Those in the know about QROPS are hinting Malta is the new go-to place for offshore pensions following the closure of hundreds of schemes.
Guernsey reigned supreme until tax rules changed in April 2012 – and now ex pats and international workers with UK pension rates are looking to Malta to fill the breach.
QROPs – short for qualifying recognised overseas pension schemes – are the most favoured offshore pension scheme for ex pats, with thousands of products offered in around 50 countries across the world.
Billions of pounds have been switched from UK pension funds in to QROPS since the schemes were introduced in April 2006.
However, why is Malta the new favoured home for ex pat pensions?
First, QROPS are a unique pension product for ex pats and international workers with UK pension rights, so as most retirement savers have a British connection, they like to look to somewhere that speaks English to do business.
Malta also ticks other boxes for QROPS investors -
- The island has robust financial regulation
- Malta is a full member of the EU and British Commonwealth with a tradition of political and financial security
- Pensions regulated on the island automatically meet HM Revenue & Customs criteria for QROPS
Financial laws regulating pension firms also give investors extra protection.
Companies running pension schemes on Malta must register with the Malta Financial Services Authority, which runs on similar lines to the UK Financial Services Authority.
Malta also builds QROPS on HMRC pension and tax rules rather than looking to exploit loopholes in the legislation to give pension savers financial advantages.
Politicians in Guernsey reckon that this was the Channel Island’s downfall as a financial centre as a succession of tax changes in the UK to close the loopholes have decimated business on the island – ranging from 300 QROPS schemes closing for transfers in to the collapse of mail order firms working in grey areas of UK VAT laws.