September 18, 2019

Limited company formation in Malta

Malta is one of the most prosperous countries in the EU, which is also due to the very favorable tax rates and other tax breaks. These include a 6/7 refund of corporation tax if the company is actually based in the country. There are also other advantages such as a very well-developed IT infrastructure (significantly better than in Germany), a well-developed financial sector and a skilled workforce.

Company formation in Malta: What options are there?

The main types of Maltese companies are:

  • General partnership (General Partnership)
  • Limited partnership (Limited Partnership)
  • Public limited company
  • GmbH, which is called Limited Liability Company here

There are certain formation requirements for each of these company forms. Which form is right for you depends on your capital, other shareholders and the business purpose. We will be happy to advise you on this. You will receive full assistance from our incorporation consultants to ensure that your company formation is legally compliant and that you can enjoy the full Maltese tax benefits at the same time.

Setting up a company in Malta: What should I bear in mind?

Even if the advantages of a Maltese limited company are undisputed, there are still a few points to consider to ensure that the effort is really worthwhile in the end. There are a number of tax traps if you lack the necessary knowledge. These are

  • #1: You must notify the German tax office that you are acquiring shares in a foreign company. This regulation applies from 10 % of such shares.
  • #2: Freedom of establishment in the EU: You can legally take advantage of the tax differential in the EU, so your Maltese company is not a sham company under EU law. However, there are additional regulations for EU countries with a corporate tax rate below 25 %. These require that you actually set up your business operations, including management, in the destination country and also generate active income there. A Maltese letterbox company definitely does not work.
  • #3: Reimbursement of Maltese corporation tax: You will receive 6/7 of the corporation tax of initially 35 % back from the Maltese tax office. However, this also requires a Maltese registered office and business operations as well as a Maltese bank account (!).
  • #4: You must have your own office. You expressly cannot use the office of a local consultant or lawyer. The Maltese tax office may look at this permanent establishment.

If you have any further questions, we will be happy to advise you!