Special Purpose Vehicle in Malta

Set up a special purpose vehicle in Malta and maximise the country’s tax regime.

Many high-net-worth are choosing Malta to invest due to the favourable tax regime for companies, a booming economy, access to the European Union’s markets, and strategic geographic position.

Malta is also renowned for its excellent wealth management schemes, estate planning and corporate finance offerings. Malta has also regulated cryptocurrency.

One of the options available to investors in Malta is the setting up of a special purpose vehicle. A special purpose vehicle is defined as a company’s subsidiary protected from the parent company’s financial risk.

The law recognises it as a legal entity created for a limited business acquisition or transactions. It can also be used as a funding structure, which can be called a special purpose entity. Under Maltese law, SPVs can take the form of limited liability companies or a trust.

Special Purpose Vehicle tax considerations

The Corporate Tax Rate in Mata is charged at a rate of 35%. However, companies can benefit from the full imputation system to deliver an effective tax rate of 0 to 5%.

An SPV in Malta can further reduce its costs concerning interests, premiums, issuance of securities, and administration charges related to the day-to-day running of the SPV and transfer of securities.

Malta’s tax regime also allows for a residual of the amount equal to the remaining income.

How to register an SPV in Malta

Registering and setting up an SPV in Malta falls under the remit of the Malta Financial Services Centre and, more specifically, the Securitization Act, Chapter 484 of the Laws of Malta.

According to the Act, SPVs can take the form of trusts, investment companies and commercial partnerships. Other forms, as mentioned earlier, include limited liability companies and public companies.

There are differences in the way SPVs are set up in Malta, depending on whether it is a trust or a commercial entity.

In the case of a trust, it is set up through a written legal agreement. Types of trusts include discretionary, accumulation and maintenance, fixed interest, spendthrift or charitable trusts.

The commercial entity form of SPV must be incorporated through the Companies Registry.

The services offered by the Registry of Companies has an arm to assist foreign investors in creating SPVS. Following the European Union Directive 1075/2013, all SPVs must appoint a service agent.