Despite the current turmoil in the investment market, the pensions market is growing and offering new retirement plan options for high-net-worth individuals and their businesses. While the European pension system is still mainly a national system, the first cross-border schemes have been authorized in Malta and industry experts expect substantial growth in the months and years ahead.

Benefits of Malta-based retirement schemes:

  • Retirement schemes are exempt from income and capital gains tax;
  • Companies established in other EU member states can sponsor occupational schemes established in Malta;
  • Fees for the administration and management of the scheme are lower than in other jurisdictions;
  • The strong regulatory framework ensures the integrity of the plan;
  • Legislation allows for customised structures that suit the requirements of individuals or international businesses;
  • English is an official language;bmw
  • A QROPS jurisdiction.

Special Funds Act

Currently, the establishment and operating of retirement schemes which are exempt from income and capital gains tax, in Malta is governed by the Special Funds (Regulation) Act 2002. The law also provides for the establishment of retirement funds which can be used as pension-pooling vehicles. This regulatory framework, which requires the registration and on-going supervision of pension schemes, as well as service providers and scheme administrators, investment managers and custodians by the Malta Financial Services Authority (MFSA), already makes Malta an attractive safe haven for accrued pension funds for expatriates living around the globe.

Home for UK pensions

The strength of Malta`s reputation as a base for the international pension market has recently reinforced, especially for UK pensions. Retirement schemes established in Malta and regulated by the MFSA are recognized by Her Majesty`s Revenue and Customs (HMRC) in the UK as Qualifying Recognised Overseas Pension Schemes (QROPS). This recognition results in tax efficiencies for UK non-residents who wish to transfer their funds from UK schemes to Maltese schemes, without incurring any tax charges in the UK. In particular, Maltaumbrella offers:

  • No income tax on pension income – benefits are paid gross;
  • No income tax on pension cash lump sums;
  • No capital gains tax on pension fund gains;
  • No inheritance tax or other death duties.

New Legislation

To further facilitate the provision of cross-border pension schemes, the Maltese Parliament recently enacted the Retirement Pensions Act which is not yet in force. The Retirement Pension Act, which is intended to regulate the retirement schemes, retirement funds and the service providers related thereto, shall replace the current Special Funds (Regulation) Act. This new legislation , drafted by the MFSA, sets out a framework for pension schemes that will go further to attract multinationals, high-net-worth individuals and wealthy expatriate individuals to base their pension provisions in Malta and benefit from a well-regulated, cost-competitive structure within a tax efficient framework.

As a member of the EU, Malta provides a pan-European platform that is secure, well regulated, and innovative. Backed up by a professional support structure and experienced skills base, Malta`s anticipated new pensions legislation is widely expected to be well received internationally and industry insiders are keeping a sharp focus on the provision of international pensions as the next major development in the jurisdiction`s financial services offerings.