Company Formation Malta: Setting Up a Company in Malta

Setting Up a Company in Malta Using a Maltese Holding Company

Anyone who is not afraid of a somewhat time-consuming "tax refund process" and would like to set up an international holding company and trading company in Malta will find the conditions in Malta ideal. However, the fees for the rather time-consuming tax refund process must be included in the overall calculation. In addition, in the case of this fiscal model, two companies must be set up in Malta (a Maltese holding company and a Maltese trading company), which means double fees within the context of the setting up and management of the companies. In addition, a foreign public limited company should exist within the EU (e.g. a German limited liability company), as the owner of the Maltese holding company. In addition, the EU parent-subsidiary company directive comes into play, for the tax system only works, if a foreign public limited company (that is, a company outwith Malta) is the owner of the Maltese holding company.

In order to achieve a final tax rate of 5% the following preconditions would have to be met:

-the public limited company would have to be within the EU, in the country where the company has its head office, that is, a German public limited company, for example

-the setting up of a Maltese trading company (Malta Ltd) with one operational facility in Malta as the active company (which conducts the business)

-the setting up of a Maltese holding company. The public limited company is within the EU, that is the German public limited company is the owner of the Maltese holding company, for example (by virtue of the EU parent-subsidiary company directive). The EU public limited company now collects the dividends of the Maltese holding company tax-free. Germany is familiar with a corporation tax retention rate of 5%. The preconditions of the EU parent-subsidiary company directive must be met).

Maltese tax law now makes it possible for the holding company to apply for the repayment of the corporation tax paid by the ITC. Of the 35% transferred, the tax authorities will then refund 30.83%, whereby the money will flow more interestingly into the holding company. This results, in the end, in a total tax burden at company level of just 4.2%.

In the event of further dividends being paid to the foreign public limited company within the EU (the owner of the Maltese holding company), this public limited company collects the dividends of the Maltese holding company by virtue of the EU parent-subsidiary company directive tax-free, whereby Germany is familiar with a corporate tax retention rate of 5%. If a further distribution takes place to the owners of the foreign public limited company - provided these are natural persons -, then this is taxed according to domestic law, that is at a withholding tax rate of 25%, in Germany.

Our Services for Setting Up a Company in Malta - Maltese Holding Company Model

-setting up of the companies through a prestigious legal firm in Malta, entry in the register,apostille,certified translations

-on request or insofar as required: appointment of a trust director for the Maltese trading company and the Maltese holding company

-on request or insofar as required: setting up of a proper registered office in Malta

-arranging tax advisers in Malta for dealing with the accounts, advance VAT returns and the process for obtaining refunds

-preparation of suitable measures: resolution adopted by the partners of the EU public limited company (shareholders of the Maltese holding company) etc..

Alternative Models

With regard to tax models within the EU, the following models for setting up companies are worthy of consideration:

-setting up a company in Cyprus or Bulgaria (10% tax rates)

-setting up a company in the special EU zones of Madeira or the Canaries (tax rates from zero to 5%).