Archive for June, 2015


Chinese Group considers Portugal the best country in Europe to invest

In on June 25, 2015 by NEWCO


Guo Guangchang, CEO of the largest private chinese conglomerate, FOSUN Group, has considered Portugal as the best country in Europe for investment purposes. Fosun Group has already acquired some Portuguese companies and is now one of the bidders for Novo Banco, but their interest is not restricted to the financial services area. “We are paying attention to all sort of opportunities” said Guo Guangchang, referring himself to what the group calls the “happiness and lifestyle” sector, which includes companies in tourism, fashion, leisure and entertainment.

However, Fosun’s interest is not restricted to investments in Portugal. “Portugal has become a gateway into Europe, and it welcomes the Chinese investors very well”, said Fosun’s CEO. Furthermore, “the costs in Lisbon are not as high as the ones in other European cities”, he added.

In fact, Portugal offers several advantages for the structuring of international groups, other than the ones mentioned by Guo Guangchang . In addition to welcoming foreign investors and boosting competitive operational costs, it grants through the International Business Centre of Madeira a highly attractive tax regime, approved by the European Commission, which guarantees a 5% corporate income tax rate until the end of 2027, among other benefits:

  • Withholding tax exemption on the payment of dividends, royalties, services and interest
  • Tax credit for International Double Taxation, both legal and economic
  • Capital gains tax exemption from the sale of shares in Madeira companies and on the sale of subsidiary companies (under some conditions)
  • 80% reduction on the rates of Stamp duty, Real Estate Transfer Tax (IMT), Municipal Property Tax (IMI), regional and municipal surcharge
  • Attractive residence programme for non-EU citizens
  • Attractive tax regime for individuals (non-habitual residents)

Check all the advantages in our website.

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Update to our Madeira Brochure

In on June 23, 2015 by NEWCO


We have just updated our Madeira Brochure in the wake of extremely important recent developments in this area of jurisdiction.

The European Commission has just approved a new regime for the International Business Centre of Madeira (IBCM), guaranteeing a low corporate tax rate (5%) until 2027, among other additional benefits.

This authorisation, which has been worked into a draft law soon to be passed, ensures not only competitiveness and unparalleled stability in today’s international taxation climate, but also improves the transparency and effectiveness of the IBCM to optimise international operations. Indeed, it is extremely significant that this regime has been approved at a time when international measures such as FATCA and BEPS are being implemented with the aim of increasing transparency, fostering the exchange of information and establishing common standards to avoid tax evasion, and when several international regimes are being called into question, both by public opinion and by international institutions, owing to their non-transparent and selective practices.

Since the IBCM was created in 1980, it has always striven to abide by the highest standards of transparency and regulation, offering a secure, stable and extremely attractive regime, especially with regard to:

  • Company income tax of 5%, until the end of 2027
  • Exemption from compulsory withholding tax for the payment of royalties, services and interest to third parties
  • Tax credit for international double taxation, both legal and economic
  • Exemption from withholding tax for the distribution of interest payments or other forms of remuneration for loans, allowances or capital advances to shareholders (provided they are not residents in Portugal or in tax havens)
  • Exemption from capital gains tax on the sale of holdings in the Madeira company and in the sale of subsidiaries (under certain conditions)
  • An 80% reduction in the rates of stamp duty, IMT (municipal property transfer tax) and IMI (municipal property tax) and regional and municipal surtaxes.

Download our Brochure to learn about these benefits in detail.

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Understanding the Maltese legal system: an interview with Rosanne Bonnici, Tax Partner of Fenech & Fenech Advocates

In on June 15, 2015 by NEWCO

Rosanne Bonnici

Established in 1891, Fenech & Fenech Advocates is one of the oldest law firms in Malta. Over the years, the firm has grown from strength to strength: from a traditional, family-run law firm to one of the largest and most diverse full service law firms in Malta. Fenech & Fenech Advocates has a strong local and international practice covering a wide range of practice areas, including the full spectrum of corporate and commercial law activities, tax, financial services, company law, trusts and foundations, marine law, aviation law, ship registration, project finance, M&As, intellectual property law, iGaming (inclu. licensing), ICT law, amongst others.

The experience, credibility and reliability of Fenech & Fenech Advocates have been some of the reasons which led NEWCO to choose Fenech & Fenech Advocates as our legal partner in Malta, and it has been a successful partnership from day one.

In this interview, Tax Partner Rosanne Bonnici describes her experience with the Maltese legal system and the role it plays in the competitiveness of Malta’s international activities, and the importance of this sector for the country’s economic performance.

  • The Maltese legal system is well known by its unique combination of civil and common law features. What operational implications does this hybrid system have for foreign investors in Malta?

Indeed, Malta is well known for its unique legal system which today comprises a synthesis of Civil Law, Common Law and EU Law.Traditionally Malta was a civil law jurisdiction having its main codified framework of laws (such as the Civil Code, the Code of Organization and Civil Procedure, the Criminal Code and the Commercial Code) being based on continental European systems and principles. Today codified civil law remains the backbone of Maltese Law, though the decades of Malta’s colonial status under British rule introduced doctrines of common law which are mirrored in local codified legislation in areas such as corporate and financial laws, tax law, administrative law and maritime law, thus influencing the legal framework and giving rise to the present hybrid system.

In addition, Malta’s accession to the European Union in 2004 brought about a modernization of the Laws of Malta with the updating of several existing legislation and the introduction of new laws and standards which allow Malta and, of course, business carried out from Malta, to compete steadily within international commerce.

This local legal and regulatory framework continues to develop in such a way as to take full advantage of internationally tried and tested doctrines, rules and procedures. In fact Malta is also known for its drive towards encouraging new areas of commerce by providing investment schemes, fiscal incentives and also by developing unique legislative tools and mechanisms that allow new industries to flourish, including in the fields of ICT, remote gaming, and financial services.

This system of laws has proven to be one of the key unique characteristics which continue to make Malta an attractive and respected jurisdiction.

For instance, firstly, from an operational point of view the system allows local and foreign investors to plan ahead and work in a sound legal environment which they (or their advisors) are already familiar with or can easily become accustomed to.

Secondly, even though Maltese is Malta’s official language, English is the second official language for Malta and the majority of the Maltese workforce is well versed in written and spoken English. In fact, most (if not all) laws are also published in the English language – thus making it easier for the laws to be understood and applied.

Thirdly, the system adopts measures and tools which are already commonly available and applied on an international level. Since the system is not one which is immersed solely in local custom or constrained by local unique procedures or rules, but rather adopts several internationally accepted rules and procedures (including amongst others on matters of governing law, jurisdiction, competition law and enforcement mechanisms), investors are therefore able to carefully determine their investment, to calculate, prepare for and limit their risks and to manage their operations with peace of mind.

  • How does such a system guarantee its efficiency and international competitiveness?

This hybrid legal system is geared towards maximizing the potential of Malta’s highly service-based economy for local business and for international trade and commerce, in all areas ranging from banking and finance, corporate transactions, tourism, education, maritime trade and aviation and of course e-commerce and ICT.

The legal system allows for investors to operate within established legal and regulatory parameters, catering for streamlined procedures and fair judicial review.

Indeed Maltese Law transpose fundamental rules of law, including for instance the European Convention on Human Rights which was entrenched as part of the Laws of Malta 1987, and basic principles of natural justice that are enshrined in the Constitution of Malta and other laws which serve to protect investors by guaranteeing a fair, yet competitive, environment.

Concurrently, Maltese law incorporates an array of contemporary laws which interact to allow businesses to operate smoothly, efficiently and competitively including, for instance, laws on trusts and foundations, employment law, data protection, intellectual property and competition law.

Today Malta compromises an excellent geographically located hub for international commerce, grounded on a resilient economy having a skilled workforce coupled with a parliamentary democracy and a stable economic and political environment – and of course, the legislative framework.

Successive Maltese governments have continued to improve Malta’s international relations, not only politically, but also on a legislative level. Malta is a member of, or contributes towards, several respected international organizations, it has ratified numerous international Conventions and has signed numerous bi-lateral or multilateral agreements with foreign States which of course serve to facilitate cross-border commerce and enhance the framework within which investors do business in Malta.

Malta’s efforts to safeguard its reputation as a reliable and trustworthy jurisdiction, including by constantly updating its laws to reflect new realities, are evidenced by the encouraging positive economic results which continue to see growth in local and foreign investment.

  • How efficient is this system in guaranteeing investors protection?

The Maltese legal system seeks to guarantee protection of investors on several levels.Firstly, investors are given clear parameters within which they can engage in commerce and take their investment forward.

Investors may participate in business and/or trade personally or they may use one or several of the many legal vehicles (such as partnerships, limited liability companies or other arrangements) with which to engage in business, each allowing for the investor’s investments and risks to be controlled and managed by said investor within the parameters established by clear legal rules.

Investors who do business with others are also protected by corporate law rules that safeguard the investor and which provide remedies in case of disputes.

In addition, business transactions may be carried out within a framework of laws that provide for basic rules of commerce, including for instance on obligations, contracts, financing instruments and means of security, amongst others.

General competition laws ensure that business is carried out in a competitive environment, and certain industries (such as telecoms, remote gaming and financial services) are also regulated by ex-ante or ex-post regulations which cater for that specific industry, often supervised by a regulatory authority established by law having regulatory and enforcement powers so as to ensure that the industry operates under fair rules and in a transparent manner.

Public procurement rules also ensure that fair competition and transparent mechanisms allow investors to compete on an equal level playing field in government related projects and contracts.

In addition, the Maltese legal system also includes an independent judicial system comprising several Tribunals and Courts (including a Constitutional Court and a Court of Appeal) which also allows for domestic or foreign arbitration and dispute resolution.

Court procedure rules also allow investors to protect any claims they have, including by means of precautionary interim measures (in Malta – or in other EU Member States) which may be applied for also before a formal dispute is brought before the Courts.

The system also provides for recourse to several levels of scrutiny, ranging from the office of the independent Ombudsman, to local authorities and regulators having investigatory and enforcement powers, and of course recourse, in certain circumstances, to foreign independent regulatory or judicial authorities such as the European Commission, the Court of Justice of the European Union (CJEU) and the European Court of Human Rights (ECHR).

Finally, Maltese law includes rules of private international law and EU Law which cater for the efficient recognition and enforcement of judgments of foreign countries in Malta, thus strengthening investor protection further.

  • Malta has just completed one decade of accession to the European Union. Which changes resulting from this accession had more impact in your activity?

The shift in status from an offshore jurisdiction to an onshore jurisdiction, and Malta’s entry into the European Union in 2004, were among the principal factors that contributed to the growth of Malta’s international business and financial services sector. The local regulator, the Malta Financial Services Authority (the ‘MFSA’), has played a vital role in developing a robust yet flexible legal and regulatory framework, not only by aligning it with EU law, but also in designing domestic rules governing, for instance, professional investor funds.Accession to the EU has most likely been the single most important contributor to the exponential growth of the financial services sector over the last 10 years, with Malta now ranking as a domicile of choice, together with Luxembourg and Dublin, in relation to investment services operators, funds and fund managers, captives, among others. Clients are clearly attracted by the possibility of obtaining a licence to operate in Malta and to then passport same into the rest of the EU.

As always with a success story, there are numerous reasons for Malta’s success.  EU membership has also brought with a general bettering of standards – Malta is regularly ‘top of the class’ insofar as transposition and implementation of EU law is concerned.  Access to EU funding – both at the level of the government and of the business operators – has also been important to Malta’s growth in recent years.  This, coupled with other elements such as the country’s relatively low labour costs, highly skilled workforce, language proficiency, attractive tax regime, convenient time zone and accessibility, all make for a very interesting proposition to our firm’s predominantly international clientele.

  • Both the Maltese government and the service providers value the regulated and rigorous features of the Maltese jurisdiction. Does this in any way affect the operational efficiency of the system?

It is indeed the case that the Maltese government and service providers alike attribute great importance to proper regulation, to the need to attract quality business to the country. This has not, generally speaking, come at the price of efficiency.  The MFSA, for instance, whilst taking its regulatory role very seriously, seeks to strike a balance in this regard and is an accessible regulator, something which is appreciated by firms such as ours and our clients, promoters of financial services operations, alike.Efforts are made, meanwhile, on an ongoing basis, at level of the administration generally to reduce bureaucracy to a bare minimum, with a view to making the life of a business operator locally as easy as possible – and this in line with the country’s pro business approach.

  • How would you characterise your partnership with NEWCO Corporate Services?

I would characterize our partnership with NEWCO Corporate services as a meeting of minds, in that we have found in NEWCO a partner that attributes the same importance to standards and quality of service to clients as our firm does.It has therefore been a pleasure for our firm, and our teams across a range of specialisations that NEWCO is active in, be it igaming, ICT, intellectual property, financial services, to name just a few, to work together with NEWCO in providing legal support to its clients looking to exploit the various opportunities that Malta offers to the international client.

We look forward to many more years of co-operation with NEWCO!


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Number of companies in Malta rises 12% a year

In on June 15, 2015 by NEWCO


The number of companies registered in Malta recently surpassed 70,000, an important landmark that shows the dynamism and competitiveness of this European jurisdiction. Around 30% of these companies have been registered in the last 5 years, which translates into an average annual growth rate of 12% over this period, at precisely a time of great uncertainty in the international economic climate.

According to the Maltese Finance Minister, Edward Scicluna, these data prove that businessmen feel comfortable with the country’s business legislation. Nevertheless, the government reviews the legal and regulatory framework on a regular basis in order to respond to the needs and the reality of the business sector.  

Malta is currently one of the most competitive jurisdictions in the European Union in terms of attracting foreign investment, with a very attractive fiscal, economic and operational framework both for the establishment of companies with international operations, and for professionals and individuals who relocate to the Island.

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Maltese economic growth will continue in 2015

In on June 12, 2015 by NEWCO


The Maltese government has published, this week, statistic figures that point out to another year of economic growth of the Maltese economy. After two years of notable economic performance, 2013 and 2014, the country is set to continue growing during this year, with figures showing that during the first quarter of 2015 the Maltese economy grew by 4 per cent in real terms, 6 per cent in nominal terms. Such growth rate is even more remarkable when compared to an average growth of 1 per cent registered in the Euro Area, for the same period.

According to the Minister for Finance, Edward Scicluna, “These highly positive outcomes are the result of this Government’s vision of implementing structural reforms to raise potential output while putting our public finances back on track.

Indeed, economic growth was underpinned by increasing consumer confidence on the back of higher employment levels, historically low unemployment rates and increasing purchasing power.

During the first quarter of 2015, private consumption increased by 2.5 per cent or €23.6 million compared to the same period of 2014 while the average wages and salaries increased by 4.2 per cent or €36.3 million confirming that economic growth is being translated into better opportunities to the Maltese families.

These positive outcomes are also backed by a recent Eurostat release showing that the Maltese place above the average of the EU in terms of satisfaction with regards jobs and their financial situation.

Official figures also show that economic growth was broad based, with growth registered in almost all sectors of the economy. Particularly strong increases were registered in the financial and insurance sector (11.9 per cent), and the professional, scientific and technical sector (11.2 per cent).

The profitability of firms and businesses has also improved substantially by 6.1 per cent or €46.7 million. This should continue to help sustain the renewed energy by which private enterprises are investing in the Maltese economy which in turn will further contribute to the productive capacity of our economy.

Source: FinanceMalta

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Webinar recording: Madeira’s new tax regime

In on June 4, 2015 by NEWCO


The recording  of our webinar “The new tax regime of Madeira” is now available.

The European Commission has recently approved a new tax regime for the International Business Centre of Madeira, thus enabling new companies to be licensed as soon as the respective legal diploma is published and is in force.

In this webinar, Frederico Gouveia e Silva explained what has changed, with regard to former regimes, and which advantages it brings about to the structuring of international operations.

Click here to view the webinar recording.

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    Portugal’s competitiveness is rising, according to IMD

    In on June 2, 2015 by NEWCO


    IMD, a Swiss business school that publishes a competitiveness yearbook for countries, has just published its ranking for 2015. Portugal has risen 7 spots in this yearbook and now ranks 36th, its highest position in the past 5 years. This is the second consecutive year in which Portugal has moved up the table and it was the second most improved country in 2015 among the 61 countries now evaluated.

    The final indicator of the IMD competitiveness ranking, which has been published since 1989, takes into account over 300 quantitative and qualitative indicators that are classified into four major areas relevant to competitiveness, each of which is also ranked individually. In this year’s edition Portugal improved its ranking in all of them: economic performance (up from 54th to 45th among 61 countries); government efficiency (up from 48th to 34th); business efficiency (up from 52nd to 48th) and quality of infrastructures (up to 26th place from 29th).

    According to IMD’s analysis, the areas in which Portugal performed best were the legal framework of business activity (14th among 61 countries), educational infrastructure (15th), price trends (21st) and international investment (22nd). Portugal ranked 1st with regard to immigration laws and ranked very favourably in other areas related to government efficiency, such as the number of days to start a business, respective procedures and investment incentives (2nd, 4th and 9th place, respectively), business efficiency, namely with respect to flexibility and adaptability, along with efficiency of the labour force (23rd and 26th place, respectively), and infrastructure quality, specifically with regard to information technologies qualifications, connectivity, management training and Internet speed (respectively 4th, 4th, 7th and 10th spots).


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