Malta and tax – Start your company

Malta and tax - Start your company

Malta as a part of European Union (Shengen Agreement and Eurozone) is considered as one of the most efficient jurisdiction in terms of corporate tax. Malta is more relevant jurisdiction when such company needs to trade with other EU companies and North America. All Malta companies pay 35% in income tax on company profits. However, when this profit is distributed in dividends to the shareholders ( which should be every year) then all those shareholders who are not domiciled in Malta are entitled to claim a refund of company tax of 6/7. This means that the net effective tax suffered on company profits is actually 5%. A holding company should be located in a jurisdiction with excellent legal and financial infrastructure as Malta. The tax ensures that repatriation of suffers minimum or no exposure to tax and creates an efficient exit route for the profits of its subsidiaries.


The refund system works very efficiently and the refund is normally in shareholder’s bank account in less than 2 weeks from the company paying the tax due.


The above makes Malta the lowest tax jurisdiction for NON MALTESE  in the whole of the EU.  For this reason Malta have been getting around 5 thousand new companies in Malta every year, mostly set up by European investors who wish to reduce their tax costs.  Tax is in fact a cost that must eventually be reflected in the price. And hence the lower the tax cost, the lower the selling price, and consequently competitivness.
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