As a resident of Sliema, Malta, I can tell you that water and electricity are comparatively expensive by European standards. Especially when compared with Germany or the United Kingdom. However, there is a simple explanation for this. Malta is one of the most arid countries in the world, and has to import water, as reverse osmosis is not providing enough water for the whole island. The only source of energy is the combustion of fossil fuels, which, considering the price of crude oil, is not only expensive but the price also fluctuates a lot. This frequently changes the prices for electricity and water. Even though it is not necessary to use a lot of heating during winter, the air conditioning systems make up for this in summer. It can be very expensive.
Different types of tariffs
There are two different tariffs for households: residential and domestic. These include 5% VAT. The residential tariff applies to households that are permanently lived in, and the domestic tariff applies to holiday homes and property that is not constantly used. However, a different tariff applies to commercial users. The non-residential rate has a higher tariff and it is also subject to a 5% VAT surcharge. The more electricity or water is used, the greater the cost will be per KWH. A larger company will therefore incur much higher charges per KWH than a smaller company, as they will consume more electricity. The day tariff is also considerably higher than the night tariff. The current prices for electricity and water can be found at the Enemalta and WSC websites. It is also possible to make a calculation of the bills and get a very close estimate of what charges to expect when running an office in Malta.
Establishing a company in Malta, however, is still comparatively cheaper than it would be in other countries. Renting an office, hiring skilled workers, and other costs associated with employees can be much lower than in other countries in the European Union. Another interesting option is also the tax incentive for companies registered in Malta. If you would like more information about company formation in Malta, you are welcome to contact us.
