Malta provides for a legal framework tailored for domestic and cross-border securitisations, offering statutory bankruptcy remoteness and tailored income tax neutrality rules, optimising the investors’ return and the originator’s cost of funding. The Securitisation Cell Company (SCC) legal framework provides for a platform-type structure that offers the advantage of lower costs and speedier set-up time.
Malta – The Right Choice for Securitisation
While a securitisation vehicle is an ordinarily taxable entity, tailored tax rules cause it to be tax neutral on its P&L. Further, Malta applies no withholding tax on outbound payments and inbound payments may benefit from Malta’s tax treaties. Finally, the VAT tax leakage is limited.
As an operating company established in Malta the Coprolin multi-originator securitisation platform responds to all requirements with regard to substance, sometimes a challenging topic for stand-alone securitisation vehicles.
Objective and Benefits of Securitisation
The objective of securitisation is to achieve real remoteness between the original owner of an asset, the Originator, and the asset acquired by the securitisation vehicle. The assets are detached from the Originator’s balance sheet, both legally and accounting wise.
The key benefit of securitisation is that it can provide non-traditional sources of capital market financing and thus complement traditional debt and equity financing strategies. Securitisation may also be a solution when applicable investment guidelines to be followed by investment funds restrict the investment in certain asset classes (e.g. private equity or lending, illiquid assets etc.).
Day to day administration responsibilities may be delegated to any third party, including the Originator.
The implementation of a securitisation transaction needs to be carefully planned. Should you be interested in learning more about the benefits and procedure of setting up a securitisation structure, please contact us. It would be a pleasure for us to assist you with any queries.