Malta

An island in the Mediterranean. The island of Malta has length of 27 km, width of 15 km. In 1964 Malta received independence from Britain. Is a member of the EU.

Capital

Valletta

Official language

Maltese and English Italian is widely spoken.

Currency

Euro

Government

Parliamentary republic

Economy

Malta has a strong economy and has long been regarded as an attractive region for investment. The main branch of economy of Malta is tourism. The flow of tourists to Malta is continuously growing. Malta is one of the world's major centers of learning English. In the last decade there has been a substantial growth in the financial sector of Malta. It has progressive laws that meet the requirements of modern conditions.

Legal system

Founded on the principles of common law and civil law, but has signs of Romano-Germanic system.

Corporate law

  • Companies Act 1995
  • Offshore Trusts Act 1988
  • Recognition of Trusts Act 1994
  • Trusts and Trustees Act 2004
  • Trusts Income Tax Regulations 2005
  • Business Promotion Act 2003

Types of companies

  • Private Limited Company 
  • International Trading Company
  • International Holding Company 
  • General Partnership 
  • Limited Partnership 
  • Branch of Overseas Company
  • Trusts

Private Limited Company

  • Company name must end in 'Limited' or 'Ltd'.
  • Only one member and one director an individual of any nationality residing in any country is required.
  • A Secretary is not required.
  • The registered office must be located in Malta.
  • The minimum share capital, if the shareholders are residents of Malta is EUR 1,165. If the shareholders are non-residents, the share capital is 23 000 EUR. If the capital exceeds the minimum value, it must be paid for at least 20% of the nominal value of shares. The share capital may be denominated in any freely convertible currency.
  • Bearer shares are not allowed. Redeemable preference shares or shares without voting rights may be issued.
  • The company must maintain an annual report certified by an auditor.

Trust

  • Under the new legislation, assets of a trust may include real estate, located in Malta.
  • A founder of a trust may choose the law by which a trust will be governed.
  • All trusts, including foreign ones, must be registered. Registration fee is EUR 350. The annual fee for the renewal of a trust is EUR 2,500 (according to data of 2012).
  • Unregistered foreign trusts can not enjoy tax advantages that are used by registered trusts (that are exempt from tax).
  • Transfer of assets or change of trust beneficiaries may result in changes in the tax regime.
  • A registered trust must have a professional trustee who will submit an annual declaration of compliance with legal requirements.
  • Trusts can take advantage of the Agreements on avoidance of double taxation, signed by Malta.

Taxation

Taxation of companies is implemented as a return of previously paid tax in the allocation of net income to shareholders. If all shareholders are non-residents of Malta, the tax on net profit is equal to 5%, although officially a company pays 35% tax. If an international holding company owns 10% of the shares of foreign companies, and all of its shareholders are non-residents, it is fully exempt from tax, i.e. Malta does not apply withholding taxes, dividends are exempt from taxation. In addition there is an exemption from taxation on capital gains on the disposal of participating holdings and on the sale of shares in a holding company by foreign shareholders. If a company has less than 10% of the shares of a foreign company, it may also receive a refund of all taxes under certain conditions, if the company does not comply with these conditions, then it gets a return 2/3 of taxes previously paid. The company also can choose a scheme whereby it will be taxed 6.25%.

Agreements on avoidance of double taxation

Signed with 59 countries. Including with countries such as Australia, Austria, Belgium, Bulgaria, Great Britain, Hungary, Denmark, Germany, India, Italy, Canada, Cyprus, China, Korea, Libya, Luxembourg, Malaysia, Netherlands, Norway, Pakistan, Poland Romania, Finland, France, Czech Republic, Sweden, South Africa.