You have decided to form / incorporate a Malta Company to take advantage of:
- the 5% effective tax rate on trading profits of a Malta Trading Company
- the participation exemption of Malta Holding Company (0% on incoming foreign dividends AND 0% tax on capital gains on sales of securities) – Full tax refund of a Malta company holding shares in another non resident Company
- the exemption (0% tax) on Royalty income of the Malta Royalty Company
- the 10% tax rate on the interest spread for a Malta Finance Company
- the numerous advantages of the Malta Online Gaming Company
- the exciting potential and reasonable set up and running costs of the Malta Professional Investor Funds (PIFs)
- the privilege of ship registration of a Malta Ship Owning Company
- the VAT and tax advantages of registering a yacht in Malta via a Malta Yachting Company
- no withholding taxes, stamp duties or exchange control restrictions apply on distribution of profits from the Maltese Company to non resident shareholders
- Low Company Incorporation costs
Company formation in Malta is regulated by the Malta Financial Services Authority (MFSA). The Company formation process takes 48 hours. Malta is a low tax jurisdiction for holding and trading companies and is in the top league of EU holding company regimes. Company formation costs in Malta are low for large corporations but also for small and medium sized businesses. No withholding taxes, stamp duties or exchange control restrictions apply on distribution of profits from the Maltese Company to non resident shareholders, and these dividends can be expatriated without any restrictions.
Malta company tax details
Dividends paid from a Maltese company to a non resident shareholder (of the company in Malta) include the right to a refund of part or all of the tax paid by the Maltese Company on the company profits. The tax paid by the Maltese company is then refunded to the shareholder in one of the following forms, depending on the source of the profits:
- Refund on 6/7th of the tax paid by the Malta company (except on profits on sale of immovable property in Malta, and profits that have been taxed at source on a final withholding regime) resulting in a 5% effective tax rate for the Malta Trading Company
- Refund of 5/7th of the tax paid by the Malta company on profits that consist of passive interest or royalties resulting in a 10% effective tax rate for the Malta Royalty or Finance Company
- Refund of 2/3rd of tax paid by the Maltese company on profits that have already claimed relief for double taxation
- Full refund on profits that are generated from a ‘participating holding’
Participating Holding rule for a Holding Company in Malta
A holding by a Maltese Company in a non resident company qualifies as a participating holding if any of the following is satisfied:
- The holding is 10% or more of equity share capital
- The Company in Malta has an investment of minimum €1.16million held for at least 183 Days
- The Company in Malta is entitled to appoint a director in the non-resident company
- Where the holding is a furtherance of the business of the company in Malta. The Profits by the Maltese Company from a ‘Participating holding’ is exempt from tax if one of the following is satisfied:
- The non-resident Company is resident in an European Union State; or
- It is subject to foreign tax of 15% or more; or
- It does not have 50% or more of its income derived from passive interest and royalties
If none of the above conditions is satisfied, the both the below conditions need to be satisfied for the participation exemption to apply:
- The holding of the Maltese company is not a portfolio investment. If the non resident company derived more that 50% if its income from portfolio investments this will be deemed as a portfolio investment.
- The non resident company has paid foreign tax of more than 5%.
You are looking for a well-known and established corporate service provider with reasonable fee quotations (including a certain flat-fee for all services) to:
- provide sound and competent advice on Malta company tax planning and International Tax Corporate Structuring to ensure the tax and other advantages are secured and tax leakages are minimised
- manage the Malta company formation and licensing stage including company incorporation, opening of bank accounts, tax and VAT registration preparation of post incorporation structuring including company registers and share certificates and generally ALL is prepared so the company can legally begin operations. This stage includes management of the licensing process for regulated activities such as online gaming and professional investor funds.
- manage the ongoing domiciliation and management of your Malta company and ensure compliance with Malta laws and regulations including acting as directors or corporate secretary, arranging for nominee shareholders for anonymity / confidentiality of the ultimate beneficial owner, provision of registered office, provision of virtual office and physical office services, provision of money laundering / compliance officer, investment committee members and fund administrators (for PIFs), administrative and secretarial support
- arrange for the provision of legal, accounting and bookkeeping, tax , VAT and auditing services as required by law or regulation
Contact us NOW to get a quotation or more information!