Repatriation schemes kick off
Banks in Malta are scurrying to promote new investment schemes as hundreds
of Maltese decide to remove their accounts from British and Channel
Island banks. The decision is thought to have been catalysed by the
new budgetary concessions to those with undeclared foreign
Within this scope, the budgetary measure that introduced an investment
registration scheme allowing those who had transferred funds overseas
without the required permits and without paying the relevant taxes to
regularise their position under the Income Tax and Exchange Control
Acts came into effect on Monday.
The scheme holds the potential of re-injecting vast amounts of funds
back into the local economy.
The investment registration scheme has provided tax defaulters with
the opportunity to regularise their position and see their overseas
holdings repatriated and integrated under the Maltese withholding tax
system - without being reported to the tax authorities.
The scheme covers all overseas financial investments current as of 1
September and will run until 31 December 2002. Those registering for
the scheme will receive a certificate ensuring exemption from steps
being taken against them in terms of their repatriated assets.
The scheme is only applicable to those who had invested overseas in
a transparent and regular manner. As such, the scheme is aimed at those
who had invested overseas and had earned money legitimately but could
have been breaching Maltese fiscal laws or exchange control regulations.
Such persons will not be considered as having committed an offence.
The scheme stipulates that these repatriated assets can be converted
into Maltese liri and held in bank deposits or invested locally through
the appointed registration agents. The assets could be otherwise retained
in foreign currency and be held locally in bank deposits or invested,
again through the approved agents, in locally-listed securities.
However, Mr Dalli has always been adamant that the scheme will not serve
as a conduit for those seeking to legitimise earnings made through crime.
As he explained earlier this year, "The scheme will give no quarter
to perpetuators of crime such as theft, fraud, drug or arms trafficking,
etc. who will not be exempt from prosecution for these crimes
nor for money laundering."
Throughout the schemes operation, a great emphasis is being placed
on anti-money-laundering procedures and in ensuring that they are meticulously
followed. In this scope, the scheme will be implemented in conjunction
with various safeguards, including the current anti-money laundering
legislation, to both deter and detect money laundering.
Those partaking in the scheme should do so through registration appointed
agents including banks, stockbrokers licensed under the Stock Exchange
Act, and persons with an investment service licence in categories two
or three under the Investment Services Act.
Participants will be required to pay a one-off registration fee equal
to a percentage of the current market value of their investment
three per cent if registered before 31 March, four per cent if registered
between 1 April and 30 June and five per cent if registered after June.