Malta companies are an ideal means to establish a business within the European Union and due to its competitive tax system, participation exemption and tax refund along with over 70 double tax agreements, Malta is seen as a jurisdiction of choice. Sovereign’s team based in Malta can establish property holding companies as well as international trading companies.
The Limited Liability Company is the most common form of business entity on Malta. A company may have the status of a public or a private company. A private company must by its memorandum and articles:
- Restrict the right to transfer its shares;
- Limit the number of members to 50;
- Prohibit any invitation to the public to subscribe for any shares or debentures of the company.
A Malta company can be used for international trade and the holding of investments and/or property. It requires a minimum of one shareholder, one director and a company secretary and there is an annual accounting requirement. With an effective tax rate of 5%, Malta has one of the lowest tax rates within the EU. It is also fully compliant with OECD standards, having implemented internationally agreed tax standards ensuring it is a white listed jurisdiction as well as one of high repute.
Malta Trading Companies are onshore business companies, registered under the Maltese Companies Act, which are taxable on a worldwide basis at the normal corporate tax rate of 35%. Shareholders are entitled to a 6/7ths refund, reducing their effective tax rate to around 5% at shareholder level. Malta’s corporate tax rate is chargeable on a company’s profits after deducting all allowable business expenses. Maltese trading companies are able to conduct any business activity, whether in Malta or outside Malta, including buying and selling of commodities, agency and representation, consulting and advisory services, e-commerce and online gaming.
Malta holding companies can be set up in order to hold shares and securities and business assets in any form such as real estate, fixed assets, aircraft, investments, bank accounts and intellectual property, as well as personal assets such as yachts, residential property, works of art. Although there is no defined holding company regime, the domestic tax treatment afforded to the different types of income received by such companies as well as the participation exemption regime make the setting up of Malta holding companies a very attractive option, especially as a conduit for the EU.
Sovereign provides ready-made or customised incorporation of all types of Malta companies. Once incorporated, we provide a domiciliary service, which includes the provision of company secretarial, registered office and nominee shareholder services. Full management services from our own licensed corporate directors are also available and highly advisable in most cases. Re-mailing services are available at modest cost for all companies established by Sovereign.
Note: Ancillary services
In addition to providing incorporation, domiciliary and management (directorship) services, a range of ancillary services at competitive prices is available on request. These services include, but are not limited to: provision of dedicated telephone lines; office and personnel assistance; designated staff members (temporary or permanent availability); assistance with office relocation, introduction to real estate agents, government agencies and other third parties.
Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality.
Combining all the features of the Anglo-Saxon trust concept within a civil law framework, the Malta trust is an effective and reliable vehicle that provides both enhanced security. The Trusts and Trustees Act, which came into force in 2005, created a streamlined and simplified trust regime and made Malta much more attractive to international clients by offering greater flexibility and high standards of certainty. The Act permits Maltese or foreign settlors to establish trusts governed either by Maltese law or by a foreign law.
The Act also provides for the authorisation and supervision of trustees by the Malta Financial Services Authority (MFSA). Sovereign Trust (Malta) Limited has been granted a licence to act in this capacity. Clients and their advisers can therefore be assured that Sovereign is deemed to be fit and proper, possessing the necessary expertise and resources to establish and administer trusts in a wholly professional manner.