Companies are getting more and more interested in optimising their company structures in order to save taxes. Since the recent developments in Luxembourg, Ireland, the Netherlands and Belgium, who are being investigated for tax evasion of large companies, legally sound solutions have become an important part of the establishment of a company in another country.
The Maltese tax system is in line with European laws, and the state does not offer preferential tax treatment for companies, as it is the case in Luxembourg. All companies in Malta have to pay the same amount of corporate tax, which is currently 35%.
Since Malta was under British occupation until 1964 the Malta Limited used to be just like the UK Limited. However, after the liberation of Malta, and its entry to the EU and eurozone, the Malta Limited has changed fundamentally. One of the differences is the capital that is needed to start the company. Whereas it is £1 in the UK, it is €1,250 in Malta.
The most fundamental difference is however, that it is possible to claim a refund of 6/7 of the corporation tax with the Malta Limited. This is achieved if certain criteria are met, and the company is owned by a foreign holding company or stakeholder. This results in an effective corporation tax rate of only 5%.
The Malta Limited offers an interesting opportunity for companies to pay fewer taxes, but it is not a suitable solution for every company. When considering establishing a company on the Maltese islands, the company operations have to be physically moved there, and it is important to consider certain factors, such as available workforce, trade opportunities and resources. Many companies who conduct their business on the Internet find Malta to be a convenient alternative to the UK Limited.
If you are interested in establishing a Malta Limited, and would like a personal consultation with a representative of the legal office of Dr. Werner & Partner in Malta you are welcome to contact us. We have helped many clients in the past to establish their business and claim the refund of the corporation tax.