Benefits of Setting up a Company in Malta

Malta has emerged as one of the top location for setting up of businesses in an extremely cost-effective environment. The favorable tax regime that the foreign investors enjoy in this location has made Malta so very attractive for people to set up their businesses. The favorable taxation systems coupled with outstanding infrastructure has made many investors and entrepreneurs eager to set up a company in Malta. Tax refund and tax relief forms the main pillars of the famed international taxation system of Malta, which has helped in attracting so many investors and entrepreneurs to her shores. Apart from this favorable tax regime, Malta has also signed double-taxation agreements with more than sixty countries across the world. These agreements help the investors originating from these countries in avoiding double-taxation upon the same country in Malta and the country of their origin. This has been one of the top benefits of setting up of businesses in Malta.

The favorable tax regime and the availability of various tax consolidation benefits have made Malta a prime destination for some of the largest corporations in the world. A large number of leading business conglomerates and investors have set up holding companies in Malta to reap the rewards of its tax consolidation benefits on profit and dividends. Thus, little wonder that a large number of entrepreneurs and investors wish to set up a company in Malta. This country is also the only one among the EU member states to have a full-fledged imputation system in place for company taxation.  Therefore, shareholders of a company are liable to receive credits for the tax that the company pays on the distributed profits or dividends. Once the shareholders’ credit exceeds their tax liability, they become eligible for refunds.

There are number of other benefits that entrepreneurs and investors will enjoy if they set up a company in Malta. The rate of corporate income tax in Malta is 35%. However, this is not the end of the story as far as tax exemptions are concerned. Shareholders become liable for claiming tax refund of up to six-seventh and five-seventh of the tax credit, if the distribution of the dividend is from the active trading income and passive incomes respectively. The passive trading income can consist of interests, royalties and other such sources. Investors also need not pay any tax on the profits made by selling of participating holdings or shares in non-Maltese entities. Investors acquiring shares in holding companies based in Malta will be able to enjoy the tax consolidation benefits without the need of owning controlling stakes in the company. Malta also does not charge any exit taxes for migration of any company form her territory. Thus, the benefits are aplenty ranging from friendly tax regimes to low operation cost for entrepreneurs and investors who set up a company in Malta.


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