XV tal-1989

I assent.

(L- S.)

CEN SU T A OONH

23rd J une, 1989

ACT No, XV of 1989

A N :4 CT loamtnd Iht M Cl/ICl /rutrnUlionCl/ BUJinu $ A ct;vi/;n A cl , /988.

BE IT EN ACTE D by the Preside nt , by and with the advice and

conse nt of the Hou:!C of Re prese nt atives, in Ihis pre:!C nl Parl iament

asse mbled. and by the authority of the same, as fo llows:-

I. This Act may be cit ed as Ihe Mah a Intern ational Business

Act ivities (Amendme nt) Act. 1989, and shall be read and const rued as

o ne with th e Malt a Internat ional Business Activities Act. 1988,

herein aft er referred to as "the princi pal Acf '.

SecTion 2 o f the principa l Act sha ll be amend ed as follows

At livilajiel Kummertjali Internazzjonali la' Malta, U $handu jinqara u

jifti ehern haga waM 3 rna' I-All ta ' 1-1988 dW3r A ttivitsJiet Kumrnerl!jali

Intern azzjonali ,a' Malt a. ha wn hckk iijed 'il quddie m irn sejja h "I-All

prinCi pali" .

Section 10

FirstColumn

Second Column

If>

"

7S

"9

Passed bylhe Houseof Representalivesat Sitting No. 2460rthe 14th June, 1989.

LAWREN CE GON ZI

Speak( r

C . MI FSUD

Acting Clerk /0 the House of Representatives

I WUN>l i~ ., ",od4Ji ... ",",.", to' ~Into..n.z,,,..

~"'rJ..v."""."'<1/I"~

.,; ... ;1,.

K.,ru/t!

M"""'" """amp<n", .. ,.o..«ft ""-' • • Go ............ , ~ """ I'r<u "" _ I'<<<t ""

(a) immediate ly a fter the defin itio n of "body of persons~,

there shall be inserted the foll owing definitions

.. " business of ba n k ing~ has the mea nin g assigned to it by

:!Cction 2 o f the Ba nking Act, 1970 a nd incl udes any othe r

b usiness customa rily ca rried on by ban ks and generally

acccpted to be KI c-d rricd on

"business o f insurance" has the mean ing assi gned to it by

scctio n 2 of thl:' Insurance Business Act. 198 1; -

Aco XVII

,~ 1""1

' hi in the defi nitio n of ~orfs ho re activityW_

(i) in the fir..t proviwthe re to . the words ~caused to be

fnrmed and registered in Ma lta for Ihe purpo!i"s of This Act by

th e co mpa ny ma nagi ng the m and a re w Tegistered- shall be

d ... leted : and

(i.) in Ihe Engli sh text orthe second proviso thereto. for

the word ~overseas~ the re shall be sub!;tituted the word

Moversea-;

(c) for the definition o f Moversea CQmpanyM there shall be

5ub!;titute<! the following definition

Moversea companyM has the meaning assigned to it by

k

~. section In of the Commercial Partnerships Ordinance;M;

(d) the second provi!iO to t he definition of " resident in

Malta M shall be deleted ;

(e) su~ions (2). (3). (4) and (5) thereof shall be

re numbered respectively as subsections (3). (4) , (5) and (6)

the reof; and

(t) immed iately afte r subsection ( I ) thereof. there sh all be

inserted the following new Subseclion

For the purposes of Ihis Act -

(a) a company which is itself an o ffshore company

shall be deemed not 10 be residenl in Malt a;

( b) an offshore company ma y use a bank in Malta

whid! is DOl an offshore bank for lhe purposes o f any

Iransaclion in foreign curre ncy. which il CQuld lawfully

carry out "" ilh any olher bank . including any facility.

other than a 1000n o r overdraft . provided IlIal socII facil ity

is fully secured by a p!'"ime foreign bank guarantee or by

bank deposits in CQnvertible foreign currency: and for tile

purpose o f any transaction tllat ma~ be c'l rried OUI

llI rougll a local bank as afo resaid. such ban k shull be

deemed nOI to be resident in Malta

(c) sllares in. and debe ntures of, an offshore

company, and sh ips, even if registe red in Malta. shall be

deemed 10 be property not situa ted in Malta .'·.

J. In sul"ose"ion (2) of section 5 ofllle princi pal Ac! for Ihe ... ·ords

"in paragrapll (d)"' Ihe re shall be sUbslituled tile wo rds Mi n pa ra-

For Ihe words " the provisions of subseClion (2,.. In subs\:ct um

(3 ) of seCI ion I} of I he pri nci pal Act. Illere shall he sub!;!iwleJ the ... ·ords

MIIle provkions of 5u~ions (2) and (3) of section 33 and of sub-

In Wbsection (I) of section II of Ihe princi pal ACI .

M

immediately after tile words M5uch lawful activi lies IIlc;re shall be added

IIle words " olller Ihan an i nl e re~1 in tile o .... nership or control of trading

M

offshore compan;es .

S«tion 22 o f the pri oci pal Act sha ll be ame nded as follows

in the pn"'isoto paragraph {cl of subsection (2 ) thc reor. po;..apal Act.

Ill '

for the word~ ~or processing of goods in Malta ~ there shall be sub-

stituted the words " m- processing of goods in Ma lta. or the own~r-

ship. ma nagement. administration or operation o f ships, ~ and im·

medi mc ll' aft er the s~ id proviso tllere slla ll be added the following

fu rther proviso

"Provided fu n her that such latter oompan~ shall sti ll be

deemed III be wholly owned by perwns not resident in Mul! a if

not mo re th l," o nc person resident in Malta ho lds suc h number

" f >lIare> a> du "ut exceed in the ~ggrcgutc o nc lira in nominal

value ... ·;tho ut any specia l voti ng right s:~;

(11) im mediately at the endof paragrapll (d ) of subsect ion (2)

the reof. there sh ~1I11c added the following proviso

~ Pmvided that ootwithsta ndinganything conta ined in tile

Control Act. ]972. one perwn residen t in Malta

E ~cllange

may hold >uch numiler of share~ in t!"le compa ny as do not

~xceed in thc aggregatc onc lira in nominal va lue: ~;

Ic) for paragraph (e ) of subsection (2) the reof there shall be

substitut ed the following paragraph

"(e) has none of its shares or debentures held by a

no minee whiell is nOI a no minee company :";

id) for paragraph (r) ofsubseet iun (2) the reof the re shall be

subst itu ted the following paragraph

"((1

has a nominee company as its secre tary;

Provided that where the company has a sole director the

foregoing requirements of this paragraph shall not apply if and

so long as a nominee company holds Ihat office

Provided fUT,her that :> compan~ ur in tcrn~tiunal repute

rec"ll11i,,,d a~ ~u("h lIy the A ut hority being a manager of a cap-

ti,'c in<u run~ offshore co mpany. ur a captive insurance

offshore compan y being a su hsidiary o f a compa ny of inte rna·

tional repule recognised as such by the Auth uri, y may be

exempted hy the Authority fmm complyi ng with th e req uire-

men!> of t h i~ puruj!r~ ph : "

in paragraph Cb) of subsection (4) Ihereof. the words

Ic l

~. prO"ided [he name of [he subsidiaryoom pany incl udes the name

t)f the holding company" sha ll be dele ted: and

,f) for paragraph (c) of 5ubscclion (4) the reof there shall be

substi tuted the followi ng paragraph

"Ic I has a name ,..I;ich on the face of it clearly ide nlifies

it 3~ ~ ~ uhsidi~ry or ~ n associa te of a ban k or banking

institution or of an insura nce company. as the case may

require, which is of inte rnati onal standin g and repule, and

which is accepted as ~ uc h by the Authority;".

Section 23 of the principa l Act shall be a me nded as follows

(8) subsection (4) thereof shall be deleted ; a nd

(b) in the fi rst proviso 10 subsection (6) Ihe rt'Of. t he words

" regi stered in Malta " shall be deleted.

In the English tut of subsectio n (2) of section 24 of the

principal Act, for the words "provisions" there shall be substituted t he

word " provision".

Section 26 of t he princi pal Act shall be amended as follows

(a ) in the margi nal nOIC the reoL the words "for illegal

activities" shall be deleled ;

(b) imm ed iate ly afte r subsection (2) Ihc roof, tllere sllall be

added tile foltowing new subsect ion

M(3) If tile Autllori ty, lIaving carried out. or caused to

be carried o ut. in accordance witll tlle provisions of tll is Act.

suell invest igations as it may deem appropriatc in respect of an

oUsllore CQmpany, i§ sati5fied Il1al circumstances cxist, or

tllat there has bee n such a change in the circumstances o f the

company , tllat. Ilad th ey been known to tile Autllority or lIad

tlley existed at tile ti me o f tile CQmpany's regist ratio n, the

company wou ld not have been registe red as an offshore

compan y. tile Authority may stri ke the name of tile company

oU tile regi ste r and tllereupon tllccompany sllall cease to be an

offshore company

Provided that the Authori ty sllall not strike tile name of

tile compa ny off the register unless it has first given the

com pany the opport unity of explaining the ci rcumstances and

making oth er representations; and the Authority may also,

where the circu mstan ces comp lain ed of arc capable of

remedy, allow the company to take re medial Bction within

such ti me and unde r such conditions as the Autllority may

spccify.-.

Section 27 of the principal Act shall be amended as follows

(a) in Ihe ma rginal note and in subsection ( I) tlle reof, the

numbers" 1962" sllalt be deleted ;

(b) in tile subsequent subsections Ihe reot. for the numbcrsof

!.eClKlns of the Commercial Partnerships Ordinance sllown. in the

order in whil:h they appea r in those subsections, in the First

Col umn of the Schedule to this Act, there shall be substituted the

corresponding numbers shown in the Second Colum n of the $aid

Sclledule.

11 . For subsection (3) of section 28 of the priocipal Act the re shall

be sub5t ilUt cd the following subsectio ll;

~ (3) Su~ctions (2) and (4) of section 5 of the Act shall not

apply; subsection (I) of the: said !iCctioll 5 ~hall not apply to a

banking offshore ovel'lta company o r 10 a banking offshore

subsidiary company: subsection (3) of the said section shall apply to

a company as aforesaid to the extent only of requiring it to give the

in formation therein referred to: and subse<:tion (5 ) of the said

section shall apply to the extent thal it is applicable in view of the

foregoing proviSio ns of th is s ubsect ion .~.

L-a rtikol u 27 ta' I· A tt printi pa li ghandll jigi cml."ndm kif gcj

(a) fin·nola mar ~inali u fis·suhartikolu (I) ticghu . j]·klicm

"Ia' 1·1%2"" ghandhom jithassru

(bl fis-suban ik oli sussegwcnti ticghu. minlTok in·numri la'

I-arlikoli ta'I-Ordinanza dwar SocjelaJiet Kummcrcja li murija. n·

ordni li jidhru fihJ f"dawk is-suhartikoli. n-Ewwcl Kolonna ta' I·

Iskrdu li t",sah ma' da" I·AtL gh~ndhom Jidhl u n-numri

korTi~pondcl\li muri)" fit -Ticni Ko lonn:o w· I-imsem mip Skcdil.

Minllok is-subani kolu (3) la' I-a rt ikolu 28 la' I-An prinCipal i 1 "-<.wo

ghandu jidhol dan is-subarti kol u

"(3) is_subartikoli (2) u (4) la' I-arti kolu 5 la' I-A n ma

ghandhorrn japplikaw; is-subanikolu ( I) la' I-imsemmi ani kolu 5

ma ghandux jappli ka glial kumpannija offshore bankarja la' barra

minn Malt a Jew ghal kumpan nija offshore ban karja sussidjarja; is-

suba nikulu (3) ta' I-i mscmmi artikolu ghandu japplika ghal

kumpannija kif inlqal qabel sa fejn biss jinhligi llia taghti 1-

infonn:m:joni filt imsemmija; u s·subarlikol u (5) ta' I· imsem mi

artikolu ghandu jappli ka sa rej n iku n app likabbli in vista lad-

dispotiujonijiet ta' qabel ta' da n is-subarti ko lu .".

12, Fit· lest Inglii. tal-paragrafu (t) tas·suba rtiko lu (3) la' I-ar-

likolu 29 ta'l-Att printipali. minllok il· kliem "the Ministe r therein re·

ferred 10 acl" ghandhom jidll lu I- kliem Ml he Minisler Iherein referred

IO, loact

M

•

In the E ngl ish tex t of paragraph (c) of subsection (3) of sec· A" .... <I" "n1

tion 29. of the principal Act. fo r th e words "tlJc, Millister therein refer- 01 iI<a.,., 29

red to act~ th ere shall be substituted the words "the Minister therein re· principal "Cl.

ferred to . to IIct".

IJ.

Sectio n 30 of the principal Act shall be amendcd as follows;

(a) for the marginal note and subsection (I) thereof there

shall be substituted the following;

L-anikolu 30 la' I-Att prinCipali ghandu jig; emendSI kif gej;

(a) minflok in-nota marginali u §·subartikol u (I) lieghu

ghandu jidhol dan li gej

~"

( I) The Incomc Tax Act (in this section

-fu~<"' .'"

~~"IOII referred to as "the Act") and any enactment replacing

I_ ..... T .. that la w shall apply to trading offshore companies

"Cl '"

subject to the provisio ns of subsections (2) and (3) of this

ofhl>o<.

"""",Nu. section .";

Cop. IU

(b) in subsecti on (2 ) thercof. immediately after the secolld

proviso , there shall be added the fOllowing new proviso;

"Provided also th at in resp«I of banking and insurance

offshore co mpanies. and such other class orclasscs of offshore

companies as may be prescri bed -

(i ) th e chargea ble income of a com pany. orclassof

compa nies. as aforesa id. sha ll be computcd aa:ordi ng to

such regula tio ns as may be prescribed o r. unli l so

prescribed . in accorda nce with ge ne rally aettpted

principles and standards;

(ii) section 17 of the Act sha ll not apply:";

(c) in subsection (6) thereof. for thc numbe r and letter

M37A ~ thc re shull be substitut ed the num ber " 4,4"; and

(d) in subseclion (9) Ihe reof. for the numbe r and Ic ttcr

"68A - there shall be substituted the numbe r ~80-.

I... [n th.., EI\!lh~h text of ).('(t,on 33 of the pri ncipa l Act. for the A "' .... 'hn <M of

wnrd\ " ~d p;.'NlOal t>elonllinll" I her~ ~ hall l>c substituted the words

"used per..on;lll>clollltinll' M; and forthc word~ "from lhe fi ~tlakil\g up .,..;"",,,,,1 " <1 .

residence in Malta - .here shall be substit ut ed the words "from firs. ta~ ·

ing up residence in Mal 'a-.

15. I n section 34 of .he principal Act. the number ". 1948" shall be

dele.ed .

16. In the English text of subsec.ion (3) of section 35 of the

principal Act . for the words -by an other person- there shall be

substituted Ihe words " by any other person".

17. Section 39 of Ihe principal Act shall be amended as follows

<a) in the Englisb lex. of paragraph (a) of subsection ( I)

thereof. for .he words -if were sucb a company"' there shall be

substituted .be words - if it were such a company-;

(b) in the English text of subsection (3) thereof, for the

words - may. demand- there shall be substituted the words '·may.

on demand -;

(c) the nllmber "1962,- wherever it appears in the sect ion

shall be deleted.

18. In section 400fthe princi pal Act. the numbe r -1948," shall be

deleted .

19. In subsection (3) o( sect ion Oof the principal Act. the words

-a nd $eCfelaries- shall be deleted .

20. Subsection ( I) of section 52 of the principal Act shall be

amended Il.'l follows

(a) in paragraph (c) thereof. immediately after the words

-the Banking Act, 1970-there shall be inserted the words -orof the

Central Bank of Malt a Act, 196r;

(b) paragraphs (e) and ( f) thereof shall be re-lettered as (f)

and (g) respectively;

(c) for paragraph (d) thereof the re !JIall be substituted the

(ollowing paragraph

-(e) alter any fees establ i!JIed by any provision of this

Act , and amend any such provision accordingly and to estab-

lish such othe r fees asmay be deemed appropriate in respect of

any maner for which a fee is not provided by this ACI

Provided Ihat fees may only be irn:reased in o rder lu re·

nect changes in the cost of living or in the value of currencies; and

Provided further that any alteration irn:reasing a fee c~·

tablished hy this Act. as such fee mu)' from time 10 time hoc in

(orce, sha ll nOI have cfkc·t before the ~xpiratiUf1 of .. ne ye'!r

(rom the publication of such alteration ,n the Ga<:etTe;": and

(d ) immediately after pangraph (c) thereof there shall be

inserted the following new paragraph

~(d) make

proviSion allowing the Authority ,

notwithstanding any ot: her provision of this Act , but subjeclto

such conditions of confidentiality and other condi tions as may

be prescribed o r as may be imposed by the Authority, to give

such in form ation conce rning offshore hllnks or offshore bank-

ing instit ut ions or offshore insurancc companie s, as will enable

foreign ce ntral banks or simil or fin ancial supe rvisory bodies

having an interest in the prope r co nduct of Ihe affairs o f an

offshore ban k or insurance company in Malta, to examinesuch

conduct.··.

21. In Ihe English text of subsection (3) o f section 54 of the

principal Act. fOT the words "of this Act. the Act" there shall be

substituted the words kof this Act, the act~ .

22. In section 55 of tile principal Act, including the marginal note

IlIerelO. the num ber", 1962" wlle rever it appears sha ll be de leted. and

for tile number "69", appea ring in tile said section and in tllc provisio n

of the Comme rci al Partne~hips Ordinance as amended by th at section .

th ere shall be substitut ed the number "70" .

.-

23. In the Second Schedu le 10 th e princi pal Act. for the words

"Income Tax Act, 1948" th ere sha ll be substituted Ihe wo rds "Income

Tax Act, Cap. 123".