Malta is gaining recognition as a prime location for business relocation. Its tax incentives, and economic legal framework make it an attractive destination for high-net-worth individuals looking to relocate their businesses.
In this interview with Julia Loko, Investment Programs Expert at Immigrant Invest, we explore advantages of setting up a business in Malta, the process of opening a company, the corporate tax system and investment opportunities with Malta citizenship.
7 Advantages of Setting Up Business in Malta
1. Favourable location. Malta’s geographical position in the Mediterranean offers easy access to European, North African, and Middle Eastern business markets. This makes it an ideal hub for relocation to Malta and opening a company.
Malta citizens can travel to more than 160 countries, according to data from the Malta passport ranking.
2. Favourable tax system. Malta has one of the most attractive tax regimes in Europe. With a corporate tax rate that effectively goes as low as 5% for international trading companies, businesses can significantly reduce their tax burden.
3. Legal framework. Malta adheres to EU regulations and has a strong legal framework that provides security and stability for businesses. This ensures that businesses operate in a well-regulated environment.
4. Skilled workforce. The country has a highly educated and multilingual workforce. English is an official language, making communication and operations smoother for international businesses.
5. Advanced infrastructure. Malta offers state-of-the-art infrastructure, including high-speed internet, modern office spaces, and excellent transport links. This supports efficient business operations and connectivity.
6. Government incentives. The Maltese government provides various incentives for businesses, including grants, tax credits, and investment allowances. These incentives can help reduce the initial setup and operational costs.
7. Quality of life. Malta offers a high standard of living with high-quality healthcare, education, and entertainment facilities. The pleasant climate and cultural heritage make it an attractive place to live in Malta permanently.
How to Open a Company in Malta: Costs and Requirements for Foreigners
Malta allows 100% foreign ownership of companies. It makes it easier for international entrepreneurs to rule and control their businesses. The first step is to choose a company type and structure. The most common structure is a Private Limited Company, Ltd.
To register a company, you must:
- Provide a Memorandum and Articles of Association to the Malta Business Registry. This document contains the company’s structure and operations.
- Get a registered office address in Malta.
The minimum share capital for a Private Limited Company is €1,165, with at least 20% paid up. The other cost of registering a company in Malta includes government fees and professional fees for legal and accounting services. On average, these costs range €1,000 to 2,500.
The process of registering a company takes 1—2 weeks. The quick turnaround allows foreigners to start operations promptly.
Malta Tax System for Business
Malta’s standard corporate tax rate is 35%. However, through the imputation system, shareholders can claim refunds that reduce the effective tax rate to between 0—10%.
To become a tax resident in Malta, a company must be managed and controlled from Malta. This means having a significant presence in the country, including a registered office and local directors.
Malta offers tax incentives, including reduced tax rates for several industries, tax credits for research and development, and exemptions on capital gains for qualifying investments.
Double Tax Relief Opportunities in Malta
Malta has signed over 70 double taxation agreements with various countries. These treaties prevent double taxation and provide clarity on tax obligations.
Double tax relief ensures that income earned abroad is not taxed twice. Malta offers unilateral and treaty-based relief to mitigate double taxation.
If there is no tax treaty, Malta provides unilateral relief, allowing businesses to claim a credit for foreign tax paid on income.
Under double tax treaties, businesses can benefit from reduced withholding tax rates on dividends, interest, and royalties. This enhances tax efficiency for cross-border operations.
To claim double tax relief, businesses must provide evidence of foreign tax paid. This involves maintaining accurate records and filing appropriate documentation with the Maltese tax authorities.
How to Obtain Malta Citizenship and relocate business
Malta citizenship for exceptional services by direct investment is obtained by naturalisation process. First, investors get a residence permit and maintain the status for 1 or 3 years. After that they may apply for a passport.
This pathway grants citizenship to individuals and their families who make a significant economic impact to the country, including:
- contributing to the National Development and Social Fund — €700,000;
- charitable donation — €10,000;
- investing in real estate.
Individuals must purchase property worth at least €700,000 or rent property with a minimum annual rent of €16,000.
Applicants must undergo a Due Diligence process to prove they meet the program’s requirements. This includes background checks and financial assessments.
Maltese citizenship offers benefits, including travelling to over 160 countries without visa, the right to live and work in any EU country, and access to high-quality healthcare and education.
Conclusion
Malta presents a compelling case for business relocation. Its location, favourable tax regime, and supportive business environment make it an ideal destination for high-net-worth individuals looking to expand their ventures.
By understanding the advantages, costs, and requirements of setting up a business in Malta, as well as the opportunities for double tax relief and investment, entrepreneurs can make informed decisions.
