Month: May 2022

Malta Aircraft Registration Cleared for Take-off

Posted on | by Charlotte Clabon

Background

Malta’s strategic geographical position has assisted its aviation industry to present numerous economic opportunities, for many years. The importance of the Malta aviation sector has led the Maltese Authorities to strengthen its aviation framework to further enhance aircraft registration and aircraft operator licensing.

Malta and the Aircraft Registration Act

Malta has aimed to position itself as one of the primary aviation hubs in the EU by continually reviewing and bolstering its aviation registry. The available aviation legislation provides the aviation industry with a solid foundation. This is further complemented by; competitive aviation registration costs, the authority’s practical understanding of the aviation sector, and favourable corporate structures. As a result, the aviation framework provides several benefits to individuals seeking to register an aircraft on the island.

The importance of Malta’s flag has already been proved within the aviation industry and the inception of the Malta Aircraft Registration Act in 2010, positioned Malta as having one of the most reputable aircraft registers, within the aviation sector.

The Aircraft Registration Act has helped to enhance the aviation framework on the island. Malta has also implemented the ‘Cape Town Convention in Interests in Mobile Equipment’ and its ‘Aircraft Protocol’. Malta took additional measures to boost the aviation industry in 2012, by establishing the Safi Aviation Park, providing a number of aviation services, including training and repairs.

Benefits of Aircraft Registration in Malta

There are many benefits and innovative concepts relating to aircraft registration in Malta.

Amongst these, as mentioned above, was the enactment of the Aircraft Registration Act (Chapter 503, Laws of Malta), which came into force on 1st October 2010. This new regime was implemented to regulate the registration of aircraft, mortgages, and other securities relating to aircraft.

  • In terms of Maltese legislation, an aircraft may be registered by; an owner who operates an aircraft, or an owner of an aircraft under construction (or an aircraft temporarily not being used or managed), or an operator of an aircraft under  temporary title (subject to certain conditions), or a buyer of an aircraft under a condition of sale or title reservation agreement.

Additional benefits include:

A. More visibility of rights and interests in relation to aircraft, through the updating of the National Register;

B. Incentives to encourage the development of finance and operating leases relating to aircraft. Legislation provides clear rules on the tax treatment of the finance charge, available tax deductions to finance lessors, and capital allowances for lessees;

C. Broader registration options, extending to aircraft under construction or temporarily not in service and aircraft under a temporary title;

D. Recognition of fractional ownership of aircraft;

E. No withholding tax on lease payments where the lessor is not a tax resident of Malta;

F. Competitive minimum depreciation periods for aircraft;

G. The private use of an aircraft by an individual who is not resident in Malta and is an employee/officer of an employer/company/partnership, whose business activities include the ownership/leasing/operation of aircraft used for international transport, does not constitute a taxable fringe benefit.

H. Legislation implementation including the provision of the Cape Town Convention on ‘International Interests in Mobile Equipment’ and its ‘Aircraft Protocol’, thereby granting secured lenders more protection and more effective remedies whilst also enabling lower borrowing costs.

Tax, Standards and Flexibility Advantages of Private and Commercial Aircraft Registration in Malta 

Tax

Since 2007, Malta has offered an attractive corporate tax system whereby non-residents can claim tax refunds. In practical terms, the standard 35% corporate tax rate is often effectively reduced to between 0% and 5%.

If you are considering aircraft registration in Malta, another tax benefit is that income, from the international transport of goods and passengers outside the country, is exempt from Maltese tax.

As an EU member state since 2004, the Maltese aircraft register permits free circulation of aircraft in the eurozone, which allows tax-free commercial operation.

VAT Treatment

The VAT treatment for aircraft leasing makes Malta an attractive jurisdiction for private and commercial aircraft registration, whilst ensuring full adherence to EU laws and regulations. The rules take into account the amount of time spent by an aircraft within EU airspace.

The imposition of VAT in Malta varies according to how an aircraft is used. The key differentiation is between, an aircraft being used by an airline operator mainly for ‘reward’ in relation to the international transport of goods or passengers, or an aircraft that is being used purely for private use.

VAT implications, such as those applicable in other EU member states, are also relevant in relation to; importations, intra-community acquisitions, and/or supply of aircraft. The intra-community purchase, importation or supply of aircraft destined for use by an airline operator chiefly for international transport of passengers or goods is classified as an exempt credit supply.

The following are additional exempt credit supplies:

(a) Supplies of equipment to constructors, owners, or operators of an aircraft;

(b) Supplies of services consisting of the modification, maintenance, chartering and hiring of an aircraft.

The VAT treatment applies to all aircraft, other than those used by airline operators for international traffic, as a VAT exemption applies in this latter case.

According to Malta’s VAT legislation, the lease of an aircraft, which airline operators do not use for international traffic, is the supply of a service subject to VAT, with the right of deduction of input VAT by the lessor.

In terms of the VAT simplification procedure, the portion of the lease that will be subject to VAT, depends on the amount of time that the aircraft is used in EU airspace. As it is difficult to identify the movement of a plane in advance and the period in which the aircraft will be operated in EU airspace, Malta applies an ‘expert technical test,’ to estimate the portion of the lease that will be subject to VAT. The standard Malta VAT rate of 18% is applicable on the established percentage of the lease that is deemed to be related to the use of the aircraft in EU airspace.

In addition, Malta offers a very solid legislative environment, with an extensive double-tax treaty network and transparency of rights and interests.

Standards

Falling under the jurisdiction of the European Union Aviation Safety Agency (EASA),  the Maltese aircraft register implements some of the highest levels of regulation in the world. Aircraft registration in Malta offers business jet owners peace of mind, with its International Civil Aviation Organisation (ICAO) rating, testament to stringent safety and security standards.

In addition, Malta adheres to the Cape Town Convention on ‘International Interests in Mobile Equipment’, which specifies international standards for leases, security interests and the registration of contracts.

Flexibility

Aircraft registration in Malta offers unparalleled flexibility for international operators. Aircraft on the Maltese aircraft register can be based and freely operated from anywhere globally.

It is also possible to add an aircraft that is currently under construction or ‘out of action’ to the Malta aircraft register.

Aircraft registration in Malta allows operators to take advantage of fractional ownership of a single aircraft. The potential benefits are enormous, with several co-owners being able to detail a percentage stake, each financed by a separate creditor.

How Can Dixcart Help?

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

Additional Information

If you would like further information regarding Aircraft Registration in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Moving to Switzerland and Want to Work? The Benefits of Forming a Swiss Company

Posted on | by Charlotte Clabon

The procedure for relocating to Switzerland is made easier for both EU/EFTA nationals and non-EU/EFTA nationals, if the new resident forms a Swiss company and is employed by it.

If you are looking for a high quality of life in one of the world’s most economically and politically stable countries, living in Switzerland could provide you with the ideal answer. Not only will you find yourself at a central hub for travel to over 200 international locations, but you will also have access to the beautiful scenery of the Alps and picturesque lakes.

There are two options for moving to Switzerland – but the main question is do you wish to work once you have moved?

This article explores the following:

  1. Why Switzerland?
  2. Who Can Move to Switzerland?
  3. Forming or Investing in a Swiss Company
  4. Criteria for Forming a Swiss Company
  5. How to Invest in a Swiss Company?
  6. Benefits – Tax and Residence
  7. Living in Switzerland

1. Why Switzerland?

Switzerland is an attractive jurisdiction to start and operate a business, as a location for individuals and for family protection and safety. 

Advantages include:

  • Located in the centre of Europe.
  • Economic and political stability.
  • High regard for personal privacy and confidentiality.
  • Most ‘innovative’ and “competitive” country in the world with various strong industries.
  • A well-respected jurisdiction with an excellent reputation.
  • A high quality and multilingual local workforce.
  • Low rates of corporate tax for Swiss companies.
  • Premier destination for international investment and asset protection.
  • Major commodity trading centre in the world.
  • Hub for HNWIs, international families and a wide variety of professionals including lawyers, family offices, bankers, accountants, insurance companies.

2. Who can Move to Switzerland?

  • EU/EFTA nationals: enjoy priority access to the labour market. They can freely enter the country but will require a work permit. The individual will need to find a job and the employer must register the employment before the individual can actually start to work.
  • Non-EU/EFTA nationals: are allowed to enter the Swiss labour market if they are appropriately qualified, for example managers, specialists, and those with higher educational qualifications. The employer needs to apply to the Swiss authorities for a work visa, while the employee applies for an entry visa from their home country. The work visa will allow the individual to live and work in Switzerland.

3. Forming or Investing in a Swiss Company and Becoming a Director or an Employee of the Company

The establishment of a Swiss company is one of the most popular routes for individuals relocating to Switzerland. This is because EU/EFTA and non-EU/EFTA nationals can form a Swiss company, be employed by it, reside in Switzerland, and benefit from the attractive tax regime.

Any foreign national can form a company and therefore potentially create jobs for Swiss nationals. The owner of the company is eligible for a residence permit in Switzerland, as long as he/she is employed by the company in a senior capacity.

4. What are the Criteria?

In principle, non-EU/EFTA nationals need to form a company which must:

  • generate an annual minimum turnover of CHF 1 million, and
  • create new jobs exploiting new technologies and/or the development of the region and contribute to the economic development of the country.

The company must produce a business plan detailing how the amount to be invested will generate a turnover of CHF 1million or more per annum, in the ‘near’ future. The business plan also needs to show that the company will achieve this turnover in a specified number of months, not necessarily in the first year, particularly if the company is a start-up.

The types of economic development objectives for the company, which are regarded positively in Switzerland, include: opening up new markets, securing export sales, establishing economically significant links abroad, and the creation of new tax revenue. Precise requirements vary by canton and more information can be provided on request.

Alternatively…

5. Investment in a Swiss Company

Alternatively, EU and non-EU/EFTA applicants can choose to invest in a company which is struggling to expand, as it lacks the necessary funding.

For non-EU/EFTA applicants this new funding should then enable the company to create jobs and assist the Swiss economy to expand. The investment must add economic value to a particular Swiss region.

6. Benefits of a Swiss Company – Tax and Residence

  • Taxation of Swiss Companies

Swiss companies can enjoy a zero-tax rate for capital gains and dividend income, depending on the circumstances, and Trading companies are taxed as follows:

  • The effective cantonal and federal corporate income tax rate (CIT) is between 12% and 14% in most cantons. The Geneva corporate tax rate is 13.99%.

Swiss Holding Companies benefit from a participation exemption and do not pay tax on profits or capital gains arising from qualifying participations. This means that a pure Holding Company is exempt from Swiss tax.

Withholding Tax (WHT)

  • There is no WHT on dividend distributions to shareholders based in Switzerland and/or in the EU (due to the EU Parent/Subsidiary Directive).
  • If shareholders are domiciled outside Switzerland and outside of the EU, and a double tax treaty applies, the final taxation on distributions is generally between 5% and 15%.

Double Tax Treaties

Switzerland has an extensive double tax treaty network, with access to tax treaties with over 100 countries.

For more information about Swiss Companies, please read our article: Formation of a Swiss Company.

  • Taxation of Individuals

Each canton sets its own tax rates and generally imposes the following taxes: income, net wealth, real estate, inheritance, and gift tax. The specific tax rate varies by canton and is between 21% and 46%.

In Switzerland, the transfer of assets, on death, to a spouse, children and/or grandchildren is exempt from gift and inheritance tax, in most cantons.

Capital gains are generally tax free, except in the case of real estate. The sale of company shares is one of the assets, that is exempt from capital gains tax.

7. Living in Switzerland

Switzerland ranks among the top countries in the world in which to live due to its high quality of living and reputation as a centre of international trade and finance. It is one of the world’s wealthiest countries and is also known for its impartiality and neutrality.

Switzerland is blessed with spectacular hiking and skiing trails, exclusive swimming spots in the many rivers and lakes, picturesque villages, Swiss festivals throughout the year, and, of course, the Swiss Alps which look spectacular during any season.

Switzerland offers an exceptionally high standard of living, first-rate health service, outstanding education system, and boasts a plethora of employment opportunities.

Switzerland is one of 26 countries in the ‘Schengen’ area and a Swiss residence permit will enable you to enjoy full Schengen travel rights. It is therefore ideally situated for ease of travel; one of the many reasons high-net-worth individuals choose to relocate here. Perfectly situated in the middle of Europe means moving around could not be easier, especially for individuals who regularly travel, internationally.

Although Switzerland has a variety of beautiful towns and alpine villages to live in, high-net-worth individuals are mainly drawn to a few specific cities. At a glance, these are Zürich, Geneva, Bern, and Lugano. Geneva and Zürich are the biggest cities due to their popularity as centres for international business and finance. Ticino is the third most popular canton, as it is located close to Italy and has a Mediterranean culture.

Additional Information

If you would like additional information regarding moving to Switzerland and forming a Swiss Company, please contact Christine Breitler at the Dixcart office in Switzerland: advice.switzerland@dixcart.com.

St Kitts & Nevis Economic Citizenship: How and Why?

Posted on | by Charlotte Clabon

Relocation or Second Passport?

A primary reason to apply for St Kitts & Nevis citizenship is a desire to move to this Caribbean Island.

An alternative objective may be to hold a second passport. Finally, there may be an initial need to hold a second passport with a longer-term objective of potentially moving to St Kitts & Nevis.

Background

Individuals and families are becoming increasingly mobile and the ability to hold a second passport, such as a St Kitts and Nevis passport, is becoming more relevant. The Caribbean is an attractive destination for a number of reasons, including the relaxing lifestyle, beautiful scenery and the climate.

Dixcart is a licensed Service Provider for the St Kitts & Nevis Citizenship by Investment scheme and can assist with all aspects relating to an application.

Advantages of St Kitts & Nevis Citizenship

  • Passport holders enjoy full Schengen privileges and do not require a visa to visit the UK. A St Kitts & Nevis passport enables travel to approximately 156 countries worldwide either on a visa free or visa on entry basis.
  • The ability is available to reside in another CARICOM country, as listed below: Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, St Kitts & Nevis, St Vincent & Grenadines, Suriname and Trinidad & Tobago.
  • The following taxes are NOT levied in St Kitts & Nevis: personal income tax, gift tax, death duties, estate taxes, inheritance tax or capital gains tax on worldwide income.
  • A single application can include dependent children up to a maximum age of 30, dependent parents with a minimum age of 55, and unmarried, dependent siblings up to the age of 30.
  • There is a fast track process which enables applicants to receive a St Kitts & Nevis passport in 45 days.
  • The St Kitts & Nevis citizenship by investment scheme Is one of the oldest citizenship by investment programmes in the world and is recognised as being platinum standard.
  • The application process is simple and Dixcart can assist with the collection and completion of the various forms and information. Please follow the link below to access details of the initial information required:  Dixcart/Nevis-CBI-information-needed

Advantages Relating to a Second Passport

There are a number of reasons why holding a second passport can be advantageous.

This may offer insurance against political, economic or fiscal change in the individual’s country of origin.  

In addition, international travel might well be made easier. Nationals of many countries have to endure lengthy waiting periods to obtain visas for travel. This may be because they are nationals of a developing country or there may be animosity between their country and another.

In addition, holding a second passport might present new opportunities for the tax structuring of personal tax affairs. Generally, an individual’s residence and citizenship are the ultimate basis for the majority of taxation rulings.

St Kitts & Nevis Citizenship by Investment – Two Routes

There are two major investment routes:

1. Sustainable Growth Fund (SGF) Contribution

  • A single applicant can make a one-off contribution of US$150,000 to the Sustainable Growth Fund (SGF).
  • For a family of four, the required contribution is US$195,000.
  • Additional dependants (children or parents); the contribution requirement is US$10,000 per dependant.
  • The addition of a sibling under the Sustainable Growth Fund, is US$20,000 per sibling.

2. Real Estate Investment

There are two options available for applicants seeking to qualify for citizenship by investing in real estate: by investing in a pre-approved real estate development or, through the purchase of a qualifying private residential property.

Approved Property Development

  • Investment of a minimum US$400,000 in an approved property development. The property must be held for a minimum of 5 years after the citizenship has been granted.

A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and additional family members over the age of 18. The addition of a sibling is US$40,000.

If this route is selected, the Dixcart office in Nevis can also help source management services for the property, which can be sold on after 5 years.

Luxury Real Estate

  • Investment of a minimum US$200,000 in new luxury real estate. The property must be held for a minimum of 7 years after the citizenship has been granted.

A registration fee is payable by the applicant and additional fees are required for the spouse, children under the age of 18 and any additional family members over the age of 18. The addition of a sibling is US$40,000.

Dependants

Key information:

  • Unmarried, dependent children who are older than 18, but younger than 30 may be included in the application.
  • Dependant parents aged 55 or above may also be included.
  • Siblings may be added to the application if he/she is the brother or sister of either the main applicant or his/her spouse, is unmarried and childless, under the age of 30, and dependent on the applicant for financial support.
  • Citizenship can be passed on to future generations by descent.

Fast Tracking

The processing time for either of the two routes above, to gain St Kitts & Nevis Citizenship is approximately 3 months. For an additional investment, however, the application can be fast-tracked and the passport received in approximately 45 days.

Sponsorship

There is the ability to sponsor applicants. A direct relative can sponsor another direct relative and a common law partner can sponsor another common law partner. Further information can be provided on request.

Additional Information

Dixcart is a licensed Service Provider for the St Kitts & Nevis Citizenship by Investment programme and can provide comprehensive details of the alternative application routes available, any additional fees that might be required, and assist with the coordination of applications.

If you would like additional information regarding the St Kitts & Nevis Economic Citizenship Programme, please contact: John Mellor at our office in Nevis: advice.nevis@dixcart.com or your usual Dixcart contact.

Listed and Private Company Secretarial Services Provided by Dixcart in Guernsey

Posted on | by Charlotte Clabon

Background

Dixcart Trust Corporation Limited provides a suite of outsourced professional company secretarial services for listed companies which trade on worldwide stock exchanges. This includes the provision of a professional company secretary who will also advise on current governance matters.

What Services Can Dixcart Offer?

  • Provision of a chartered governance professional (ACG) (Chartered Secretary) with 22 years of listed company experience with clients trading on stock exchanges in the UK, Canada, USA, and Australia.
  • Management of Board and Committee meetings: pre-meeting discussion with Chairs; draft agendas; circulate meeting materials; attend and act as recording secretary; prepare initial ‘To Do’ list from the meeting and provide minutes.
  • Assistance with ongoing regulatory compliance for the listed company.
  • Assistance in preparing AGM meeting materials.
  • Provide advice on corporate governance practices, including the preparation of a full suite of corporate mandates / charters / policies.
  • Monitor corporate governance compliance to ensure best practices are being maintained.
  • Undertake annual Board assessments and tabulate results in a confidential manner.
  • Administer compensation plans.
  • Function as warrant agent for the listed company.
  • Function as the liaison for the listed company with the registrar, professional advisors and corporate stakeholders.
  • Minute Book custody in both hard copy and electronic format.
  • Provision of an administrative substance expected of operating companies.

Private Companies

Many private companies require their internal governance to be at the same level as that of a listed company, especially where the shareholders have invested significant financial capital.

Dixcart can work with management and the Board of these companies to determine and implement an appropriate level of corporate governance policies and processes. This is particularly of interest to a private company that is seeking an exchange listing as part of its short to medium-term corporate strategy.

Attendance at Meetings

Many Board and Committee meetings are held by video conferencing platforms. However, the Dixcart Guernsey office is only a short thirty-five-minute flight to London by air and has excellent transport links to other key UK airports, which enables easy access to European and international connections, attendance in person for Board and Committee meetings is easily facilitated.

What Advantages Does Dixcart Offer?

Dixcart provides effective and efficient solutions to listed company clients, using experience gained over 22 years.

The cost effective solution for a listed company is to outsource the company secretary role until there is a requirement to engage a full time in-house person. Dixcart is well positioned in this market to provide an experienced company secretary, whether as an officer position or in an advisory role.

Further Information

For further information on this topic please contact your usual Dixcart adviser or speak to Shaun Drake in the Guernsey office: advice.guernsey@dixcart.com.

Three Types of Portuguese Company – Advantages and Criteria

Posted on | by Charlotte Clabon

Background

There are three types of company that can be incorporated in Portugal and it is important to understand the differences, as the relevant corporate income tax rates and substance criteria vary widely substantially.

The Three Types of Portuguese Company

The three types of company that can be incorporated are; through the Portugal mainland, or the island of Madeira, or the International Business Centre of Madeira (also based on the island of Madeira).

What Corporate Income Tax Rates are Applicable for these Types of Company?

The corporate income tax rates, vary significantly and are detailed below for the three types of company:

 Portuguese Mainland CompanyMadeira CompanyInternational Business Centre of Madeira Company (for international activity)
First €25,000 of taxable income17%11.9%5%
Taxable income above €25,00021%14.7%5%

As you can see the corporate tax rate for companies incorporated in the International Business Centre of Madeira are very attractive but very specific substance requirements need to be met, as detailed below.

What Substance Criteria are Applicable for Companies Registered in Mainland Portugal and in Madeira ?

Portugal and Madeira do not have specific substance requirements that need to be met. However, to be able take advantage of Portugal’s double taxation treaty network,  substance does need to be maintained.

How this can be achieved, is detailed below:

  • Maintaining an open and active bank account in Portugal;
  • A registered office address and/or premises for the exclusive use of the company in Portugal;
  • A qualified director and/or permanent employee, resident in Portugal;
  • Making important business decisions in Portugal and evidencing these through minutes of board meetings;
  • Ensuring sufficient commercial activity occurs in Portugal.

A Summary of the Advantages Available to Companies Registered in Portugal

Portuguese companies can offer a number of advantages. An important positive is the extensive network of Portuguese double taxation treaties with numerous jurisdictions around the world, with more than 70 agreements in place. This enables cooperation regarding taxation between respective jurisdictions and the smooth enforcement of respective tax laws.

Portugal is also part of the European Union and therefore has free access to the European market.

Please see below a Dixcart Article that summaries the advantages that are available: the-advantages-of-portuguese-companies-including-portuguese-holding-companies

What Substance Criteria are Applicable for Companies Registered in the Madeira International Business Centre of Madeira?

Specific substance criteria are required to be met for companies operating in the International Business Centre of Madeira (IBCM).

This criteria includes:

  1. Following the incorporation of a company:
    1. Within the first 6 months of activity, the IBCM company must hire at least, one worker, and undertake a minimum investment of €75,000 in fixed assets, within the first 2 years of activity. OR;
    1. If it hires six employees, during the first 6 months of activity, it will be exempt from undertaking the minimum investment of €75,000.
  2. On an ongoing basis, the company must have at least one full time employee on its payroll, paying Portuguese personal income tax and social security. This employee can be the Director or a Board Member of the IBCM company.

A Summary of the Advantages Available to Companies Registered in the International Business Centre of Madeira

Please see the following Dixcart Article, which explains the benefits available to companies registered in the International Business Centre of Madeira in more detail and also explains the capping of benefits that is applicable:

a-madeira-portugal-company-an-attractive-way-to-establish-a-company-in-the-eu

Additional Information and Assistance from Dixcart

Dixcart has extensive experience in the incorporation of each of the three types of company detailed above. Dixcart Portugal also has expertise in advising how substance may be established and maintained, as well as having an in-depth knowledge regarding Portuguese double taxation agreements.

Please contact us at Dixcart Portugal, if you require additional information or have any questions: advice.portugal@dixcart.com.