Malta Tax Advantages Overview
Having amended its tax legislation in anticipation to EU Accession, Malta has enhanced its tax system that is ideally suited both to inbound and outbound EU investors. Notable amendments were the introduction of a Participating Holding and a Participating Exemption regime.
Sunset provisions were also introduced, whereby companies incorporated on or prior to 1st January 2007 as International Trading Companies, had to adhere to an new income tax regime, negotiated and approved by the EU Commission in anticipation of EU membership, by 1 January 2011.
The credit imputation system was retained, however, the statutory impediment placed on International Trading Companies from trading domestically, thereby artificially segregating the EU common market, was removed. The new tax climate offers to the investors the following Malta tax advantages:
- Low taxation;
- Onshore, EU– status;
- Possibilities for tax planning in order to lower taxes even further (in some cases to 0%);
- Extensive double tax treaty network;
- Exemption from tax on dividends received;
- Exemption from tax of profit generated from transactions in securities;
- Exemption from withholding tax on the repatriation of income either of dividends, interest and royalties;
- Access to EU directives
Malta Flexible & Modern Legislation
There are no restrictions concerning maximum allowable percentage participation, and all minimum monetary level of foreign investment in any enterprise / legal entity in Malta were lifted in 2004.
Malta’s Investment Policy allows 100% foreign participation in Malta Entities in almost all sectors of the economy irrespective of nationality.
- Full exemption from all exchange controls – restrictions, both for EU and non-EU Nationals;
- The legislation ensures full anonymity of foreign beneficiaries;
- Save for licensable activities, such as Remote Gaming, Captive Insurance and Financial Services, Malta Entities, whether beneficially owned by foreign nationals or local persons can engage into either local or international activities without the need for any special permit.
Malta Excellent Infrastructure
- Modern and efficient multilingual banking & financial services sector;
- Excellent air and sea connections and telecommunications services;
- Professional, reputable and efficient Government and Tax Authorities;
- A mature professional services sector;
- Very low expense level (fees) for financial and professional service provision compared to other EU Jurisdictions. The difference is more evident in the case of professional service recurring costs (administration, accounting & tax compliance) are estimated to be at 35- 40% of Western European rates. One could very easily be misled by the low quoted start up costs for major European Jurisdictions as to the final total costs which can be considerable if one calculates recurring costs.
Malta as an EU Financial & Business Centre
- Malta is a member of the EU and a fully flexed, modern international business and financial centre, with excellent infrastructure, situated at a strategic geographic location and time zone. English is one of the two official languages, the other being Maltese, with French, Italian and German also widely spoken.
- Malta has succeeded in differentiating itself from other financial centres. It has a favourable tax system with a wide network of very beneficial double tax treaties. As a result, Malta today is firmly established as a reputable, dynamic, international business, financial and commercial gateway for investments into or from Europe, Northern Africa, Asia and the Middle East.
- Malta is a tax-incentive country and not a “tax-haven”. Malta Companies are fully-regulated, onshore, EU entities, which however allow their shareholders to reap full benefits from a series of attractive tax refunds (final tax rate, 5% or less in most cases);
- Malta has an excellent infrastructure allowing clients to create “substance” to their tax planning in the form of setting up fully-flexed offices or operations in the island (avoidance, if deemed necessary, of brassplate operations). This is particularly important in the case of licensed entities such as investment managers, fund administrators etc; where a minimum local presence requirements need to be maintained at all times;
- Malta is the jurisdiction of choice for a prestigious, onshore but low-tax presence. During the past seven years, Malta has established itself as a leader in Remote Gaming with over 300 licensed entities, and secured an ever-increasing clout in financial services, particuarly throughout the licensing of Professional Investor Funds.
Contact one of our officers to initiate the incorporation of a Maltese registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction. Simply fill in the contact box below or contact us by email on firstname.lastname@example.org or by calling at +356 2338 1500
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