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.
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