Doing business in Malta 2016 In association with: Contents Introduction ................................................................................................................................................................................ 3 – Country profile ................................................................................................................................................................... 4 Legal overview ........................................................................................................................................................................... 5 Conducting business in Malta ................................................................................................................................................... 9 Tax system ................................................................................................................................................................................11 Labour ...................................................................................................................................................................................... 18 Audit ......................................................................................................................................................................................... 21 Trade ......................................................................................................................................................................................... 23 Finance ..................................................................................................................................................................................... 25 Infrastructure ............................................................................................................................................................................ 27 This Guide has been prepared jointly by HSBC Bank Malta p.l.c. and Grant Thornton for the purposes of providing a high-level general overview of the business environment in Malta for the information of businesses who may be interested in transacting or investing in Malta. Any transaction or investment in Malta, however, should only be undertaken based on professional advice specific to such transaction or investment. 2 Introduction This guide to doing business in Malta will provide foreign investors with an insight into the key aspects of undertaking business and investing in Malta. The country’s geographical location, modern infrastructure and skilled and flexible labour supply make it especially attractive for overseas investors. Furthermore, Malta is a safe investment environment and provides a number of incentives to encourage and assist investors. Malta’s GDP is highly dependent Alongside a number of government • High standard of living incentives for investment, Malta on foreign trade, manufacturing • Widespread use of English and tourism. The economy also offers the following competitive language and, to a lesser extent, possesses a growing services advantages for investors: other languages sector which includes a strong financial services division. Malta • A safe investment environment experienced continuous economic • A strategic geographical location, While this guide makes reference to growth following its accession to the ideally placed to approach both some of the most common issues EU in 2004 and, before the financial the European and North African investors might face, it must be crisis, was one of the fastest markets noted that certain industries, such growing economies in the Eurozone. • A stable political environment as the financial services sector, However, as many countries, it • Highly regarded education system are subject to special regulation experienced a period of contracted and therefore companies wishing growth in 2009. Malta’s economy • A well-established economic to invest in this area should seek fared better than many within the environment, highly credited for Eurozone and has had growth in its growing strength in financial legal advice. services every year since the crisis. This is expected to continue through 2016 • A strong legal system which is in The information in this publication is and 2017; the EU has predicted line with EU regulations current at January 2016 growth rates of 3.6 per cent and 3.2 • Highly educated and skilled per cent, respectively. workforce 3 Country profile Capital City Valletta Area 316 sq. km Population 425,799 Language Maltese and English Currency Euro International dialling code + 356 National Holidays 2016 1 January – New Year’s Day 10 February – Feast of St Paul’s Shipwreck 19 March – St Joseph 25 March – Good Friday 31 March – Freedom Day 1 May – Worker’s Day 7 June – Sette Giugno 29 June – Feast of St. Peter and St. Paul 15 August – Feast of the Assumption 8 September – Feast of Our Lady of Victories 21 September – Independence Day 8 December – Feast of the Immaculate Conception 13 December – Republic Day 25 December – Christmas Day Business and Banking hours 08:30 to 17:30 hours Stock exchanges Malta Stock Exchange Political structure Republic and parliamentary system Doing Business rank 2016 80 Ease of Doing Business Topics 2016 rank 2015 rank Change in rank Starting a business 132 129 -3 Licenses and Permits 83 77 -6 Getting Electricity 86 73 -13 Registering property 96 94 -2 Financing 174 171 -3 Protecting Investors 36 33 -3 Paying Taxes 25 25 No change Trading Across Borders 39 39 No change Enforcing Contracts 61 61 No change Resolving Insolvency 83 83 No change Source: World Bank Group (Doing Business) 4 Legal overview Political and legal system • Personal data is processed fairly Malta is a parliamentary democracy. and lawfully The parliament is the supreme • Personal data is always processed political power; the President is the in accordance with good practice Head of State. The government • Personal data is only collected is formed from the House of for specific, explicitly stated and Representatives by the political legitimate purposes party that wins the most seats in a general election. General • Personal data is not processed for elections are held at least once any purpose that is incompatible every five years. with that for which the information is collected Malta has been a member of the EU • Personal data that is processed is since May 2004. Malta is a member adequate and relevant in relation of the Eurozone and has therefore to the purposes of the processing adopted the single currency. Malta’s • No more personal data is external commercial policy in now processed than is necessary Malta’s external conducted primarily through the EU. having regard to the purposes of the processing commercial Maltese law is based on the civil-law • Personal data that is processed is pattern of Continental Europe, policy in now correct and up to date although most administrative, financial and fiscal legislation is • All reasonable measures are taken conducted based on British laws. There are to complete, correct, block or three judicial jurisdictions: civil, erase data to the extent that such primarily criminal and voluntary. There is one data is incomplete or incorrect, court of appeal for all jurisdictions having regard to the purposes for through the EU. and the Constitutional Court is which they are processed the ultimate competent court • Personal data is not kept for a for judgments on the conformity period longer than is necessary, of laws. having regard to the purposes for which they are processed Maltese law also includes European Union legislation. Some EU laws Companies must notify the Office of (Regulations) are automatically the Information and Data Protection applicable; others (Directives) have Commissioner if they are processing to be transposed into local law by personal data. This involves filing legislative authorities. certain information relating to the processing operations carried out by Data protection the data controller and paying a fee The right to privacy is established of EUR23.29 on an annual basis. in the Constitution of Malta. The enforcement of this right is Stronger legal protection is available facilitated by the protection of for more sensitive information data from abuse. Data protection such as ethnic background, political provisions can be found in the EU opinions, religious beliefs, health, Data Protection Directive and the sexual health and criminal records. Maltese Data Protection Act which was enacted in 2001. Businesses that fail to comply with these rules and principles can The Data Protection Directive and face enforcement action by the Malta Data Protection Act are based Office of the Information and Data on the following key principles: Protection Commissioner. A data 5 controller that is in breach of the Prevention of Money Laundering Act with the regulations may lead to data protection rules may be liable establishes the Financial Intelligence a fine of up to EUR50,000 and/or to an administrative fine by the Analysis Unit (FIAU). The FIAU imprisonment for up to two years. Commissioner of Data Protection, is responsible for the collection, an order to pay compensation to collation, processing, analysis and The legislation imposes a number the data subject or a criminal fine dissemination of information related of duties on ‘subject persons’, such or term of imprisonment. The to suspected money laundering or as identification and customer maximum administrative fine that terrorist