Since the launch of the Securitisation Act Malta has become a prime jurisdiction for setting up securitisation vehicles and the transactions that are undertaken by them. Malta offers a comprehensive and flexible framework along with multiple financial and tax incentives to encourage growth in this area. Furthermore, business is conducted in English which adds to its appeal for English speaking investors wishing to conduct transactions of this type.
The Maltese Securitisation Act defines a securitisation transaction as a complex and structured financing method designed to offer a return on investment whilst providing stability due to it usually being guaranteed by a third party. Capital can be raised by transferring assets from the originator to SPVs (such as an investment company, commercial partnership or trust) and then the SPV issuing financial instruments to investors which are backed by those assets.
Malta offers a range of fiscal and financial motivations, to attract and retain these kinds of structures and transactions. These include:
- A neutral tax position
- Specific legislation to ensure that assets transferred to SPV are bankruptcy remote from the originator by operation of law;
- Malta’s double tax treaty network with more than 70 treaties currently in place