Avoiding misunderstandings when establishing a Malta ltd company

Many entre­pre­neurs who want to estab­lish a com­pa­ny abroad are often not well enough informed about the legal and fis­cal aspects that can cause prob­lems when they are dis­re­gard­ed. If you are think­ing about relo­cat­ing your com­pa­ny to anoth­er coun­try you should plan the incor­po­ra­tion thor­ough­ly with the help of legal coun­sel by your side.

Mal­ta is a low tax coun­try, and as a mem­ber state of the Euro­pean Union the free­dom of estab­lish­ment law applies. A com­pa­ny in Mal­ta is sub­ject to the laws of Mal­ta and needs to pay 35% cor­po­ra­tion tax to the Mal­tese author­i­ties. How­ev­er, if the com­pa­ny is owned by a for­eign share­hold­er or a hold­ing com­pa­ny it is pos­si­ble to get a refund of 6/7 of this cor­po­ra­tion tax. The refund is paid to the for­eign share­hold­er or hold­ing com­pa­ny and the tax laws of the cor­re­spond­ing coun­try apply.

When estab­lish­ing a com­pa­ny in Mal­ta it is not pos­si­ble to just have a phan­tom or let­ter­box com­pa­ny. It needs to be ver­i­fi­able that the com­pa­ny oper­a­tions and the man­age­ment are based in Mal­ta and that there are active rev­enues. This also means that Mal­ta is not a suit­able loca­tion for every busi­ness and it is impor­tant to assess before­hand if the com­pa­ny’s activ­i­ties can be car­ried out in Mal­ta and if there are enough resources and per­son­nel.

If you can­not prove that the busi­ness oper­a­tions are in fact in Mal­ta and the rev­enues were gen­er­at­ed there, the rev­enues will be taxed accord­ing to the laws of your coun­try of res­i­dence, and you risk legal charges for tax eva­sion.

You can con­tact the office of Dr. Wern­er & Part­ner for ques­tions regard­ing the estab­lish­ment of a com­pa­ny in Mal­ta. Togeth­er we can dis­cuss your options and plan the best com­pa­ny struc­ture for your needs.

About Philipp Sauerborn

In 2005, Philipp Sauer­born joined the firm of St. Matthew in Lon­don, one of the lead­ing Ger­man account­ing firms in Eng­land renowned for its exper­tise in cor­po­rate, com­mer­cial and tax law, as a depart­ment head. After three years, he was a part­ner and man­ag­ing direc­tor.
Towards the end of 2011, he decid­ed to move to Mal­ta, where he first worked at inter­na­tion­al law firms and con­sul­tan­cies in an employed and con­sult­ing capac­i­ty. Since the begin­ning of 2013, he has been a senior employ­ee at Dr. Wern­er & Part­ner. Mr. Sauer­born is cur­rent­ly com­plet­ing his ADIT ‑Advanced Diplo­ma in Inter­na­tion­al Tax.

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