During the last years, Malta has established itself as a destination of choice for foreign investors from all over the world. By the end of the year, Malta is expected to register the fastest growth rate in the European Union based on the property prices on the rise and the local banks’ bigger revenues. The Government is also providing high net worth individuals and companies very attractive tax rates.
In order to maintain the reputation of Malta as a competitive economy, the Government grants foreign investors different incentives and subsidies in order to help them establish companies in Malta. Traditionally, the country’s most prosperous industries are tourism and manufacturing, but during the last years the financial services and banking sectors have turned Malta into one of the most developed economies in the European Union.
At the base of this rise is the Maltese legislation on banking, mutual funds, insurance and trust services. The low taxes applied to both individuals and companies have also contributed to the country’s ascension as an attractive regional financial center. In order to avoid becoming a tax haven, Malta has enabled a full imputation tax system and established a corporate tax rate of 35%.
Taxation of both individuals and companies in Malta is based on tax residency. The greatest advantage of the Maltese taxation system is the exemptions it offers. Among these, Malta does not levy an inheritance tax or wealth tax which has turned the country into a very attractive destination for retirees from all over Europe.
Companies are exempt from paying an annual property tax and also from withholding taxes on dividends and interests. Foreign companies also benefit from an advantageous tax regime, as they are applied a tax on the income earned in Malta and on their foreign income received in the country. The same rules apply to foreign citizens living or working in Malta.
Foreign companies will also benefit from Malta’s double taxation agreements which include the EU Parent-Subsidiary Directive resulting in lower taxes for foreign enterprises holding shares in a Maltese company.
For a complete picture of what makes Malta so appealing for foreign businessmen, please contact our specialists in company formation.