Will Brexit impact Maltese businesses?
On the 29th of March, 2019, The United Kingdom is set to leave the European Union. Whilst very little has been negotiated so far, the EU and the UK are working hard to reach a trade agreement that will seek to limit disruption as much as possible.
When the UK leaves the EU in five months’ time it will be automatically treated as a third country and as such, different rules will apply on import, export, and migration.
If you or your business is actively engaged in the import or export of products from the United Kingdom, you will be obliged to declare these goods, even if you transport them through EU countries. Excise goods will also be affected and you will have to deal with EMC procedures as well as filing import/export declarations.
Furthermore, Malta is set to lose the UK as its strongest tax harmonisation ally, according to Marisa Xuereb, Director of Raesch Quarz LTD.
“The biggest risk for Malta as a whole and for Maltese businesses will come after Brexit when the island sits at the EU negotiation table without Britain.”
It seems that very few businesses have yet to prepare themselves for the worst case scenario which could result in serious fiscal challenges after the UK leaves. Despite Malta’s long-term special relationship with the UK, this is likely to become tense as Malta vies for co-location, or as an alternative to a UK base.
Issues also arise around the uncertainty of where British citizens who reside in Malta will stand in terms of residency and employment, as many based their applications on being EU citizens. The right to work and reside in EU member states and the effect that the UK withdrawing from the EU will have on the thousands of British expats in Malta, as well as the many Maltese in Europe, hangs at a balance.
Businesses that employ UK staff are advised to see what the outcome of ongoing negotiations are, whilst being reminded of the fact that Malta is still a part of the British Commonwealth, and as such, British citizens should not be treated as foreigners.
With just a few short months to go until the UK officially leaves, businesses, expats, and legal professionals will just have to wait and see how this monumental occurrence will impact businesses both here, and in Britain.
If you are interested to incorporate your company in Malta, E&S Group can help you. Send us an email on [email protected] for further information.