Many companies in Malta are benefiting from the Malta Limited company structure which allows them to lower the tax burden. We are being contacted by more people every day who are interested in optimising their taxes with a limited company in Malta. However, there are a few things to consider before moving the company to Malta, and unfortunately, this model is not suitable for every company.
Company operations have to be moved to Malta
When establishing your limited company in Malta it is necessary to move the company operations to Malta as well. Saving taxes is achieved through a tax refund of 6/7 of the corporate tax, but only when certain criteria are met. The limited company needs to be owned by a foreign shareholder or holding company, and the company operations need to be in Malta. It is not possible to simply create a letter box company. It is also important to adhere to country regulations. If a company carries out business that would be considered illegal in Malta, it is not possible to do business on the islands. Whether or not it is a good idea for you to move the company operations to Malta you will have to research if the company structure is suitable for your type of business, or you can contact our legal office in Malta.
Applying for the tax refund
Once your Limited company has been established you have to pay a corporate tax rate of 35%. This is the general corporate tax rate in Malta that every company has to pay. However, a foreign owned company can apply for a refund of 6/7 of this tax, which would mean that the effective tax rate is 5%. When applying for the refund it is important to not make any errors, as the refund might be rejected.
The office of Dr. Werner & Partner is specialised in company formations and optimising your company structure in order for you to get the best results. If you are interested in a personal consultation you are welcome to contact the office to schedule an appointment. We have already helped many clients to optimise their tax burden, and to have a successful start with their company in Malta.
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