Interested in Setting Up a Captive in Malta?
- Call Ray Schembri +356 2380 8651
- E-mail Ray Schembri
More Information
The island republic of Malta is a member of the European Union and is strategically situated at the crossroads of the Mediterranean Sea, between mainland Europe and North Africa.
Many great civilisations, the Phoenicians, the Ancient Greeks, the Carthaginians, the Roman Empire, the Normans, the Ottoman Empire, the Knights of St. John, the Napoleonic Empire and the British Empire, have recognised and availed themselves of the Maltese islands’ superb strategic and economic potential as an important trading post as well as an island fortress.
In 1964 Malta obtained its political independence from Britain and in 1974 it became a Republic. Since the 1st of May 2004 Malta has been a member of the European Union.
Malta is an established financial services centre. Its Insurance and Company legislation is based on research carried out amongst Maltese and international insurance operators and provides opportunities for captive insurance companies and related services. The legal infrastructure incorporates the standards set by the European Union.
General Information
Government
Malta is an island republic and a full European Union member state.
Legal
Malta’s legal system is based on a Civil Code originating from Roman Law. Several specific laws are, however, based on the English model – such as Maltese insurance, company and tax laws.
Taxation
Malta has a standard corporate tax rate of 35%. However, non-resident shareholders may benefit from the refund of tax on distribution reducing the tax rate to 5%.
Insurance companies are VAT exempt without credit.
Currency Control
Since 1 January 2008 Malta has adopted the Euro.
Stamp Duty
Captive insurance companies are exempt from duty in respect of contracts of insurance where the risk (the insured or the property insured) is situated outside of Malta.
Regulatory Environment
All insurance companies in Malta are regulated by Malta's single financial services regulator, the Malta Financial Services Authority (The "MFSA"), in terms of the Insurance Business Act, 1998. The MFSA's approach is reputed to be 'firm but flexible', it encourages informal discussion at all levels with insurance company stakeholders, sponsors, insurance managers, applicants and other interested parties.
The MFSA’s Insurance Unit recognises the varying business techniques and numerous accounting conventions applicable in different countries where captive parent companies may be situated and the overall approach is generally aimed at establishing acceptable requisites tailored to meet the applicant’s specific business requirements.
General Representative
Every insurer is required to appoint a ‘General Representative’. This is usually the company’s appointed insurance manager.
Auditors
Every insurer is required to appoint an independent and approved firm of auditors to draw up the statutory financial reports.
EU Single Passport
Since Malta’s accession to the European Union, Malta licensed insurance companies are able to benefit from the European Union single passport for services and establishment.
Re-domiciliation
Maltese law allows for the re-domiciliation of insurance companies established in accepted jurisdictions to Malta. This has the benefit of continuing the company’s operations without a break in the company’s personality.
Protected Cell Companies
Maltese law allows the setting up of Protected Cell insurance companies and of cells within such companies. Each cell may be managed separately and assets attributed to such cells will constitute a segregated patrimony from the other cells.
Minimum Solvency Margin and Own Funds Requirement
Captive Insurance companies are required to maintain at all times a margin of solvency and technical provisions in accordance with regulations which are modelled on the European Union Directives.
€ 2millions – € 3millions own funds requirement depending on the type and class of business
