For those who are interested in forming a company with international potential, one of the most important decisions is which country to register your new business or corporation. There are certainly many different countries that offer advantages, but few reach the business friendly environment of Malta. For many years, Malta has been one of the best places for companies in Europe and around the world for register and organize thanks to its business-friendly laws and welcoming environment.

For many, the island of Malta may be somewhat of a mystery given its relatively small size. However, its prime location in the central Mediterranean Sea has allowed it to become a hub of business efforts from Europe and Northern Africa which has in turn created an environment where companies have found it most profitable to locate. Creating a Malta company certainly offers many advantages along with consulting a lawyer Malta companies have found most beneficial when forming their business.

The Advantages of Forming a Malta Company

There are several benefits that forming your company in Malta provide that begin with its unique location. Situated on a small island located between Sicily and Tunisia, Malta has played a very important role in the history of this region for thousands of years. For history students, Malta’s importance during World War II may be its most recognizable efforts, but today the island is well known for its very business-friendly environment as well as its physical beauty located in the Mediterranean Sea.

Corporate Tax Participation Exemption: While the corporate tax rate on Malta is 35% which puts it on the higher end of the scale comparable to the United States, Malta holding companies enjoy a full participation exemption which means that all the dividends from the subsidiaries of a Malta holding company are not taxable during distribution.

In addition, a shareholder who actively trades companies of Maltese origin is entitled to a refund consisting of 30% of the 35% that is paid to the company itself. This reduces the leakage of the effective tax down to 5% which makes it a very friendly place to do this type of activity. In addition, the entitlement to refunds on taxes is available to any corporate shareholder in a Maltese company as well.

Royalties: Also, royalties will benefit from having this reduced rate as well as long as all the rules for the IP holding company is recognized. So, if the copyrights, patents and trademarks which are assigned in Malta are satisfied, then the benefits from the royalties are taxed to a far lesser extent. For many, this is ample enough reason to choose Malta as a place to set up their business.

Setting up such a business is also no big issue as all that is required from a company with origins outside of Malta to take advantage of this unique structure is to have the board of directors present inside the country as the registration takes place. Once accomplished and the status of an overseas company is recognized, the passive income that is generated through royalties is taxed at a very minimal level. For many businesses and organizations, having a Malta company in this regard will bring them far more money that having similar circumstances in many other countries.

Requirements for Forming a Malta Company

There are minimum requirements that must be met in order for a business to properly register in Malta. You will need the services of a proper lawyer Malta businesses have used for years in forming such a company or corporation

The Malta Companies Act which is modeled after the UK version basically sets out a very simple procedure that will quickly incorporate the company under Maltese law. The entire process is designed to be quick and relatively easy to accomplish. In fact, the day the business is formed the company must register within 24 hours to receive the proper Maltese documentation, funds and information so that it can be properly registered.

Residency: To form a Maltese company and have it properly registered does not require becoming a resident or citizen of Malta. All that is required is that the actual act of registering the company be performed within Malta itself. Once properly registered, all that is needed is for the proper reporting of revenues that is generated by the company as it would be under any national government. However, there are certain additional regulations that may apply depending on the nature of your business which may include gambling or gaming activities as one example.

There is a fee involved when forming the company in Malta, but it is a relatively small one and only 20% needs to be paid up front and deposited into a bank account.

Set Up: In order for a company to be properly recognized and registered, it does need to have at least one director who may also act as the secretary of the company as well. In addition, the body corporate may also act as the director as well, although the company secretary must be an individual.

Plus, a company director may also be a shareholder also which means that under Maltese law very few people are required to be present when it comes to the formation of the company.

Shareholders: There must be at least two shareholders present for the formation of the company in Malta. However there are certain conditions that allow for a single shareholder provided some conditions are met. The new Malta company can have individuals or corporate bodies act as shareholders which offer certain advantages in terms of keeping the privacy of the individuals involved confidential.

As a requirement for continuing to be recognized as a Malta company, an Annual General Meeting (AGM) must take place at least one time every 12 months of the company’s existence.

All in all, forming a company in Malta offers many advantages. Your lawyer Malta businesses can trust will provide all the details necessary to ensure that your company is formed correctly to take advantage of the unique, business-friendly environment that this beautiful island nation has to offer.

Can your business benefit from only five percent in tax?

REQUEST A QUOTE