Why Malta?
Date: 18th February, 2010
The following article is written by Krista Pisani Bencini, who specialises in financial services, corporate and asset finance. In this article, Dr Pisani Bencini highlights Malta's attraction for corporate entities.
MOVING ONSHORE
Legislative intervention has ensured that moving to Malta is an easy, cost-efficient and straightforward procedure. Corporate entities which are registered under the laws of an approved jurisdiction outside Malta, and which carry on business of insurance including captive companies, may migrate to Malta to an attractive EU-approved fiscal regime, a robust but flexible regulatory environment and access to EU markets through the single passport route.
Continuation of Companies
The Continuation of Companies Regulations coupled with the Insurance Business (Continuance of Companies Carrying on Business of Insurance) Regulations make it possible for a company registered outside Malta to move from its country of origin to Malta without liquidating or terminating policies on risk. Said company would “continue” as a company formed and registered under the Companies Act, without the need to re-register as a new corporate entity. Regulated insurance companies and captives are specifically allowed to re-domicile by the Maltese regulatory framework.
Eligibility
Insurance companies and captives can re-domicile to Malta if, amongst others, they are a foreign entity that:
- is a body corporate, registered, incorporated or constituted under the laws of an approved
- country or jurisdiction outside Malta,
- carries on business of insurance,
- is similar in nature to a company as known under the laws of Malta, and
- would, if it were a Maltese company, qualify to be authorised under the Insurance Business Act or, in the case of insurance brokers and managers, the Insurance Intermediaries Act.
The law of the foreign jurisdiction must allow continuations or re-domicilation to other jurisdictions. Alternatively, the possibility of a merger with a Maltese company could be explored.
Procedure
Approval of continuation per se is divided in two phases. The first is a provisional certificate of continuation establishing the continuation date and issued upon receipt / approval by the Registrar of the requisite documentation. Upon issuance of a certificate to this effect, the company would be deemed to be a body corporate incorporated under the Companies Act and is, from then on, subject to all the obligations and capable of exercising all the powers of a company which is so registered. The second phase of the redomicilation must be finalised within 6 months from the issuance of the provisional certificate, by which time the company must submit evidence to the Registrar that it has ceased to be a company registered in its country of origin. A final certificate of continuation will then be issued.
Companies migrating to Malta to carry out a licensable activity would require a new licence from the Malta Financial Services Authority (MFSA) before commencing operations. In practice, simultaneously with the corporate procedures for re-domiciliation, the captive would submit a licence application to the MFSA.
The Registry of Companies liaises closely with the MFSA Authorisations Unit to provide timely feedback and to issue the necessary licence contemporaneously with the approval of the redomiciliation.
Why Malta?
The continuation procedures ensure that, with only minimal technical requirements, the redomiciled company would continue its life in Malta without becoming a “new” legal entity upon continuation. It would thus retain all its assets, rights and liabilities as those it had before moving to Malta, hence “continued”, and without the need to run-off policy portfolios.
Legislation allowing redomicilation of insurance companies and captives to Malta dates back to 2003. Since then the island has continued to increase in its popularity as an attractive base for insurance businesses, particularly since EU membership in 2004 and joining the Euro zone in 2008. Historically, Malta’s appeal lied mainly with its geographical position and moderate climate. Today, its legal and regulatory framework, strong reputation, availability of trained human resources, competitive costs and approachable and efficient regulator are a few of the factors which are turning Malta into an onshore, EU domicile of choice for financial services businesses.
