such conditions as

may be specified or provided for in the regulations; including

conditions consisting in the application of tile said provisions witll

suell variations as may be specified or provided for as aforesaid;

(d) alter any fees establislled by any provision of this Act.

and amend any such provision accordingly to reflect cllanges in the

cost of living or in the value of currencies, and establisll socII olher

fees as may be deemed appropriate in respect of any maller for

which a fee is not provided by tllis Act

Provided tllal no alteration of any fees slla[] have effect before

tile expiration of one year from Ihe publication of such alteration in

the Gazette;

(e) make rules of coun for any purpose of tllis Act and o f

proceedings thereunder. providing by such rules for any matter

referred to in section 29 of the COOe of Organisation and Ci~iI

Procedure;

(f)

prescribe any matter that mayor is to be prescribed;

(2) Regulati ons. rules and orders made under any of the

provisions of this Act may be made in the Engl ish language only.

(I) The registration of an offshore company under this Act GU&nlln'e< of

sha!l constitute a contraCl be[v"ccn the Government and the company eMmption>.

guaranteeing the rights and exemptioll5 and other privileges due as

provided by this Act , subject only to the due observance of all the

provisions of this Act.

(2) The guarantee given by subsection (1) of this section shall

apply also against retrospective action. whether by legislation or

otherwise. as would nullify any rights. exemptions or privileges so

guaranteed .

(3) The guarantee granted by subsect,on (1) of this sect,on

shall be (or a period of ten years from the issue of the certificate of

registration.

(I) No proceedings for an offence under this Act shall be Crimin.ol

~inp.

commenced without Ihe sanClion orthe Attorney General.

(2) The provisions of this ACI shall not affect any criminal

proceedings that may be competem under any other law.

(3) Where in respect of any offence against any of the

provisions of this Act, the Act or omission constituting tbe offence can

be attributed directly to a person or persons clearly identifiable, and

such person or persons are convicted oflhal offence, theCoun shall not

be requ ired to convict also any other person if it is satisfied that such

person had no pan: in the offence and that by reason of his behaviour or

other circumstances he deserves not to be convicted.

The Comme rcial Partnerships Ordinance. 1962. s h~1I be A"",ndn><n'oI

amended by the subs titution . for section If) thereof. of the following Commerciol

Ponnonhll"

section:-

Ordino"",.I9t.2.

(I) SuhjeCl to Ill" provIsions of (his \Cection. a

company may be designated fly any name . hut such namcshall

hac'c ··limiH.'d·· as the laSI word.

(2)

A company shall nOt be regist<:red hy a name

whidt: -

(a) is (he same as a name of another registered

company or so nearly similar as in the opinion of the

Registrar it could create conf us;on: or

is in the opinion of the Regi~lrar offcos;"'! or

(h)

otherwise undesirable: or

(c) has been reserved for reg;,trat;"n ror another

company upon a notice in writing to the Registrar gi"<'rl

not earlier than three month s before the date of Ih,-

second request

Provided that the Registrar shall notify any rdusa l

under this sectio n wi t hout delay to the person rcquc'sling

the registra tion.

(3) A company shall nOl be registered by a name

which includes the word " nominee" unless it is a company

qualified 10 be registered a~ a nominee company und.:r the

Malta International Bl1sines~ Activities ACI , 191:)8

(4) A person or persons Irading or ca rryin~ on

business o r ol h~r ~ctivity: -

(a) und~r a name or title of which "limited" Or a

contraction or imitation thereof is Ihe lasl word and

which is not the name of a company dui)' regis(ered under

this Ord inan("(': or

(b) under a name or (itk wh ich contains Ihe word

"nominee", or a cOrllTac(ion or im,latio n thereof. and

wh ich is nO( (he name of a company in possession of a

warrant. curremly in force, issued under (he M all~

International Business Activities Act. 19~, ur the

OffsllOre Trusts ACl, 1988, authorising such company tu

act as a nominee comPllny for the purpose of those Act s,

shall be liable on conviction 10 a pcnally of nOl less than onc

hundred ~nd nO! more (han five hundred liTi and to a further

penalty nOI e xceeding ten tiri for any day during which Ihe

offence conlinues,",

A

FIRST SCHEDU LE

Section 25

"-ees Payable by Offshore Companies

ONREG1~AnON

ANNUAL FEE

c_

,~

(a)

in respect of a banking offshore

company - .... , ....................... .

25.(0)

25,000

in respect of an in surance offsllore

Ib)

company. other than a captive

insurance offshore compan y - .... ,

5,000

5,000

Ic) in respect of a lf11ding OffMloTC oomp.1ny

5,000

5,000

for collective investment ........ , ... .

(d) In respect of a captive lnSUr3llce

1.000

offshore company -

............ , ... ,.

1.000

respect of a general trading

(ol

In

offshore company olher than a

company referred to in paragraph (c)

1,000

above ......... .

1.000

in respect of a non-trading offshore

(r)

company -

.

. ............ , .... .