My Items

Many entrepreneurs in Malta are diversifying their commercial activity and engaging in e-commerce. The Electronic Commerce Act (Chapter 426 of the Laws of Malta) provides the general framework legislation regarding electronic commerce and matters connected therewith or ancillary thereto. Part II of the Act deals with the application of legal requirements to electronic communications and transactions.

The essence of the Act is that: For the purposes of any law in Malta and subject to thevother provisions of this Act, a transaction is not deemed to be invalid merely because it took place wholly or partly by means of one or more electronic communications. There are certain exceptions, which are listed in Schedule V of the same Act (eg. Powers of attorney, contracts involving immovable property excluding lease, wills, etc…). Furthermore, If under any law in Malta a person is required or permitted to give information in writing, that requirement shall be deemed to have been satisfied if the person gives the information by means of an electronic communication, provided certain safeguards listed in the law are maintained.

Electronic contracts are also governed by this Act, with the exception of electronic signatures which removed from the purview of said Act by means of Act XXXV of 2016. Electronic signatures under Maltese law are now regulated by EU Regulation No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the eIDAS Regulation), which has direct effect and does not require transposition into domestic law.

Lexvirtualis™ can assist you with the following:

• Opening a company and other corporate services

• Any applicable licenses depending on nature of commercial activity (eg. in the case of remote gaming or financial services)

• Banking facilities and payment gateways

• Consumer protection law (especially relating to distance selling)

• Data protection (especially the GDPR)

• Intellectual property – such as trademarks, designs, copyright

• Digital marketing, advertising and social media

• Taxation

• Jurisdictional issues, ADR and litigation

Sports law refers to a specialized practice which focuses on legal issues pertaining to the sports industry. Whether sports law is an area of law in itself or simply an amalgam of various laws and regulations relating to various issues encountered in the sports industry is still a jurisprudential debate. Employment law, intellectual property law, media law, medical law and bioethics, immigration law, contract law, tort, administrative and constitutional law, criminal law, and even fiscal legislation are all notable areas which the world of sports touches upon continuously. Depending on the status of the sportsperson, the type of sport in question and the jurisdiction/s involved – one can encounter a complex interplay of legal rights and obligations. Moreover, sports law is generally divided into the areas of amateur, professional, and international sports.

Malta enacted the Sports Act (Chapter 455 of the Laws of Malta) in 2009, the purpose of which is to encourage and promote sport, to provide for the establishment of a national sport council to exercise the functions relating to sport currently vested in the Department of Youth and Sport and SportMalta, to provide for the registration of sport organisations, and to establish dispute resolution structures.

Two regulations of paramount importance promulgated under this Act are the: Sport Persons (Registration) Regulations of 2008 and the Anti-Doping Regulations of 2015, both of which were amended in 2016. The Anti-Doping Regulations bring Malta in-line with the World Anti-Doping Agency’s comprehensive ‘World Anti-Doping Code’ and its current ‘Prohibited List’.

Another important law is the relatively recent Prevention of Corruption in Sport Act of 2018 (Chapter 593 of the Laws of Malta), which repealed the 1976 Prevention of Corruption (Players) Act of 1976. The Act deals with corruption-related activities such as manipulation of sports events, as well as establishing the Sports Integrity Unit – a body corporate with a distinct personality possessing various functions relating to integrity and transparency in sports.

Furthermore, in line with the OECD Model Tax Convention on Income and on Capital, Malta allows sportsmen (as is the case with entertainers) to remit or route through Malta income such as royalties and thus benefit from a favourable tax regime.

Lexvirtualis™ offers the following services relating to sports:

• Representation of sportspersons vis-à-vis sports associations and clubs (eg. SportMalta, MFA, MFPA, MBA, etc…)

• Establishing and setting up of sports associations and clubs (drafting of statutes, registration with authorities, legal personality, etc…)

• Immigration, residency and employment of sportspersons

• Compliance

• Intellectual property

• Corporate structure planning and tax planning

• ADR and litigation.

Succession law in the broad sense of the term determines the transfer of property from a deceased person’s estate to their legal successors (informally known as ‘heirs’). Under Maltese law, the bulk of succession law is found in Part II Title III of the Maltese Civil Code entitled 'Of Succession'. 

The devolution of a deceased person’s property onto its heirs could take place by means of:

• A will made according to law (known as ‘testate succession’);

• By operation of law (known as ‘intestate succession’) in the case of absence of a will

• Through a trust (heirs will be nominated as beneficiaries)

In Malta, only two types of wills are recognised – the public will and the secret will, both of which must be made according to law for in order to be valid and legally enforceable. The public will is usually drafted by a notary public according to the needs of the testator. The will is then formally ‘received’ by the notary public in the presence of two witnesses and published, ie. enrolled in the public registry. The existence of a public will, that is, whether or not a particular person has in fact made a will, is searchable in the public registry; whilst the contents of such wills remains undisclosed until the death of the testator.

Maltese law also recognises the secret will, even the existence of which, remains unknown until the death of the testator. The contents of the secret will need not even be disclosed to the notary or the witnesses. This type of will is deposited in the Court Registry and may only be opened after the testator’s death and by the authorization of the Court in favour of the interested parties.

Maltese law also allows married couples to submit a unica charta (joint) will.

Wills which are not made according to the procedures imposed by law, such as holographic wills, are not legally enforceable in Malta.

Intestate succession occurs when a person dies without having made a will (however, there are other cases where intestate succession can prevail – either in whole or in part) and therefore the succession takes place by operation of law. The provisions of Articles 788-816 of the Maltese Civil Code govern intestate succession. A set of predetermined rules based on the presumed proximity of the relationship between the deceased and his heirs. As a rule, the estate of the deceased devolves accordingly upon the said person’s i) descents; ii) spouse; iii) ascendants; iv) collateral relatives; and lastly v) in favour of the Government of Malta.

There is also what is known as the ‘reserved portion’ (formerly called the legitim) which is a legal right to part of the estate guaranteed by law in favour of the descendants and/or spouse of the deceased. As a rule, the reserved portion is calculated on the estate in its entirety, after deducting the debts due by the estate, and the funeral expenses. There are many factors which determine the amount of the reserved person – such as the number of children of the deceased.

In Malta, we do not have what is known as ‘probate’ – ie. the judicial process in which a will is reviewed to determine whether it is valid and authentic. However, this is not to say that probate issues will never arise in cross-border inheritance scenarios involving Malta or a Maltese parties. Furthermore, Maltese Courts have often dealt with cases relating to validity of wills published in Malta, disputes as to who is the legal heir and rights of heirs, challenging actions performed by the testator, the extent of the reserved portion, etc…

Lastly, no duty is chargeable on the transfer causa mortis (transfer from deceased to heir) of movable property. However, duty is chargeable on the transfer causa mortis of immovable property and of securities.

Civil lawyers and notaries specialising in succession law at Lexvirtualis™ can help you with:

• Drafting a will according to your needs, as well as and the legal restrictions and advising you as to the legal and fiscal implications involved

• Reviewing an existing will and advising accordingly

• Intestate successions

• Cross-border successions and probate

• Setting up a trust for devolution of property

• Private International Law / Conflict of Laws

• Challenging the legal validity of a will; challenging acts made by the testator

• ADR and Litigation

1. Introduction to trusts

Malta is traditionally a continental / civil law jurisdiction, whilst the notion of ‘trusts’ and the

legal regime concerning their regulation emanates from the common law legal tradition. This

notwithstanding, the Maltese legal system has evolved into one of a hybrid nature: it retains

its continental/civil law basis, whilst welcoming common law concepts.

Trusts under Maltese law are regulated by the Trusts and Trustees Act (Chapter 331 of the

Laws of Malta) as well as various regulations enacted thereunder. The Act provides for strict

regulations relating to the authorisation and supervision of trustees. Furthermore, Malta is

party to the Hague Convention on the Law Applicable to Trusts and on their Recognition of

1985

A trust exists where a person (known as a trustee) holds, as owner or has vested in him

property under an obligation to deal with that property for the benefit of persons (called the

beneficiaries), whether or not they are yet ascertained or in existence, which is not for the

benefit only of the trustee, or for a charitable purpose, or for both such benefit and purpose

aforesaid.

The person who establishes the trust is referred to as the settlor, which term also includes a

person who ‘provides trust property or makes a disposition on trust or to a trust’. Therefore,

the settlor creates the trust and transfers assets from his patrimony therein. Typical assets

usually held in trust include shares, bonds, immovable property, and bank accounts.

The parties in a trust scenario are typically:

The settlor 

The person who establishes the trust,This term also includes a person who ‘provides trust

property or makes a disposition on trust or to a trust’. Therefore, the settlor creates the trust,

transfers assets from his patrimony therein. Typical assets usually held in trust include shares,

bonds, immovable property, intellectual property, bank accounts, etc… The settlor may also

be a beneficiary under the same trust.

The trustee

The trustee is the person or entity entrusted with administering the property of the trust as a

bonus paterfamilias, acting in utmost good faith and in accordance with the trust deed and

Maltese law on trusts. Although the trustee becomes the legal owner of the property held in

trust, the said property is ringfenced and cannot be attacked by eg. creditors of the trustee.

The beneficiary or beneficiaries 

The individual or group of people who benefit from trust assets and the income they may

generate. They are the persons in whose interest the trustee administers the trust assets – eg.

the family members in a family trust.

Usually, the settlor expressly establishes the trust by means of a written trust deed evidencing

his intention to this effect, whilst also stating who the beneficiaries are or will be (since they

may not yet be ascertained or in existence) and to what extent they will benefit from the trust.

This is known as an ‘express trust’.

Once the trust has been created, the settlor ceases to be the legal owner of the property held in

the trust and thus does not continue to control, nor does he retain an active role in the affairs

of the said trust. 

However, the law provides for some inroads to this general rule:

For example, the settlor may expressly provide in the trust instrument that he may revoke (or

vary the terms of) the trust accordingly. Therefore, he may also reserve for himself any power

to appoint, remove, or add beneficiaries, trustees, or protectors. Moreover, the settlor can

reserve for him or herself a benefit derived from the property of the trust or the power to

appoint or remove trustees without affecting the validity of the trust. Therefore, a settlor can

also be a beneficiary under the same trust.

Although a trust does not enjoy a separate legal personality (as is the case regarding

foundations), trust property is distinct and separate from the personal property of the settlor,

as well as the trustee. Furthermore, the property held in trust is also distinct and separate from

the personal property of the trustee and from other property held by the trustee under any

other trust.

For example – a debt or liability incurred by the settlor after the trust is created cannot be

attacked by creditors. However, trusts under Maltese must be utilised in good faith and

cannot be established, for example, in order to defraud creditors; or to circumvent succession

laws on the reserved portion due to heirs; or to circumvent civil laws in relation to

maintenance due to spouse and children, etc. In this regard, one can refer to the landmark

Maltese judgment in Bettina Vossberg pro et noe v. Equinox International Ltd et (CoA

9/11/2012). The bottom-line is that: the trust be established before the assets at issue become

subject to third-party rights or restrictions arising therefrom.

The terms of a trust may provide for the office of ‘protector of the trust.’

Subject to the terms of the trust, the protector shall have the following powers:

(a) to appoint a new or additional trustee;

(b) to remove a trustee;

(c) to require the trustee to obtain his consent prior to exercising a discretion.

Trusts established for a charitable purpose may nominate an ‘enforcer’. The duty of the

enforcer shall be that of ensuring that the trustee administers the trust in accordance with the

terms of the trust and to promote the purposes of the trust.

What are the advantages of setting up a trust?

1. Protection and safeguarding of assets - the property that constitutes the trust is independent

from the settlor’s, the trustee’s and the beneficiaries’ assets, thereby guaranteeing greater

protection. One may wish to protect one’s assets as part of a risk management policy or

against political instability (eg. wars, expropriation, etc.)

2. Estate planning - By utilising a trust, the settlor can administer and distribute his assets

during the settlor's lifetime and after his death. He may distribute income and capital to meet

specific expenses i.e. education, medical or in emergency.

3. Succession planning – One can utilise the trust as a vehicle to transfer one’s assets to

successive/future generations. The Act allows the creation of a ‘family trust’ which it defines

as: “a trust created to hold property settled by the settlor or settlors for the present and future

needs of family members or family dependants who are definite and can be ascertained.” In

this respect, one can simplify proceedings, manage more efficient tax planning e and avoid

notarial formalities which would normally arise when one inherits under a will or by

operation of law (in an intestate scenario). Judicial formalities in Maltese courts in order to

prove heirship in the absence of a will can be avoided. In case of cross-border inheritance

cases, one can avoid probate proceedings abroad as well as judicial proceedings which may

arise in relation to succession. That said, however, when a Maltese trust is created, certain

indefeasible succession rights (whether testate or intestate), especially the reserved portion of

the spouses, ascendants and descendants, will prevail over the terms of the trust. It is

noteworthy that by utilizing a trust, the settlor can administer and distribute assets both

during his lifetime and after his death. Furthermore, a settlor can ‘reserve’ assets for his heirs

under a trust without said assets being transferred immediately to the heirs upon the settlor’s

death. For example, in the case where the settlor would like his heir to reach the age of

majority before benefiting from the inheritance assets. Also, trusts allow the creation of

special funds for minors or people with certain infirmities.

4. Tax planning –Trusts may be utilised in order to mitigate tax exposure, through efficient

and transparent tax planning. Trusts are considered to be transparent vehicles for tax

purposes. The trustee is not taxed for income attributable to a trust if such income is

distributed to a beneficiary. Income attributable to a trust which is not distributed to the

beneficiaries is taxed in the hands of the trustees at a rate of 35%. Other laws and regulations

may have an impact on the taxation of trusts and trustees. Malta is also a signatory to a

number of Double Tax Treaties which may apply accordingly.

5. Portability - Under Maltese law, a trust may be converted to a foundation and vice-versa. A

trust may be established for 125 years (which may be terminated sooner), or indefinitely (in

the case of unit trust sand trusts for a charitable purpose)

Thinking of setting up a trust in Malta? LexVirtualis™ can assist you with

advice on:

• Choice of fiduciary entity and related matters

• Recognition of trusts under foreign law.

• Formation of the trust and drafting of all necessary trust documents

• Re-domiciliation of trusts

• Taxation of trusts

• AML and CFT compliance

Furthermore, LexVirtualis™ can appoint an affiliated fully-licensed fiduciary to assist you with:

• Acting as a ‘trustee’ in terms of the Trust and Trustees Act. This entails the holding,management and administration of assets held in trust for the benefit of the beneficiaries. Furthermore, securities over charged assets, or assets on behalf of secured parties, may also be held.

• Other fiduciary services such fiduciary holding of assets, company nominee services, acting as a foundation ‘administrator’ in terms of the Second Schedule to the Civil Code, and escrow services.

2. Introduction to legal organisations - eg. foundations and associations.

Legal organisations are governed by the Second Schedule of the Maltese Civil Code (Chapter

16 of the Laws of Malta). Article 1 of the Second Schedule defines an ‘organisation’ as a

‘universality of persons who associate or a universality of things which are appropriated to

achieve a lawful purpose having a form recognised by law, and which is capable of being a

legal person in terms of law.’ Organisations are classified according to their purpose, ie:

• To exclusively promote a social or public purpose on a non-profit making basis, excluding any private benefit (however it might have a type of beneficiary known as a ‘public interest beneficiary’ such as religious organisations or public organisations) – in which case it is referred to as a ‘public benefit organisation’

• To promote any lawful purpose in terms of the Voluntary Organisations Act (other than those referred to above) - in which case it is referred to as a 'private benefit organisation' or

• To promote any other lawful purpose, in which case it is referred to as a 'private interest organisation'.

Both foundations and associations fall under the term ‘organisations’. In the case of

foundations, the focus of the law is on the patrimonial aspect of the assets that are vested in

the foundation itself. On the other hand, in the case of associations, the law focuses on the

associative element of the organisation - ie. the members who have convened and established

the association in order to fulfil its aims.

If the organisation is a ‘voluntary’ one, then the Voluntary Organisations Act (Chapter 492 of

the Laws of Malta) also applies.

The voluntary organisation is an organisation which is created or established:

• For any social purpose including that which qualifies as a public purpose or for public

• benefit

• As non-profit making

• Is voluntary

Whether it is registered or registerable as a legal person or not in terms of the Second

Schedule to the Civil Code and whether it is or may be enrolled under the Act or not. The

meaning of ‘voluntary’ is defined by the Act itself (eg. administrators do not receive

remuneration; and/or the organisation is created by the endowment of voluntary and

gratuitous grants, etc…)

Foundations

Foundations are governed by Title III, and more specifically, Sub-Title II of the Second

Schedule of the Maltese Civil Code (Chapter 16 of the Laws of Malta).

A foundation is defined as:

An organisation consisting of a universality of things constituted in writing, including by

means of a will, by a founder or founders whereby assets are destined

(a) for the fulfilment of a specified purpose (purpose foundations); and, or

(b) for the benefit of a named person or class of persons, and which are entrusted to the

administration of a designated person or persons (beneficiary foundations)’

Purpose foundations may be established for a public benefit or for any other lawful purpose

(non-public benefit).

Beneficiary foundations may be established for a private benefit or for a public interest.

Furthermore, a foundation may be classified as a ‘private interest foundation’, defined as a

foundation, which neither qualifies as a public benefit foundation nor is it established for a

public or social purpose and which is not a voluntary or non-profit organisation but which

can be established for a legitimate purpose.

The legal provisions dealing with foundations are numerous and vast. Foundations are often

compared to trusts and although similar (ie. they can serve the same purpose and achieve the

same results), there are some notable and crucial differences between the two. Whilst trusts

originate from common law, foundations are more akin to the continental/civil law tradition.

Unlike trusts, foundations enjoy separate legal personality. Whilst in a trust scenario, the

ownership of the patrimony of assets placed in the said trust scenario is vested in the trustee.

In the case of foundations, the foundation itself is the legal owner of the assets transferred to

it.

A foundation can be established either by a public deed (published by a notary and enrolled

in the Public Registry) or by means of a will. The minimum endowment of funds or value of

property in order to set up the foundation is €1,164.69. However, if the foundation is

established exclusively for a social purpose, the minimum endowment required is €232.94.

As a rule, foundations cannot engage in commercial activities (such as trade) except in the following cases:

•  It may be endowed with commercial property or a shareholding in a profit-making enterprise, a franchise, a trade mark or other intellectual property which gives rise to income, as well as a ship or aircraft, but may only act as the passive owner of such assets.

•  It may, subject to such authorisations as may be necessary under applicable laws, be used as a collective investment vehicle, as a pension or employee benefit scheme, as a retirement scheme or fund, as a securitisation vehicle or for the purpose of supporting or implementing a securitisation transaction,

• A foundation may hold, administer, develop or sell undivided property originating from an inheritance deriving from one or more deceased person or persons common to the beneficiaries.

• A foundation may carry out any trading activity resulting from such foundations owning, administering or otherwise operating an ‘innovative technology arrangement’, as defined in the Malta Digital Innovation Authority Act

What are the advantages of foundations?

• A foundation (unlike a trust) is granted separate and distinct legal personality, and therefore acquires its own patrimony of assets and liabilities, has its own rights and obligations and is separate and distinct from its founders, administrators and beneficiaries. It must therefore register itself as a legal person.

• The founder, administrator and beneficiary respectively can be natural persons (eg. individuals) or legal persons (eg. companies, etc.). A founder may also assume all three roles by also acting as administrator and also being named beneficiary of the same foundation.

• Whilst administrators are subject to fiduciary bligations, a protector and supervisory council may be appointed to supervise the said administrator

• Private foundations may be established for a maximum of 125 years, whilst there is no such time limit on public benefit foundations. Private foundations may engage in trade.

• Foundations (like all organisations) may establish within them segregated cells to achieve particular purpose and to protect the patrimony of the said foundation.

• Confidentiality (which may be waived by the founder).

• Low endowment impositions - €1,164.69 payable upon enrolment of the deed of foundation and in the case of a public benefit foundations in which case the endowment shall be of at least €232.94. Endowment can also be in kind.

• Ideal for tax planning – eg. assets may be transferred out of the patrimony of the founder prior to death and will not be subject to inheritance tax, private interest foundations can either be taxed either as company or as a trust, etc…)

• Foundations may be converted into trusts and vice versa, due to the similar legal rights and obligations at play.

In view of the above, foundations may prove useful for the following practical purposes:

• Succession planning – disposing of one’s estate via a foundation may afford a greater degree of confidentiality, privacy and flexibility than doing so under a will or in the absence of the latter, by operation of law. 

• Charitable / Philanthropic Purposes – Foundations are enforceable without having any nominated beneficiaries (unlike trusts which must have beneficiaries). This renders it ideal for a founder to dispose of his estate in furtherance of an altruistic objective of his or her choosing,

• Asset protection and ringfencing – One can carry out asset structuring and estate planning in view of the fact that certain assets may be segregated and thus not continue to form part of the estate/patrimony of the founder. In this regard, one can protect his estate against future events which may entail debts and/or liabilities. Conversely, debts and liabilities incurred by the foundation can only be satisfied by assets forming part of the patrimony of the said foundation.

• Confidentiality – Save in cases involving money-laundering and terrorist financing, and certain due diligence requirements, the general rule is that the confidentiality of a foundation’s beneficiaries is respect and safeguarded, even by the Maltese Courts. The identity of the founder may be also be kept confidential, for example, by utilising fiduciaries (nominees) in the establishment of the foundation. The public deed creating a foundation must be enrolled in the public registry. However, only a minimum of information is available to the public and confidentiality is retained.

One can also, by means of a foundation, cater more specifically to the needs of the:

• Founder – The founder is the person wishing to transfer assets from their estate into a foundation (and is akin to the settlor in relation to a trust. However, unlike trusts, in the case of foundations – the founder may continue to exercise control over the foundation during his/her lifetime, depending on the constitutive instrument – he may monitor the administrators’ activities or may be an administrator himself. Unlike in the case of a will, the founder can decide what is to happen in certain cases while he still alive. For example, should he or she become unable to administer their estate due to ill health, disability or age – in which case he can also finance his medical care and assisted living or nursing home.

• Beneficiary or beneficiaries – in case of succession planning, it is the potential heirs who would fill in this role, should the founder wish to do so. The founder can pre-empt future situations where there is a high risk of his heirs squandering the estate – for example, in view of any potential habits or lifestyles they might be engaged in. There is a much lesser degree of control and flexibility in the case of a testator disposing of his estate under a will or in an intestate scenario by operation of law.

Associations

An association, which is not bound to register itself as a legal person, but may nonetheless do

so, is defined as:

an agreement between three or more persons to establish an organisation with defined aims or

purposes to be achieved through the dedication of efforts and resources by such persons and

others who may join voluntarily, the patrimony, namely assets and liabilities, if any, of the

association being distinct from that of the members, its administrators or any beneficiaries:

Provided that an association which is not established as a public benefit organisation may be

established between two persons.

An association can established for various purposes, such as:

• the fulfilment of private interests;

• the promotion of trade or a profession;

• the obtainment of a social purpose,

• the carrying on of any lawful activity on a non-profit making basis

Depending on the purpose of the association, different legal rules may apply. Associations

are regulated, as a rule, by Sub-Title III of Schedule II of the Civil Code entitled ‘Of

Associations’.

They may be established for a:

• private benefit – for example – those that promote a private interest or a particular profession or trade. These associations are subject to special laws and specific provisions enlisted in Article 48 (1) of the Schedule (eg. those on civil and/or commercial partnerships, unions and employer associations, etc.) However, the rules of Sub-Title III 'Of Associations' (other than those governing public benefit organisations) continue to apply as a lex generalis. 

• public benefit – these associations are governed by the provisions of this Sub-Title III 'Of Associations' and the applicable provisions of this Schedule, with the exception of provisions of article 48.

Legal Personality

Legal persons are organisations which are endowed with legal personality. Legal personality

is acquired through the formal recognition of the State. Recognition by the State requires a

specific act of recognition and no other administrative act of the State in relation to an

organisation or activity shall constitute recognition.

Except where legal personality is recognised or established by a law or an international treaty

or agreement or is granted in virtue of registration pursuant to any special law, legal

personality shall only be acquired by an organisation on its registration with the Registrar for

Legal Persons.

LexVirtualis™ can assist with the following advice in relation to legal organisations such as foundations and associations:

• Establishing and registering foundations, associations and other organisations in accordance with Maltese law

• Appointing a fully licensed administrator for holding of assets as mandatary or depositary

• Drafting of the statute or other constitutive instrument.

• Drafting of public deeds where necessary

• Assistance and advice related to obtaining legal personality

• Assistance and advice relating to the establishment of segregated cells within organisations

• Advice on taxation in relation to any organisation.

• Protection of assets

• Responsibility and liability

• Conversion, Amalgamation, Division

• Revocation of the organisation

• Termination and winding up

• ADR and litigation

Taxation is a term describing the act of a government or other authority requiring that an involuntary or compulsory fee be paid by citizens and corporations, usually in connection with their income, assets or certain transactions. The primary purpose of taxation is for the Government to raise revenue, although it may serve additional purposes such as deterrence.

Examples of types of taxes in Malta are:

• Income tax

• Value Added Tax (VAT)

• Duty on Documents and Transfers

• Capital gains and Property Transfer Tax.

Malta offers favourable tax structures to individuals and corporations. Depending on the residence and domicile of the individual, liability to Maltese income tax and certain capital gains tax arises either on a worldwide basis, on a remittance basis, or on a territorial basis.

Individuals who are both ordinarily resident and domiciled in Malta are taxed in Malta (worldwide basis). This also applies to their spouses – they are also subject to a worldwide basis of taxation (and not on a source and remittance basis).

Any person who is ordinarily resident in Malta but not domiciled in Malta is taxable only on income and chargeable gains arising in Malta (territorial basis) and on any foreign income remitted to Malta (remittance basis). These persons are not taxable in Malta on income arising outside Malta which is not received in Malta, and on capital gains arising outside Malta (regardless of whether they are received in Malta or otherwise)

A non-resident individual is taxed only on income and chargeable gains arising in Malta (territorial basis)

The income tax rates vary depending on the tax status of the individual (single, married, single parent) and whether an individual is a resident or non-resident individual in Malta. Income tax rates are applied on progressively with a tax-free bracket which ranges from €9,100 to €12,700 and a tax rate which varies from a minimum of 15% to a maximum of 35%.

Corporations are taxed at 35% of their chargeable income, however, Malta offers what is known as the ‘full imputation system’ which prevents economic double taxation. Although companies are taxed at 35%, a shareholder of the said company would be entitled to a refund of any tax paid by the company depending on its source of income, ie. of 5/7ths (10% effective tax rate), 6/7ths (5% effective tax rate) or 7/7ths (0% effective tax rate) of income tax already paid by the said company.

Malta also has a double taxation treaty network with over 60 countries, which ensures relief from double taxation on certain types of income.

Malta offers specific schemes and programmes with fiscal advantages:

• The Residence Programme (TRP)

• The Global Residence Programme

• The Malta Retirement Programme

• The Highly Qualified Persons Rules

• The Qualifying Employment in Aviation (Personal Tax) Rules

• The Qualifying Employment in Maritime Activities and the Servicing of Offshore Oil and Gas Industry Activities (Personal Tax) Rules

• The United Nations (UN) Pensions Programme

Benefits of the Maltese taxation system:

• Full imputation system and refundable tax credit system for shareholders of corporations– resulting in 0% to 10% effective tax rate.

• Full tax exemptions for holding companies and exemptions on duty on documents for companies which operate internationally.

• No withholding taxes or duties on profit repatriation

• No withholding tax on outbound royalty payments and dividends

• Malta is an EU member State and a party to numerous double taxation treaties

• No wealth/net worth/capital/property ownership tax

Lexvirtualis™ can assist you with the following services:

• Tax planning, structuring and advice for individuals, corporations and their shareholders

• Tax and financial planning for high net-worth individuals and residence/retirement schemes

• Taxation of trusts and foundations

• Advice on EU direct tax directives

• VAT compliance obligations and VAT grouping

• VAT rules and benefits in relation to lease structures of yachts and aircraft

• Shipping companies and tonnage tax

• Aviation companies and tax incentives

• Tax objections and appeals

• Tax advice relevant to specialised sectors

In lawman’s terms, money laundering is the act of making dirty money (ie. money obtained from criminal activity) appear to have originated from a legitimate source, thus transforming it into ‘clean money’. The amounts of money involved in such cases are usually of such a high amount as to raise suspicion. Counter-Financing of Terrorism (CFT) involves investigating, analyzing, deterring, and preventing sources of funding for terrorist activities usually carried out by terrorist organisations. Such funds usually move across one jurisdiction to another, making them hard to trace. By tracking down the source of the funds that support terrorist activities, law enforcement may be able to prevent some of those activities from occurring.

In Malta, the Anti-Money Laundering (AML) regime consists mainly of the Prevention of Money Laundering Act (Chapter 373 of the Laws of Malta) criminalises and regulates money laundering, also establishing the Financial Intelligence Analysis Unit (FIAU). The Prevention of Money Laundering Act was amended in order to transpose the provisions of EU Directive 2015/849 (dealing with the prevention of the use of the financial system for the purposes of money laundering or terrorist financing) and in order to elaborate on, and strengthen, the national AML/CFT regime. On the 19thJune 2018 the 5th anti-money laundering Directive (Directive (EU) 2018/843), which amended the 4th anti-money laundering Directive, was published in the Official Journal of the European Union. The Member States had to transpose this Directive by 10 January 2020.

Moreover, the Prevention of Money Laundering Act and the Prevention of Money Laundering and Funding of Terrorism Regulations made thereunder are supplemented by the Implementing Procedures issued by the FIAU. The Implementing Procedures provide an interpretation of the regulations and their purpose is to guide and assist subject persons in understanding and fulfilling their obligations under the regulations, thus ensuring effective implementation thereof. The said Implementing Procedures are binding on subject persons and failure to comply is subject to an administrative penalty. Lastly, in relation to money laundering, it is also pertinent to mention the Dangerous Drugs Ordinance (Chapter 101 of the Laws of Malta) and the Medical and Kindred Professions Ordinance (Chapter 31 of the Laws of Malta) which contain, inter alia, provisions which apply as a lex specialis to laundering of money obtained from drug trafficking.

Contrary and inversely to money laundering, in the case of counter-financing of terrorism, it is not the source of the funds on which focus is made, but the destination and purpose of the said funds. According to Sub-title IV A of the Criminal Code (Chapter 9 of the Laws of Malta) entitled 'Of Acts of Terrorism, Funding of Terrorism and Ancillary Offences', funding of terrorism is defined in Article 328F. as ‘… directly or indirectly, collecting, receiving, providing or inviting another person to provide, money or other property or otherwise provides finance intending it to be used, or which he has reasonable cause to suspect that it may be used, in full or in part, for the purposes of terrorist activities or knowing that it will contribute towards the activities …’

Lexvirtualis™ offers the following services:

• Compliance with Maltese and EU legislation

• Compliance with FIAU Guidelines

• Formulation of proper AML-CFT programme, policy and procedures manuals, documentation

• Support, advice and assistance with regulatory returns, regulatory requests and regulatory inspections

Media Law is a legal field that relates to legal regulation of primarily publishing and broadcasting – such as television, radio, film, internet, newspapers, and advertising. Telecommunications law refers to the regulation of electronic communications, whether wired or wireless. Traditionally, this area of law pertained to telegraphs, the telephone system, facsimile, submarine cables and satellite communication. Information Technology law is the body of law which regulates all aspects surrounding electronic or digitized information or data – its collection, storage, dissemination and transfer; and its related technology – such as computers, networks and the internet.

As technology advanced, especially in the digital age, these three areas of law are heavily interlinked and the subject-matter which they regulate often overlap. For example, an online videoconference call which is broadcast to the public may be governed by media, IT as well as telecommunications law. However, one still finds actions or events which are governed solely by one area of law: eg. a traditional printed newspaper article published in one particular jurisdiction (assuming it cannot be found online) is governed by media law.

In Malta, the Broadcasting Authority and the Malta Communications Authority are the regulators in these fields of law. In December 2018, the EU has adopted Directive (EU) 2018/1972 establishing the European Electronic Communications Code, which will consolidate and enhance the legal framework in the sector. This Code must be transposed into local law by member States by 21 December 2020.

Examples of Maltese legislation dealing with

Media law

• The Broadcasting Act

• The Media and Defamation Act (formerly known as the Press Act)

• The Electronic Communications (Regulation) Act

Telecommunications law

• Electronic Communications (Regulation) Act

• Electronic Communications Networks and Services (General) Regulations (Chapter 399.28 of the Laws of Malta)

• General Authorisations (Radiocommunications Apparatus) Regulations (Chapter 399.40 of the Laws of Malta)

Information Technology Law

• Electronic Communications (Regulation) Act

• Electronic Communications Networks and Services (General) Regulations (Chapter 399.28 of the Laws of Malta)

• Data Protection Act (Chapter 586 of the Laws of Malta)

• Criminal Code (Sub-title V ‘Of Computer Misuse’ - Articles 337B-337H)

Lexvirtualis™ offers legal services and advice relating to:

• Broadcasting licenses and compliance

• Telecommunications licenses and compliance

• Radiocommunications Authorisations and Licenses

• The Media Register

• Contracts of services (eg. service provider agreements)

• Data Protection and Freedom of Information

• Cybersecurity

• Defamation and libel (right of reply, defences, etc…)

• Damages (inc. moral damages)

• Disputes and litigation including appeals

Since Malta took the plunge and introduced its Remote Gaming Regulations (L.N. 176 of 2004), the local iGaming industry in Malta has flourished rapidly and shows no signs of backing down. Malta is considered a stable, one-stop-shop jurisdiction for remote gaming operators due to its advantageous regulatory and fiscal framework. The principal legal regime is provided by the Gaming Act (Chapter 583 of the Laws of Malta) and all regulations made thereunder. The main Act also establishes the Malta Gaming Authority (MGA) as the principal regulator of the sector in Malta. The MGA is empowered to issue Directives and other binding and non-binding instruments containing detailed processes and requirements for the purpose of ensuring that the law responds to technological advancements in a timely manner.

The Malta gaming license enjoys such an impeccable and sound reputation, it is efficient, and is subject to rigorous regulatory standards, thus protecting the interests of both operators and players alike. It comes as no surprise that operators holding such license are taken seriously and trusted blindly by players, placing them a cut above competitors in other jurisdictions. The gaming licensing regime is established by the Gaming Authorisations Regulations. 

The two main categories of licenses are:

a) Gaming service licence - this type of license authorises a business to offer or carry out a gaming service to a consumer. (B2C)

b) Critical gaming supply license – this type of license authorises a business to provide or carry out a critical gaming supply to another business. (B2B)

Lexvirtualis™ can assist you with the following services:

• Choice of most favourable jurisdiction for incorporating a gaming company from a regulatory framework and fiscal perspective.

• Advice on igaming laws in other jurisdictions

• Incorporation of the company and setting up of operations

• Obtaining a gaming license: assistance and advice throughout all stages of the license application (eg. fit and proper test, financial and business evaluation, operational and statutory requirements, system review and compliance audit, etc…)

• Advice on gaming tax

• Compliance (Eg. GDPR and AML) and regulatory obligations

• Intellectual property

• Disputes – ADR and Litigation

Resources law is the body of law that regulates the use and protection of natural resources – regardless of the purpose for which such resource is used. More specifically, energy law concerns the production, distribution, conservation, development and use of energy resources. Energy resources can be many, for example, coal, oil, natural gas, nuclear power, renewable energy (such as solar, wind, hydropower). Due to environmental measures such as reduction of one’s carbon footprint, renewable energy is the resource of the future. Resources law is the body of law that regulates the use and protection of natural resources.

The regulatory authority in Malta with regard to resources is the ERA (Environment and Resources Authority), which apart from its environmental role, has taken over most of the functions of the former MRA (Malta Resources Authority). The functions of the MRA are nowadays mainly limited to those relating to groundwater (eg. licensing of boreholes) and the EU Emissions Trading Scheme . In relation to water and electricity, the regulatory authority in Malta is the REWS (Regulator for Electricity and Water Services).

Malta has recently revised the its energy legislation, mainly the Enemalta Act, which was repealed by Act XXXIV of 2014, making the transformation from Enemalta Corporation to Enemalta plc.

This body of law deals with various aspects of energy such as:

• Natural gas distribution

• Crude oil and petroleum products

• Electricity and electrical accessories

• Kerosene control

• Biofuels

Lexvirtualis™ offers the following services in energy and resources law:

• Compliance and regulatory issues

• Environmental aspects

• Advice on / negotiating / drafting of contracts such as power purchase agreements or cooperation agreements

• Assistance with public procurement

• Transposition of EU directives into national law

• Ratification of multilateral and bilateral treaties

• Production sharing agreements

• Dispute resolution and litigation

Property law is a branch of civil law which regulates the legal relationship between a person and property. In this field, the latter term refers mainly to tangible immovable assets such as land, buildings or dwelling places, also known as ‘real property. The said legal relationship, concerning rights and obligations of a person in a particular property, may vary – for example, from ownership to lease and to emphyteusis (ċens). Maltese property law is derived from Roman law, and is largely codified in Book Second of the Maltese Civil Code entitled ‘Of Things’, which categorises property into immovable and movable property.

The majority of acquisitions or enjoyments involving property are for residential purposes (such as a house, maisonette, apartment/flat etc.), followed by those for commercial purposes such as (development and projects, office, retail outlet, etc…). Whether by means of lease, ‘sale and purchase’ or inheritance, contracts and legal implications are involved. Moreover, transfers of ownership in immovable property must be effected by means of a public deed in front of a Notary Public. Under normal circumstances, the transfer of ownership of immovable property (or part thereof) is preceded by the signing of a ‘promise of sale agreement’ (konvenju) by the prospective buyer and seller. Not all property transactions necessarily involve a buyer and seller. Examples of this are: inheritance of property (transfer causa mortis) or donations. At all stages of transactions involving immovable property, legal advice is strongly recommended to any party involved.

Furthermore, the Immovable Property (Acquisition by Non-Residents) Act applies to all transactions involving acquisition of immovable property in Malta. At least when acquiring property as a primary residence, Maltese and EU Citizens – whether with 5 years continuous residence in Malta or not need not apply for a permit prior to purchasing immovable property. When it comes to a secondary residence, EU citizens must satisfy the 5 years continuous residence requirement. Third Country Nationals require an AIP permit prior to purchasing their property (whether for primary or secondary residence). Exemptions, such as properties in a Special Designated Area, apply throughout.

The rental market in Malta was liberalised in 1995. Private residential lease agreements are governed by Jan 2010 law and long-let private residential leases, as a rule, must be registered by law with the Housing Authority. This new law has had many ambivalent reactions, mostly from lessors, and is the subject of much controversy. As Malta continues to attract more foreigners, the letting industry has boomed – specially due to foreigners working in the the iGaming sector.

Unlike other European States, despite the growing rate of property development, the Maltese real estate sector demonstrates a realistic propensity to appreciate. This is expected to continue further as foreign investors seek quality properties, for both residential and commercial purposes, in various locations in the Maltese islands. The financial returns on property investment have, time and time again, throughout the years, proven to be lucrative and stable. One common practice is for one to purchase an immovable property financed by a loan, which is eventually paid off by rental income derived from letting the property to a third-party. By the end of the process, the property pays for itself and one has a property to call their own.

Lexvirtualis™ provides legal advice on all aspects of buying, selling, renting, renovating or developing residential, commercial and industrial property in Malta.

Our lawyers will assist clients during the purchase/transfer process.

Examples of services we offer:

• Drafting and vetting of contracts, as well as notarial services relating to

- Lease, Emphyteusis (cens), Usufruct

- Promise of sale agreements (konvenji)

- Sale and Purchase of immovable property (including loan) contract

- Divisions of co-owned property

- Powers-of-Attorney relating to the above

• Advice regarding to any type contracts prior to signature

• Acquisition of Immovable Property (AIP) Permits (esp. third county nationals) and other government permits and procedures

• Drafting of condominium rules and administration thereof

• Registration of Promise of Sale Agreements

• Registration of Lease Contracts

• Timeshare exits

• Creation of property-owning trusts

• Tax Structuring and Advice

• Property searches with the Public Registry and Land Registry

• Registration or cancellation of privileges and hypothecs over immovable property

• Redemption of ground rents (cens)

• Assistance with bank loans and finance

• Assistance to architects

• Assistance with development planning

• Notarial services relating to any of the above

• Consultation services, on residential, commercial, mixed-use and industrial property acquisition, tourism and industrial real estate development

• Alternative Dispute Resolution and Litigation (eg. enforcement or recission of promise of sale agreement, recovery of deposits, latent defects, etc…)

Medical law is the body of laws concerning the rights and responsibilities of medical professionals and their patients. Issues such as confidentiality, negligence and malpractice, often giving rise to not only civil but also criminal action, are the focus of this area of law. The medical practitioner owes his patient a duty of care, and a breach of this duty renders the practitioner liable to damages and prosecution. A medical lawyer is a legal professional who is trained not only in the general field of law, who also possesses a profound understanding of medicine and bioethics and the standards involved in medical practice.

The World Health Organisation (WHO) defines health law as ‘the area of law concerned with the health of individuals and populations, the provision of health care and the operation of the health care system.’ In Malta, the Public Health Regulation Department / Superintendence of Public Health is responsible to develop and implement strategies to promote and improve public health; issue standards for public health; licence health care service and diagnostic facilities; regulate health care professions; advise the Minister responsible for Health on matters regarding public health; ensure that the regulatory functions emanating from law are properly discharged and carry out any other function emanating from national legislation. Examples of laws dealing with health law in Malta are the Health Act of 2013, the Public Health Act of 2003, the Mental Health Act of 2013, Health Care Professions Act of 2003, etc…

Pharmaceutical law is the body of law which regulates the manufacture, sale, distribution, and use of pharmaceuticals. These laws include intellectual property rights to protect pharmaceutical manufacturers' research, safety standards to protect the public from harmful side effects, restrictions on advertising and marketing of medicines, and rules regarding such medicinals may be prescribed and distributed. The main legislation related to medicinal products is Directive 2001/83/EC as amended. This Directive was transposed in the Maltese legislation as the Medicines Act (Chapter 458 of the Laws of Malta). The Medicines Authority was established by virtue of the Medicines Act of 2003. The mission of the Medicines Authority is to protect and enhance public health through the regulation of medicinal products and pharmaceutical activities.

Lexvirtualis™ can assist you in the following areas:

Medical Law

• Malpractice cases (advancing or defending a malpractice claim)

• Liability (both civil and criminal) and compensation

• Medicolegal research

• Forensic cases

• Legal advice and assistance to medical professionals (eg. liability, insurance, etc)

Health Law

• Compliance with national and EU laws

• Drafting of laws and regulations (eg. transposition of EU directives)

• Entitlement to healthcare services

• Liability and Compensation

• Bioethics

Pharmaceutical Law

• Regulatory Compliance with EU and national laws and regulations such as product compliance (eg. labelling, packaging, medical packaging leaflet)

• Licenses (importer, wholesaler, distribution, pharmacy)

• Product Liability

• Intellectual Property rights (eg. trademarks)

• Certification relating to manufacture and distribution

• Marketing authorisations of medical products