16 JANUARY 2002

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Investment registration scheme response to date "encouraging"

By David Lindsay

With the investment registration scheme in place now for approximately a month and a half, the response to date has been encouraging, according to Central Bank of Malta Deputy Governor, David Pullicino.

Speaking to The Malta Financial and Business Times yesterday, he explained, "The first returns had only come in at the middle of January and, so far, I think the response has been encouraging. We’ve had returns from a good deal of registration agents and if this is an indication of the way the scheme is going to move forward, then I would say that it looks positive.”

The scheme was introduced in November’s budget and is aimed at individuals with ‘undeclared’ foreign accounts, allowing them to repatriate such funds without facing penalties.

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.

While many investors have seized the golden opportunity to repatriate their funds, to date there have been far more enquiries than registrations. Mr Pullicino elaborates, "There have been far more enquiries than there have been take-ups, but that is only natural. An initial lag was expected during investors’ decision-making process. Secondly, those participating need to collect documentation, as the scheme depends on documentation."

Mr Pullicino also expects an increase in registrations toward the end of March, as he explains, "I think we will see a pick up, remember that 31 March will see the first change to the registration fee, when it rises from three to four per cent. So I would expect that there would be many investors aiming to capitalise on the lower pre-April fee."

Participants are required to pay a one-off registration fee, which is 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.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt