New Maltese Exchange Control Liberalisation Measures Effective

by Robert Lee, Tax-News.com, London

05 January 2004

The Central Bank of Malta reminded investors in a recent announcement that a number of exchange control liberalisation measures announced in the last budget have now entered into force.

In a statement, the Bank outlined the following changes which came into effect on January 1st:

• The limit for payments in connection with cash gifts or remittances for family living expenses is being raised from the present level of Lm20,000 per adult person each year to Lm30,000.

• The limit on the annual allowance in connection with foreign portfolio investment by adult persons is being removed. However, the funds invested cannot be placed in portfolio assets with a maturity of less than six months.

• The amount of foreign currency that a resident is exempted from surrendering to an authorised dealer is being increased from the present limit of Lm20,000 to Lm50,000. Adult persons may hold foreign currency current accounts with local credit institutions as long as the funds deposited are already in foreign currency and the maximum aggregate balance in such accounts does not exceed the equivalent of Lm50,000.

• Bodies corporate/local retail outlets which receive foreign currency in the course of their business activities are exempted from surrendering such foreign currency to an institution licensed to carry on the business of foreign exchange. Such foreign currency may, however, be deposited in foreign currency accounts with local credit institutions. These accounts may only be debited with payments in foreign currency overseas related to the business costs of the body corporate/retail outlet.

The Central Bank also pointed out that, in effecting capital payments, institutions licensed to carry on the business of foreign exchange should continue to ensure that the necessary documentation is provided by customers, as evidence of the purpose of the payment, and the appropriate reporting forms are filled in. In addition, the Bank implored firms to maintain adequate records of all foreign exchange transactions for the Bank’s statistical purposes.

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