Company formation in Malta

Company formation in Malta offers many key advantages in terms of taxation laws, stable and steadily growing economy, advance infrastructure, etc. The Republic of Malta is an island situated in Southern Europe. Maltese and English are the official languages. Malta offers significant advantages for setting up your company. As an EU Member State, Malta offers you EU-compliant, low effective tax rates, a very professional and stable services infrastructure and a respected reputation.

Malta has the one of the lowest corporate tax rates in the EU so it does not come as a surprise that company formation in Malta is highly sought after, especially in the EU, which compromises a number of advantages that can be paralleled to those of offshore companies.

What are the main benefits of company formation in Malta?

In practice, a company in Malta pays the official 35% corporate tax. However, if the owners of a company registered in Malta are not tax residents in Malta, i.e. they are foreigners or not domiciled in Malta, they can recover 6/7 of this tax. This means that the actual tax rate is only five percent. The shareholders of companies registered in Malta do not need to wait long for the tax refund. The law states that the refund is to be made within 14 days of the end of the month when the tax was paid.

The dividend received from a company registered in Malta and the entire profit coming from the sales of its subsidiary are fully exempt from corporate tax provided that it is paid out to the shareholders as dividend. Under certain circumstances, there is no tax liability for income generated thus, i.e. tax reimbursement is not necessary either.

Malta double taxation treaties:

In order to encourage the growth of international trade including that of financial services, successive Maltese governments have sought to conclude double taxation treaties with important trading partners as well as with emerging countries. Malta double taxation treaty is expected to continue in the future. There are 73 countries that have active double taxation treaty with Malta. Find out more on Double Taxation Treaties

Beware of cheap agencies!

There are numerous start-up agencies that provide their clients incorrect guidance such as relying on concealment of ownership. At times, such a design may remain inscrutable for a few years and the taxpayer remains undetected. In the event of a discovery, however, sensitive back payments on all un-taxed profits are threatened.
Therefore, we recommend a trustworthy provider that allows you to withdraw money from Malta Limited, and will not make you lose your sleep over it. The way to a recognized establishment and the local business management is unfortunately associated with higher costs. However, this is precisely what distinguishes between a legal and illegal structure. Working with over 500 companies, we have found the ideal price which is cost friendly and is suitable for any potential clients.

Which taxes can I save?

There are promises of advertising with a reduction of the tax burden to 0%. We do not promise that precisely because it maybe harmful in the long run for our clients. The combination of a Malta Limited and private residency in the UK results in huge tax savings as there are no taxes on foreign income in the UK.
However, not every entrepreneur is worth starting a business in Malta. There are annual fixed costs and a certain profit margin should be taken into consideration in order to manage these costs.

The biggest advantages of company formation in Malta are

  • 5% Corporate tax effectively
  • Lowest effective corporate tax rate in the EU as a whole after Romania (1%)
  • Simple tax system
  • Strong and steadily growing economy
  • Advance infrastructure and regulations to support new and emerging technologies

Reasons for incorporating a Maltese Limited

Many agencies and company formation law firms do not advise comprehensively, find out what to look for.

5% effective taxation

Malta initially requires 35% corporation tax. This will be refunded on application in the ration of 6/7, if the shareholder of the Limited is a foreigner. It takes 6-8 weeks from payment of taxes to the reimbursement by the tax office.

Strong bank industry

The major banks on the island are HSBC and the Bank of Valletta. Both banks have a high equity ratio and are stable.

Nominee services

We recommend you to acquire our services for a managing director and a shareholder to rely on nominees. In both cases these are companies and not persons. The director of these companies can not access your bank accounts and also provides the high anonymity status to our clients.

Proficient accounting services

In Malta, significantly more expenses than the general business expenses can be claimed. Subsequent mongering by the local tax office does not exist. Tax estimates for non-declarations are also foreign to Malta.

We comply with the following code:

  • Legally secure company formations
  • No unexpected(hidden) costs
  • No false promises
  • Finding the right solution by focusing on your requirements

With this strategy, we have been on the market since 2013 and have not disappointed any customer so far. And we prioritize it in keeping that way. We strive to ensure that every client is satisfied and does not take risks with the solutions we provide for them, but only takes advantage of legal opportunities which are in compliance with the authorities. Setting up a company that involves doing real business is more costly than a letterbox company, but it is the only way to save on taxes without risking legal action.

What makes a company in Malta attractive to foreigners?

5% effective tax rate Officially 35% corporation tax applies in Malta, which means that 35% of the profits have to be paid to the Maltese tax authorities, but foreign shareholders have a huge advantage. Because foreign shareholders, i.e Natural and legal persons who are not taxable in Malta receive 6/7 of the tax paid back from the tax office. Thus, the effective corporate tax is only 5%.

Other advantages:

  • Simple and easy tax system
  • low registered capital required to set-up a company
  • High anonymity
  • English also available as the official language

Tax structure comparison

Here are some examples of the tax differences between a highly taxed jurisdiction and Maltese tax structure.

  Belgian Limited (SPRL/BVBA) Malta Limited (Ltd.) Romanian Limited (SRL)
Profit 100,000 EUR 100,000 EUR 100,000 EUR
Corporate tax 33% including. surcharge tax rate 3% Totally 36,000 EUR(36%) 5,000* EUR (5%) Effectively reduced from 35% 3,000 EUR(3%) Can be effectively reduced to 1,000 EUR (1%)
Profit after taxes 64,000 EUR 95,000 EUR 99,000 EUR
Key advantages Strong economy, highly reputed country Stable and growing economy, high anonymity, low start-up capital Lowest corporate tax in EU, ideal for micro-enterprise, low cost and highly skilled labor force
Tax burden 36,000 EUR 5.000 EUR 1,000 EUR

Company formation Malta - How it works

Setting up your company in Malta is easy and it can be done remotely without physical presence of the client(s). For the company formation process only a certified ID or passport copy and utility bill is required. Please contact us for further inquiry.

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