Malta became one of the most attractive destinations for setting up holding companies in Europe, after the Government introduced the participation exemption a few years ago. Even if it does not have specific laws dedicated to the incorporation of holding companies, Malta has a unique taxation system that turns the country into an ideal location for setting up companies. It is good to know that Maltese holding companies may operate both in and outside the European Union. Support for establishing a holding company in Malta can be provided by our team of company formation agents in Malta.
Quick Facts | |
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Legal entities used | Private or Public Limited Liability Company |
Incorporation method | With the Maltese Registrar of Companies |
Incorporation time | Around 2 weeks |
Advantages | It can operate within or outside EU |
Precautions | Employer number required |
Shareholding structure | 1 shareholder |
Minimum Capital | EUR1,200 for private LLC; EUR46,000 for public LLC |
Taxation | 0% tax on dividends and capital gains |
Control | Foreign ownership available |
Accounting and Reporting | Annual accounts submitted to the Maltese Government |
Number of double taxation treaties | More than 70 |
Company name | Must be unique and approved by Registrar of Companies |
Share capital structure | No restrictions on currency; can be in any denomination |
Holding company activities | – Holding investments; – managing subsidiaries. |
Accounting standards | Follow International Financial Reporting Standards (IFRS) |
Annual filing requirement | Financial statements and annual return |
Corporate tax rate | Flat rate is 35%, but Malta provides a 6/7ths corporate tax refund for non-resident, non-domiciled shareholders, lowering the effective tax rate to 5%. |
Dividend Taxation | Exemption for dividends received from subsidiaries |
Registered office | Must have a registered office in Malta |
VAT registration | Pure holding companies are exempt from Maltese VAT, but the tax might be applicable to intra-community acquisitions of services under reverse charge regulations. |
Shareholders’ liability | Limited to share capital |
Types of assets owned by the holding company in Malta | Malta holding companies have the flexibility to hold various assets, including shares, securities, real estate, aircraft, bank accounts, and intellectual property, as well as personal assets like yachts, residential properties, and artworks. |
Requirement for local bank account (Yes/No) | Yes |
Registered agent requirements | No, but it is recommended to hire our company formation agents in Malta for smooth incorporation of a holding company. |
Residency requirements for the founder(s) (yes/no) | No |
Assistance in opening a holding company in Malta | From initial consultations to navigating legal requirements and paperwork, our team ensures a smooth and efficient incorporation process. |
Opening a holding company in Malta involves several steps, and it’s advisable to seek professional advice from legal and financial experts to ensure compliance with local regulations. Here is a general guide to the steps involved in setting up a holding company in Malta:
Please note that this is a general guide, and the specific requirements and processes may vary based on the nature of your business and any subsequent changes in local regulations. It is strongly recommended to consult with our company incorporation consultants familiar with Maltese corporate law throughout the entire process. Also, you can discover an infographic with details about holding companies in Malta:
Based on the Maltese taxation system, the incomes or capital gains resulting from qualifying participation holdings may benefit from tax exemptions. Participating holdings qualify for tax exemptions in Malta if the Maltese holding company owns at least 10% of the equity shares of a company and the holding offers the following rights:
Additionally, the participating holdings must meet at least one of the following conditions:
The video below shows the main advantages of Maltese holding companies:
No, there is no need to be concerned about the withholding tax on dividends of holding companies in Malta, as such tax is not imposed, regardless if the stockholders are residents or not. However, companies must register for VAT in Malta. Malta sets specific thresholds that determine the obligation for companies to charge Value Added Tax (VAT). The applicable threshold for your business hinges on the nature of your operations, such as supplying goods, low-value-added services, or other activities.
In summary, if your annual turnover is below €10,000, you are likely exempt from VAT charges; if it exceeds €35,000, you are obligated to charge VAT. For turnovers falling between €10,000 and €35,000, the requirement depends on various factors. Regardless of meeting the turnover threshold, it is necessary to register your company with the VAT authorities. Once VAT charging begins, it must continue unless your annual turnover drops below a distinct threshold, which is lower than the entry threshold for the VAT system. You are welcome to get in touch with our agents if you are planning to open a company in Malta. With their assistance, you can also get guidance on VAT regulations.
Apart from the participating holding regime, Malta is a preferred destination for setting up a holding company because it offers other advantages among which:
The support of our company incorporation representatives in Malta is recommended for investors from abroad who want to set up a holding company in Malta. The formation of holding companies benefits from the lack of harsh bureaucracies, and even so, instead of dealing with the language barriers or all sorts of problems in matters of legislation, it is ideal to have the assistance and the experience of a local team of company formation agents in Malta. Our team is at your disposal with all kinds of services, among which, are support for tax compliance, acquisitions, accounting services, and representation with a power of attorney for any kind of business structure available in Malta.
Holding companies in Malta have an advantageous taxation structure and are proper options for foreign entrepreneurs interested in expanding their portfolios in a country that offers many benefits in the business climate. We remind that Malta signed around 70 double taxation treaties with countries worldwide and the provisions of these agreements are also applicable to holding companies established in Malta. International trading companies are attracted by the benefits of holding companies in Malta, especially the convenient tax structure applicable in this country. Below you can find interesting information, figures, and statistics about investments in Malta:
How is a holding company registered in Malta?
Private and public limited liability companies are suitable for holding companies in Malta. EUR 1,200 and EUR 47,000 respectively represent the minimum share capital for holding companies established as private or public LLCs.
How long does it take to register a holding company in Malta?
It takes around 3 days to register a holding company in Malta, yet you should ask for complete assistance and guidance from our team of specialists to benefit from the entire support. The formalities can be explained by our agents in Malta.
Can a holding company in Malta appoint a director?
Yes, owners of Maltese holding companies have the choice of appointing their managers or directors. This is one of the advantages of a holding company in Malta, but for more details on this matter, please get in touch with our specialists in company formation in Malta.
Is the tax structure advantageous for holding companies in Malta?
Yes, dividends and capital gains are not subject to taxation. This is quite an advantage for international entrepreneurs who want to enjoy tax advantages and direct a part of the profits through investments in the firm.
Are holding companies protected by the double taxation treaties signed by Malta?
Yes, Malta signed several double taxation agreements for protection against fiscal evasion and paying the taxes twice. All you need to know about taxation in Malta can be discussed with our company formation agents in Malta.
Is the registration of a holding company formation in Malta expensive?
No, the costs for registering a holding company in Malta are affordable and are among the lowest among the EU countries.
Why is a holding company in Malta beneficial?
Besides the taxation regime that is advantageous for holding companies in Malta, having control over other companies is quite important to international or local entrepreneurs. The existing subsidiaries can be consolidated with the help of holding companies.
Is a holding company in Malta flexible?
Yes, flexibility is one of the characteristics of holding companies registered in Malta. Entrepreneurs can develop other operations too, as such entities are quite advantageous from this point of view.
How many shares a Maltese company need to own in another company?
At least 10% shares in a company in Malta are necessary to register a holding company in this country. Maltese holding companies are suitable business ideas for many entrepreneurs from overseas.
Can I ask for support for registering a holding company in Malta?
Yes, one of our company formation specialists in Malta can assist entrepreneurs in registering holding companies in Malta. The formalities of a holding company in Malta are not complex and can be explained by one of our specialists in business formation in Malta.
One compelling reason to establish a holding company in Malta is its remarkable flexibility, catering to diverse purposes such as holding real estate assets, shares, and securities. Maltese holding companies, whether private or public, can be registered efficiently, typically within two to three days, with minimum share capital requirements varying based on company type. Public limited liability companies face additional obligations, including comprehensive financial status declarations, yet offer advantages such as the ability to have over 50 shareholders. The allure of Maltese holding companies extends to their tax efficiency, with no taxes on capital gains and dividends, making them attractive to international investors seeking to consolidate subsidiaries, raise capital, and enhance proficiency in distribution. Malta’s business-friendly environment, and favorable tax regime, with a potentially reduced corporate tax rate, contribute to its appeal as a financial destination. The ease of starting a business, straightforward formalities, and supportive laws for foreign investments further position Malta as an attractive choice. Here are a few of the most important features of Malta, in terms of investments:
No matter if you want to open a holding company or another type of business in Malta, you can rely on the support of our company formation specialists in Malta and see how they can help you with the formalities. It is quite recommended to have support by your side and to make sure you understand the business direction in this country.
For complete information about the taxation of holding companies, please contact our company formation agents in Malta.