Malta Pensions & Retirement Schemes

Malta Pensions & Retirement Schemes

Retirement schemes duly licensed in Malta by the MFSA, may be recognised by Her Majesty’s Revenue and Customs in the U.K. (the “HMRC”) as Qualifying Recognised Overseas Pension Schemes (“QROPS”). CSB Group assists clients with Malta Retirement Schemes and Investment Planning as well as the setting up a QROPS / QNUPS in Malta which would be established in the form of a trust or otherwise by contract.

Retirement Schemes & Investment Planning


Over the past years, Retirement Schemes have become a significant element in investment planning. To this effect, Malta has been attracting high-net worth individuals in pursuit of an investment vehicle, as well as international employees and global corporations seeking the ideal pension schemes. Malta’s current international pension legislation scheme coupled with its EU Membership is making Malta the ideal location to manage and administer cross-border pension vehicles, in addition to the following benefits:

  • Malta is an established finance centre;
  • Effective Regulation in force and an accessible Regulator, MFSA (the Malta Financial Services Authority);
  • Retirement schemes are exempt from income and capital gains tax in Malta;
  • Companies established in other EU member states can sponsor occupational schemes established in Malta;
  • The new pension regulations will aim at passporting rights;
  • Various customised structures;
  • Highly-skilled professional workforce;
  • Cost-effective administration and management of the schemes;
  • Malta being a QROPS jurisdiction.


Furthermore, retirement schemes duly Malta licensed in Malta by the MFSA may be recognised by Her Majesty’s Revenue and Customs in the U.K. (the “HMRC”) as Qualifying Recognised Overseas Pension Schemes (“QROPS”). Malta has gained further popularity as a pension jurisdiction for British expats’ UK pensions since the country met HMRC regulations for UK QROPS. Non-UK tax residents may transfer their QROPS to an attractive and tax-efficient jurisdiction such as Malta and benefit from greater flexibility as regards investments and withdrawals (when compared to similar UK Schemes). Thus, newly set-up Schemes licensed in Malta may apply for recognition as QROPS with the HMRC. QROPS give their pension holders greater control of their pension and in addition, Malta offers attractive and comprehensive tax breaks to such QROPS investors.

Since QROPS are subject to UK inheritance tax upon the holder’s decease, British authorities have introduced Qualifying Non UK Pension Scheme (QNUPS) whereby money transferred into these Schemes will be free from such UK inheritance tax.

Malta is an attractive jurisdiction particularly since it is the only QROPS compliant jurisdiction offering 100% flexibility on full pension access.


Malta’s current regulatory and legislative framework is robust and ensures the integrity of pensions plans. Pensions are currently regulated by the Retirement Pensions Act which came into force in January 2015, replacing the the Special Funds (Regulation) Act.  It regulates Retirement Schemes, Retirement Funds and the Service Providers related thereto. This Act also seeks to further attract high-net-worth individuals, multinationals, individuals and wealthy expatriates to Malta and base their pension provisions. There have also been significant amendments to UK law in April 2015 which have updated the position from the UK perspective.

Pension Plan – Setting up a Malta QROPS

UK-based Qualifying Recognised Overseas Pensions Scheme (QROPS) providers are moving to Malta to set up new schemes at a fast pace. As such, an individual having accumulated benefits under a private pension in the UK, but who has left the UK to take up residence elsewhere (not necessarily Malta), may transfer such benefits to a Maltese QROPS.

What are QROPS? Setting up a Malta QROPS

QROPS are Pillar II pension schemes established outside the UK and which are recognised as such by Her Majesty’s Revenue and Customs (HMRC).

The administrators of a pension scheme established in Malta may apply to HMRC for formal acceptance of the scheme as a QROPS. Once approved as a QROPS, the Maltese scheme could accept funds/assets transferred from existing UK pension schemes.

The Malta QROPS

A Maltese QROPS would be regulated by domestic legislation – specifically, the Retirement Pensions Act, which as of January 2015, replaced the Special Funds (Regulation) Act, Chapter 450 of the laws of Malta and subsidiary legislation promulgated thereunder. There have also been significant amendments to UK law in April 2015 which have updated the position from the UK perspective.

Maltese legislation is suitably comprehensive and meets the high standards set by HMRC. Still, a Maltese QROPS may afford greater flexibility as regards investments and withdrawals (when compared to corresponding UK schemes) and is likely to be attractive from a tax perspective.

In light of the comprehensive and high quality of Malta’s applicable legislative framework, and the ongoing scrutiny of that framework and of domestic schemes by the local regulator (the Malta Financial Services Authority), such additional flexibility and tax advantages would not be achieved at the expense of investment security – an overriding concern, particularly in the context of retirement pensions.

A QROPS would be established in Malta in the form of a trust or otherwise by contract. Each scheme must be licensed by the MFSA.

The QROPS Licence

Such a license would be procured pursuant to the submission to the MFSA of an appropriate application, the accompanying trust deed/scheme document (detailing, for example, the purpose and rules governing the scheme) and any other documentation or information required by the MFSA.

MFSA – Requirments

The MFSA would consider the application and supporting documentation having regard to:

  • compliance with the provisions and requirements of applicable legislation;
  • the protection of investors and the general public;
  • the protection of the reputation of Malta taking into account Malta’s international commitments;
  • the protection of competition and choice;
  • the reputation and suitability of the scheme administrator and any other parties connected to the scheme.

Every Maltese pension scheme must appoint an auditor and an administrator – approved for the purposes by the MFSA. The administrator may be responsible for the day to day management of the scheme. A licensed asset manager would be required to manage the assets of the scheme should the administrator not have the required competence and/or facilities in this regard. The trustee of a scheme set up as a trust may also undertake the functions of administrator provided, of course, that the trustee has all requisite expertise and resources. The MFSA may also require the appointment of a custodian charged with safekeeping all assets pertaining to the scheme and, perhaps, monitoring the administrator in the exercise of its duties. Once a pension scheme is established, the administrator/s would be required to apply to HMRC for formal recognition of the scheme as a QROPS.

When can the Contributor Benefit from a Maltese Qrops?

The beneficiary under a Maltese QROPS may only receive benefits from the scheme once s/he shall have attained the age of fifty-five but before s/he shall have turned seventy (although benefits may be accessed earlier in limited prescribed circumstances should, for example, the beneficiary suffer permanent invalidity or death). However, upon maturity, the beneficiary would be entitled to opt to take an annuity and/or a lump sum payment. Details as to timing and amounts of benefits would be specified in the trust deed/scheme document.

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