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Five Reasons Why Companies Register in Malta

why companies register in malta


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5 Reasons Why Companies Register in Malta
  1. The Real Tax Rate
  2. Incorporation
  3. The People and Economic Infrastructure
  4. Capital Gains Taxes
  5. Tax Treaties

Malta is a tiny island nation in the Mediterranean that attracts company formation from neighboring countries.

It's got a small economy and, according to The Tax Foundation, the highest statutory corporate tax rate in Europe.

So why is it becoming an increasingly popular spot for business registration?

There are quite a few reasons people want to have a Malta company, but we'll focus on the top five.

First, the statutory corporate tax rate is somewhat misleading; we'll show you how it's possible to pay between 0% and 10% taxes.

It is also cheap and easy to incorporate, inexpensive and profitable to incorporate in, part of the European Union, has low capital gains taxes, and has a variety of double taxation prevention treaties.

Reasons Why Companies Register in Malta

Keep in mind that you'll need a local address, a bank account, and a company secretary to register a company in Malta. You can get these through formation services or by using your Maltese address.

There is also a registration fee associated with incorporation, which varies depending on the authorized share capital of your company.

The Malta Business Registry provides a detailed breakdown of the fee structure, with options for paper and electronic registration.

1. The Real Tax Rate

The actual tax rate in Malta can be as low as 0% – but it's complicated.

A shareholder can be reimbursed for 70%-100% of the corporate taxes paid depending on what type of company it is.

The result is that most businesses, particularly limited liability companies, have an effective tax rate of 10% or less.

This Malta tax paid is significantly lower than the headline corporate tax rate.

Further, the shareholder reimbursement system makes Malta appealing for a foreign private company aiming to reduce its tax burdens.

If you're going to do business in the European Union, you're going to have to set up shop somewhere.

Malta is part of the EU and has full access to the Eurozone.

Foreigners often choose to start a business in Malta by setting up a Private Limited Liability Company (Ltd.).

Malta is a great choice for the aforementioned tax purposes – you'll get your foot in the door of one of the biggest trading blocks in the world and save money on taxes at the same time.

Registering in Malta

2. Incorporation

Registering in Malta will help keep your Eurozone taxes low, but you'll still have to pay taxes in your host country.

The solution?

You can make Malta your home country by incorporating your business there and registering it.

After all, it's been a part of the European Union since 2004, giving full access to the Eurozone.

Malta company incorporation allows companies to avoid their host countries' relatively high tax rates while losing few benefits.

Additionally, incorporating a Maltese company is cheap and easy.

The Maltese government has ensured that it's an attractive option for companies to incorporate.

After all, receiving low taxes is better than receiving no taxes, and even if there are virtually no corporate taxes, run-of-the-mill employees will still be taxed. 

In general, more business is good for business.

3. The People and Economic Infrastructure

Malta has a well-educated supply of English speakers; English is actually one of the national languages of Malta, and about 88% of Maltese people can speak it.

The majority of Maltese people can also speak Italian.

These advantages are obvious; some are more subtle. Aside from solid education, the Maltese people share common Western values.

Banking is easy and efficient, and foreign cash flow is largely unrestricted compared to the U.S. Malta is in the Central European Time Zone, which is logistically convenient, and its banking and economic services are top-notch.

There are also favorable logistical and legal frameworks for foreign investments; the Maltese government wants you there.

Many of these advantages are relatively intangible, and they certainly aren't the first things you look for when debating where to incorporate them, but they really do add up.

One final note – these laws are all above-board, and Malta is a reputable destination for such a company like those of a private or public company.

There is little economic and political turmoil in Malta that could threaten the prosperity of a typical company, and the economic and legal clout of the Eurozone backs their stability.

4. Capital Gains Taxes

Malta technically doesn't have any capital gains tax, per se.

Instead, there's a 12% withholding tax from the sale of a given asset.

12% is very reasonable compared to many other countries, including a handful of global financial hubs like the U.S., and a wide variety of tax breaks and loopholes can also be utilized.

5. Tax Treaties

Malta has a wide variety of treaties (over 40) with various governments and entities that help shield Malta companies from double taxation.

For example, in many cases, host companies tax profits that you make abroad.

If you make $100 million in global profits, that money could be taxed in your host country, and in the countries where you made the profit.

Needless to say, being taxed twice on the same profits isn't good for a company's bottom line, but Maltese treaties can help you avoid that scenario.

In Short

Companies incorporated in Malta for a reason.

Remember that registration is necessary for any company intending to operate in Malta.

As always, consult legal and tax professionals before making any decisions about the best way to meet your corporate needs.

In this case, quite a few legal and tax professionals are available for consultation in Malta who specialize in advising corporate clients on matters like this.

This can make a relatively painless process even simpler.

Whether you're looking to break into the European market, looking for tax breaks through incorporation, trying to dodge double taxation, or just looking for a logistically sound headquarters, Malta has a lot to offer.

Business aside, Malta is also a gorgeous country and a wonderful place to live!

Are you looking for a more connected city with all the greatest aspects of a Maltese-registered entity?

Consider registering in Hong Kong instead and plug in your business to the financial world.


Malta has a high corporate tax rate of 35% on a company's worldwide income tax and capital gains. However, the effective tax rate for shareholders can be much lower, depending on the type of company and the residence of the shareholders. In most cases, businesses end up paying between 0% and 10% in effective taxes. Additionally, Malta has double taxation agreements with over 40 countries, which can further reduce tax burdens.

Though not a tax-free jurisdiction, Malta encourages foreign investment with a low tax rate for foreign companies and several beneficial tax advantages for both foreign and local companies. Additionally, Malta promotes non-domiciled residency schemes for high-net-worth individuals, capping their income tax rate at 15%.

Malta has no withholding taxes, no stamp duty, and no dividend tax under certain circumstances. Additionally, the country offers low company formation and maintenance fees. Malta's smart economic policies have also protected it from the global financial crisis.


Vivian Au

For many years, I worked at big accounting and company secretary firms in Hong Kong. I started Air Corporate to make the life of entrepreneurs and SMEs easy.

Vivian Au


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