Companies in Malta

A company is considered resident in Malta if it is incorporated in Malta, or alternatively, in the case of a foreign body of persons, if the control and management are exercised in Malta. Provided all documentation required for the registration of a company is in place, the process of incorporation may take as little as 24 hours to be completed by the Registry of Companies.

The advantages of operating via a Maltese company include the following:

• All Malta companies pay tax at the rate of 35% but shareholders receive full credit for any tax paid by the company on distributed profits. Profits taxed at company level are not subject to further taxation at shareholder level
• On receipt of a dividend from the Malta company, shareholders are entitled to a refund of 6/7ths of the total tax paid , resulting in the total effective tax rate paid in Malta will be a maximum of 5%
• A tax refund of 5/7th of the total tax paid is applicable where the dividend is distributed out of profits derived from passive interest or royalties, resulting in a maximum net tax paid in Malta of 10%
• Malta does not impose any withholding tax on outgoing dividends, interest and royalties irrespective of the recipient’s tax residence and status
• To forego the possibility of income received from foreign sources being subjected to a withholding tax and suffering other foreign taxes, Malta’s fiscal legislation offers four forms of double taxation relief: double taxation agreements ; Commonwealth income tax relief; unilateral relief and the flat-rate foreing tax credit
• Foreign companies may operate and conduct business in Malta via a branch which is treated as a permanent establishment in Malta for tax purposes and all the fiscal benefits available to companies incorporated or registered in Malta are also extended to branches
• Maltese legislation permits companies incorporated outside Malta to redomicile in Malta and vice-versa. Provided the conditions permitting re-domiciliation of companies are present, this allows the company to continue its existence in Malta, having all its assets, rights, liabilities and obligations. This is a particularly important option for specialised companies operating in highly technical sectors, such as the aviation field or the pharmaceutical industry