Malta

Malta is a Presidential Republic, member of the European Union since 2004, politically stable country with a multi-party democracy.

Malta is an independent Republic since 1964, population – 445, 500.

The legal system of Malta is based on English Common Law.

Private limited company (LTD) incorporated under the Companies Act, 1995

Tax RateNotes
Income (Corporate) tax35 % , 0-10%*tax refund system
Paid dividends0 %no withhold tax
Capital gains tax0 %
Royalties paid0 %
Interest paid0 %
Royalty incomesee tax table
Interest received (trading)see tax table
Interest received (passive)see tax table
Received dividendssee tax table
VAT18%

*the rate of corporate income tax can be significantly reduced

Shareholders upon a distribution of dividends by the Maltese company are entitled to claim a tax refund, see below tax table:

RefundFull refundRefund of 6/7thsUsing DTRRefund of 5/7ths
Tax 0%5%2,5%-6,25%10%
Type of incomesParticipating holding, information see below about PHLTDTrading-Passive interest/royalty income, not derived from trade business, and interest/royalties have suffered foreign tax of less than 5%
Notes-No claim for double tax relief
(DTR) is made
1.Claim for double tax relief
2.Unilateral relief, proof of tax suffered abroad is requested
3.Flat rate foreign tax credit relief, no proof of tax suffered abroad is required
No claim for double tax relief (DTR)is made

Participating holdings – in order to be a participating holding PHLTD:

  • holding of minimum 10% of the equity shares
  • give an entitlement to call for and enquire the entire balance of the equity shares
  • give the right of first refusal in the event of the proposed disposal, redemption or cancellation of all the equity shares
  • entitle to sit or appoint a person to sit on the Board of directors
  • investment of a minimum of 1 154 000 EUR that is held for an uninterrupted period of not less than 183 days; or
  • are held for the furtherance of its own business and the share-holding is not held as trading stock for the purpose of trade

The 100% refund is conditional on the company in which the PHLTD is held satisfying any of the following conditions:

  • is a resident or incorporated in the EU
  • is subject to any foreign tax at a rate of at least 15%, or
  • less than 50%of its income is derived from passive interest or royalties

Alternatively 100% tax refund can be claimed where the equity shares constituting the PHLTD:

  • do not represented a portfolio investments, and
  • the company in wich PHLTD is held or its passive interest or royalties have been subject to tax a rate that is not less than 5$

If LTD that derived income in the form of dividends but not satisfy any of above PHLTD requirement, may claim a 5/7ths tax refund. In such case effective tax rate is 10%.

There are alternative to the 5/7ths refund in Malta. It is the flat rate foreign tax credit of 6,25%.This is credit granted unilaterally by Malta for tax that is deemed to have been suffered overseas.

Tax paid should by law be refunded within 14 days from the end of the month in which the application is submitted.

Double tax treaties –   with 57 countries

Advantages 

  • EU country
  • Tax refunding system makes this jurisdiction with lowest corporate tax for non-resident Malta shareholders
  • LTD can be used for holding company, international trade, assets protection, investment company, etc

Disadvantages

  • Annually required to file with Register and Inland Revenue audited Financial Statement
  • Required together with tax return prepare tax refund that is paid in time of 14th days
Name Must end with the word “private limited company” or “Limited” or “Ltd”, special requirements for private investments company
Share capital The minimum authorized share capital is EUR 1 165, required to be paid 20% before a company formation
Stamp duty is payable, calculated on the basis of the value of nominal capital

Shareholders A minimum of one Shareholder, corporate Shareholders are allowed
Director A minimum of one Director, corporate Directors are allowed, can be resident or not-resident in Malta
Secretary Required, natural person, can be resident or not- resident in Malta
Registered Address Required
Annual reporting Annual reporting to the Registrar
Annual audited Financial Statements to the Registrar and tax return to the Inland Revenue


Company formation package Request package price ⇒

Timeframe

Incorporation of a new company 5 business days
Preparation of apostilled documents 15 business days

Annual support (beginning with the second year) Request price ⇒

Required information from the client

Incorporation process is possible after Due Diligence procedure is completed.

Please completed and send us Order form, we are going to send you information about required Due diligence documents.

1. Consult to determine the order. To choose a jurisdiction for a company we offer a consulting services:

  • via telephone +(371) 67280645
  • via e-mail: consult@bbp-net.com
  • via online question form found in the header Ask an expert
  • Navigation through our web site will help you to determine: benefits, prices and requirements in respective jurisdiction

2. Complete an application form. After you have made your decision, please complete one of the online application forms:

3. Issue of invoice and settlement of order. Within one business day of filling in the online application form, you will receive an invoice via e-mail. You can pay the invoice using money transfer to the BBP bank account provided in the invoice or via Internet, using PayPal. We suggest using PayPal only in case the amount is less than 200 EUR.

ATTENTION! The invoice number should be written in the details of payment!

A payment acknowledgement will be sent to you as soon as we will receive the payment.

4. After we receive the required Due Diligence documents from you, we shall commence the incorporation or the preparation of the documents required in order to carry out the acquirement of a ready-made company.

5. Document delivery to the client. Documents are sent via international courier mail.

6. Further supporting services. We guarantee to inform, assist and provide you with all the necessary services for further support of the company.

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