EXTERNAL TRANSACTIONS _g S.L.233.04 1
SUBSIDIARY LEGISLATION 233.04
EXTERNAL TRANSACTIONS REGULATIONS
26th December, 2003
LEGAL NOTICE 427 of 2003.
Title.
Regulations.
Cap. 233.
The Minister of Finance and Economic Affairs has
provided that all restrictions and, or obligations existing under the
Exchange Control Act, as in force before the issue of this notice
and listed hereunder, shall remain in force for such time as the said
Minister shall by notice in the Gazette prescribe, and the provisions
of the Exchange Control Act as in force before the issue of this
notice shall continue to apply with respect to any such restriction or
obligation:
Cash gift/family 
subsistence 
allowance.
1. The maximum limit on payments by residents in
connection with cash gifts or family living expenses is Lm30,000
per adult person each year.
Current accounts 
with overseas 
credit institutions.
2. The opening and maintenance of current accounts by
residents with overseas credit institutions is not permitted.
Financial services companies which provide investment services to
their clients are permitted to open and maintain clients’ current
accounts with overseas credit institutions.
Foreign currency 
holdings - resident 
(natural person).
3. The maximum limit on foreign currency holdings (cash/
cheques) that a resident is exempted from surrendering to an
institution licensed to carry on the business of foreign exchange
(formerly referred to as an authorised dealer) is the equivalent of
Lm50,000.
Foreign currency 
current accounts 
with local credit 
institutions - 
resident (natural 
person).
4. The holding of foreign currency current accounts by
natural persons with local credit institutions is permitted subject to
the following conditions:
(i) that funds deposited are already denominated in
foreign currency; and
(ii) the maximum aggregate balance in such
accounts does not exceed the equivalent of
Lm50,000.
Foreign currency 
accounts with local 
credit institutions - 
companies/retail 
outlets.
5. The holding of foreign currency accounts (current, savings,
fixed) by companies/retail outlets with local credit institutions is
permitted subject to the following conditions:
(i) that funds deposited are already denominated in
foreign currency; and
(ii) balances may only be used to effect overseas
payments in connection with business costs.
Agents who receive payments in foreign currency from
local customers for import of goods and services may deposit such
funds into foreign currency accounts with local credit institutions.
2 _g S.L.233.04 EXTERNAL TRANSACTIONS
However, such receipts have to be remitted to the foreign
counterparty company within a month of receipt.
Foreign portfolio 
investment.
6. While foreign portfolio investments are not subject to any
quantitative limit, residents are not permitted to place funds in
portfolio assets with a maturity period of less than six months.
Financial loans by 
residents to non-
residents.
7. Residents are not permitted to extend financial loans to
non-residents for periods of less than six months.
Financial loans to 
residents in foreign 
currency.
8. Residents are not permitted to borrow in foreign currencies
from resident or non-resident sources for periods of less than six
months.
Investment by 
local fund 
investment 
schemes.
9. Fund investment schemes which collect funds in Maltese
lira from residents with the specific aim of investing such funds in
Maltese lira-denominated assets are not permitted to maintain
foreign currency assets in excess of 15% of their shareholders’
funds.
Contracts with 
non-resident life 
insurance 
companies.
10. Residents are not permitted to enter into life insurance
contracts with non-resident life insurance companies except in
cases where the policy of insurance provides solely for the payment
of a sum of money or other consideration upon the occurrence of
death within a period which is specified in the policy.
Contracts with 
non-resident non-
life insurance 
companies.
Cap. 403.
Cap. 104.
11. Residents are not permitted to enter into non-life insurance
contracts involving motor vehicle insurance with non-resident
companies (that is any premium in terms of Group 2 of Part II of
the Third Schedule to the Insurance Business Act, which provides
for policies of insurance issued by an authorised insurer as defined
in the Motor Vehicles Insurance (Third Party Risks) Ordinance.
Spot/forward 
currency 
transactions.
12. Institutions licensed to carry on the business of foreign
exchange are not permitted to enter into spot_cforward contracts
relating to capital account transactions where funds in Maltese lira
borrowed by the resident or non-resident counterparty are used in
the transaction.
Repatriation of 
export proceeds.
13. Residents undertaking export transactions are not
permitted to retain export proceeds in accounts with foreign credit
institutions. They are however permitted to deposit such proceeds
in foreign accounts with local credit institutions.
Issue, acquisition, 
sale and 
redemption of 
unlisted securities 
registered in Malta 
- non-residents.
Cap. 123.
Cap. 234.
14. Applications by non-residents for the issue, acquisition,
sale and redemption of securities not listed on the Malta Stock
Exchange in local companies established, or to be established, in
Malta have to be cleared by the Registrar of Companies at the
Malta Financial Services Authority. This procedure does not apply
to companies as defined in article 2 of the Income Tax Act, (that is,
international holding/trading companies) and to companies which
own a vessel registered under the Merchant Shipping Act, and
where the resident participation does not exceed 20%.
