                     MALTA FREEPORTS [ CAP. 334.        1
CHAPTER 334 
MALTA FREEPORTS ACT
To provide for the establishment of a Freeport system in Malta and to regulate its
operation.
20th April, 1990
ACT XXVI of 1989, as amended by Legal Notice 103 of 1995, and Acts X of 1997, IV of 2001
and IV of 2003.
ARRANGEMENT OF ACT
  Articles
Part I.  Preliminary  1-2 
Part II.  Freeports 3-4 
Part III. Freeport Authority  5-10 
Part IV.  Licensed Companies  11-15 
Part V.  Fiscal Regime  16-24 
Part VI.  Administrative Arrangements  25-30 
Part VII.  Offences and Penalties  31-35
SCHEDULE 
  2      CAP. 334. ]                MALTA FREEPORTS
PART I
PRELIMINARY
Short title. 1. The short title of this Act is the Malta Freeports Act.
Interpretation.
Amended by:
X. 1997.2;
IV. 2001.35.
2. (1) In this Act, unless the context otherwise requires -
"Authority" means the Freeport Authority constituted under
article 5;
"body of persons" means any partnership, fellowship, society or
other association of persons, whether vested with legal personality
or not;
Cap. 281.
"certified public accountant and auditor" means an individual
who holds a warrant to act in this capacity issued under the
Accountancy Profession Act, or a partnership of such individuals
duly registered under the said Act;
" company" means -
(i) any partnership constituted under the Companies
Act, being a partnership  en nom collectif ,  en
commandite  or a limited liability company;
(ii) a body of persons constituted or registered
outside Malta, and of a nature similar to the
aforesaid partnerships;
(iii) any co-operative society duly registered as such
under the appropriate law for the time being in
force in Malta;
"Comptroller" means the Comptroller of Customs and includes
any other person having an express or implied authority to act for
the said Comptroller in carrying out the provisions of this Act; 
 
Cap. 337.
"customs duty" means duty charged or chargeable under the
Import Duties Act;
"excise laws" means:
the Beer (Excise Duty) Act, 1993 * ; and
Cap. 382. the Excise Duty Act;
"Freeport" means any area of Malta comprised within a Freeport
zone in accordance with the provisions of article 3; 
Cap. 123.
Cap. 372.
"income tax" means tax charged or chargeable under the Income
Tax Act and the Income Tax Management Act;
"Income Tax Acts" means a collective reference to the Income
Tax Act and the Income Tax Management Act;
"licensed company" means a company licensed by the Authority
to operate within a Freeport under article 11; 
"Minister" means the Minister responsible for Freeports;
 "person" includes a body of persons;
*Repealed by Act XVI of 1995 (Chapter 382).
                     MALTA FREEPORTS [ CAP. 334.        3
"prescribed" means prescribed by regulation under this Act.
(2) Any reference in this Act to any law or provision thereof,
shall be construed as a reference to that law or provision as from
time to time in force and shall include a reference to any enactment
replacing such law or provision (including the imposition of any
taxes whatsoever analogous to or in substitution to those contained
in such enactments or provisions) and to any subsidiary legislation
made thereunder.
(3) Words and expressions used in this Act with reference to
another law shall, so far as necessary to give effect to this Act, and
consistently with the provisions thereof, have the same meaning as
they have in the law with reference to which they are used in this
Act.
Cap. 276.
(4) Any reference in this Act to a criminal offence committed
abroad, or against the law of another country other than Malta, or to
an act which if committed in Malta would be a criminal offence
against the law of Malta, shall be construed as limited to offences
which are extraditable for the purposes of article 5 of the
Extradition Act.
(5) In this Act and in any regulations made thereunder, if there
is any conflict between the English and Maltese texts, the English
text shall prevail.
PART II 
FREEPORTS
Declaration of 
Freeports.
3. (1) The areas of Malta shown on the plan enrolled by the
Secretary General of the Government of Malta in the records of the
Chief Notary to Government, Dr. Franco Pellegrini, of the 25th
April, 1989, shall, for all intents and purposes of this Act and of
any other law, constitute Freeport zones. The said areas are
indicated in the plan shown in the Schedule.
(2) The Prime Minister may, by Order approved by resolution
of the House of Representatives and published in the Gazette,
amend the Schedule:
Provided that the provisions of article 27 shall apply to any
amendment to the Schedule whereby any such area or part thereof
ceases to be a Freeport zone:
Cap. 88.
Provided further that no land shall be included in a Freeport
unless such land shall immediately prior to its inclusion be held by
Government under title of absolute ownership, or be in the process
of acquisition by Government under such title in terms of the Land
Acquisition (Public Purposes) Ordinance; and in the latter case the
provisions of article 32 of the said Ordinance shall not apply:
Provided also that where land has been included in a Freeport
zone as aforesaid it shall vest in the Authority by operation of this
Act, without the need of any further formality, under the same title
  4      CAP. 334. ]                MALTA FREEPORTS
under which it was held by the Government, and where the land is
still in the process of acquisition as aforesaid, the acquisition shall
be continued by the Government and on its acquisition it shall vest
in the Authority by operation of this Act without the need of any
further formality.
Exemption from 
certain legislation. 
Cap. 268.
4. (1) The provisions of the Disposal of Government Land
Act, shall not apply to any land as defined in article 2 of the said
Act when such land is situated within a Freeport.
Cap. 283. (2) The provisions of the Carriage of Goods by Sea
(Regulation) Act, shall not apply to goods landed or loaded in a
Freeport.
PART III
 FREEPORT AUTHORITY
Freeport Authority.
Amended by:
X. 1997.3.
Cap. 168.
5. (1) Malta Freeport Corporation Limited, a limited liability
company (No. C9353) registered under the Commercial
Partnerships Ordinance *  on the 25th day of January 1988 shall be
deemed to be constituted under this Act and shall constitute the
Freeport Authority, hereinafter in this Act referred to as "the
Authority".
Cap. 168.
(2) All rights and obligations of whatever nature of the said
Malta Freeport Corporation Limited constituted and registered
under the Commercial Partnerships Ordinance *  as aforesaid, and all
acts done by the said company shall, after the coming into force of
this article, be deemed to be rights and obligations of, and acts done
by, the Authority.
(3) It shall be the duty and function of the Authority:
( a ) to administer the affairs of Freeports with a view to
fostering the economic development of Malta by
encouraging the establishment of industrial and
economic enterprises therein;
( b ) to liaise with all Ministries and departments of
Government and all bodies and other authorities
established by law in the application of the provisions
of article 6(2);
( c ) to advise Government on all matters relating to
Freeports;
( d ) to do all such other acts as may be necessary or
conducive to the attainment of any or all of the said
objectives.
(4) Without prejudice to the generality of the provisions of
subarticle (3), the Minister may vest the Authority with such
supervisory and executive powers, and may impose on the
Authority such conditions, obligations and restrictions as to him
*Repealed by Act XXV of 1995 (Cap. 386.)
                     MALTA FREEPORTS [ CAP. 334.        5
may seem necessary for the proper and fruitful establishment,
development, maintenance, operation, management, control and
conservation of Freeports.
Cap. 386.
(5) Subject to the other provisions of this Act, the Authority
shall continue to be regulated by its memorandum and articles of
association, and by the Companies Act, sohowever that:
( a ) the Authority shall not be dissolved or merged with
another company;
( b ) the Authority shall not alter its memorandum or
articles of association, unless such alteration is first
approved by resolution of the House of
Representatives; and
( c ) no share in the Authority shall be allotted except to the
present members of the company, and no change in
ownership of shares in the Authority carrying a right to
vote in a general meeting or otherwise to appoint
directors shall be effected unless such allotment or
such change is authorised by a resolution of the House
of Representatives.
(6) The Authority shall each year publish in the Gazette and in
two daily newspapers in Malta its profit and loss account and
balance sheet, audited by a certified public accountant and auditor,
together with any notes thereto, by not later than six months after
its accounting date. Such report shall, together with a copy of a
report of the Board of directors of the Authority be placed by the
Minister on the Table of the House of Representatives, not later
than two months after they are made; so however if the House is
not in sitting on the lapse of the said two months, these shall be laid
on the Table of the House not later than one week after it next
meets.
(7) The Authority shall afford to the Minister full facilities for
obtaining information with respect to its property and activities,
and shall furnish him with returns, accounts and other information
with respect thereto, and afford him facilities for the verification of
the information so furnished in such manner and at such times as
the Minister may request.
(8) The Minister may, after consultation with the Authority,
give to the Authority directions of a general character not
inconsistent with the provisions of this Act, and the Authority shall
give effect to any such directions.
Powers of the 
Authority.
Amended by:
X. 1997.4.
6. (1) Without prejudice to the generality of the powers
conferred upon the Authority by this Act, the Authority may:
( a ) do all such acts as may be necessary or conducive to
the attainment of the objectives, duties and obligations
of the Authority;
( b ) enter into agreements with companies that seek to
become licensed to operate in a Freeport;
( c ) allocate areas, spaces, factories, wharves, and any
other facility or structure which may be available in a
  6      CAP. 334. ]                MALTA FREEPORTS
Freeport on such terms as the Authority determines
appropriate:
Provided that the Authority may not by title of sale
or any other similar title alienate any immovable
property situate within a Freeport: 
Provided further that a temporary emphyteusis for
not more than fifty years shall not be considered to be
a title similar to sale;
( d ) exercise, perform, and discharge all such powers,
duties and functions as are by or under this Act vested
in or assigned or delegated to the Authority;
( e ) determine the rents, charges, dues and other levies to
be paid in or in connection with any aspect of a
Freeport or of the services and facilities made
available thereunder;
( f ) by notice in the Gazette, make rules for the control and
management of a Freeport and all activities carried on
therein or connected therewith;
( g ) do all such other acts as are incidental to or
consequential upon the exercise, performance and
discharge of its powers, duties, and functions under
this Act.
(2) The Authority shall, notwithstanding any other law but
subject to the provisions of this Act, be the centre and channel
wherein and through which all Ministries and departments of
Government and all bodies or other authorities established by law
shall act in all matters with respect to all Freeports and all activities
related thereto, and with respect to companies which are licensed,
or which seek to be licensed by the Authority, and as the centre and
channel through which any such company shall apply for and
obtain any permit, licence or other authorisation, or any other thing
it may require, and through which it shall communicate with any of
the authorities aforesaid:
Provided that this subarticle shall not be construed to mean
that any investigation, inspection or other similar act which any
such authority may deem expedient to have carried out and any
information such authority may require, for the purposes of any of
its functions under the law, with respect to a licensed company,
shall be carried out or obtained by the Authority:
Provided further that this subarticle shall not be construed to
derogate from the powers and duties of any Ministry, department of
Government or any body or other authority established by law with
respect to matters relating to defence, public order and health.
(3) It shall be the duty of the Authority to carry out the
functions conferred on it by subarticle (2) promptly and efficiently;
and it shall be its particular duty to ensure that any act or thing to
be done by virtue of the aforesaid subarticle is done to the
satisfaction of the Ministry, department, body or other authority for
which it is required to act.
                     MALTA FREEPORTS [ CAP. 334.        7
Agreements 
entered into by the 
Authority.
7. Every agreement which the Authority enters into under
article 6(1)( b ) shall be reduced to writing, and every such
agreement shall constitute a binding contract for the purposes of
article 27.
Provision of 
industrial 
structures, etc.
8. (1) Where the Authority is satisfied that in the case of a
company licensed to operate in a Freeport it would be consistent
with the aims and objectives of the policy under which the Freeport
was constituted, the Authority may provide for the company
industrial buildings, structures and land in the Freeport including,
on such terms as may be agreed, industrial buildings and structures
constructed or altered according to the requirements of the relative
company:
Provided that immovable property in a Freeport shall not be
transferred to a licensed company under any title for a term beyond
the term of the licence, original or extended, of the company to
which it is so transferred and that the title under which any such
immovable property is transferred shall terminate automatically on
the termination of the licence of the company to which it is so
transferred.
(2) The industrial buildings and structures contemplated in
subarticle (1) shall include especially factories, warehouses
(whether refrigerated or not), storage areas, sheds, tanks, pipelines
and such commercial and industrial equipment as may be
necessary.
(3) The Authority shall also make available such immovable
property in a Freeport under such conditions as may be appropriate
for the purposes of article 9.
Provision of 
utilities.
9. (1) Subject to the provisions of the applicable laws, if any,
it shall be the duty of the Authority to ascertain that every Freeport
shall be provided with the following utilities, that is to say: 
( a ) electric power supply;
( b ) potable and other water;
( c ) postal services;
( d ) telecommunications;
( e ) banking and insurance services;
( f ) fire fighting services;
( g ) waste disposal arrangements;
( h ) adequate road systems;
( i ) wharves, jetties and other similar structures;
( j ) transport for goods and passengers to and from the
Freeport;
( k ) security systems including adequate public lighting.
(2) Nothing in this article shall be deemed to impede the
Authority from procuring the provision of such other utilities as
may be required for the proper operation of any Freeport, or to
exonerate it from its duty of procuring the provision thereof.
  8      CAP. 334. ]                MALTA FREEPORTS
Certificates of 
origin and of non-
manipulation.
10. (1) The Authority may, having regard to a substantial
transformation achieved in the identity of goods or articles and to
the value added through any processing or other operation carried
out in a Freeport, release a certificate indicating that Malta is the
origin of any such goods or articles.
(2) The Authority may, where it is so satisfied, release a
certificate to the effect that any goods or articles which have been
transhipped through a Freeport have not suffered any manipulation
in the Freeport so as to transform their identity.
(3) It shall not be lawful for any person unless a certificate has
first been obtained from the Authority under the provisions of this
article to indicate in any manner that - 
( a ) goods or articles which have been subjected to any
process or other transformation whatsoever in a
Freeport have Malta as their origin;
( b ) any goods or articles transhipped through a Freeport
have not suffered any manipulation in the Freeport. 
PART IV
LICENSED COMPANIES
Licensed 
companies.
11. (1) The Authority may grant licences to companies to
carry out in a Freeport a trade or business being principally -
( a ) the labelling, packaging, sorting, warehousing,
storage, exhibition or assembly of any goods,
materials, commodities, equipment, plant or
machinery; or
( b ) any activity concerned solely with the conduct of a
Freeport including, but not limited to, stevedoring,
wharfage, operation of terminals and container
handling; or
( c ) the rendering of services analogous or complementary
to the activities referred to in paragraph ( a ),
and the status as a licensed company shall be evidenced by the
issue of a licence for this purpose by the Authority.
(2) No company shall be granted a licence contemplated by this
Act unless its activities are, in the opinion of the Authority, wholly
or mainly carried on or exercised within a Freeport.
(3) For the purpose of subarticle (2), the following activities
carried on or exercised outside a Freeport by a licensed company
shall not be deemed to infringe the rule therein set out:
( a ) the management and administration of a company, its
trade, business or property and the holding thereof; 
( b ) the execution of instruments, transactions, negot-
iations or agreements relative to a company’s trade or
business;
                     MALTA FREEPORTS [ CAP. 334.        9
( c ) the transit of goods or their commodities to and from a
Freeport.
(4) The Authority shall have the exclusive right to license
companies to operate in a Freeport. Licences and the relative
benefits shall only be granted to companies which engage in
activities that advance the objectives of Freeports.
Company ceasing 
to be a licensed 
company for illegal 
activities.
12. (1) The Authority shall revoke the licence of any company
which carries on any activity, or has income accruing to it or
derived by it, which consists of or originates from any transaction,
operation or other activity which is a criminal offence against the
law of Malta, or would be such an offence if carried out in Malta,
or has received or has in its possession or control money or other
property the receipt, ownership, possession or control of which is,
or would be, such an offence as aforesaid.
(2) All income, money or other property as is referred to in
subarticle (1) shall be liable to seizure and shall be forfeited in
favour of the Authority and become its property absolutely:
Cap. 37.
Provided that any person wishing to challenge any such
seizure or forfeiture may sue the Authority before the First Hall of
the Civil Court and the provisions of article 73 of the Customs
Ordinance shall apply to such an action, so however that any
reference in that article to the Comptroller and to the Ordinance
shall be read and construed as a reference to the Authority and to
this Act, respectively.
Goods in 
Freeports.
13. (1) In issuing licences for operations in a Freeport, the
Authority shall ensure that a Freeport shall be open to all goods,
irrespective of their nature, quantity and country of origin,
consignment or destination; nor shall there be any limit of time
during which goods may be retained in a Freeport.
(2) Notwithstanding the provisions of subarticle (1) - 
( a ) the Government and the Authority shall have power to
impose such prohibitions or restrictions as to them
may seem justified on grounds of public morality,
public policy or public security, the protection of
human, animal or plant health and life, the protection
of national treasures of artistic, historic or
archaeological value, or the protection of industrial or
commercial property;
( b ) the Authority shall have power to require that goods
which are dangerous or likely to spoil other goods or
which, for any other reason whatsoever, require
special facilities, be placed in premises specially
equipped to receive them.
Reserved 
operations in 
Freeports.
14. (1) The Authority shall not issue a licence to any company
for the purposes of article 11 if the company, in the opinion of the
Authority, is engaged in any operations connected with alcoholic
spirits, tobacco products or those other commodities as the
Authority may from time to time determine by notice in the
  10      CAP. 334. ]                MALTA FREEPORTS
Gazette, unless the relative operations are conducted by a
recognised manufacturer of the commodities.
(2) The Authority shall not allow any part of a Freeport to be
utilised as a bonded store for customs duty purposes in relation to
goods which are or which will be imported into Malta but outside a
Freeport.
(3) The Authority shall not issue a licence to any company
unless it is satisfied that the said company is occupying, under any
title valid at law, or is being allowed by the Authority to make use
of immovable property in a Freeport whether on its own or in
conjunction with other licensed companies.
(4) The Authority may permit any person whomsoever to have
access to and operate in a Freeport, even if such person cannot, for
any reason whatsoever, be a licensed company for the purposes of
article 11 of this Act if, in the opinion of the Authority - 
( a ) it would be useful, necessary or conducive to the better
development or functioning of a Freeport that such
person be granted such access and be allowed to
operate in the Freeport; or
( b ) permission and access as aforesaid are necessary
pursuant to the provisions of article 9.
Certificates and 
fees.
15. (1) The Authority may from time to time release
certificates as it may deem appropriate attesting that a company, or
a company in the process of formation, is, or will be, a licensed
company pursuant to the provisions of this Act, and such certificate
shall be conclusive evidence for the purposes of article 24 and for
all purposes of this Act, and for all related, corollary or ancillary
matters, to the effect that the said company is, or will be, so
licensed.
(2) A licensing fee of one thousand liri shall, unless otherwise
prescribed by the Minister on or after the fifth anniversary of the
enactment hereof, be payable to the Authority by every company to
whom a licence is issued pursuant to the provisions of this Act; and
an annual fee of like amount shall thereafter be payable upon each
anniversary of the company being granted a licence:
Provided that no alteration to the licence fee shall have effect
before the expiration of one year from the publication of such
alteration in the Gazette.
PART V 
FISCAL REGIME
Exemption from 
customs duty and 
the excise laws.
Amended by:
X. 1997.5.
16. (1) Subject to the provisions of this Act, all goods
imported into a Freeport by a licensed company or by the Authority
shall be exempt from customs duty:
Provided - 
                     MALTA FREEPORTS [ CAP. 334.        11
( a ) such goods are imported exclusively for the con-
struction, alteration, reconstruction or extension of an
industrial building or structure within a Freeport or for
any extension thereof, or for the purpose of effecting
repairs to such an industrial building or structure or the
extension thereof, or constitute equipment, spare parts,
machinery or plant, contained in any such industrial
building or structure or extension thereof, or are
intended to replace any equipment, machinery or plant
in any such industrial building or structure or
extension thereof, and in all cases for the purposes of
the Authority or of the trade or business carried on or
intended to be carried on by the company; or
( b ) such goods are raw materials, components, inter-
mediate products, by-products, unfinished goods, or
other goods imported for the purposes for which a
company has been granted a licence by the Authority
under the provisions of this Act.
(2) Every company which imports into a Freeport any goods
free of customs duty under subarticle (1) shall - 
( a ) keep proper and sufficient records of the goods which
it so imports; and
( b ) permit the Authority at all reasonable times to inspect
the said records and to have access to any premises of
the company for the purpose of examining any such
goods which it may believe to be therein and of
satisfying itself of the accuracy of the said records.
(3) No goods imported into a Freeport by the Authority or by a
licensed company free of customs duty under the provisions of
subarticle (1) shall be sold, given away or otherwise disposed of
other than to the Authority or another licensed company except -
( a ) through re-export from Malta, whether in the same
state as when imported, or otherwise, or, subject to
such restrictions as to importation as would be
applicable had such goods been imported from outside
Malta, by transfer into Malta outside a Freeport on the
payment of customs duty in accordance with the
provisions of subarticle (6); or
( b ) in the case of an industrial building or structure for the
construction, alteration, reconstruction, extension or
equipment of which such article was imported into a
Freeport to the person for whom such industrial
building or structure was constructed; or
( c ) in the case of materials, components or accessories
imported into a Freeport for any purpose referred to in
article 11(1):
(i) if incorporated in the goods or commodities in
respect of which they were imported; or
(ii) subject to such restrictions as to importation as
would be applicable had such goods been
  12      CAP. 334. ]                MALTA FREEPORTS
imported from outside Malta, by transfer into
Malta outside a Freeport after payment of the
amount of customs duty which would have been
payable upon the importation of such materials
or components but for subarticle (1).
(4) When goods imported into a Freeport by the Authority or
by a licensed company free of customs duty are sold, given away or
otherwise disposed of to the Authority or a licensed company in
terms of subarticle (3), then such goods shall for the purposes of
this Act be deemed to have been imported by the Authority or by
the company to which they are sold, given away or otherwise
disposed of.
(5) Subject to such conditions and the giving of such security
as he may determine, the Comptroller shall - 
( a ) allow any goods destined for a Freeport to be landed in
Malta free of customs duty:
Provided that in all cases, the said goods shall
(unless otherwise permitted by the Comptroller) be
transferred into the Freeport within seven working
days of having been landed;
( b ) allow the transit of any goods destined for export from
a Freeport to any port or airport in Malta without
levying customs duty thereon:
Provided that the said goods shall (unless
otherwise permitted by the Comptroller) be loaded on
a ship or aircraft within seven working days of having
exited from the Freeport.
Cap. 337.
(6) Whenever any goods which have entered a Freeport free of
customs duty in accordance with the provisions of this article are
transferred out of a Freeport and remain in Malta otherwise than for
the purpose contemplated in subarticle (5)( b ) or, if owned by the
Authority, for use by the Authority in pursuance of its duties or
functions hereunder outside a Freeport, such goods shall as soon as
so transferred be deemed to have been imported into Malta and
subject to customs duty under the relative provisions of the Import
Duties Act where applicable:
Provided that in the case of any goods which have been
processed in a Freeport and qualify for certification as having been
made in Malta pursuant to the provisions of article 10, the nature of
the goods, the value and the quantity to be taken in consideration in
determining customs duty shall, at the request of the person liable
to pay duty, be those which would be taken into account had the
goods not been processed as aforesaid.
(7) Where customs duty has been paid in respect of any goods
upon their importation into Malta, no claim for refund of such duty
shall be competent solely on the grounds that such goods are later
transferred into a Freeport.
(8) The excise laws shall not apply to any goods produced in a
Freeport unless such goods are entered for consumption in Malta
                     MALTA FREEPORTS [ CAP. 334.        13
outside a Freeport.
Safeguards for 
customs and excise 
duties.
17. (1) The Authority shall - 
( a ) ascertain that every Freeport is equipped with
adequate control systems to prevent evasion of
customs and excise duties that would be payable to the
Government but for the provisions of this Act;
( b ) ensure that every area designated as a Freeport
pursuant to the provisions of this Act is properly
enclosed; and
( c ) determine the entry and exit points thereof,
and in every such matter the Authority shall conform with any
requirements of the Comptroller in respect thereof, unless the
Prime Minister otherwise directs.
(2) Any person entering a Freeport from any place in Malta
outside a Freeport zone or leaving a Freeport other than to a
destination outside Malta with any goods shall answer such
questions as the Comptroller may put to him with respect to the
said goods and shall, if required by the said Comptroller, produce
those goods for examination at such place as the Comptroller may
direct.
(3) At the time when a vehicle is entering or leaving a Freeport
the Comptroller may board the vehicle and search any part of it.
(4) The Authority shall not permit any person to take up
residence within a Freeport.
(5) The Authority may deny access to a Freeport to any person
who does not provide such guarantees as it may deem necessary
regarding the proper application of any rules, regulations or orders
in respect thereof.
(6) Every licensed company shall make available to the
Authority such records in writing relating to the goods it is
importing or will be importing into a Freeport as may be necessary
to identify their nature, quantity and country of origin, consignment
or destination, which records shall be available for inspection by
the Comptroller.
(7) The Minister may, with the advice of the Authority, by
regulations published in the Gazette, make provision with respect
to the movement of goods into, and the removal of goods from any
Freeport, and the keeping, securing and the treatment of goods
which are within a Freeport.
(8) Without prejudice to the generality of subarticle (7),
regulations made thereunder may make provisions - 
( a ) permitting goods in a Freeport to be destroyed without
payment of customs or excise duties, in such
circumstances and subject to such conditions as the
Authority may determine;
( b ) requiring that specified operations within a Freeport
are to be carried out in such manner and subject to
  14      CAP. 334. ]                MALTA FREEPORTS
such restrictions as may be imposed by or under the
regulations;
( c ) establishing the penalty which may be imposed by any
court in the event of non-compliance with any
conditions or restrictions imposed in virtue of
paragraph ( b ):
Provided such penalty shall not exceed a fine
( multa ) of five thousand liri together with the
forfeiture of the goods to which the offence refers;
( d ) specifying the information to be given to the Authority
in respect of goods imported into a Freeport and the
form in which, persons by whom, and time within
which, such information must be given.
Exemption from 
income tax.
Amended by:
X. 1997.6.
18. (1) A licensed company shall be exempt from paying
income tax on the gains or profits arising to it from a trade or
business exercised in a Freeport pursuant to the provisions of
article 11.
(2) For the purposes of the Income Tax Acts, the income or part
thereof of any company for any year of assessment in respect of
which exemption from income tax operates under the provisions of
this article shall be computed in the manner set out in the said Acts
and in accordance with their provisions:
Provided that the provisions of the Income Tax Acts, shall be
superseded or replaced as necessary by the provisions of this Act.
 (3) Interest and royalties paid by a licensed company in respect
of or related to operations or transactions exempt from income tax
under the provisions of subarticle (1) shall also be exempt from
income tax:
Provided that such exemption shall not operate where interest
or royalties are paid to a person ordinarily resident or domiciled in
Malta.
Tax free dividends. 19. (1) Any dividends (or part thereof) distributed by a
licensed company out of its gains or profits, or part thereof, which,
under the provisions of this Act, have been relieved from the
payment of income tax, shall be exempt from income tax in the
hands of the members of the company in receipt of such
distribution:
Provided that the provisions of this subarticle shall not apply
to a dividend distributed to a person ordinarily resident or
domiciled in Malta.
(2) Where a dividend to which subarticle (1) applies is
distributed to a member which is also a company (in this subarticle
referred to as "the second company"), the said dividend shall
likewise be distributable by the second company to its own
members in the form of dividends exempt from income tax in the
hands of the recipients, and where a member of the second
company is again a company, the preceding provisions of this
subarticle shall apply  mutatis mutandis  as though references to the
                     MALTA FREEPORTS [ CAP. 334.        15
first company were references to that member, and the principle set
out in this subarticle shall continue to be applied for as long as the
gains or profits or part thereof to which this article applies are
distributed by way of dividends:
Provided that the provisions of this subarticle shall cease to
operate where a dividend is distributed to a person ordinarily
resident or domiciled in Malta.
Exemption from 
duty. 
Amended by:
X. 1997.7.
Cap. 364.
20. Notwithstanding the provisions of the Duty on Documents
and Transfers Act, no duty shall be payable thereunder in respect
of:
( a ) the allotment of any newly issued shares or stock of a
licensed company;
( b ) the purchase, transfer, assignment or negotiation of
any share or stock of such a company;
( c ) the purchase, sale or other transfer of any asset by a
licensed company or by the Authority, other than a
sale or other transfer to a person domiciled or
ordinarily resident in Malta unless such person is the
Authority or another licensed company;
( d ) the transfer of any hypothec, mortgage or other charge
over any asset of a licensed company or of the
Authority;
( e ) valuations made on behalf of a licensed company or of
the Authority;
( f ) receipts given by a licensed company or by the
Authority;
( g ) any application filed by a licensed company or by the
Authority;
( h ) insurance policies issued in favour of a licensed
company or of the Authority.
Transitory 
provisions with 
respect to articles 
18, 19 and 20.
Added by:
IV. 2001.35.
Amended by:
IV. 2003.18.
20A. (1) With effect from such date *  as may be determined by
the Minister by order in the Gazette, the provisions of articles 18,
19 and 20 shall only be applicable to companies which were
licensed under this Act on the day immediately preceding such
date, and the said articles shall continue to apply to these
companies up to and including the year of assessment 2021.
(2) Notwithstanding the provisions of subarticle (1), with
effect from the year of assessment 2004, no person shall be entitled
to the benefits provided by articles 18 and 19 and with effect from
the first day of January 2003 no person shall be entitled to the
benefits provided by article 20:
Cap. 325.
Provided that a person may qualify for such benefits as may
be applicable to him under the Business Promotion Act.
* See  Legal Notices 134  and 243 of 2001 .
  16      CAP. 334. ]                MALTA FREEPORTS
Exemption from 
Exchange Control. 
Cap. 233.
21. (1) Subject to the provisions of subarticle (2), licensed
companies shall be exempt from the provisions of the Exchange
Control Act, to the extent that such exemption shall ascertain:
( a ) free and unrestricted foreign exchange transfers by
licensed companies;
( b ) that no limits shall be set regarding the holding of
shares in licensed companies by persons not resident
in Malta;
( c ) unrestricted repatriation of dividends paid by licensed
companies where the dividends are exempt from
income tax under the provisions of article 19;
( d ) free transfers of shares in licensed companies;
( e ) unrestricted repatriation of the proceeds of liquidation
of licensed companies;
( f ) right of free management by licensed companies of
their foreign currency;
( g ) the unrestricted repatriation of any sum due as wages
or salaries to expatriate employees referred to in
article 22:
Provided that such exemptions shall not apply (except for
normal banking transactions) in respect of transactions and
operations carried out with persons resident in Malta.
(2) The exemptions granted by this article shall only be due to
licensed companies in which Maltese citizens (including
companies) are entitled to less than forty per cent of the nominal
value of the issued share capital, excluding any part thereof which,
neither as regard dividends nor as regard capital, carries any right
to participate in any distribution of profits beyond a specified
amount.
Expatriate 
employees.
Amended by:
IV. 2001.35. 
Cap. 217.
22. (1) The Authority may certify that an individual who is
not an exempt person under the Immigration Act, would, if granted
a licence under the said Act to be employed with a licensed
company, or with the Authority, contribute through his technical or
managerial knowledge and experience towards the proper and
fruitful establishment, development, maintenance, operation,
management, control or conservation of a Freeport or the
Authority, and of their operations.
Cap. 123.
(2) Where subject to the provisions of the Immigration Act, an
individual who is not domiciled in Malta or who, if so domiciled, is
not ordinarily resident therein, is employed with a licensed
company or with the Authority, the income tax on the chargeable
income of such an individual shall be charged at the rates
contemplated by the Income Tax Act, so however that any rate of
tax in excess of thirty cents on every lira shall be reduced to thirty
cents.
                     MALTA FREEPORTS [ CAP. 334.        17
Cap. 318.
(3) Individuals referred to in subarticle (2) who are employed
with a licensed company or with the Authority, and such licensed
company and the Authority in respect of such individuals, shall be
entitled to be exempt from the provisions of the Social Security
Act, and of any enactment replacing that law.
(4) The used personal belongings, including one motor car
suitable for family use, of any individual referred to in subarticle
(2) of this article, imported into Malta not later than six months
after his first taking up residence in Malta, may be so imported free
of customs duty:
Provided that duty shall be payable on anything imported free
of duty under this subarticle if and when such thing is sold,
assigned or otherwise transferred to a person resident in Malta:
Provided further that with effect from such date as may be
determined by the Minister by order in the Gazette, the provisions of
this subarticle shall only be applicable with respect to importations
made prior to that date.
(5) With effect from such year of assessment *  as may be
determined by the Minister by order in the Gazette, the provisions
of subarticles (2) and (3) shall only apply with respect to
remuneration paid in the year preceding that year of assessment and
in the following four years, provided that such remuneration is paid
to individuals in respect of whom this article applied in the year
preceding the year of assessment determined by the Minister as
aforesaid.
Exemption from 
death and donation 
duty. 
Cap. 239.
23. (1) Notwithstanding anything contained in the Death and
Donation Duty Act † , no duty shall be payable thereunder in respect
of any interest in a licensed company possessed by any person
when - 
( a ) such interest is comprised in a chargeable transmission
under the said Act, and
( b ) the former owner thereof before the happening of the
chargeable transmission and the new owner after its
happening are both persons not domiciled in Malta,
and
( c ) the interest is an interest to which the provisions of
this article apply.
(2) The provisions of this article apply to an interest in a
licensed company being - 
( a ) any share in or debenture thereof;
( b ) any dividend distributed or due to be distributed by the
said company;
( c ) any money loaned or advanced to the company, and
any other credit whatsoever, irrespective of the way in
which the loan or advance has been made, or has
* See  Legal Notice 134 of 2001.
†Repealed by Act XVI of 1993.
  18      CAP. 334. ]                MALTA FREEPORTS
resulted, and the security granted therefor;
( d ) any interest on money or other income paid or due to
be paid by the company before the happening of the
chargeable transmission.
General rule 
regarding 
exemptions.
24. The exemptions contemplated by this Part shall only apply
to transactions and operations which are relevant to the purposes
for which the Authority has been appointed pursuant to the
provisions of article 5(1), or for which a company has been or will
be licensed pursuant to the provisions of article 11(4).
PART VI 
ADMINISTRATIVE ARRANGEMENTS
Records and 
certification.
Amended by:
X. 1997.8.
25. (1) No exemption or other benefit which may be granted
or obtained under this Act shall be so granted or obtained, and no
entitlement thereto shall exist notwithstanding anything contained
in this Act unless - 
( a ) proper and sufficient records and accounts, including
appropriate supporting documentation, have been
maintained for the relative period, by the relative
licensed company;
( b ) separate accounts have been kept as may be necessary
to identify and quantify the exemption or benefit;
( c ) such computations, returns, statements, particulars or
documents as may be necessary to establish clearly the
entitlement to an exemption or benefit are submitted as
appropriate, including submission to the Authority.
Cap. 386.
(2) No claim, statement, account or document whatsoever that
is in any way connected with the entitlement or presumed
entitlement to any exemption or benefit contemplated under the
provisions of this Act shall be considered or taken into account
unless certified by a certified public accountant and auditor to the
same effect that the balance sheet and profit and loss account of a
company are to be certified under the provisions of the Companies
Act, and for the purposes of this subarticle the provisions of
articles 179 and 181 of the said Act shall apply.
Information 
required by the 
Authority.
26. Any licensed company or other person purporting or
seeking to obtain or enjoy any exemption or other benefit under the
provisions of this Act, or who has obtained such an exemption or
other benefit, shall - 
( a ) furnish to the Authority and to any other authority
such information, accounts, statements and other
documents which the Authority or that other authority
may deem to be necessary for the purposes of this Act;
                     MALTA FREEPORTS [ CAP. 334.        19
( b ) attend or send a representative to attend before the
Authority or other authority and answer any question
lawfully made in connection therewith;
( c ) provide the Authority or other authority with
reasonable access to all premises, places, books and
other documents, and allow copies to be made thereof.
Guarantee of 
exemptions and 
benefits.
27. (1) Where a licensed company or its officers or employees
are granted or become entitled to an exemption or other benefit
under the provisions of this Act, there shall be deemed to have
come into existence a contract between the company or its officers
or employees and the Government, or the Authority, as the case
may be, guaranteeing for a period of fifteen years from the grant of
the relative licence, the grant and enjoyment of the relative
exemption or other benefit in accordance with the provisions of this
Act.
(2) Where any exemption or other benefit is not due as of right
under the provisions of this Act to any beneficiary, but depends on
the use of discretion vested in any person or authority, the use by
such person or authority of the discretion so vested in him in favour
of a beneficiary shall constitute a contract between the beneficiary
and the Government, or the Authority, as the case may be,
guaranteeing for a period of fifteen years from the use of such
discretion, the grant and enjoyment of the exemption or other
benefit in accordance with the provisions of this Act.
(3) The guarantees given by this article shall apply also against
retrospective action, whether by legislation or otherwise, as would
nullify any rights, exemptions or privileges so guaranteed.
(4) The provisions of this article shall be without prejudice to
the controlling and regulatory provisions laid down in this Act. 
(5) A licensed company or other beneficiary may, at any time,
by notice in writing, elect not to be granted or to take any incentive
or benefit otherwise due to it or him under the provisions of this
Act. Such notice shall specify the date from which its election shall
be operative, which date shall invariably be the first day of a year,
or of a year of assessment or of any other financial period, and shall
be irrevocable and indefinite in respect of the matters on account of
which it has been made.
Revocation for 
non-compliance.
28. (1) Where a licensed company fails to comply or cause
compliance with any of the conditions attached to the grant of an
exemption or other benefit under this Act or engages in activities
inconsistent with the objectives of a Freeport, the Authority may
either revoke the grant of the exemption or other benefit or by
notice in writing require such company within thirty days of such
notice - 
( a ) to comply or cause compliance with such conditions or
to terminate any activity inconsistent with a Freeport;
or
( b ) to establish to the satisfaction of the Authority that
failure to comply or cause compliance with such
  20      CAP. 334. ]                MALTA FREEPORTS
conditions, was due to some cause beyond its control
and that there are actual prospects of complying or
causing compliance with such conditions, within such
time as the Authority may consider reasonable.
(2) Where a company establishes to the satisfaction of the
Authority that failure to comply or cause compliance with any
conditions attached to the grant of any incentive or benefit under
this Act was due to some cause beyond its control, and that there
are actual prospects of complying or causing compliance with such
conditions within a reasonable time, the Authority may authorise
such reasonable postponement for the purpose of compliance with
such conditions, as it thinks fit.
(3) Where a licensed company -
( a ) having been required so to do by notice under
subarticle (1), fails to establish to the satisfaction of
the Authority that its failure to comply or cause
compliance with any conditions attached to the grant
of any exemption or other benefit was due to some
cause beyond its control and that there are actual
prospects of complying or causing compliance with
such conditions within a reasonable time; or
( b ) having been allowed a postponement under subarticle
(2) of this article, fails within the period of such
postponement to comply or cause compliance with
such conditions,
the Authority may revoke any exemption or other benefit granted to
the company under this Act, and such revocation shall be operative
from such date as may be determined by the Authority.
(4) Where the grant of any exemption or other benefit to a
licensed company under this Act is revoked in accordance with the
provisions of this article, such company shall pay to the
Government or to the Authority, as the case may be, any sums
which it would have paid to the Government or the Authority but
for the provisions of this Act.
Procedure 
regarding disputes.
29. (1) The Authority shall not - 
( a ) revoke any licence granted under article 11; or
( b ) revoke any grant or exemption or other benefit under
this Act,
unless the company in question has - 
( a ) been notified in writing of the action the Authority
proposes to take; and
( b ) has had an opportunity for a hearing before the
Authority.
                     MALTA FREEPORTS [ CAP. 334.        21
Cap. 325.
(2) Any dispute relating to the interpretation of the provisions
of any agreement under this Act or the right of any party under this
Act or the exercise by the Authority of any powers vested in it by
this Act (except for the matters contemplated in articles 8, 9, 10, 11
and 14) shall, unless the parties agree otherwise, be referred for
arbitration and settlement to the Appeals Board constituted under
article 28 of the Industrial Development Act:
Provided that no appeal shall lie from any award made by the
said Board:
Provided further that proceedings before the Board shall be
regulated,  mutatis mutandis , as if reference under this article were
an appeal filed to the Board under the said Act.
Cap. 12.
(3) Except for the purpose or in execution of a judgment given
in pursuance of any action mentioned in subarticle (5), no property
of any kind belonging to a licensed company shall be subject to any
precautionary or executive act or warrant as is mentioned in the
Code of Organization and Civil Procedure.
(4) No director or other officer of any licensed company, and
no person being a member of or having an interest in any such
company, shall be subject to any precautionary or executive act or
warrant as aforesaid in respect of any obligation or other liability of
the company.
(5) An action referred to in subarticle (3) is either- 
( a ) an action for the enforcement of an obligation or other
liability of the company; or
( b ) an action for the recovery of any property acquired or
held by the company, or otherwise in its possession or
control, and originating from any transaction,
operation or activity referred to in article 12(2).
(6) Notwithstanding the foregoing provisions of this article, no
warrant or other act shall be issued by the court unless the applicant
first satisfies the court that the warrant or other act may be issued
under this article.
Power to make 
regulations.
30. (1) The Minister may from time to time make regulations
generally for carrying out or putting into effect the provisions of
this Act and may, in particular, by those regulations prescribe for
any such matters as are authorised by this Act to be prescribed.
(2) Regulations made by the Minister or rules made by the
Authority, as the case may be, under any of the provisions of this
Act may be made in the English language only.
PART VII 
OFFENCES AND PENALTIES
Penalty for making 
incorrect 
statements, etc.
31. Any person who, without reasonable excuse, prepares any
incorrect statement or gives any incorrect information in relation to
  22      CAP. 334. ]                MALTA FREEPORTS
any matter or thing falling under this Act, shall be guilty of an
offence and shall, on conviction, be liable to a fine ( multa ) of not
less than five hundred liri and not exceeding five thousand liri.
Provisions relating 
to fraud, etc.
32. Any person who wilfully with intent to obtain any
incentive or benefit under this Act or to assist any other person to
do so -
( a ) omits from a return or any other document or
statement made, prepared or submitted for the
purposes of or under this Act, any matter which should
be included therein; or
( b ) makes any false statement or entry in any return or
other document or statement prepared or submitted for
the purposes of or under this Act; or
( c ) gives any false answer, whether verbally or in writing
to any question or request for information asked or
made in accordance with the provisions of this Act; or
( d ) prepares or maintains or authorises the preparation or
maintenance of any false books of account or other
records or falsifies or authorises the falsification of
any books of account or records; or
( e ) makes use of any fraud, art or contrivance whatever or
authorises the use of any such fraud, art or
contrivance,
shall be guilty of an offence, and shall for each such offence be
liable, on conviction, to a fine ( multa ) of not less than one thousand
liri and not exceeding ten thousand liri or to imprisonment for any
term not exceeding two years, or to both such fine and
imprisonment.
General penalty. 33. If any person contravenes or fails to comply with any of
the requirements of this Act or of any regulations made thereunder,
in respect of which no special punishment is provided, such person
shall be guilty of an offence and shall for each such offence be
liable, on conviction, to a fine ( multa ) of not less than one hundred
liri and not more than five hundred liri.
Provision with 
respect to offences.
34. The provisions of this Act establishing offences and
punishments in respect thereof shall not affect the operation of any
other law establishing offences and punishments in respect of the
same acts or omissions and shall not, in particular, affect the
application of any higher punishment under any other law.
Prescription for 
proceedings.
35. Proceedings for an offence under this Act may be
commenced at any time within five years from the date of the
commission of the offence.
                     MALTA FREEPORTS [ CAP. 334.        23
SCHEDULE
[ARTICLE 3]
