Investment Registration Scheme (Amendment) Regulations, 2014

L.N. 382 of 2014

EXTERNAL TRANSACTIONS ACT

(CAP. 233)

Investment Registration Scheme (Amendment) Regulations, 2014

IN exercise of the powers conferred by articles 11(2) of the

External Transactions Act the Minister for Finance has, after

consultation with the Central Bank of Malta, made the following

regulations:-

The title of these regulations is the Investment Registration

Scheme (Amendment) Regulations, 2014, and these regulations shall

be read and construed as one with the Investment Registration

Scheme Regulations, hereinafter referred to as "the principal

regulations".

Regulation 2 of the principal regulations shall be amended

as follows

(a)

in the definition "applicable date" in sub-regulation

(1) thereof, for the words "between 4 November 2013 and 30

September 2014" there shall be substituted the words "between

4 November 2013 and 30 November 2014";

(b)

in the definition "fiduciary" in sub-regulation (1)

thereof, for the words "means any private foundation or any

person who is engaged to hold in his name or owns any eligible

assets for another person under a mandate or a trust;" there shall

be substituted the words "means any private foundation or any

person who is engaged to hold in his name or owns any eligible

assets for another person under a mandate or a trust and shall

include a company referred to in regulation 2(2)(b)(iv);";

(c)

at the end of paragraph (b) of sub-regulation (2)

thereof, there shall be added the words "and (iv) shares

representing assets, where the preparation and filing of audited

accounts are not mandatory under the law of their place of

registration, and the applicant is otherwise unable to provide to

the satisfaction of the Commissioner audited accounts by a

reputable audit firm, companies referred to in sub-paragraph (i)

shall be deemed to be fiduciaries of the beneficial owner of the

said shares, holding assets on behalf of the beneficial owner of

such shares and where there are several shareholders, the

interest of the applicant in the eligible assets shall be the

proportion of his rights to assets available for distribution on a

winding up of the company as represented by the proportion of

his shareholding to the total number of the shares in existence

having rights to assets available for distribution on a winding up

of the company. Provided that on the application of the

beneficial owner, being the shareholder of such company, such

assets shall be separately assessed for eligibility under

paragraphs (a) to (g) but shall not include any shareholder loans

or advances to such companies as is referred to in paragraph

(f);"; and

(d) in paragraph (f) of sub-regulation (2) thereof, for the

words "or other advances extended to a company registered in a

reputable jurisdiction" there shall be substituted the words "or

other advances extended directly or indirectly to a company

registered in a reputable jurisdiction".

In regulation 4 of the principal regulations, for the words Amends

"until 30 September 2014" there shall be substituted the words "until regulation

the principal

30 November 2014".

regulations.

In regulation 6 of the principal regulations for the words Amends

"on date of registration." there shall be substituted the words "on date regulation

the principal

of registration:" and immediately thereafter there shall be added the regulations.

following new proviso

"Provided that where an asset belonging to the applicant on

the 4 November 2013 has been converted by the applicant into

an eligible asset, consisting of a deposit fixed for one year held

with credit institutions licensed in Malta, during the period

between 4 November 2013 and the registration date, such asset

shall qualify as an eligible asset for registration under this

Scheme.".

Regulation 7 of the principal regulations shall be amended Amends

regulation 7 of

as follows

the principal

regulations.

(a)

in paragraph (c) of sub-regulation (2) thereof, for the

words "or other advances to a company in a reputable

jurisdiction, a duly authenticated copy of the agreement by

virtue of which funds were advanced by the applicant to such

company" there shall be substituted the words "or other

advances extended directly or indirectly to a company in a

reputable jurisdiction, a duly authenticated copy of the

agreement by virtue of which funds were advanced directly or

indirectly by the applicant to such company";

(b) in paragraph (d) of sub-regulation (2) thereof, for

the words "or other written confirmation from the relevant

licensed financial intermediary;" there shall be substituted the

words "or other written confirmation from the relevant licensed

financial intermediary and in the case of an eligible asset to

which the proviso to regulation 6 applies a written confirmation

from the applicant that the asset that has been converted

belonged to the applicant on the 4 November 2013.";

(c)

in paragraph (f) of sub-regulation (2) thereof, for the

words "where eligible assets are held by a third party in a

fiduciary capacity," there shall be substituted the words "where

eligible assets are held by a third party, including a company

referred to in regulation 2(2)(b)(iv), in a fiduciary capacity,";

and at the end of paragraph (f) there shall be added the

following new sub-paragraph

"(iii) where the fiduciary is a company referred to

in regulation 2(2)(b)(iv), a certified copy of the company’s

memorandum and articles of association and its certificate

of registration and its register of members; and a

confirmation bearing the original signature of the directors

of the said company authenticated in the jurisdiction of

registration of the company evidencing that (a) the

applicant is the beneficial owner of the shares, alone or

with others, and controls the same, alone or with others;

and (b) the company is the beneficial owner of all the

assets of the company subject of the application

Provided that the existence of any shareholder

loans or advances, any liabilities to third parties and any

security agreement relating to the assets shall not hinder

the making of such confirmation and may be referred to in

the directors’ statement should the directors consider it

appropriate to do so. The directors may also attach a copy

of the latest unaudited accounts of the company in any

form they may take should they consider it appropriate to

do so."; and

(d) in sub-regulation (3) thereof, for the words "other

assets" there shall be substituted the words "other eligible

assets"; and for the words "This rule shall also apply if the

assets are held by a fiduciary." there shall be substituted the

words "This rule shall also apply if the eligible assets are held

by a fiduciary.".

In paragraph (f) of sub-regulation (1) of regulation 8 of the

principal regulations for the words "the registered assets were held in

or outside Malta on 4 November 2013;" there shall be substituted the

words "the registered assets were held in or outside Malta on 4

November 2013 or in the case of registered assets referred to in the

proviso to regulation 6 such registered assets were held in Malta on

the applicable date;".

In sub-regulation (1) of regulation 12 of the principal Amends

regulations for the words "of the Income Tax Act." there shall be regulation

the principal

substituted the words "of the Income Tax Act:", and immediately regulations.

thereafter there shall be added the following new proviso

"Provided that in the case of an eligible asset to which the

proviso to regulation 6 applies, notwithstanding the provisions

of article 9B of the Income Tax Act, the exemption from tax on

income referred to in sub-article (2)(a) of the said Act shall not

apply and the exemption from tax on income referred to in sub-

article (2)(b) of the said Act shall apply to the extent that the

said income has not been declared in any income tax return

which has been furnished to the Commissioner by 4 November

2013, and no tax has been assessed with respect thereto in any

assessment raised under the Income Tax Acts and notified

before 31 May 2014.".

Sub-regulation (2) of regulation 13 of the principal Amends

regulation 13 of

regulations shall be amended as follows

the principal

regulations.

(a)

paragraph (b) thereof shall be re-numbered as

paragraph (c);

(b) immediately after paragraph (a) thereof there shall

be added the following new paragraph

"(b) in the case of an eligible asset to which the

proviso to regulation 6 applies, seven and one half per

centum of the current market value of the registered

asset;"; and

(c)

in the second proviso thereto, for the words

"Provided that in respect of eligible assets referred to in

paragraphs (a) and (b) which were held abroad on 4 November

2013" there shall be substituted the words "Provided also that in

respect of eligible assets referred to in paragraphs (a) and (c)

which were held abroad on 4 November 2013", and for the

words "for at least three years after date of registration." there

shall be substituted the words "for at least three years after date

of registration:", and immediately thereafter there shall be

added the following

"Provided further that in the case where the eligible

asset consists of shares in the capital of a company

registered or incorporated in Malta or in a reputable

jurisdiction outside Malta which does not own any asset

other than immovable property or where more than ninety

five percent of its assets consist of immovable property, the

current market value of the company shall be reduced by

the excess of the current market value of the immovable

property, upon which the current market value of the

shares was determined, over the original cost on date of

purchase of the said immovable property owned by the

company.

Where in the case of a company referred to in

regulation 2(2)(b)(iv), the eligible asset is an immovable

property forming part of the assets of a company which

does not own any asset other than immovable property or

where more than ninety five per cent of its assets consist of

immovable property, reference shall be made to the

original cost of the immovable at the date of purchase. In

the case of all other eligible assets owned by such

company reference shall be made to the current market

value of the eligible assets, including when the eligible

assets are themselves shares within sub-paragraph

2(2)(b)(iv), and no reference shall be made to the current

market value of the shares in the company itself.

Furthermore, no reference shall be made to any

accounts of the company (unless the applicant is able to

provide to the satisfaction of the Commissioner audited

accounts by a reputable audit firm) or to any liabilities, any

reserves, shareholder loans or advances

Provided further that, in respect of eligible assets

referred to in paragraphs (a) and (c) which have been

subject to a registration fee of five per centum, where the

beneficial owner of the eligible asset and in whose name or

for whose benefit a Registration Certificate has been

issued pursuant to these regulations does not retain the

repatriated assets locally for a period of three years after

the date of registration, he shall be considered as never

having been entitled to the exemptions referred to in article

9B of the Income Tax Act, and shall forfeit the right not to

refund any benefit, exemption or advantage acquired

before the registration.".

€0.45