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An increasing number of foreign investors (established and start-ups) are choosing to set up or relocate their businesses to Malta due to a number of fiscal and social benefits including the highly advantageous corporate tax system offered by the Maltese Jurisdiction. The distinctive lifestyle that the island can offer, its location in central Europe, the climate, English as an official language and other factors also play an important role in attracting a number of such investors. Our professionals at CSB Group provide expert advice and ongoing guidance to assist clients in building their businesses on solid foundations that ensures success and long-term return on investment.
Relocating your Business to Malta
Malta is considered as a highly attractive jurisdiction by foreign investors who wish to relocate a business to the island. Such advantages include tax, investment immigration opportunities, fiscal and social benefits, distinctive lifestyle and a stable economic ecosystem.
Furthermore, Malta’s service industries, particularly the financial services sector, are consistently emerging as very strong and innovative, facilitating and adding value to the whole process of conducting business in Malta. A trained and highly motivated workforce and relatively low costs of labour also make Malta an ideal location of choice in this respect.
Tax and Legal Framework
Malta is one of the few European countries to adopt a full imputation system, which is one of the main advantages of Malta’s tax system along with the fact that Malta has an extensive network of double taxation agreements and the refundable tax credit scheme.
A company which is set up in Malta would be chargeable to tax on a worldwide basis and typically taxed at our standard corporate tax rate of 35%, however, upon a distribution of dividends to the shareholder, such shareholder becomes applicable to an income tax refund on the Malta tax paid at company level.
With the full imputation system, profits taxed at the level of the company are not subject to further tax at the level of shareholder, since the latter receive full credit for any tax paid by the company distributing the profits.
The rate of refund depends on various factors and can be either a 2/3, 5/7 or 6/7, with a 6/7 refund applicable for companies carrying out a trading activity. Malta also adopts the participation exemption regime, meaning any dividends or capital gains derived by a Maltese company from a qualifying “participating holding” in a subsidiary would be exempt from tax in Malta. Lastly, Malta does not withhold any tax on dividends paid to its shareholders.
Business Infrastructure in Malta
Malta is a small island, yet it is equipped with infrastructure of high standards that anyone wanting to open a company in Malta would expect to find.
Commercial and Residential Property
With the construction industry being a very strong one, the island is not short of modern and highly finished property that can meet different budgets. The most popular business areas in Malta are the ones closest to the Marsamxett Harbour area that would include Sliema, Gzira, Ta’ Xbiex, Msida, Pieta, Valletta and St. Julians, however, other areas conveniently located in well-connected areas, like Swatar and Mriehel, are also in high demand.
Anyone looking for residential property can rest assured that a vast selection of property is available for sale or rent at various budgets and in any desirable location.
Malta is quite advanced when it comes to IT infrastructure. Such types of services include co-location and hosting services, data centres and cloud services and internet services. Robust government information systems architecture together with established service providers, ensure that anyone interested in doing business in Malta will have access to secure, affordable, efficient and reliable system in place.
Business Support Services
Outsourcing any support required to ensure that all business needs are met is a highly cost saving exercise. Malta boosts a number of professional service providers that can efficiently handle corporate requirements such as submission of annual returns to the Malta Business Registry or directorship or secretarial services, auditing and accounting, payroll, recruitment, employment law, compliance and regulatory advice.
The workforce in Malta is highly renown for its qualified and multi-lingual population that consists of both local and foreign workers. Besides the Maltese language, English is also an official language in Malta, making communication easy within the business itself but also with clients worldwide. Italian is also widely spoken and candidates with a good grasp of French, German, Spanish and other language are significantly common too.
Despite being an island, Malta is highly accessible via both sea and air transport links to main and subsidiary airports in mainland Europe and North Africa. Regular and frequent flights to and from Malta are operated by numerous airlines that make use of Malta International Airport.
In addition, the island’s small size is convenient for short commuting times from all locations across the island. Other than public buses servicing routes across the island, numerous transport companies offer immediate, 24-hour transportation services to any location in Malta, particularly upon arrival at the airport.
Immigration and Investment Incentives
A number of citizenship and residence programmes are available, allowing qualifying persons that satisfy a robust due diligence process, to take up citizenship or residency in Malta. While some programmes grant residency to Highly Qualified Persons and professionals in Key Employment, other programmes are an investment incentive that would grant an EU passport or residency permit to qualifying persons that are interested in making advantageous investment in Malta.
Malta’s Business Culture
Malta’s history of serving as a commerce and trading hub for foreign rulers throughout the centuries has perhaps donated Malta and the Maltese an inherited gene and propensity for discussing and doing business. Inevitably marked by the legacy of 150-year long British rule, traditional British ways are still very much evident in the Maltese way of conducting official business.
Business introductions in Malta are often characterised as formal, requiring the appropriate attire and the other party is addressed by their title and surname on the first meeting. From then onwards, after business cards and details have been exchanged and a working relationship established often over coffee or a light meal, introductory formalities are quickly set aside.
Generally, business hours coincide with what are deemed to be standard office hours in Malta, usually Monday to Friday between 8am and 5pm and sometimes Saturdays between 8am and 12pm. The capital of Valletta and Sliema and St. Julian’s nearby are the areas where most of Malta’s commercial and business activity is centered. These areas are easily accessible and well-supported with all modern-day facilities and amenities.
Malta has been repeatedly rated as a strong and stable economy by major credit rating agencies such as Moody’s, S&P and Fitch. As described by major economists, Malta’s economy is highly volatile, meaning that if it gets impacted with either a local crisis or a global one, like the COVID-19 pandemic, its economic size makes it possible to get back on its feet after a shorter time than a larger economy would.
This translates into a safe economic climate which is also safeguarded by the highly regularised industries, robust anti-money laundering system and an extremely low probability of natural disasters.
In our dealings with CSB Group for over 10 years, we have found every member of the staff and leadership team to be wholly and completely knowledgeable and professional when doing business in, and from Malta.
Liberation Group Holdings
As foreigners having our business located in Malta, it did not take long until we realised the importance of local know-how and the value of having the presence of a professional partner that could take care of juridical and financial matters. We can honestly say that choosing CSB as our advisor is one of the best decisions we have made. CSB always delivers great results in a timely fashion and we would give them the best recommendations to anyone that considers starting up their business abroad.
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CSB Group specialises in providing tailor-made advice to Individuals and companies looking to relocate to Malta. We strive for excellence and give tailor-made advice to our clients wishing to enhance their lifestyle and business prospects by moving to Malta.