When Malta joined the European Union in 2004, the country introduced an interesting taxation structure aimed at foreign companies to move their business to Malta and invest in the country. The plan has succeeded, and since then many companies have established their business on the islands.
Every company that is registered in Malta will have to pay 35% corporation tax. However, if the company is owned by a foreign shareholder or a holding company it is possible to apply for a refund of corporation tax. A Malta limited company that generates their income through trading activities can apply for a refund of 6/7ths of the corporation tax.
Establishing a company in Malta is not possible for everyone, and in order to qualify for the refund, the business operations will need to be moved to the islands. To find out if the Malta limited company model is something for you, you will have to assess whether the islands can offer everything your company needs to carry out its business, among them are for example workers, resources and distribution options. Many of the companies that have chosen Malta are Internet-based companies that do not focus on the production of goods. However, there are also some production companies, among them is toy giant Playmobil.
Another advantage is the low income tax. Especially high earners can benefit from the favourable taxation structure. For example, income between €14,500 and €60,000 is taxed with 25% and everything over is taxed at 35%.
If you would like more information about the company formation in Malta you are welcome to contact the legal office of Dr. Werner & Partner for a personal consultation. We have helped many clients to successfully and quickly establish their business in Malta.
