The Malta Stock Exchange is an HMRC recognised exchange, which means that shares and bonds that are admitted to trading on the MSE enjoy the same tax treatment that would be applied to financial instruments that are included in the official UK list maintained by the Financial Services Authority (in its capacity as the UK Listing Authority).
In effect, besides being another strong indication of confidence in the standards of professionalism and quality that the MSE enjoys, the main advantage of HMRC recognition is in the bond market as this means the bonds issued by UK domiciled companies and are listed on the Malta Stock Exchange are not subject to withholding tax.
The advantages that apply to equities that are listed on the MSE include the fact that there would be no requirement for a capital gains tax calculation based on a valuation, and the market price can be used instead. In addition, the shares would be eligible for inclusion in a SIP (Share Incentive Plan). This may be of particular interest to early stage companies (or others interested in employee share ownership) as it would allow their shares to be included in SIP arrangements, which are not available to AiM companies.
The EU passporting directive allows companies to pick and choose between EU jurisdictions, with complete freedom of movement between them, enabling companies to seek a listing of their securities in Malta, whilst allowing these to be traded on any other exchange within the EU. This is the key feature within the MSE's strategy to un-bundle its services by promoting the advantages of the various unique and distinct types of relationship that one may have with the Exchange and / or its Depository.
For more information, contact the Malta Stock Exchange on borza@borzamalta.com.mt or call (00356) 21244051.
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