Benefit from Incorporating a Company in Malta

Learn about the tax benefits of incorporating your company in Malta.

Setting up a company in Malta can enable you to benefit from various advantages that our country offers to a non-resident who chooses to incorporate their company in Malta. The following are the main benefits that Malta can offer to such companies.

Taxation Benefits

Malta has a full-imputation system of corporate taxation. Therefore, any income tax that a Maltese company pays is fully imputed or credited to the shareholder who receives dividends. This enables the same to benefit from the full relief of double economic taxation of corporate profits.

Although the standard rate of taxation in Malta currently stands at 35% of the company’s chargeable income, a shareholder of such a company would be entitled to a refund of any tax paid by the company. This depends on the company’s source of income, which typically results in an effective net tax rate of approximately 10%, 5%, or 0%, respectively.

Such refund may be reduced if double taxation relief is claimed on the income and given within a period of three weeks following the day on which the refund becomes due.

Low Incorporation and Maintenance Costs

A company can be set up in Malta with a minimum share capital of € 1,165, of which 20% should be paid up. Therefore, the minimum deposited share capital to incorporate a company in Malta is € 245.

The minimum registry fee required is € 240, with minimum annual payments of € 100. These are a small price to pay for the company incorporation in a reputable jurisdiction that is also a member of the European Union!

Exemption from Duty on Documents

The companies in Malta carry out international activities exempt from duty on documents, which effectively means that transfer of shares and increases of the company’s share capital are exempt from duty.

Double Taxation Treaties signed

Malta has signed over fifty double taxation treaties, with the latest being the Malta – Russian Double Taxation Treaty which should come into force at the beginning of next year.

Capital Gains Tax

Capital gains tax derived by non-residents on transfers of shares and increases of share capital is not subject to tax in Malta if the company’s assets do not include immovable property situated in Malta.

Other Benefits of Incorporating a Company in Malta

There is no withholding tax on the payment of dividends, interest or royalties, no controlled foreign company legislation or transfer of pricing rules, no thin capitalization rules, exit taxes, wealth taxes, payroll-based tax, or trade tax.