Tax Benefits in Malta

Malta offers a range of tax benefits for companies operating in the country, making it an attractive location for businesses looking to establish themselves in Europe. In this informational article we explain the tax benefits of holding a Malta company and the company formation process in Malta.

Here are some of the tax benefits that a Malta company can enjoy:

  1. Low corporate tax rate: Malta has a low corporate tax rate of 35%, which can be reduced to 5% for companies that meet certain conditions.
  2. Participation exemption: Malta offers a participation exemption on dividends and capital gains earned from a qualifying participation in a company resident in Malta or outside Malta. This means that if a Malta company holds at least 10% of the shares in a foreign company, it may be exempt from tax on any dividends or capital gains earned from that investment.
  3. Double taxation treaties: Malta has signed double taxation treaties with over 70 countries, which can reduce the tax burden on a Malta company doing business with these countries.
  4. Tax credits and refunds: Malta offers tax credits and refunds for certain types of income, such as income earned from intellectual property and research and development activities.
  5. Access to the EU single market: Malta is a member of the European Union, which provides a Malta company with access to the EU single market and the benefits that come with it.

It is important to note that tax laws and regulations can be complex and subject to change, and it is recommended that you consult with a tax professional before making any decisions regarding your Malta company’s tax affairs.

Company Formation Process in Malta

Companies in Malta are registered with the Malta Business Registry (MBR) according to the Maltese Companies Act. Once you decide on the best business structure, to form a private limited liability company, you will need to provide the following information: A name for the company, the primary and secondary objects of the company, the authorised and issued share capital, a registered address in Malta, and at least one shareholder, one director and one company secretary. The identification documents of these individuals also need to be presented. A set of due diligence documents on the shareholders and directors also need to be presented for compliance purposes. Generally, the compliance team sends out KYC forms which need to be filled out.

It’s important to know that in the case where a shareholder of the proposed company is a body corporate, then a Form BO1 must be filed and submitted to identify the beneficial owner of the company. With all this information in hand, the authorised corporate services provider will be able to draft the memorandum of association and articles of association for approval and signatures, and then submit to MBR for the registration of the limited liability company. Once these documents are processed, it’s a matter of days until the Certificate of Incorporation is issued.

If you are looking into for professional tax advice and wish to incorporate a company Malta, our firm, Fairwinds Management Limited, is authorised by the Malta Financial Services Authority to carry out corporate services. Get in touch with our Director, Ms Joceline Caruana, accountant and tax specialist on jcaruana@fairwindsmanagement.net.

Fairwinds Management Limited is a MFSA licensed firm offering Business Solutions in Malta. As part of our services, we offer Accounting, Administration, Corporate and Legal solutions.  Fairwinds Management also manages the brand Accounting Services. More information about us and our key services please visit our website. You may reach Fairwinds Management on +356 2704 0903 or info@fairwindsmanagement.net.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.