Malta

Advantages of this jurisdiction:

• Malta is a member of the EU and a member of the Schengen Agreement;
• It does not appear in any black or gray list of international organizations;
• To avoid double taxation, Malta has entered into over 80 agreements;
• The country is a party to the Hague Convention of 1961, which abolishes the mandatory legalization of foreign documents and provides for he possibility of affixing an Apostille on documents;
• It`s easy to use Maltese company in business structuring. There is a possibility to use it as both trading and holding company;
• There is no exchange control;
• There are no rules of transfer pricing and «thin» capitalization.

Taxation peculiarities

Companies which are registered in the territory of the jurisdiction or managed from this territory are considered to be residents in Malta. Resident companies domiciled in Malta are subject to income tax on income derived from sources located both in Malta and outside of it.

The income tax rate is 35%

If the share of a Maltese company profit, which it receives from doing business directly in Malta, does not exceed 10%, a system of imputed taxation is used. The effective income tax rate for a trading company is only 5% (6/7 of the income tax is refundable).

Main registration requirements:

• The authorized capital is 1165 €, 20% of which must be paid upon registration.
• Director – at least 1 director. It can be either an individual or a legal entity. There are no residency requirements. However, it is recommended to use a resident director in the structure to pass the management and control test.
• Shareholders - the minimum number is 1 (if the director of the company is an individual) or 2 (if the director of the company is a legal entity). There are no residency requirements. They can be both individual and legal persons.
• Secretary – the minimum number is 1. A company secretary can be either an individual or a legal entity (a legal entity can act as a secretary only if it is a provider of corporate services in accordance with the Law). There are no legal requirements for residency of the secretary, he/she can be a resident of any country, however, in practice, it is more convenient to use the secretarial services of residents of Malta, which are provided by a registered agent.
• Beneficiary – Since 2018 information on the beneficial owners of Maltese companies must be filed with the Malta Registrar. However, this information is not on public record.

To start the registration process, you must:

• Provide several variants of a company name;
• Provide information on the proposed type of activity of the registered company, as well as the geography of business;
• Make a 100% prepayment.

If the director and shareholder are natural persons also must be provided:

• Copies of current passports of the director and shareholder.
• A certified copy of the passport of the beneficial owner.
• Copies of the documents confirming the factual residence of the director, shareholder, beneficiary.
• Original bank reference letter of a shareholder, director, beneficiary.
• Original professional reference letter of the beneficial owner.
• Certificate of criminal record of the shareholder.
• CV of the beneficial owner.
• Declaration of the beneficial owner.

If the shareholder is a legal entity:

• A certified copy of Certificate of incorporation of a legal entity.
• A certified copy of M&AA.
• A certified copy of Certificate of Incumbency.
• A certified copy of Good standing certificate.
• If the company is registered outside the European Union, a bank reference letter of the legal entity or professional reference letter of the legal entity shareholder is required. The original bank reference letter of the beneficial owner is required.

Reporting requirements

The company must submit an annual report and be audited. Financial statements and tax returns are required.