INVESTMENT REGISTRATION SCHEME (NO. 2) REGULATIONS

SUBSIDIARY LEGISLATION 233.08

INVESTMENT REGISTRATION SCHEME (NO. 2)

REGULATIONS

22nd April, 2005

LEGAL NOTICE 121 of 2005, as amended by Legal Notices 242 of 2005,

411 of 2007 and 426 of 2012.

(1) The title of these regulations is the Investment

Registration Scheme (No. 2) Regulations.

(2) The scope of these regulations is to provide for the

e s t a b l is h m e n t o f a r e g is t r a t i o n s c h e m e t o b e k n o w n a s t h e

Investment Registration Scheme, hereinafter referred to as the

Scheme, whereby residents of Malta who hold assets outside Malta

without the necessary exchange control permits and, or, without

declaring the relevant income (including capital gains) for the

purposes of the Income Tax Act, may regularise their position

under the External Transactions Act, hereinafter referred to as "the

Act"), the Income Tax Act and other relevant laws.

Amended by

L.N. 411 of 2007.

Section 4: Applicant’s Declaration

In completing Section 2, I/we declare

1. to be the owner/joint beneficial owner(s) of the registered assets or the heir or legatee

of the owner;

2. that the registered assets were (a) held outside Malta and owned by me/us on or after

1 January 2000 and repatriated to Malta prior to 16 June, 2005 and/or (b) held abroad and

owned by me/us on 3l March, 2005;

3. that these assets are being registered only once under this Investment Registration

Scheme and that these assets have not already been registered in any form under the

Investment Registration Scheme established by virtue of Legal Notice 315 of 2001, Legal

Notice 59 of 2002, Legal Notice 209 of 2003 and Legal Notice 226 of 2003;

4. that the registered assets do not represent proceeds from a crime of money laundering

in terms of the Prevention of Money Laundering Act, or from a crime that would result due to

an infringement of any law other than the External Transactions Act or the Income Tax Act;

5. that the documentary evidence being hereby submitted to the appointed registration

agent in support of the registered assets is true and original;

6. that I/we accept full responsibility for the accuracy and authenticity of the

information and of the documentary evidence submitted to the appointed registration agent

under the Scheme;

7. that I/we will make available to the appointed registration agent any further

information, statements or documents that it may require for the proper exercise of its

functions in terms of the Investment Registration Scheme;

8. that the declaration is being made in good faith;

9. that in return for my/our making this declaration and obtaining the relevant

exemptions arising from law upon registration, I/we hereby pay the registration fee in Euro on

the market value of the eligible assets as per Column E Row 15 in Section 1;

10. I/we understand that the submission of false statements and documents will nullify

this Certificate and render me/us liable to legal prosecution;

11. I/we also understand that in the event that I/we am/are receiving any benefit,

exemption or other advantage under the Social Security Act or under any other scheme made

by the Government or any public entity or under any other law, as a result of not having

declared the eligible assets being hereby registered (or income therefrom), I/we shall not be

required to refund that benefit, exemption or other advantage acquired before this declaration.

However, if after this registration, I/we continue to take that benefit, exemption or advantage

without being entitled thereto, I/we shall be considered as never having enjoyed exemptions

referred to in article 11 of the External Transactions Act and article 9B of the Income Tax Act,

and shall forfeit the right not to refund any benefit, exemption or advantage acquired before

the registration.

Section 5: Appointed Registration Agent’s Declaration

In completing Section 3, we declare

1. that we have obtained the necessary information, statements and documents required

for the proper exercise of our function under the Scheme;

2. that we have retained copies of supporting documentary evidence as necessary and

undertake to continue retaining such documentation for 10 years;

3. that we are bound by law by the duty of professional secrecy and will not disclose

any information contained in the Registration Certificate.

(1)

In these regulations, unless the context otherwise

requires -

"applicable date" means

(a) in respect of assets referred to in regulation 6(a), any

date between 1 January, 2000 and 30 March, 2005, and

(b) in respect of assets referred to in regulation 6(b) and

6(c), any date between 31 March 2005 and 16 June,

2005;

"eligible assets" means deposits as defined in the Banking Act,

securities including shares and stock in the capital of a company,

debentures, certificates of deposit, bonds, notes and any other

s im i la r i n s tr um e n t a c k no w l e d gi ng i nd e bt e d nes s ; u n it s i n a

collective investment scheme, life and annuity long term insurance

policies, whether index-linked or not; precious metal bullion;

warrants, options, futures and other derivatives as well as any other

financial instruments entered into for investment purposes; loans to

a non-resident company; and immovable property situated outside

Malta;

"loans to a non-resident company" mean, for the purposes of

these regulations, funds advanced by a Maltese resident to a non-

resident company which he owns in part or in whole and which has

as its sole object the investment of funds for portfolio purposes.

(2) The words and expressions which are also used in the Act

or the Income Tax Act shall have the same meaning as in these

Acts.

(3) For the purposes of these regulations, the following shall be

treated as if they were eligible assets held outside Malta

(a) foreign currency deposits held with credit institutions

licensed under the Banking Act;

(b) investments in a non-prescribed fund of a Malta-based

Scheme as defined in regulation 5(2) of the Collective

Investment

Schemes

(Investment

Income)

Regulations; and

(c) investments in any long-term policy of assurance,

whether index-linked or not, as specified in Classes I

to VI listed in the Second Schedule to the Insurance

Business Act, expressed in foreign currency and issued

by an insurer lawfully carrying on in Malta long-term

business of insurance.

(4) For the purposes of these regulations, any income arising

from eligible assets which is received after 31 March 2005 and re-

invested outside Malta before the date of registration, shall be

deemed to constitute eligible assets existing on 31 March 2005 and

shall be eligible for registration under these regulations.

(1) Residents of Malta who own eligible assets outside

Malta may regularise their position under the Act and, or, the

Income Tax Act and, or, other relevant laws, by registering such

assets under the Scheme on the prescribed form as set out in the

Schedule.

(2) Eligible assets shall be registered under the Scheme by the

person who owns such assets outside Malta on the applicable date,

or by the heir or legatee of such person when such heir or legatee

becomes the owner of eligible assets after their repatriation.

The Scheme shall run until 30 June, 2005.

Registration of eligible assets shall be executed through the

appointed registration agents which shall be credit institutions

licensed in Malta under the Banking Act, stockbrokers licensed

under the Investment Services Act, and persons holding a category

2 or category 3 Investment Services Licence granted under the

Investment Services Act, and in each case appointed as registration

agents by the Central Bank of Malta.

Registration of eligible assets under this Scheme shall be

open to

(a) eligible assets which were held outside Malta on or

after 1 January, 2000 and which were repatriated to

Malta prior to 31 March, 2005;

(b) eligible assets which were held outside Malta on 31

March 2005 and which are repatriated to Malta prior to

16 June, 2005;

(c) eligible assets which were held outside Malta on 31

March 2005 and which are retained overseas.

(1) In the case of eligible assets which are repatriated to

Malta, the appointed registration agent shall only register such

assets against the submission by the applicant of original

documentary evidence

(a) confirming that such assets were held outside Malta

between 1 January, 2000 and 30 March 2005 in the

case of assets referred to in regulation 6(a), or on 31

March 2005 in all other cases; and

(b) confirming repatriation during the Scheme’s operation

period.

(2) In the case of eligible assets which are to be retained

abroad, the appointed registration agent shall only register such

assets against the submission by the applicant of original

documentary evidence confirming that such assets were held

outside Malta on 31 March 2005.

(3) The documentary evidence referred to in subregulations (1)

and (2) shall be

(a) in the case of precious metal bullion, a confirmation

from the licensed institution with which the precious

metal bullion is held;

(b) in the case of immovable property situated outside

Malta, a duly authenticated copy of the original

contract by virtue of which the property was purchased

and a confirmation from a duly qualified person;

(c) in the case of loans to a non-resident company which

has as its sole object the investment of funds for

portfolio purposes, a duly authenticated copy of the

agreement by virtue of which funds were advanced by

a Maltese resident to such non-resident company;

(d) in the case of all other eligible assets which are not

referred to in paragraphs (a), (b) and (c), a

confirmation from a licensed financial intermediary

outside Malta;

(e) such other documentary evidence which may be

declared sufficient by the Central Bank of Malta in

writing on a case by case basis;

(f)

where eligible assets are held by a third party in a

fiduciary capacity, the applicant shall also submit to

the appointed registration agent

(i)

where the fiduciary is regulated and licensed in

Malta or in a foreign jurisdiction, evidence that

such fiduciary is in fact so regulated or licensed;

or

(ii) where the fiduciary is not licensed or regulated,

a confirmation, bearing the fiduciary’s original

signature and witnessed by a Notary Public or a

Commissioner of Oaths, evidencing that such

fiduciary held eligible assets on behalf of the

applicant; and

(g) where eligible assets are repatriated to Malta, the

confirmation required by subregulation (1)(b) shall be

provided by a local licensed financial intermediary.

(4) Where eligible assets which may be registered under the

Scheme have been switched by the applicant into other foreign

assets during the period between 31 March 2005 and the

registration date, the applicant is to provide documentary evidence

of such switches as may be required by the registration agent.

(5) Copies of the original documentary evidence specified in

subregulations (1), (2), (3) and (4) are to be retained by the

appointed registration agent, in printed or electronic form, for

record purposes for a period of ten years.

(1) A person who registers eligible assets under the

Scheme shall sign a declaration which is to be provided by the

appointed registration agent, stating that

(a) such person is the beneficial owner of the assets being

registered;

(b) such person accepts full responsibility for the accuracy

and authenticity of the information and documentary

evidence provided to the appointed registration agent;

(c) such person undertakes to make available to the

appointed registration agent any further information

that may be required by the agent for the proper

exercise of its functions in this regard;

(d) the documentary evidence being submitted to the

appointed registration agent in terms of regulation

7(1), (2) (3) and (4) is the true original documentation;

(e) the registered eligible assets do not represent proceeds

from

(i)

a crime of money laundering under

the

Prevention of Money Laundering Act, or

(ii) any of the crimes listed in the Second Schedule

to the Prevention of Money Laundering Act

other than a crime against the Act or the Income

Tax Act, or

(iii) any offence against any other law;

(f)

the registered assets were held outside Malta between

1 January, 2000 and 30 March 2005 in the case of

assets referred to in regulation 6(a), or on 31 March

2005 in all other cases;

(g) the registered assets have only been registered once

under the Scheme;

(h) the declaration is being given in good faith.

(2)

The declaration shall also include

(a) a detailed description of the eligible assets being

registered and details thereof;

(b) details of the beneficial owners including full name, a

legally valid identification document number, address

and signature; and details of the fiduciary where

eligible assets are held by a third party;

(c) details of the appointed registration agent.

(1) The appointed registration agent, after having duly

completed the declaration modalities, shall issue a registration

certificate. The certificate shall be sequentially and uniquely

numbered and in controlled stationery.

(2) The registration certificate shall be issued to the applicant

against the payment of a registration fee as specified in regulation

(3) The registration certificate shall be issued by the appointed

registration agent in triplicate: one copy shall be provided to the

applicant, one copy is to be retained by the appointed registration

agent, and one copy is to be provided to the appointed central

registration certificate depository. The Central Bank of Malta is, by

means of these regulations, being appointed the central registration

certificate depository.

(4) Every person, including past and present officers or agents

of an appointed registration agent or of the appointed central

registration certificate depository, shall be bound by the duty of

professional secrecy in the exercise of his functions under these

regulations and shall not disclose any information contained in the

registration certificate which may come in his possession in the

exercise of his functions under these regulations.

(5) Upon registration, the beneficial owner of the eligible

assets registered under this Scheme shall be entitled to the

exemptions referred to in article 11 of the Act and article 9B of the

Income Tax Act.

(6) The submission by the applicant of false statements and

documents shall nullify the certificate and render the applicant

ineligible to the benefits granted under the Scheme.

(7)

The registration certificate is strictly non-transferable.

(8) In the event of the loss or destruction of the registration

certificate, the applicant may make a request in writing to the

central registration certificate depository for the issue of a copy of

the lost or destroyed certificate.

10. (1) The issue of a registration certificate is subject to the

payment by the applicant of a registration fee payable to the

Government. Such fee is equivalent to five per centum of the

market value of the registered eligible assets, calculated on the

basis of a valuation by a duly qualified person made within the

preceding three months and presented to the appointed registration

agent.

(2) The registration fees paid by registered applicants are to be

remitted by the appointed registration agent to the Government at a

designated account at the Central Bank of Malta by not later than

seven days after the end of the month during which the fees are

collected.

(3)

The appointed registration agent shall issue a receipt, which

is an integral part of the registration form, to the applicant in

respect of the registration fee paid.

(4) The triplicate copies of all the registration certificates

issued by the appointed registration agent during the month are to

be sent to the Central Depository at the Central Bank of Malta

within seven days after the end of that month.

The appointed registration agent is entitled to recover a fee

for services rendered to effect registration. Such fee shall be

deducted from the registration fee paid in respect of the issue of the

registration certificate. Such fee shall be equivalent to five per

centum of the registration fee, provided that it shall not be less than

€23.29 or more than €291.17 per application registered. No service

fee is to be charged by an appointed registration agent which is a

credit institution where funds are repatriated and placed with that

credit institution in a deposit account fixed for one year or over.

Holders of a registration certificate who convert their

registered eligible assets into other assets shall, after registration,

retain the documentary evidence regarding such conversions.