‘Some people stand in the darkness
Afraid to step into the light
Some people need to have somebody
On the edge of surrenders inside’
‘Don’t you worry,
It’s gonna be alright
‘Cause I’m always ready
I won’t let you outta my sight’
‘I’ll be ready
(Whenever you fear) oh don’t you fear
(I’ll be ready)
Forever and always, I’m always here’
I am sure many of us will be singing softly this song which evokes some vivid images of red-swimsuit-dressed lifeguards running on sun-kissed Californian beaches. Right?
Baywatch wasn’t just a TV show, it was a cultural phenomenon. It launched the career of Pamela Anderson, who went on to become one of the world’s biggest female symbols. At the helm of it all was David Hasselhoff as the often-shirtless Mitch Buchannon.
According to Guinness World Records, Baywatch is the most watched television programme with over one billion viewers across 148 countries and translated into 44 different languages. There are very few nations around the world unfamiliar with the self-assured David Hasselhoff and the well-known Pamela Anderson.
In 2001, when Pearson Communication, the company that produced the show at the time, cancelled the series after 11 years, Baywatch was valued at $1 billion worldwide. It is estimated that Hasselhoff alone has been making around $4 million every year since year one thanks to his beach patrolling role.
We of course have no way of telling what structure the Pearson Communication or the star David Hasselhoff himself have in place for their royalty streaming, but this is to reflect on the immense potential value of Intellectual Property (IP).
In the modern world, IP can be one of the most valuable assets both for companies or individuals; choosing the right jurisdiction to hold and develop IP is, therefore, a key-strategic decision to make.
It is essential that the chosen location is one that can serve the organisation’s business model or individual’s circumstances, provide protection and safeguard their IP and also optimise IP management in a tax efficient manner.
Malta is a jurisdiction which satisfies each of these key criteria.
In Malta, any literary work and audio-visual work is considered intellectual property and falls under the legislation of the Copyright Act. Artistic work receives copyright protection even if it was not previously registered, sufficing to be made public. Copyright offers its authors moral and economical rights. Copyrights are available for 70 years after the death of its author.
Also, Malta has updated its law regarding the protection of copyright, patents and trademarks in order to be in line with the EU intellectual property legislation. In 2007, Malta became member of the European Patent Convention (EPC) and the Patent Cooperation Treaty and, in 2009, it became a signatory member of WIPO Copyright Treaty and Performances and Phonograms Treaty.
This means that in Malta it is possible to register various IP rights at a European Union level. The advantage of EU registration is that a trademark or other IP right will benefit from enhanced protection and recognition on the territories of all member states.
An intellectual property right obtained in Malta can also be registered at an international level with the World Intellectual Property Organization (WIPO). The main requirement for obtaining world recognition of a Maltese trademark or other IP right is to first have it registered in Malta.
The European Union member state offers the unique combination of a favourable onshore tax regime in a heavily-regulated business environment and access to an extensive network of Double Taxation Agreements (DTAs) which is essential for tax efficient IP management.
Malta’s tax regime provides various fiscal incentives to Malta-based companies purposely set up to hold IP such as patents, trademarks, copyrights and intellectual property rights. When a company in Malta derives royalty income from qualifying IP rights, any income stemming from those rights is exempt from corporate tax in Malta.
Dividend and royalty payments made by Maltese companies are not subject to withholding tax in Malta. Malta also caps the amount of withholding tax applied by countries with which Malta has a tax treaty. The capped percentage may not exceed 10% of the dividend and/or royalties being paid into the Maltese company.
How we can help
At Abacus, we understand the importance of intellectual property rights and their increasing significance to business. We are geared to meet the demands of our clients by offering focused and strategic expertise in a professional and proper manner. We have a diverse international client base and specialise in setting up tax efficient structures to maximise our client’s future earnings. Furthermore, we have a dedicated team of tax professionals who stay abreast of tax developments and who are able to react effectively and efficiently to the implications of changes for the structures that we manage.
For more information on how Abacus can assist you with Intellectual Property in Malta, please contact Alex Beetham at email@example.com
No action should be taken on the basis of this note, nor should it be construed as amounting to tax, legal or VAT advice. Suitable and professional tax advice on any such planning should always be obtained before entering into transactions of this kind. Particularly, as there may be tax issues/ leakage in the country where the IP is being exploited and in the jurisdiction of residence of the shareholder.