The Maltese company offers one of the most versatile and effective tax solutions for any promoter, from the small start-up company to the most savvy investor.

At the outset, the Maltese corporate tax rate is set at thirty-five percent (35%), however, the shareholders are, upon a final distribution of dividends, entitled to a series of tax refunds – leaving an ultimate tax leakage of just 5% or less. This tax leakage, already the most advantageous in the European Union, may be further reduced, if the Maltese company has incurred expenses outside Malta, which expenses may be grossed up in the income tax computation, so as to further lower the tax leakage.

Further complementing this generous tax treatment, is an ever expanding network of double tax treaty which has placed Malta firmly on the tax planning map.

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

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.
  • 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.