Why Malta

Malta has become an appealing jurisdiction to establish a captive insurance company for a number of reasons, mainly:

  1. Malta’s EU membership and the corollary right of Maltese insurance companies (including affiliated insurance companies) to passport their business throughout the EU and the EEA states. This allows a Maltese insurer to carry on insurance business in Europe following a notification procedure to the MFSA;
  2. Malta’s ‘continuation of companies regulations’ allow insurance companies operating in other jurisdictions the opportunity to transfer their seat to Malta;
  3. Malta has agreed with the European Union, under State Aid Rules and the Code of Conduct Group for Business Taxation, an imputation system of taxation. Companies pay tax at the rate of 35% and upon declaration of a dividend, shareholders are entitled to claim a refund of up to 6/7ths of the tax paid. The net effect is to create a potential net tax rate in Malta of 5% to the Group.
  4. Malta’s extensive double tax treaty network (currently Malta has treaties with over 50 countries);
  5. Malta’s Protected Cell Company (PCC) legislation, the only EU jurisdiction to offer this structure. The main benefit of a PCC is that a Cell can use the Core capital and therefore does not need to have its own Minimum Guarantee Fund. This is advantageous to those insurers who wish to have their own company but whose business might not justify the setting up of an individual insurance company from a capital point of view, primarily due to the relatively low level of business undertaken. A PCC is a limited liability company which, in its entirety, needs to satisfy the Minimum Capital Requirements under the Insurance Business Act. The Core does not need to take on any insurance risk itself, but must be solvent at all times based on the business written by the whole (i.e. including cells). The cells are all independent of each other and from a legislative point of view are protected from each other. In addition each cell shareholder receives its own dividend stream and from a tax perspective each cell is treated as a separate entity.
  6. Malta’s sound company law (modelled on English company law rules and compliant with EU Directives ) and its fiscal legislation which operates an imputation taxation system;
  7. The insurance regulator’s positive approach to regulation of the insurance industry;
  8. A comparatively low cost jurisdiction in the EU.

In view of the above reasons the parent company is strongly positioned to capitalise on new business opportunities. Recent captive growth in the domicile has been strong. Entrepreneurial start-ups find Malta an extremely attractive place to start their new venture, with low capital entry requirements and within a reasonably short period of time.