December 2013 / Issue 04Salt Partners Group of Companies

A PINCH OF

A DOSE OF CORPORATE INSIGHTS AND MORE

MALTA GLOBAL RESIDENCE PROGRAMME PROMISES NEW BEGINNINGS

MALTA’S INDIVIDUAL INVESTOR PROGRAMME

UP, UP & AWAY

December 2013 / Issue 04

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So what is going on?

It would seem that there are two very closely related factors driving this increase in asset prices.

The first is cheap money. Interest rates are historically very low, to the point that they cannot practically be lowered much further. The Federal Reserve, the European Central Bank and the Bank of England are each in the unusual territory of having moved interest rates so far that it is no longer clear that further movements will have any impact on the economy.

The second factor is that there is a lot of this cheap money. The profits of large corporations are at historic highs and quantitative easing (QE) is still underway. In the United States, QE is running at US$85 billion per month in asset purchases. These purchases are mainly in the bond markets but they clearly still have an impact on other markets.

The net result is that there is a lot of money, both private and institutional, that is unable to generate any real return in cash and so is actively looking for riskier options. In such an environment, a one-off work of art or the next big technology wave seems like a good thing. As long as interest rates remain low and QE in place, we can expect this wave of asset prices to continue.

References:

http://www.businessinsider.com/why-facebook-was-willing-to-pay-3-billion-for-snapchat-2013-11http://www.bbc.co.uk/news/entertainment-arts-24937683http://www.bbc.co.uk/news/entertainment-arts-24848138

There has been a marked contrast in news stories in recent weeks. On the one hand, there is the continuing uncertainty in the eurozone, major economies are still failing to bounce back and the United States government shut some of it's doors in October. On the other hand, prices of assets have been rising strongly causing many commentators to use the word 'bubble' once again.

There have been many examples...

In the technology space, the founders of Snapchat rejected a US$3 billion all-cash offer from Facebook. Snapchat is just two years old and not only does it not have any profits, it has no revenue either. Speaking of no profits, Twitter floated on the NYSE and opened at US$45 per share, despite a launch price of just $26.

Also in the technology space are the new crypto currencies, the most well known of which is Bitcoin. There were many days in October where one Bitcoin was worth in the region of US$160, but since then prices have rollercoastered their way upwards and now prices are over US$1,000.

In more traditional markets, such as art, recent auctions have seen record breaking prices with just one Warhol being sold for US$105 million. And if that still seems trivial, the Dow Jones has just blasted through the 16,000 mark. At the start of the year it was a little over 13,000.

UP, UP & AWAY

COMPANIES INCORPORATED IN MALTA IN 2013

JAN

0

125

250

375 329

307

433395

329378

362321

373316

500

FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Jan 316Feb 329Mar 307Apr 433May 395Jun 329

Jul 378Aug 362Sep 321Oct 373Nov --Dec --

Number ofCompanies

December 2013 / Issue 04

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As a scheme, this has been met with some controversy, particularly with regards to the part of the legislation stating that the names of applicants and benefactors of this scheme would not be disclosed – although the Government has since revoked this decision. Others have pointed out that the legislation does not enforce further investment in the island, aside from the initial contribution, and the Opposition has voiced its concern at the fact that it was not consulted about this legislation.

The Government, in turn, has defended the scheme and said that it would help bolster Malta’s economy while bringing further investment to the country. Furthermore, due diligence fees are set at €7,500 for the main applicant, €5,000 for spouses and dependents, and €3,000 for minors, to ensure that proper background checks are undertaken.

The IIP scheme will be administered by Henley & Partners, a global leader in residence and citizenship planning.

The Individual Investor Programme (IIP) is a scheme that was first introduced to Malta by the Government during the 2014 Budget.

In principle, it aims to give Maltese passports – and, consequentially, Maltese citizenship – to ultra high-net-worth individuals and families against a contribution. As a direct result of this, individuals who make use of this scheme will also gain the right to residency in Malta and, thus far, the rest of EU member states. A similar scheme currently exists in Cyprus.

The Government has diligently set requirements for those opting to use this citizenship-by-investment scheme. The most well-known is that the applicant must make a beneficiation of €650,000 to the country in order to gain citizenship, meaning that Maltese citizenship is not being sold per se. Minors and spouses of the investor must also contribute €25,000 each, while dependents (children aged 18 to 25, or dependent parents aged 55 or above) need to hand out €50,000 to be granted residency and citizenship. Individuals must also pass a criminal background check.

MALTA’S INDIVIDUAL INVESTOR PROGRAMME

• Company incorporation and administration for multiple jurisdictions.• Trust & fiduciary services.• Bookkeeping services.• Malta office and management facilities.

OUR SERVICES

The Azure Window, Gozo

December 2013 / Issue 04

w: www.saltpartnerslimited.com t: +356 2701 1727

EVENTS OF INTEREST

LESLEY ZAMMITLesley’s strong administration and PA background

provided a solid foundation from which to develop her Corporate Administration skills over the past three years with Salt Partners. Originating from Wales, Lesley is one of the few expats who speaks Maltese fluently, thanks to encouragement from her Maltese husband and two sons

who have grown up on the island. Although Lesley has lived in Malta more than half her life, the

Welsh accent slips out on occasions!

MEET THE TEAM

JAN 15JAN 16

JAN 22, 23JAN 30 - FEB 1FEB 12FEB 19MAR 6, 7MAR 12MAR 13MAR 12, 13MAY 12 - 14

http://www.step.org/http://www.step.org/

http://www.offshoreinvestment.com /http://www.step.org/

http://www.step.org/http://www.step.org/http://www.step.org/http://www.step.org/http://www.step.org/http://www.offshoreinvestment.com/ http://www.stepcaribbeanconference.com/

Succession Planning for Business ClientsCross-Border Estate Planning, Tax, New Developments The 2nd Offshore Investment ConferenceConference Annual Institute on Tax, Estate Planning and the EconomyResidence and DomicileGlobal Cross Border - Estate planningStep Malta Conference Investment Objective for TrusteesAll About Wills - Multiple WillsThe 3rd Offshore Investment ConferenceStep Caribbean Conference 2014

LET’S TALKCULTURETHE BEHEADING OF ST JOHN THE BAPTIST - CARAVAGGIOCompleted in 1608 in Malta, the painting had been commissioned by the Knights of Malta as an altarpiece; it was the largest altarpiece which Caravaggio would ever paint. It still hangs in St. John's Co-Cathedral, for which it was commissioned and where Caravaggio himself was inducted and briefly served as a knight.

DISCLAIMER: The content contained in this newsletter is provided for informational purposes only and should not be construed as advice on any matter.

UKCanada

SingaporeUSA

UKCanadaMaltaUKCanadaPanamaBahamas

December 2013 / Issue 04

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disruption to applicants who want to invest and pay taxes in Malta.

At present, applications can be submitted via Authorised Registered Mandatories in Malta. The registered mandatory may appear on behalf of an applicant during the application process and when collecting the Residence Permit. The application fee is €4,000 at the application stage. When the person takes up residence in Malta, a further amount of €2,000 shall be payable and there is a deduction of €500 if residence is taken up in Gozo or the Southern part of Malta. But remember, the application fee is non-refundable.

Time will tell how the new Global Residence Programme will take its course, its antecedent (The Foreign Residents' Scheme) was dogged by controversies and subsequently suspended. However as indicated by Hon. Dr Zammit Lewis, there is light at the end of the tunnel and a better implementation has been promised.

Applicants must demonstrate that they are financially self-sufficient and must be in possession of adequate medical insurance. They must commit to buying or renting a property in Malta at a certain minimum amount within 12 months of being accepted into the scheme. Under the scheme, the value of the immovable property bought in Malta has to be at least €275,000. However, if the property is in the southern part of Malta or in Gozo, the minimum value can be €220,000. Applicants will also be eligible if they rent a property on an annual basis of €9,600 in Malta and €8,750 in Gozo or in the South of Malta.

Another hurdle to the applicants is an agreement to spend no more than 183 days a year in a foreign jurisdiction. This criterion is also used in the UK on the route to British naturalisation that prohibits an individual from spending more than 450 days outside the UK during the five-year period before naturalisation. The applicant will be allowed to work or establish a business in Malta.

How to Apply?

According to Hon. Dr Zammit Lewis, the Parliamentary Secretary for Competitiveness and Economic Growth, the Government will support this scheme with all necessary infrastructure to operate and work well. He went on to assert that the procedures that operate this program are not bureaucratic and create the least possible

The Global Residence Programme (GRP) is intended to attract individuals who are not nationals of the EU, EEA or Switzerland and who are not long-term residents. The scheme replaced The Foreign Residents' Scheme which was suspended in 2011. The Global Residence Programme is not to be confused with The Individual Investor Programme (IIP). The former is criteria based while the latter is automatic upon donation of €650,000 and a Maltese passport (citizenship) is granted thereafter.

The GRP scheme is more bureau-cratic and seeks to attract economically self-sufficient expatriates looking for an alterna-tive residential base in an EU country. The scheme applies to individuals and families comprising a husband and wife, and depen-dent children up to the age of 25 years.

MALTA GLOBAL RESIDENCE PROGRAMME PROMISES NEW BEGINNINGS

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