Malta has amongst the lowest tax rates in the EU so it is not surprising that you can found a company in Malta in compliance with community laws which offers a number of advantages that can be compared to those of offshore companies.
Located in the middle of the Mediterranean Sea, this small island country managed to maintain its extremely attractive tax system even after its accession to the EU in 2004 and also introduced a range of new incentives. Thanks to this, a growing number of foreigners are registering companies in Malta or many European investors are transferring their business from another EU member state, and indeed there are many who would actually settle in this Mediterranean paradise. Maltese companies qualify as onshore in professional jargon; they are no longer seen as offshore companies and foreign investors or entities with foreign tax residence can benefit a lot from the Maltese tax system. This is possible because foreign investors can enjoy the benefits of an extremely favourable tax regime which is accepted by the EU too. Thus, although Malta is no longer an offshore zone, it remains amongst the EU member states with the lowest tax rates. Since smart economic policy ensured that the global economic crisis avoided the island country, registering a company in Malta has proven not only to be tax-effective but also a safe investment.
The key benefits of registering a company in Malta: The well-known 6/7 reimbursement system
Undoubtedly, the greatest tax benefit in Malta is that shareholders can claim back most of the money paid out as dividend from the corporate tax paid, so they can recover nearly all the corporate tax they have paid. 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 generally 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.
Tax benefits for Maltese holding companies
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.
Other benefits for Maltese companies
The Maltese tax benefits are attracting a growing number of investors from Europe and other countries. The most frequent legal form is the “trading company”, that is, a company engaged in trading activities. However, it is not only small companies that are present in the Maltese market. Malta is well-known for offering tax benefits to companies involved in the betting and online gaming business. The most recent group of investors to have appeared on the Maltese market includes companies which register ships and aircraft. They can also make a nice profit in the island country.
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