• E.g.Malta Companies

Since joining the EU in 2004, Malta has become an attractive jurisdiction for tax planning and corporate structuring. With its constantly updated regulatory framework and continuously expanding network of double taxation treaties, Malta is ensuring that it retains its position as an attractive domicile for international companies.

A low tax burden for the owners of a company, familiar and recognized corporate standards and an easy incorporation procedure – a Malta company is the ideal vehicle for a wide range of activities. While Malta has been included in the list of countries which adhere to international tax standards – the so-called white-list – set out by the Organisation for Economic Cooperation and Development (OECD), an agreement with the EU preserves the competitive Maltese full imputation tax system which has been deemed by the European Commission to be compliant with EU non-discrimination principles.rycerz3

Tax refund system

Under Malta`s full imputation system the shareholder will, upon a distribution of dividends, be entitled to a refund in part or in full of any advance corporation tax levied on the distributing company. Corporate tax for companies established in Malta is taxed is a flat rate of 35 per cent on profit. However, shareholders of Malta-registered companies are entitled to benefit from a tax refund when the profits are distributed by way of dividend amounting to 6/7ths of the tax paid by the company. The amount of the tax refund is set at 5/7ths in the case of passive interest and royalties. The refund is reduced to 2/3rds where distributing company claims double taxation relief on foreign-sourced investment income. An added tax advantage is that Malta does not impose any withholding tax upon distribution of outbound dividends to shareholders resident in any other jurisdiction.

Malta`s tax system also makes the country the ideal location for establishing companies for the purpose of holding shares, partnership or similar interest in one or more entitles, whether located within or outside the European Union. Income or gains derived from such entitles that qualify as a ‘participating holding’ are wholly exempt from tax in Malta.

Double taxation relief

In addition, Malta has a wide double tax treaty network, and combined with its tax system, this means that businesses operating on the island are able to effectively minimise tax leakage to ensure maximum profitability. The Maltese tax regime governing double taxation relief includes not only treaty relief but also unilateral relief and the flat rate foreign tax credit , and thereby ensures that income arising from overseas is not a subject to double taxation, even if there is no double taxation agreement in existence with the relevant jurisdiction.

Forming a company

Incorporating a company in Malta is relatively easy and only takes a couple of days. The Maltese legal structure is a hybrid system of Civil and Common law. While it is based on the civil law pattern of continental Europe, most administrative and fiscal legislation is constructed on the British model. This offers Malta a particular advantage in company formation as practitioners have a cultural affinity with both systems and can easily bridge the gap between continental Europe and Anglo (UK) legal frameworks. The incorporation procedure usually takes one week.

Key Features of Malta Companies

Company Law: Companies Act 1995

Type of Company: Private and Public limited Liability Company

Exchange control: No

Length of Time to Incorporate: approximately 1 week

Government Registration Fee: There is a minimum registration fee, payable to the Registry of Companies of €245 (registration in paper) and €210 (registration in electronic format). This increases in proportion to the amount of authorised share capital of the company.

Shelf Companies Available: No

Corporate Names

Name Restrictions: Names identical or similar enough to create confusion, offensive or otherwise undesirable

Endings and Abbreviations Required: ‘Private Limited Company’, ‘Limited’ or its abbreviation ‘Ltd.’

Length of Time to Verify Name Availability: Less than 24 hours depending on name similarity

Reservation of Names Permitted: Yes

Language of Names: Any language using the Latin alphabet

Capital and Shareholders

Minimum Numbers of Shareholders: 2 (there are exceptional circumstances where one member is permitted)

Corporate Shareholders Permitted: Yes

Local Shareholders Required: No

Disclosure of Shareholders: Yes

(Anonymity can be retained through a licensed Fiduciary or Trustee)

Minimum Authorised Shares to be Issued: 1,164.69 euro

(one thousand one hundred and sixty four euro & sixty nine cents)

Bearer shares Permitted: No

Registered Shares Permitted: Yes

Directors and Company Secretary

Minimum Numbers of Directors: 1 (private), 2 (public)

Minimum Number of Company Secretaries: 1

Corporate Directors Permitted: Yes

Corporate Company Secretary Permitted: No

Local Directors / Company Secretary Required: No

Disclosure of Directors / Company Secretary : Yes

Appointment of Subsequent Directors / Officers: Yes

Meetings

Annual General Meeting of Shareholders Required: Yes –notice to be given  to every member of the company and its auditor

Annual General Meeting of Directors Required: No

Location of Directors and Shareholders Meetings:  Malta – for place of effective control & management

Adoption by Consent Permitted: Yes

Quorum Required for Purposes if Meetings : 2 members personally present or by proxy shall be quorum in so far as the articles of the company do not contain other provisions

Local Requirements

Registered Office/Agent: Yes/No

Register of Directors/Offices to be kept at Registered office: Yes

Company Seal Required: No

Copy of Minutes to be kept at Registered Office: Yes or at any such places as may be specified in the memorandum of articles

Copy of Share Register to be kept at Registeredg Office: Yes

Annual Requirements

Minimum Annual Government Fee or Franchise Tax: Registration of an annual return, €163.06 where the authorised share capital of the company does not exceed 11,646.87 euro

Requirement  to File Annual Report: Yes (42 days after the date to which it is made up)

Requirement for Financial Audited Accounts: Yes

Requirement to file Financial Statements: Yes (ten months after the end of the relevant accounting reference period + 42 days)

Requirement to file Tax Return: Yes

Other Relevant Information

Signatory to the Hague Convention: Yes

Increase or Reduction of the Amount of Issue Shares: By extraordinary resolution – restrictions may apply

Appointment or Removal of Director(s): By ordinary resolution – restrictions may apply

Redomiciliation Permitted: Yes

Reinstatement in Registry: Yes, by court order preceding striking-off

Removal from Registry: Following dissolution & consequential winding up

Corporate Tax: 35 %, however, credit refunds may apply to shareholder(s)

Double Taxation Agreements: 60