Business Incentives in Malta - Benefits for Companies

Business Incentives in Malta - Benefits for Companies
Updated on
February 13, 2023

Malta is renowned as a global centre of excellence for commerce. This reputation is thanks in part to the significant business incentives in Malta, afforded by its inherently pro-business policies. It is no surprise, then, that so many successful companies establish themselves in Malta.

Choosing where to base a company and operate from is an important decision for entrepreneurs and owners of growing businesses. The choice of jurisdiction has significant implications in terms of taxation, regulation, geography and access to markets. Malta is rightly considered to be a location where businesses can operate in a safe environment that offers abundant commercial opportunities. Malta’s advantageous individual and corporate tax regulations appeal to foreign business owners, investors and diverse high net worth people who wish to conduct their business in Europe.

Malta offers an exceptional commercial environment.

Malta is recognised in the financial world as an ideal jurisdiction in which to conduct business. The Maltese Authorities work tirelessly to promote a beneficial commercial environment where investments and dealings can be handled easily and professionally. Notable business incentives are available: a dividend imputation system of company taxation, double taxation relief managed through a broad double tax treaty system, an exceptional tax refunds system and a participating exemption for businesses operating as participating holdings. The Euro currency, its status as an EU member and its membership of the Schengen Area make Malta one of Europe’s preeminent locations to register a company. Malta is a strategic choice for businesses wishing to access the European, North African and Middle Eastern markets, since it is conveniently situated centrally in the Mediterranean and has positive relationships with all the surrounding nations.

Malta has an unwavering pro-business approach.

Malta boasts a commerce-oriented market: financial services form 13% of Malta’s GDP. The robustness of its banking structure is one of the reasons that Malta achieved economic growth in the midst of the worldwide economic downturn, while other countries struggled to maintain growth rates. The business incentives offered by the Maltese Authorities are applicable to multiple industries. It is a focal point for funds and investors: Private Schemes, Specialist Schemes, Professional Investor Funds and Retail Funds are just some of the fund vehicles available in Malta to fund managers. Malta’s regulations accord with all pertinent European Union directives. It also offers non-EU investors access to Europe’s globally significant financial services market.

Being identified as a Maltese company affords significant business benefit.

Maltese businesses, with the corresponding benefit of being registered in the EU for VAT, can take advantage of an effective net tax rate of 5% – after shareholder refunds – when trading or providing services across the EU and outside Europe. Companies in Malta are subject to a 35% corporate tax rate, but refunds are payable to shareholders. Maltese companies are therefore ideal organisations for treasury operations, the routing of royalties, e-commerce and iGaming. The tax status of Maltese companies extends to Malta trusts that choose to be considered as companies, facilitating advantageous asset protection for trust beneficiaries when this option is chosen.

Benefits for entrepreneurs, particularly in manufacturing.

The enactment of the Business Promotion Act (Chapter 325) by the Maltese Government in 2006 provides business incentives in Malta for entrepreneurs. Industries that demonstrate economic growth or increased employment opportunities – particularly in the manufacturing sector – are afforded business incentives under the Act. It has played a key role in drawing foreign investment and especially in the development of Malta’s reputation as a centre for manufacturing companies.

Malta holding companies enjoy competitive business rates.

Business assets of any form – such as global real estate, investments, fixed assets, securities, intellectual property and bank accounts – and personal assets such as luxury items, are offered asset protection by Malta holding companies. Such companies enjoy competitive tax rates on profits generated globally:

  • 0% on dividends from a participating holding (where a minimum of 10% of the equity is held in a subsidiary or where an investment of at least €1.5m in a subsidiary is held for more than 183 days)
  • 0% on capital gains that arise from disposing of a participating holding
  • 5% on dividends from non-participating holdings
  • 10% on royalties, interest and other passive income

Advantages for Maltese vessels.

Vessels such as ships, boats and yachts can be registered under Malta’s flag – and therefore within the EU – if they are owned by a Maltese company or by a resident of Malta. This offers numerous benefits, including low ship registration costs and preferential management of ships in some ports. Ships of more than 1000 Gross Tons, together with private and commercial yachts, are exempt from tax, while commercial yachts also have a tax rate of only 5%. There are no nationality restrictions for the ship owner, crew, master or officers. The sale and/or mortgaging of ships is tax-free. Maltese guidelines indicate that yachts may be imported into the EU at a VAT rate of just 5.4%.

A global hub for iGaming.

Malta has swiftly established a reputation as a nucleus for iGaming companies and attainment of gaming licences. Malta’s iGaming sector has grown quickly, due to business incentives in Malta that have encouraged iGaming investors to gravitate towards the island. A first-rate legal context for gaming, low fees for a reputable licence and high levels of protection for players have enabled Malta to achieve a deserved reputation in the iGaming industry. Malta offers four licence classes for different types of gaming companies. Moreover, Malta offers a high level of professionalism and regulation, competitive rates of corporate tax and a multi-lingual workforce. Its position in the Mediterranean is particularly advantageous for performing business across Europe, the Middle East and North Africa. It is no wonder that Malta is now regarded as a key location in the iGaming sector.

A focus for world-wide commerce.

Malta is recognised as a particularly hospitable location for commercial activities: its unrivalled geographic location, the enactment of legislation and regulations that are favourable to businesses and in particular its membership of the European Union make Malta an unparalleled locale for conducting business. It is a strategic geographic location for shipping – south of Italy and north of Libya – and vessels registered in Malta enjoy diverse business benefits. Malta is a key global player in the financial services and iGaming industries and has gained a reputation as being pro-business, professional and competitive. Malta is therefore a magnet for successful companies that wish to enjoy the excellent opportunities and tailored services that Malta offers, as well as for new businesses making a strategic decision about where to base their operations. The business incentives in Malta are numerous and significant: the benefits of favourable regulations and competitive tax rates cannot be overstated in today’s economy.

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