BREXIT from the Maltese Perspective – What will the future hold?
The impending Brexit, will affect the relationship between Malta and the United Kingdom greatly, with Malta hosting many British nationals as well as numerous Maltese nationals residing in the United Kingdom. The two countries have discussed the future of the countries’ relationship post-Brexit at length, with the aim of maintaining the same positive and amicable relationship they have had for the last two centuries and more.
Malta and the United Kingdom have always enjoyed a close alliance. Not only is Malta also a member of the Commonwealth of Nations, but thrived under the British rule until 1964, when on the 21st of September, the islands gained their independence. However, the British monarch still ruled until the 13th December, 1974, when Malta became a Republic.
How will a no-deal Brexit affect individuals in Malta?
With 13,000 UK nationals residing in Malta, 5,000 of whom working on the islands, the Maltese government has decided that the Maltese residence document held by UK nationals prior to the 29th March 2019 shall continue to be valid until a new document is issued. This new document, which will be issued according to Regulation 1030/2002, will be issued upon application for a new residence document, which will be issued free of charge granting such individuals a special immigration status, valid for ten years. This will also waive their obligation, as third-country nationals, to acquire an employment license to work in Malta, granting them free access to the labour market in Malta.
On the other hand, UK nationals granted the tax status under the High Net Worth Individuals and Residency Programme will no longer fall under such category, and will be asked to register under other similar programmes targeting non-EU/EEA/Swiss nationals at no extra cost. This will also mean that they will not lose the benefit of paying tax at a flat rate of 15%.
UK nationals in a cross-border situation between Malta and the United Kingdom will no longer be covered by the EU Social Security coordination rules. This also applies to any family, maternity, sickness and unemployment benefits such individuals may enjoy.
VAT and Customs
The Maltese authorities will be obliged to double-up on their due diligence practices on persons established in the UK registering for VAT in Malta. This is due to the fact that the Maltese and UK authorities will no longer be obliged to interchange intelligence on fraud, evasion of tax and the recovery of tax claims from persons in their respective jurisdictions.
Furthermore, all packages and consignments imported from and exported to the United Kingdom in any shape or form will be scanned and analysed by the Customs departments. Depending on the value and contents of the consignments, these may be subject to duty and VAT, as per all imports and exports from third countries.
Business and Enterprise
Discussions are currently underway among the Malta-UK Business Promotion Task Force, potential investors and select companies which may relocate to Malta from the United Kingdom. Malta is targetting sectors such as pharmaceuticals, financial services and aviation.
Conversely, cross-border mergers between Maltese companies and UK companies will no longer be a possibility since EU company law will no longer apply in the case of UK companies. Neither will a European company (Societas Europea) be able to transfer its registered address to the UK (or vice-versa). In addition, passporting of Financial Services license (e.g. banking, insurances, payment services etc) will not be possible.
The EU Trademark will no longer be applicable in the United Kingdom. This also applies to elements of Copyright which only cover EEA member states, since such coverage will not be extended to the UK. Current EU right holders in the UK will be notified that a new UK right covering their IP or patent has been granted. Any enterprise that would prefer not to receive a UK Trademark or Copyright coverage may opt not to receive it.
refers to the service mark through which Kinanis LLC of Cyprus, Kinanis Fiduciaries Limited of Malta and their affiliated
companies are conducting business, each of which is a separate legal entity.