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Company formation in Malta - Emigrating to Malta
Anyone emigrating to Malta, utilizing the Non-Dom status, and establishing a company in Malta can legally reduce their tax burden to an effective rate of 5%. This requires a specific holding structure.
Taxes apply to corporate profits, with no upper limit on this exceptionally low tax rate. Regardless of profit size, an effective 5% tax rate is applied. Dividends paid to the holding company are not taxed.
Table of Contents
General Information about Malta
Malta is a tiny island nation in the Mediterranean, located south of Sicily. The country of Malta comprises three islands: Gozo, Comino, and Malta (the main island). Malta has a permanent population of just 400,000 inhabitants across an area of 316 square kilometers. Malta has been a full EU member since May 1, 2004, and part of the Schengen Area since December 21, 2007.
Key Facts about Malta
- Member of the European
- Union since May 1, 2004
- Not a member of NATO
- Member of the Schengen Area since December 21, 2007 (air and sea routes)
- Official languages: Maltese and English
- Capital: Valletta
- Government: Parliamentary Republic
- Population: 520,000
- Gross Domestic Product: 18 billion USD
- Internet TLD: .mt
- National currency: Euro (EUR)
- Country code: +356
Key Facts about the Tax System in Malta
- Personal income tax rate: 0–35%
- Social contributions: 15% (self-employed) or 20% (combined employer and employee share for employees)
- Corporate tax rate: 35% (standard), effectively only 5% with the 6/7 rule
- Withholding tax: 0% (dividends)
- VAT rate: 18% (standard), 12% (reduced), 7% (highly reduced), 5% (very highly reduced)
Important Developments in Malta
Implementation of the EU Regulation ATAD-3 (Anti-Tax Avoidance)
Update: Transfer Pricing Rules.
Implementation of the European Minimum Tax Directive
"Company Formation in Malta"
Typically, when setting up a company in Malta, a second parent company (holding) is often established outside of Malta. The holding company acts as a non-resident shareholder and holds the shares in the operational Malta Limited company. Since two companies must be formed, this results in a higher time investment during the setup phase and in the tax-efficient structuring of this arrangement.
Target audienc
For whom is company formation in Malta suitable? In principle, company formation is suitable for almost any legal business activity. In certain industries, such as financial services or gambling, specific licenses are required for proper business operations. However, the conditions for obtaining these licenses are very business-friendly.
If company formation in Malta is also pursued for tax reasons, the use of the 6/7 rule or the “Fiscal Unit” introduced in 2021 is particularly attractive, as, when structured correctly, only a 5% corporate tax is payable. There is no withholding tax on dividend distributions in Malta.
Advantages
- Extremely low taxes for businesses (5%)
- Well-educated workforce
- Favorable geographical location
- Good logistics (international airport and short distances)
- Member of the European Union
- Member of the Schengen Area
Legal forms in Malta
What legal forms exist in Malta? The most common form for capital companies is undoubtedly the Limited (LTD), the public company is called Public Limited Company (PLC), and the sole proprietorship is simply referred to as “Self-Employment.” For tax purposes, self-employment as a sole trader is rather unappealing, as an income of over 60,000 EUR per year results in income tax of up to 35%, along with an additional 15% social security contributions.
Taxes and contributions for legal entities in Malta
| Type of tax or levy | Tax rate / tax burden | Basis |
| Corporation tax (regular) | 35% | Profit |
| Corporation tax (6/7 rule) | 35% or 5% (effective) | Profit |
| Corporate income tax (Fiscal Unit) | 5% (direct) | Profit |
| Dividend tax/withholding tax | 0% | Profit distributions |
| Value added tax | 18% | Revenue |
Key features of the Malta Limited:
- Legal form: A legal entity that gains its own legal personality upon registration in the commercial register
- Number of shareholders: Minimum one shareholder, maximum 50 shareholders
- Share capital: Minimum 1,200 EUR
- Liability: Limited liability of the shareholders to the amount of their contributions; the company is liable with its assets
- Management: At least one natural person
- Accounting: Obligation to keep accounts
- Organs: Shareholders’ meeting, management
Non-Dom status in Malta
The Non-Dom status in Malta allows individuals to receive foreign income tax-free outside of Malta, as long as the income is not transferred to Malta. To qualify, it is first necessary to become a resident. The following conditions must be met:
Residence in Malta
No tax domicile in Malta
Tax liability in Malta
“Non Dom but not domiciled” – This means being a resident but not tax-domiciled. You must provide evidence, through documentation, during the application process to prove that you meet these requirements. If you’re unsure how to do this, we can assist you.
Tax comparison between Germany and Malta
In the following examples, it will be assumed for simplicity that the annual profit is identical. Additionally, the best possible tax rates will be applied in these examples.
| Basis: € 250,000 annual profit | |
 Germany |
 Malta |
| 37.500 EUR (15% Corporate income tax) | 12.500 EUR (5% Corporate income tax) |
| 37.500 EUR (ca. 15% Business tax) | - |
| 43.750 EUR (25% Capital gains tax) | - |
| 2.406 EUR (5,5% Solidarity contribution) | - |
| 121.156 EUR (48,46% Total tax burden) | 12.500 EUR (5% Total tax burden) |
| -108.656 EUR Taxes per year (-90%) | |
| Basis: € 500,000 annual profit | |
|
Germany |
Malta |
| 75.000 EUR (15% Corporate income tax) | 25.000 EUR (5% Corporate income tax) |
| 75.000 EUR (ca. 15% Business tax) | - |
| 87.500 EUR (25% Capital gains tax) | - |
| 4.813 EUR (5,5% Solidarity contribution) | - |
| 242.313 EUR (48,46% Total tax burden) | 25.000 EUR (5% Total tax burden) |
| -217.313 EUR Taxes per year (-90%) | |
| Basis: € 1,000,000 annual profit | |
|
Germany |
Malta |
| 150.000 EUR (15% Corporate income tax) | 50.000 EUR (5% Corporate income tax) |
| 150.000 EUR (ca. 15% Business tax) | - |
| 175.000 EUR (25% Capital gains tax) | - |
| 9.630 EUR (5,5% Solidarity contribution) | - |
| 484.630 EUR (48,46% Total tax burden) | 50.000 EUR (5% Total tax burden) |
| - 434.630 EUR Taxes per year | |
Salary and wage calculation in Malta:
| Simplified calculation scheme for the tax burden on wages and salaries | |
| Amount | Designation |
| 31.000 EUR | Gross salary p.a. |
| - 2.821,19 EUR | Health insurance (D2) |
| - 5.153,13 EUR | Income tax (25% less € 2,725) * |
| - 512,52 EUR | COLA/BONUS (1,65%) |
| = 22.513,16 EUR | Net salary |
Requirements
- Legal age
- Legal capacity
Process
- Conversation for mutual acquaintance
- Issuance of order and payment through our website
- Submission of identity proof and proof of residence
- Submission of the powers of attorney prepared by us and signed by you
- Company formation through representation by power of attorney (reservation of company name, creation of the articles of association, notary appointment, registration with the commercial register)
- Application for tax numbers
- Registration as an employer for social security
- Preparation of a managing director contract
- Submission to the register of beneficial owners
- Application for tax number and VAT ID
Company Formation in Malta: Service overview
- Reservation of company name
- Registered address (12 months)
- Registered agent (12 months)
- Creation of the articles of association
- Preparation of all powers of attorney
- Registration with the commercial register
- Creation of a valid managing director contract
- Registration for social security as an employer
- Registration with the register of beneficial owners
- Valuable information regarding the Malta Limited and tax matters
Support by a licensed tax advisor in Malta
As soon as your Malta Limited is registered in the commercial register, it acquires rights and obligations, including towards tax authorities. To ensure you don’t miss any deadlines and that everything is in order, you will be supported by an experienced and licensed tax advisor in Malta. We would be happy to provide you with a personalized offer.
Emigrating to Malta
If you wish to emigrate to Malta, there are several things to consider. After all, you don’t want to waste time, money, or energy on experiments—you want to reach your goal as quickly as possible: to start a new chapter in life and carry on with your business in peace.
Target audience
Who emigrates to Malta? Our clients typically cite various reasons for their move to Malta:
- Mediterranean lifestyle
- Geographical location
- Growing economy
- A fresh start abroad
- Romantic reasons
- Frustration with their home country
- Extremely low taxes
Advantages
- Very low taxes
- Favorable geographical location
- Good flight connections
- Easy emigration thanks to freedom of establishment for EU citizens
- Efficient travel through Schengen Area membership
Taxes and contributions for individuals
| Type of tax or levy | Tax rate / tax burden | Basis |
| Income tax | 0 - 35% | Earned income (self-employed and non-self-employed work) |
| Social security contributions | 20% | Earned income (self-employed and non-self-employed work) |
| Value added tax (regular) | 18% | Consumption (all consumption other than discounted and heavily discounted goods and services) |
| Value added tax (reduced) | 7% | Consumption (pharmaceuticals, medical devices, books, newspapers, magazines, cultural events, hotel services) |
| Value added tax (heavily reduced) | 5% | Consumption (social housing, food, hotels, restaurants, amusement parks and sports facilities) |
| Income tax table for single persons (2024) | |
| Taxable annual income (EUR) | Tax rate (%) |
| 0 - 9.100 EUR | 0% |
| 9.101 - 14.500 EUR | 15% |
| 14.501 - 19.500 EUR | 25% |
| 19.501 - 60.000 EUR | 25% |
| 60.001 EUR and more | 35% |
| Income tax table for married couples (2024) | |
| Taxable annual income (EUR) | Tax rate (%) |
| 0 - 12.700 EUR | 0% |
| 12.701 - 21.200 EUR | 15% |
| 21.201 - 28.700 EUR | 25% |
| 28.701 - 60.000 EUR | 25% |
| 60.001 EUR and more | 35% |
| Parents' income tax table (2024) | |
| Taxable annual income (EUR) | Tax rate (%) |
| 0 - 10.500 EUR | 0% |
| 10.501 - 15.800 EUR | 15% |
| 15.801 - 21.200 EUR | 25% |
| 21.201 - 60.000 EUR | 25% |
| 60.001 EUR and more | 35% |
Taking up residence in Malta
If you want to emigrate to Malta, there are several things to consider. After all, you don’t want to waste time, money, or energy on experiments—you want to reach your goal as quickly as possible: to start a new chapter in life and peacefully pursue your business.
Real estate market in Malta
The real estate market in Malta varies from place to place. Naturally, property prices are lower in rural areas compared to the city. There are also significant differences between cities. The most expensive cities are undoubtedly the capital Valletta, Sliema, and St. Julian’s.
To help you quickly get an overview of current prices and locations, we recommend using our relocation service and benefiting from our network.
Employment contract in Malta
As part of the company formation in Malta, we also prepare a valid employment contract that complies with legal requirements. Malta also has a working hours law, meaning that only one full-time job per person is allowed. There are exceptions for executive mandates.
Requirements
When immigrating to Malta, there are two groups of people: EU citizens, who enjoy the freedom of establishment, and citizens from third countries. The procedure for EU citizens is relatively simple, while the process for citizens from third countries is significantly more complex. If you do not hold an EU citizenship, please contact us so we can discuss your individual options. For citizens of the European Union, the following apply:
- Valid rental agreement
- Valid employment contract
- Correct application submission
- Appointment with the immigration authority
- Personal attendance at the immigration authority appointment
Process
After you have entrusted us with the task of professionally assisting you with your relocation or immigration to Malta, one of our qualified team members will contact you.
In the next step, we will request some documents from you. Afterward, we will prepare the necessary, customized powers of attorney for you, which you will sign and return to us with notarized certification.
We will submit the documents in the correct format to the immigration authority and schedule the relevant appointments. We will then coordinate regarding the administrative procedures.
For each appointment, one of our team members will be present to accompany you, assist with communication issues through valuable translation services, and ensure that everything proceeds smoothly.
Typically, you will receive your personal Malta ID within a few weeks.
Residence in Malta: Service Overview
- Access to our network of brokers in Malta
- Scheduling of all official appointments
- Police registration
- Application for personal tax number
- Application for personal social security number
- Certificate of Residence
- Personal assistance by our staff
- Valuable information on country-specific peculiarities and recommendations
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