Malta Company Formation
From maltawiki.com
This article is about company formation in Malta. See also the article about Financial and Corporate Services in Malta or the list of Financial and Corporate Service Providers.
Malta is one of the most interesting places in the world to form a company. Malta is surely the most interesting place in Europe to form a company from many perspectives. The combination of an English speaking population, stable and rich economy, full EU membership and a very generous tax credit scheme makes Malta an ideal base for your European company.
Contents |
[edit] The Tax Credit Scheme
As with many former UK dependencies, tax from foreign companies has long been an important source of income for the state budget in Malta. Upon joining the EU and the evolution of anti tax-haven legislation in competing countries, the Maltese taxation legislation was revised. The result was a generous tax credit scheme for foreign shareholders of Maltese registered companies.
While corporate tax in Malta is a stiff 35 %, the tax credit scheme means that a foreign shareholder to a Maltese company can apply for a tax credit of up to 6/7 of the tax suffered by the company. This equals a tax credit of 85 % of the tax suffered by the company.
For a company that is held uniquely by foreign shareholders, a tax credit of 85 % of the 35 % tax originally suffered by the company means that the net effective tax burden for the company is around 5 %.
To enable the actors on the market more freedom on the playing field, solutions such as holding companies, foreign holding companies, company webs and bare trusts are often applied.
[edit] Bare Trusts and Company Formation in Malta
When registering companies in Malta, foreign individuals and companies often take advantage of the bare trust system still in function in Malta. The bare trust system means that Maltese companies can be held by nominee shareholders acting on behalf of the actual shareholders and thereby effectively hiding the true owner of the company formed.
[edit] Company Formation and virtual office space
Alternatively to using a company formation agent, a virtual office can be used when establishing a business presence in Malta. A virtual office is a private, discreet and effective way of running a professional company in Malta.
A virtual office can also compliment working with a company formation agent, because this will help diversify both risk and roles with regards to the company. In this way, you are free to do a risk free change in company formation agent/ corporate service provider. It also allows you to keep your established mailing address and phone number even when changing provider or discontinuing the services from the company formation agent.
[edit]
In November 2010, the Malta Chamber of Commerce arranged the Scandinavian Business Forum to create bonds between Malta and Scandinavia and help educate Scandinavians of the tax advantages of basing their EU company in Malta.