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Malta

Company limited by shares

Malta is a reputable, compliant and transparent financial hub, and the gateway to the European Union, a market of more than 500 million people.

Due to its advantageous tax regime, Malta is the jurisdiction chosen by a large number of international companies and holding companies, to establish their headquarters and do business in the European Union.

Although its corporate standard rate is 35%, in practice there is a system of tax credits and refunds for individuals and corporate shareholders of part of the tax suffered on the distribution of profits.

The tax refund may be either a six-sevenths refund for trading income, a five-sevenths refund for passive interest and royalties, or a two-thirds refund for passive income. This may lead to a reduction of corporate tax to effective tax rates of between 5 and 10 percent, the lowest across the European Union.

Holding companies may benefit from a participation exemption. Dividend income, profits from a foreign P.E., and capital gains may be tax-exempt if the holding fulfill certain participation conditions. Furthermore, certain investments that yield a fixed rate of return may also be tax-exempt.

Malta is a full member of the EU and since 2008 has adopted the Euro as its official currency, with the benefits that it entails, such as the availability of funding opportunities or the European tax directives, including the Parent-Subsidiary Directive, the EU Mergers Directive and the EU Interest & Royalties Directive.

Malta has also signed a large list of Double Taxation Agreements, and companies doing business in Malta have access to an English-speaking high-skilled workforce, make it even more attractive to incorporate in the jurisdiction.

Malta costs to obtain and administrate licenses are one of the lowest of the European Union and often valid for the whole EU territory. This makes Malta an attractive jurisdiction to establish businesses related to e-gaming, shipping, airline or investment funds.

In addition, Malta company registration process is simple and straightforward, being possible in as little as 1 day to incorporate a company.

It is important to note that corporate tax residence in Malta is defined by the place of management and control, so to qualify for tax residency it may not be sufficient to just hold annual general meetings in Malta, decisions have to be really taken there. A company incorporated in Malta but not ordinarily resident, is subject to taxation on Malta-source profits and profits remitted to Malta.

Malta is a compliant jurisdiction leading OECD and FATF compliance, committed to implement the OECD’s automatic exchange of information for tax purposes (AEoI) by 2017.

All in all, Malta is a reputable jurisdiction and its private company limited by shares an excellent vehicle, whether to conduct international trade, hold immovable assets and intellectual property, conduct e-gaming business, or as a holding group company, a ship-owning company, an investment vehicle or a captive insurance company.

Taxes

Tax residency – A company is tax resident in Malta, if it is incorporated in Malta or the management and control of its business is exercised in Malta

Basis – Companies both domiciled and resident in Malta and is consequently taxable on a worldwide basis. A non-Maltese incorporated company that is resident in Malta through management and control is subject to Maltese tax on income arising in Malta and on income remitted to Malta.

Tax rate – Corporate tax standard rate is 35%.

However, a relief of double taxation upon the distribution of taxed profits is ensured, granting a shareholder the right to claim a refund of all or a part of the Malta tax paid on the qualifying profits out of which the dividend was distributed, reducing the effective tax rate to 0%-10%.

In addition, certain investment income is taxed at a CIT rate of 10% or 15% and certain categories of rental income are taxed at 15%.

Capital gains - Capital Gains are included in corporate income tax base. An exemption may apply for gains derived from the disposal of a participating holding or a P.E. outside Malta, subject to certain conditions. Certain investments that yield a fixed rate of return may be tax-exempt.

Capital Gains derived from the transfer of immovable property situated in Malta may be taxed at a final tax of 8% of the transfer value. Rates from 2% to 12% may apply in certain cases.

Dividends -  Dividends received from a resident company are taxable on the gross amount in the recipient’s hands. If the distributed profits have been taxed, no further tax should be chargeable to the recipient company. Dividends received from a non-resident company and remitted profits from a foreign PE, may be tax-exempt, subject to certain participation conditions.

Interests - Interest income is subject to taxation at standard rates.

Royalties – Royalty income is subject to income tax.

Foreign-source income – Companies ordinarily residents and domiciled in Malta are taxed on their worldwide income. Companies that are not ordinarily resident or not domiciled are taxed on income accrued in Malta or remitted to Malta.

However, taxable profits of Maltese-resident companies derived from foreign investments; profits of a foreign PE; and profits derived from foreign investments, assets, or liabilities of an onshore bank licensed in Malta, for which no evidence of tax paid is available can qualify for a flat-rate foreign tax credit of 25%.

In addition, shareholders may be entitled to a tax refund of part of the tax suffered on the distribution of profits. The tax refund may be either a six-sevenths refund, a five-sevenths refund, or a two-thirds refund, depending on the type of income.

Withholding taxes – Malta does not levy withholding tax on dividends paid to non-residents. A 0% withholding tax applies to royalty and interest payments, provided that the recipient does not act on behalf of a Maltese domiciled resident.

Losses – Losses arising from taxable income may be carried forward indefinitely. Carryback of losses is not allowed.

Inventory - Inventory valuations are usually made at the lower of cost or market value. In general, the book and tax methods of inventory valuation will be acceptable. The Last in first out method (LIFO) is not allowed for taxation purposes.

Anti-avoidance rules – The transfer pricing regime in Malta is not sophisticated. There are included some anti-avoidance provisions and brief references to transactions at arm’s length.

Malta has not enacted thin capitalization rules, nor controlled foreign companies regulations.

Labor taxes – Employers and employees are required to make contributions to the Social security fund at 10% on employees’ monthly income, each one, without a maximum limit amount.

Tax credits and incentives – A tax credit for foreign tax paid is usually available. When no evidence of tax paid is available, a company may qualify for a flat-rate foreign tax credit of 25%.

The Malta Enterprise Act and other related legislation provide comprehensive tax incentives for foreign investment on certain activities in Malta, such as manufacturing activities.

There are also tax incentives for securitisation vehicles, re-insurance special purpose vehicles and collective investment schemes.

The Micro Invest Scheme provides tax credits up to EUR 30,000 for micro-enterprises. Tax credit may be increased to EUR 50,000 for self-employed women, businesses that are majority owned by women, and start-ups established in Gozo.

Compliance – On average, a Limited company in Malta may require 8 payments and 138 hours per year to prepare, file and pay taxes.

Personal income tax - Maltese ordinarily residents and domiciled in Malta are subject to personal income tax on their worldwide income and capital gains.

Maltese ordinarily residents and not domiciled in Malta are taxed on their income and capital gains arising in Malta and on income arising outside Malta that is remitted to Malta.

This means that if you are a Maltese resident non-domiciled (permanent home) in Malta, only your Maltese-source income and capital gains and your income remitted to Malta may be subject to tax.

Foreign-source income not remitted and capital gains (remitted or not) may be tax-exempt.

Non-residents are only taxed on their income and capital gains from Malta.

Personal income tax rates are progressive from 0% to 30%. Capital Gains are taxable income. However, gains from the disposal of immovable property are taxed at lower rates of 8%, 10% or 12% depending on the circumstances.

Other taxes – In Malta, there are no inheritance, real property, net wealth and municipal taxes. There is a stamp duty applied on certain transfers such as real property or securities. Value-added tax is 18%.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 35% Offshore Income Tax Rate
  • 35% Corporate Tax Rate
  • 35% Capital Gains Tax Rate
  • 35% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 100 Losses carryforward (years)
  • 139 Tax time (hours)
  • 8 Tax payments per year
  • 10% Social Security Employee
  • 10% Social Security Employer
  • 35% Personal Income Tax Rate
  • 18% VAT Rate
  • 75 Tax Treaties

Country details

Malta
EUR
Valletta
Europe
m t , e n - M T
403000

The Republic of Malta is a densely populated archipelago, located in the center of the Mediterranean, in the south of Italy, east of Tunisia and north of Libya. Malta is a former British colony, and currently a member of the European Union and the Commonwealth.

It has about half million inhabitants. Its capital is Valletta, although its most populated urban center is Birkirkara, with over 22,000 inhabitants. Its official languages are Maltese and English. Since 2008 its legal tender currency is the Euro (EUR).

Malta has a House of Representatives, known in Maltese as Kamra tar-Rappreżentanti, which is elected by direct universal suffrage by simple transferable vote every five years, unless the House is dissolved by the President in consultation with the Prime Minister.

The President of the Republic is elected every five years by the House of Representatives.

Malta is strategically located in the center of the Mediterranean Sea at a crossroads between Europe, North Africa and the Middle East.

Its economy depends mainly on tourism, foreign trade, serving as a transhipment port for ships, manufactures, especially electronics and textiles, and on its developed ICTs and financial clusters.

The country produces only 20% of the food it consumes. It also has limited reserves of fresh water and does not have its own sources of energy.

Film production is a growth factor for the Maltese economy, with several large-budget foreign films being shot annually.

The country has increased exports of many other types of services such as banking and finance. The financial sector has grown in recent years and managed to escape the economic crisis of 2008. Locally attributed to the stability of the country's banking sector and its prudent practices in granting loans.

It also stands out its fully developed mixed market economy and its low effective corporate tax compared to the European Union average, which encourages the location of foreign companies' headquarters.

Malta also has an approved EU citizenship by investment program, where it is possible in a period of 12 months, to be granted as Maltese citizen, through a contribution to the National Development and Social Fund, among other requirements.

Tax treaties

Country Type Date Signed
Hungary DTC  1991-08-06
Mauritius DTC  2014-10-15
Denmark DTC  1998-07-13
Turkey DTC  2011-07-14
Hong Kong, China DTC  2011-11-08
Portugal DTC  2001-01-26
Bermuda TIEA 2011-11-24
India DTC  1994-09-28
Montenegro DTC  2008-11-04
Albania DTC  2000-05-02
Saudi Arabia DTC  2012-01-04
Norway DTC  2012-03-30
Russian Federation DTC  2013-04-24
Greece DTC  2006-10-13
Macao, China TIEA 2013-05-30
Austria DTC  1978-05-29
Georgia DTC  2009-10-23
Belgium DTC  1974-06-28
Netherlands DTC  1977-05-18
Cayman Islands TIEA 2013-11-25
Spain DTC  2005-11-08
Cyprus DTC  1993-10-22
Poland DTC  1994-01-07
Jordan DTC  2009-04-16
Romania DTC  1995-11-30
San Marino DTC  2005-05-03
Slovenia DTC  2002-10-08
Germany DTC  2001-03-08
Egypt DTC  1999-02-20
Singapore DTC  2006-03-21
Ireland DTC  2008-11-14
Pakistan DTC  1975-10-08
Latvia DTC  2000-05-22
Malaysia DTC  1995-10-03
Uruguay DTC  2011-03-11
Estonia DTC  2001-05-03
Sweden DTC  1995-10-09
Czech Republic DTC  1996-06-21
United Arab Emirates DTC  2006-03-13
Italy DTC  1981-07-16
United States DTC  2008-08-08
Serbia DTC  2009-09-09
Iceland DTC  2004-09-23
Lebanon DTC  1999-02-23
United Kingdom DTC  1994-05-12
South Africa DTC  1997-05-16
Croatia DTC  1998-10-21
Gibraltar TIEA 2012-01-24
Slovakia DTC  1999-09-07
Canada DTC  1986-07-25
Qatar DTC  2009-08-26
Lithuania DTC  2001-05-17
Jersey DTC  2010-01-25
Tunisia DTC  2000-05-31
Guernsey DTC  2012-03-12
Mexico DTC  2012-12-17
Finland DTC  2000-10-30
France DTC  1977-07-25
Bulgaria DTC  1986-07-23
Bahamas, The TIEA 2012-01-18
Libya DTC  2008-12-28
Morocco DTC  2001-10-26
Korea, Republic of DTC  1997-03-25
Liechtenstein DTC  2013-09-27
Israel DTC  2011-07-28
Switzerland DTC  2011-02-25
Syrian Arab Republic DTC  1999-02-22
Isle of Man DTC  2009-10-23
Moldova, Republic of DTC  2014-04-10
Bahrain DTC  2010-04-12
Australia DTC  1984-05-09
Luxembourg DTC  1994-04-29
Barbados DTC  2001-12-05
Kuwait DTC  2002-07-24
China DTC  2010-10-23

Procedures

We can help you incorporate a Company limited by shares in Malta for $4,300.


Description


Malta Limited Liability Company (Ltd.) – US$4,300.00 (All Included)


We pride ourselves in providing the best possible professional service which includes our honest hassle free “No Hidden Fee” policy. Your incorporation package includes:



  • MFSA fees

  • Bound set of Constitutional Documents

  • Company Secretary (1 year)

  • Registration with ITU

  • VAT and Tax registration

  • Registered Office fees

  • Courier fees


Time to form: 2 to 3 weeks.


All our incorporation services include a yearly consulting session, a dedicated account manager and access to our global network of trusted business services, including introductions to accountants, financial, tax and legal advisors at no cost.


Bank Account Options



  • Malta Bank Account (In-person/Remotely) – US$900.00

  • Offshore Bank Account* (Remotely) – US$300.00

  • Mauritius Bank Account (Remotely) – US$500.00

  • Labuan (Malaysia) Bank Account (Remotely) – US$500.00

  • Curaçao Bank Account (Remotely) – US$500.00

  • Bahamas Bank Account (Remotely) – US$500.00

  • Switzerland Bank Account (Remotely) – US$1,200.00

  • Hong Kong Bank Account (In-person) – US$1,200.00

  • Singapore Bank Account (In-person) – US$900.00

  • Crypto-Friendly Bank Account (Remotely) – US$3,000.00


We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we are happy to help you with introductions that can empower your business.


*Offshore Bank Accounts: Belize, Puerto Rico, Nevis, Antigua, Saint Lucia.  Other bank account options may be available depending on business profile and turnover.


Annual Fees (2nd year) – US$2,650.00


Including:



  • Annual return filling

  • Government Fee

  • Registered Office

  • Company Secretary


Additional Services



  • Local Director for Holding Company – US$2,100.00

  • Local Director for Trading Company  – US$3,100.00

  • Nominee Shareholder – US$1,700.00

  • Tax Residence Certificate – US$150.00

  • Refund Registration + Refund Claim + Completion and Submission of Tax return D  – US$900.00

  • Accounting & Book-keeping services – Request quote

  • Payroll services – Request quote





Click here to incorporate your Malta LTD.

Incorporate now

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

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