MALTA PATENT BOX
Malta has recently introduced a revamped “Patent Box” regime in order to provide rules for deductions allowed for a certain type of Intellectual Property (IP) income, known as “Qualifying IP income”. The main aim of this regime is to incentivize the development and motivate the creation of new knowledge, by further ensuring the protection of intellectual capital so as to guarantee that the knowledge is utilised and exploited. Malta has taken advantage of IP rights in a successful attempt to transform the island into a royalty holding jurisdiction, notably for Patents under the new rules and provide an exemption on royalties and similar income derived from patents and inventions.
The main qualifying assets under the Patent Box are the following:
Patents whether issued or applied for.
Assets in respect of which protection rights are granted under national, EU or international law, including those relating to Plants, genetic material and Plant or crop protection products to name a few.
Other IP assets having features similar to those of patents in respect of small entities (as defined by law)
The rules also cater for the qualification criteria, namely that the R&D is done by the Beneficiary which is the (co-)owner of the IP asset. In addition, it is important that the IP asset is granted legal protection in at least one jurisdiction and that the Beneficiary has sufficient substance (personnel, assets etc) in the relevant jurisdiction of the IP asset.
The eligible deductions are calculated by a prescribed formula which allows a deduction of up to 95% of the Qualifying IP Expenditure divided by the Total IP expenditure multiplied by income or gains derived from the Qualifying IP. The regulations go into great details as to what the above terms entail as well as to the calculation of losses for tax purposes.
This new regime lays down an ideal framework for companies involved in R&D, and coupled with the already established tax friendly environment, vast double tax treaty network offered by Malta, clients now have an unrivalled opportunity to set up their IP holding company in Malta.
Dr. Francesco Sultana
Kinanis Fiduciaries Limited Francesco.Sultana@kinanis.com
We are a Law Firm with offices in Cyprus and Malta and a representative office in Shanghai China comprising of more than 80 lawyers, accountants and other professionals who advise, international and local clients.
Member of the Kinanis Law Firm group is Kinanis Fiduciaries Limited a Maltese licensed fiduciary company (by the Malta Financial Services Authority) and corporate service provider specializing in corporate and tax advice excelling in providing the international investor with a one-stop-shop solution in doing business through Malta.
The Firm has been offering legal and consulting services since 1983 evolving from a traditional law firm to an innovative cutting-edge multidisciplinary law firm combining exceptional expertise in law, tax, vat and accounting.
From its establishment the Firm’s focus has been heavily business oriented and always abreast with the latest global developments and innovations. Drawing from our pool of experienced professionals we provide our clients’ businesses full legal and accounting support on an everyday basis as well as customized solutions in today’s global financial and legal challenges.
We consider ourselves as ‘traditional pioneers’ and our motto is to foresee and anticipate any issues that may potentially impact our clients’ business and to offer effective advice and solutions proactively.
Civil Partnership, Law Firm
Kinanis Fiduciaries Limited
Suite 20, The Penthouse, 4th Floor, Ewropa Business Centre,
Dun Karm Street, Birkirkara, BKR 9034, Malta
Tel: + 356 27 54 00 24, Fax: + 356 27 54 00 25
Lawyers’ Limited Company
12 Egypt Street, 1097, Nicosia
P.O. Box 22303, 1520 Nicosia, Cyprus
Tel: + 357 22 55 88 88 – Fax: + 357 22 66 25 00
E-mail: KinanisLLC@kinanis.com – Web site:
Kinanis (China) Limited
China Representative Office
Unit 661, 6/F CIROS PLAZA,
388 Nanjing West Road, Huangpu District,
Shanghai City, 200003, China
Tel: + 86 18 410 072 690
is the service mark through which Kinanis LLC of Cyprus, Kinanis Fiduciaries Limited of Malta, Kinanis, Civil Partnership, of Malta, Kinanis (China) Limited of Cyprus and their affiliated companies are conducting their business each of which is a separate legal entity.