The Malta Stock Exchange (MSE) has welcomed the importance given to capital market development in this year’s Budget.

The Exchange featured in a number of proposals that should have a beneficial effect on the Maltese capital market.

“These measures will no doubt make the Malta Stock Exchange a more attractive venue both for investors as well as for companies seeking to raise capital and finance. The initiatives announced by the minister, in fact serve as the perfect backdrop for the Capital Market Strategic Plan that the Exchange will announce on October 27,” a spokesman said.

For small investors who hold no more than 0.5 per cent of an issued share listed on the Malta Stock Exchange, a tax refund can be claimed for dividends paid out from profits made as from January 1, 2017, according to their personal income tax rates.

Through the Risk Incentive Scheme, investors will also benefit from tax credits of up to €250,000 a year when investing in qualifying SMEs admitted to Prospects which is owned and operated by the MSE, directly or through qualifying SME funds.

Investors in SMEs admitted to Prospects will now also benefit from capital gains exemptions – as in the Regulated Market – with reductions in capital gains tax directly commensurate to the percentage of shares offered to the public with total exemption on companies with 25 per cent of the equity in the public hands.

For companies seeking to list their equities on the market for the first time, the Budget has also introduced the removal of the payment of 15 per cent on the capital gains.

This important measure makes it more attractive for shareholders of existing companies, in many cases family-run businesses, to list their companies through the issue and sale of equity on the market since they will now pay no capital gains tax on their shareholdings as at the point of admission.

Companies admitted on Prospects will also benefit from a similar tax incentive, which is directly commensurate to the percentage of shares offered to the public. The government has also introduced additional investing options such as green and pension-oriented bonds.

“It is hoped that these measure will incentivise more companies to list on the Exchange thus offering Maltese savers and pensioner’s additional avenues from where to invest,” the MSE said.

The chairman of the Malta Stock Exchange, ­Joseph Portelli, also welcomed these initiatives as being very positive for the Maltese Capital Markets and local investors.

“These proposals coupled with the soon to be announced National Capital Markets Strategic Plan will take our capital markets to a significantly higher level and in the process could benefit our economy handsomely,” he said.