When you have an established company or you are a new entrepreneur, you probably want to make the most out of your company and optimise the taxes to ensure you have the best possible company model without evading taxes. Clients sometimes ask us if it is tax evasion to make use of the Malta company model, and they are rightfully concerned. Last year, many countries were under investigation and harsh critique for offering lower tax rates to large corporations, for example in Luxembourg. However, Malta is an exception. The country is a low tax country, but the tax laws are in line with European laws and moving a company to Malta is not considered tax evasion.
When registering a company in Malta you will have to pay 35% corporation tax. This is one of the highest rates in Europe. However, it is possible to apply for a refund of the corporation tax if the company meets certain criteria and is structured according to strict specifications. For example, the company needs to be owned by a foreign holding company or a foreign shareholder. This will then make it possible to apply for a refund of 6/7ths of the corporation tax.
This company and taxation model has led to many companies choosing Malta as a location to carry out their business. However, when considering Malta as a business location it is important to know that the operating side of the business needs to be moved to Malta, which means it is not possible to just have a letter box company.
If you would like more information about the Malta Ltd company model you are welcome to contact the legal office of Dr. Werner & Partner. We have helped many clients to establish their business on the islands and take advantage of the favourable taxation structures.
