Malta: the lowest Corporate Tax Rate in Europe 5%

By Caitlyn Buchanan, 17.07.18

Malta is attracting a growing number of investors from Europe and around the world. Due to a number of advantages, some investors would even consider Malta to be superior to offshore jurisdictions.

Malta is not an offshore jurisdiction, it joined the EU in 2004 and was able to maintain its extremely attractive tax system for foreign investors. A foreign-owned Maltese company is entitled to a tax refund that results in 5% Corporation Tax, the lowest corporate tax rate in Europe. Additionally, foreign-owned Maltese holding companies are entitled to full tax exemption, 0% corporation tax. Malta has no withholding taxes or stamp duty and there is a 0% dividend tax in certain situations. Additional benefits include low company formation and maintenance fees while reaping all the benefits of a European free trade location. The island country is backed by smart economic policies that protected it from the global economic crisis; incorporating a Malta company is proven to be not only cost-effective but also a safe investment.

Typically, small and medium enterprises involved in trading are attracted to Malta, but it is also a popular centre for larger companies involved with ship and aircraft registers and licensed online businesses such as betting and online gaming. Recently, the government have passed new regulations for Cryptocurrency Businesses in Malta, attracting a new sector to the market. Malta is a unique place for business where English is largely spoken resulting in many European investors transferring their businesses from other EU member states. Malta has a beneficial immigration programme for foreigner investors looking to relocate as well as plenty English language learning opportunities.

5% Corporation Tax

Many entrepreneurs form a Maltese company, so they can take advantage of the lowest Corporate Tax rate in Europe. The official corporation tax rate is 35% which is quite high. However, there is a loophole in place, for companies whose owners are not tax residents in Malta; the system allows 30% to be reclaimed. Thanks to the 6/7 reimbursement system, effectively 5% Corporation Tax is payable, this is the lowest corporate tax rate in the EU and it is also very competitive globally.

0% Tax for Maltese holding companies

A registered Malta holding company can avail of 0% dividend tax. Any profit coming from a subsidiary of a registered Maltese holding company can be paid out to the shareholders as dividends. Under these circumstances, there is no tax liability for income generated and the business is fully exempt from corporate tax without the need for a 6/7 reimbursement refund.

There are many factors that make Malta an excellent option for non-resident entrepreneurs including clear accounting requirements, low maintenance fees and a highly advantageous geographic location. The experts at Euro Company Formations can assist you to Incorporate a company in Malta and take advantage of the lowest corporation tax rate in Europe. Please contact us today to start the process.

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