Brokerage Forex

Malta’s Securitization Act (the “Act”) provides a legal framework for securitisation transactions that has been carefully designed to reflect both the specificities and wide variety of securitisation transactions brought to market. The Act provides statutory solutions and greater certainty of outcomes for many of the legal challenges that investors and credit rating agencies are typically concerned with, including true sale, bankruptcy remoteness and the privileges of securitisation creditors over the vehicle’s assets. The structural enhancements afforded to Maltese securitisation vehicles under the Act allow for competitive borrowing costs relative to any recognized issuer jurisdiction.

Maltese securitisation vehicles can be used to structure various forms of securitisation transactions, including synthetic risk transfer securitisation, and a wide variety of asset-classes can be securitized, including credit card receivables, trade receivables, lease/charter payments for aircraft and ships, insurance risk, and income/royalty streams from intellectual property assets such as copyright, patents, and trademarks, to name a few.

Tax Neutrality: Malta has specific rules on the tax treatment of securitisation vehicles that enable them to achieve tax neutrality in respect of the securitisation transactions for which the vehicles are established. These tax rules can be applied to eliminate tax leakage for securitisation vehicles established in Malta and to ensure that there is no Maltese tax liability for originators that are not Malta tax resident.

Tax Treaties: Malta has an extensive Double Tax Treaty network in place with more than 65 Treaties currently in place.

Interest Payments: No Maltese tax is payable on payments of interest by a securitisation vehicle to a holder of the vehicle’s securities that:
– is not resident in Malta;
– does not have a permanent establishment in Malta; and
– is not owned and controlled (directly or indirectly) by, or acts on behalf of, an individual who is ordinarily resident and domiciled in Malta.

Dividends: No Maltese tax is payable on the payment of dividends by a securitisation vehicle to its shareholders.

Transfers of Securities: No Maltese tax is payable on the transfer of any securities issued by a securitisation vehicle if the transferor is:
– not resident in Malta; and
– not owned and controlled (directly or indirectly) by, or acts on behalf of, an individual who is ordinarily resident and domiciled in Malta.

Stamp Duty: A securitisation vehicle established as a Maltese company qualifies for a stamp duty exemption where more than 90% of its business interests are situated outside Malta.

Absence of Regulatory Authorizations: Securitisation vehicles are specifically exempt from licensing or authorization requirements of any kind, irrespective of the kind of activities carried out by the vehicle, including where such activities would ordinarily require authorization (under the Investment Services Act or the Banking Act, for example).

Securitisation vehicles are merely required to notify the MFSA of Our intent to enter into one or more securitisation transactions. The only exception is for a securitisation vehicle that (unusually) issues financial instruments to the public on a continuous basis, which would require authorization by the MFSA prior to issuing financial instruments to the public. Securitisation vehicles also qualify as financial vehicle corporations pursuant to Regulation (EU) 1075/2013 of the European Central Bank, with attendant quarterly statistical reporting requirements to the Central Bank of Malta.

For more information, please feel free to contact Neptune Fiduciaries at info@neptunecorporate.com or sales@neptunecorporate.com.