MALTA – YOUR IDEAL PLATFORM FOR BUSINESS WITH ONLY 5% INCOME TAX
MALTA is located at the southern tip of Italy and lies virtually midway between Europe and North Africa. Situated at the heart of the Mediterranean, Malta has become a major shipping hub with its position on the major East-West shipping lanes granting easy access to both Eastern and Western Mediterranean ports.
Malta is a member of the European Union, the Council of Europe, the United Nations and the Commonwealth.
The Maltese Government has a tradition of encouraging foreign investors to establish operations in Malta and has always adopted policies that favor an open economy and direct investment.
Key facts about doing business in MALTA:
- Short travel times
Malta has excellent flight connections. The national carrier Air Malta operates to numerous European and a number of North African destinations, with regular flights. There are also a large number of international carriers operating to and from Malta. By air, main European (London, Milan/Rome, Paris, Frankfurt, etc) and North African (Tripoli, Tunis, Cairo, Rabat) hubs can be reached in 2-3 hours.
- EU Member State
Passporting rights for services and companies. Forming part of the Schengen area, this allows travel between member states without internal border controls.
Doing business in MALTA:
Over the years, Malta’s leaders have been on a mission to make Malta a magnet for financial services. It was their vision to turn the island into a platform for international business and to develop a model economy, which has regularly been among the best in the European Union.
Malta’s rise into the ranks of Europe’s leading financial centers has been driven by the island’s reputation for stability, predictability and security which has made it an exception among other global financial centers.
Towards the future:
One of Malta’s aims is to become the European financial center of choice.
Outside of Europe, Malta continues to build its good relations with China, with both nations keen to encourage cooperation between various sectors of the economy.
Among Malta’s advantages and incentives to foreign investors include:
- INTERNATIONAL TAX system
- VISA & RESIDENCE programs
- SHIP & YACHT registration
- AIRCRAFT REGISTRATION
- REMOTE GAMING
- COLLECTIVE INVESTMENT SCHEMES
Maltese Trading Companies
Maltese Company with VAT is favored for general trading purposes due to unique tax regime. When dividends are paid by a trading company to its non-resident shareholder, this shareholder is entitled to claim refunds of the 35% tax rate paid by the company. 6/7ths of the tax amount are refunded to the non-resident shareholder.
As a result, the total tax rate is reduced to 5%.
The refund is guaranteed and is paid by Inland Revenue Department to shareholders account 14 days after application is submitted.
- 6/7 refund of the paid corporate tax (at rate 35%) brings down effective tax rate to less than 5%.
- Tax Residence Certificates are available provided that management & control is carried in Malta.
- EU VAT number registration generally takes 2 weeks.
Foreign Tax Relief
There are instances where the same income is taxed more than once in the hands of the same tax payer. This gives rise to double taxation. For this reason, in order to encourage the growth of international trade, Maltese law contemplates 3 main mechanisms for the elimination of double taxation.
Double Tax treaty Relief
The below is the list of the Malta Double Taxation Treaty Relief:
|Ireland||Isle of Man||Israel||Italy||Jersey|
|Portugal||Qatar||Romania||San Marino||Saudi Arabia|
|Turkey||United Arab Emirates||United Kingdom||United States of America||Uruguay|
Treaties signed but not into force:
- Effective tax rate on trading profits 5%, lowest rate in the EU
- Full participation exemption on dividends and capital gains
- No withholding taxes on outbound payment of dividends, interest and royalties
- Malta has no thin capitalization rules or debt-to-equity ratios
- Malta has no transfer pricing and CFC rules
- Member of the EU, OECD white-listed country
- Tax residence certificates available for all Malta companies
- Maltese companies may benefit from the EU Parent-Subsidiary Directive, Merger Directive and the Interest and Royalties Directive
- Re-domiciliation to Malta is permitted
- No exchange control regulations, excellent banking services
- From January 2008 adopted the euro as the currency
- English is the official language
- Strong political support for the financial services industry
- Extensive tax treaty network of 70 treaties in force
- Tax Residency in Malta
- Malta Citizenship Programme
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