I know, yon want to know how it is possible to get company in Europe and only pay a 5% tax.
You can do it too!!
If you like to have a company in Europe and pay less tax possible, we suggest you setting up a company in Malta.
Malta Company has many advantages and executive features and has become a very popular location for foreign investors and businesses on an international level.
Malta has Double Tax Treaty Agreements with over 70 countries, and the procedure of incorporation is easy and fast.
100% foreign ownership is allowed. Additionally, there are valuable advantages of the tax system in Malta. Malta tax rate can be decreased to %5, which is the lowest in the EU area.
Since Malta is one of the members of the European Union, effective tax handling can be done.
If you do not mind where the company is incorporated as long as it is a tax haven, we suggest you to look as our article about offshore company formation.
- Outline of Malta
- Living in Malta
- Merits of a Malta Company
- The certainty of Tax Treatment
- Malta tax rate and Refund System
- Two types of Malta Company
- Shareholder, Secretary, Director
- Minimum Capital of a Malta Company
- Memorandum of Association
- Evidence of Paid Share Capital
- Government Fee
- Bank Account in Malta
- Block chain and Malta
- General FAQ
Outline of Malta
The official name is Republic of Malta, located in the center of the Mediterranean Sea, just 93 km south of Sicily.It is a small island country, whichthe total area is 316 km2and the capital city is Valletta. Malta is one of the EU countries and also a member of the Commonwealth of Nations.
Malta is well-known as a tourist resort, with beautiful areas and historical monuments. Also, Maltese people are known as independent, highly educated and hard workers. Their official languages are Maltese and English.
Living in Malta
The state has unique programs for high net income retires. Malta is appealing to entrepreneurs, staff and retires alike.
The tax benefits of living in Malta are several. Only revenue transferred to Malta is taxed, so you can possess offshore investments without paying tax dime. In addition, the capital gains that are transferred to Malta are tax-free. Malta does not have an inheritance tax, property tax, or a yearly property tax. Combine low taxes, low living costs, and sunshine all year round, and it is evident why it is very appealing to live and work in Malta.
Recently, the Maltese government reduced the threshold to provide residency for foreigners who rent or purchase land in Malta. The program is known as the "Global Residence Programme" which offers foreigners the possibility of residing in an EU country. This allows foreigners to obtain residence permits if they purchase property in Malta for a minimum of € 220 000 or are renting at a total rental value of € 8,750 (or € 730 monthly). The previous residence limit for investment in immovable was € 400,000.
Price: 3400.00 EUR (5012.28 CAD)
Courier fee:70EUR (103.19 CAD)
Merits of a Malta Company
Merits of a Malta Company Malta has a lot of advantages and merits as follows:
- Double Tax Treaty Agreements with more than 70 countries.
- Fast and easy procedures of incorporation.
- 100% foreign ownership is allowed.
- Valuable advantages of the tax system in Malta.
- The income of Malta companies is subject to a flat income tax rate of 35%. However, 30% tax will be refunded if the company has foreign shareholders. That means the foreigners pay only a 5% corporate tax in Malta. Please check the MFSA website for more information.
- No need of Malta resident director.
- Company director can be accepted.
- No need of Malta resident shareholder.
- Nominees can be accepted for your security, etc...
- Europe's geographical vicinity.
- EU ports and commercial treaties access.
- Ownership of a single Member is available.
- Re-domiciliation is permitted.
- English as the main languages.
- In the Latin alphabet a company name can be in any language.
- Flexibility in administration.
- Modern corporate law.
- Have no negative overseas tax haven associations.
- Non-resident companies have much of the same benefits as resident companies.
The certainty of Tax Treatment
In Malta, official tax decisions can be obtained. Rulings ensure that a particular transaction and the law are enforced and are five years ' long binding on Malta Revenue.
There is also an informal revenue management system. This comes in the form of a guidance letter from the revenue. Such letters are not specifically governed by legislation but generate a legitimate expectation for a taxpayer. The authorities of Malta Revenue consider letters to be binding.
Malta tax rate and Refund System
As mentioned above, the tax rate in Malta is 35% and its flat rate applies to all types of business. At first glance it looks somewhat like a high tax rate, but in Malta a specific refund system considering tax exists. In fact, under this system your company will be able to pay less tax.Here under is a simple summary of the refund system:
- In a normal company´s case, 86% (6/7ths) of paid tax will be refunded.
- 71% (5/7ths) of interest or loyalty will be refunded.
- 100% will be refunded from overseas company income with which Malta Company has more than 10% shares , etc...
In the result, the actual tax rate will be 5% on average. This is the most beneficial feature of the Malta Company.
Two types of Malta Company
There are two types of Malta Company available: one is a Private Limited Liability Company, and the other is a Public Limited Liability Company. The acronym that should follow a Private Limited Liability Company should be “Ltd.”, “Limited”, “Co Ltd”, “Company Limited”, “Co Limited”, and “Company Ltd”. In the case of Public Limited Liability Company will be “plc.” and similar. Each type has different regulations about minimum capital and a government fee.
Usually, a Private Limited Liability Company would be the best choice.
Shareholder, Secretary, Director
When it comes to Private Limited Liability Company, at least two shareholders, one director, and one company secretary are required. The company’s directors, shareholders, and secretaries are not required to live in Malta or be Malease. A Malta company can have a corporate as its shareholder. However, the company must have more than one individual shareholders. In contrast, a company secretary must be an individual person and you cannot register a business as a secretary. It is possible to form a company with a single person and appoint him/her as shareholder, director and secretary. In such case, we call the company a “Single Member Company” and they are qualify as private exempt company. This kind of companies are limited to specific or single business activity.
Minimum Capital of a Malta Company
The minimum capital of a Private Limited Liability Company will be EUR 1,164.69 (one thousand one hundred and sixty-four Euro & sixty-nine cents).This odd amount has been used after Malta joined the EU (2004) andchanged the rate from their own currency to EUR. Of course a company can incorporate with more capital and they can increase the amount of capital later on as well.
Please note that 20% of the capital should be deposited in a bank by cash when incorporating. In other words, 20% of capital will be considered as “paid” capital, and would be needed to be prepared beforehand. With a larger amount of capital, the needed deposit capital will be increased. That is why normally the above-mentioned capital amount is most suitable.
Memorandum of Association
A Memorandum of Association shall be drawn up and signed in the original by the shareholders before a company formation can take place. Alternatively, an approved official may also sign papers on behalf of the shareholders when the powers of attorney / resolution are presented. When the paper is finalized, it is usually a good idea to consult an accountant or lawyer. Moreover, many businesses send the Articles of Association describing the governance of the business.
Evidence of Paid Share Capital
Documentary proof is needed at the time of incorporation that the paid-up share capital was placed on an account in the name of the business, which will be provided by the bank on opening of the company's bank account. However, we will help you to get this process done without bank account at first.
Trade Restrictions
Although the kinds of trade that the IBC can participate in are not restricted, certain company operations may require license such as gaming, insurance, investment, and financial services.
Incorporation Processes
The Companies Act 1995 is the Maltese law regarding companies. The Registry of Companies malta is one of the departments of The Malta Financial Services Authority (MFSA) where the registration of companies proceeds. During the process with the Registry of Companies malta, some documents such as The Memorandum and Articles of Association (M&A) must be submitted. Although it is not required to visit Malta during the registration process, it will waste time if you proceed it without knowing the exact procedure. We can support you with our incorporation package. It will include:
- Preparation and filing of the necessary paperwork for registration
- Provision of Initial Subscriber
- Certificate of Incorporation
- Memorandum and Articles
- Articles of Association
- Resolution of the appointment of a director and allocation of shares
- Share Certificates for each shareholder
- Transfer Forms
- Registration fees payable to the Malta government
- Registered address and agent to comply with minimum local presence laws
Fees are calculated based on the above-mentioned capital. Higher capital would result in higher fees, depending on the amount needed. Details are written below. Please note that one director and two shareholders are required in Malta, as well as a company secretary, but no need to appoint a Malta residence. We can provide full nominee service for protecting your security.However, the structure and fee will be different from our general nominee services fee.
Nominee Service
As mentioned above, all information regarding directors, shareholders and secretaries will be available to the public. So if you incorporate a Malta company under your name, all your information will be available to the public. We recommend using our Nominee Service. By using a Nominee Director and a Nominee Shareholder, your personal information would not be on public records that put you at risk. Please contact us for further details about our Nominee Service in Malta.
For further details on the Nominee Service, refer to the following pages:
Time for Incorporation
The formation of Malta Company will take just one week after all necessary documents are prepared and submitted to the Registry of Companies malta.
Government Fee
The registration fee to the Registry of Companies is calculated based on the authorized share capital. If the authorized share capital is less than €1500, the fee is €245. For companies whose authorized share capital is more than €2,500,000, the maximum fee is €2,250. Also, companies must pay the annual return fee every year, which is calculated based on the authorized share capital as well. Up to €1500 of the authorized share capital, the fee is €100. For companies whose authorized share capital are more than €2,500,000, the maximum fee is €1,400.
Bank Account in Malta
Since 2019, there a big change in Malta Central bank regulation and it is almost impossible to get bank account inside the malta for companies owned and managed by foreigners. Thus, If you really need a Malta bank, you need to use our nominee services.
Overseas Banking
In fact, we have other solutions for your company to get a bank account. There are a few e-banking systems in Europe that are almost similar to actual banks and in some cases even better. Also we can help you to get an offshore bank account in the following countries:
- Belize Banking
- Euro Pacific Bank
- Euro Pacific Bank
- Vanuatu Bank
- Saint Kitts and Nevis
- Saint Lucia
- Mauritius bank
- Liechtenstein Bank
- Bank of Singapore (requires individual visit)
Getting various License
Malta is well-known as a suitable place to obtain various financial licenses. Most common licenses that businesses are looking for are gaming, financial services, ICO consultancy, and lottery licenses. Please contact us if you need more information regarding obtaining license in Malta.
Block chain and Malta
As far as we know, Malta is supposed to be a Blockchain Island. However, from our recent experience it is not yet a suitable place for cryptocurrencies. We hope we can go back to this Island for this matter in the future. We would suggest Estonia as a place to obtain a license for cryptocurrency exchange and wallet.
General FAQ
Does Malta company law a company to issue bearer shares?
No, the bearer shares are not allowed in Malta company law. In order to protect your privacy and identity, the best way will be using nominee.
What Malta two-tier company structure?
It is a structure in which a Malta/Cyprus holding company will be the shareholder of Malta trading company. This will help you to secure some information and benefit from the tax refund mechanism (effective tax rate of 5% only). We suggest a Cyprus holding company with nominee for additional security and privacy. In addition, Cyprus company maintenance fee is cheaper.
Is the audited financial statements required by Malta Law?
Yes. This is mandatory for all Maltese companies to prepare their audited financial statements whether the company trades or not.
Do we need to register for VAT in Malta?
Yes, for malta trading company you need to register for VAT. However, you do not need to register it if your company is just a holding company.
Is that possible to get a registered address outside of Malta?
Every company registered in Malta should have a registered address inside the Malta and any changes to address must be notified to the Registry of Companies malta.
What is the deadline for submitting the annual report in Malta?
The company account, auditor’s report, and directors report must be filed within 10 month from the end of financial year.
Can I reserve the name of company in Malta?
Yes and the company name can be reserved for three month.
