Company Formation in Malta

Why Malta ?

We’ve always had an attractive tax system, which has proven to be a big advantage.
The reason is that under our full imputation system,
International Trading Companies operating in Malta
could pay an effective rate of tax lower than live per cent (4.17
per cent). The way it works is that the company pays 35 per cent
tax on profits, but on distribution of dividends the tax is refunded
to foreign shareholders, effectively reducing tax to five per cent
of profit. This system has recently been updated and is fully
compatible with EU rules. Dr Lawrence Gonzi, Malta's prime minister,

Malta has a lot to offer to the potential investor. There are various legislative regimes designed to promote sectors as diverse as those of the maritime and manufacturing industry. Malta’s fleet ranks sixth in the world and its maritime industry has evolved into a comprehensive centre offering various services from bunkering, ship repairs to ship chandelling, further enhanced by the country’s strategic position and its natural harbours. The country boasts a Freeport equipped with the latest terminal equipment offering a 24-hour service and the possibility of storage within a duty free zone. On the other hand, Malta’s industrial base is well diversified. A strong emphasis is laid on the manufacturing of products that require specialized personnel, high production skills and meticulous quality control. This factor has contributed in attracting a considerable number of high technology industries. Malta’s ability to attract foreign investment has been attributed to various factors namely the skill and adaptability of its workforce, its European culture, political and economic stability, enhanced language skills and its geographic position enabling quick access to both European and North African markets.

Perhaps the country’s largest project and testimony to its foresight is its commitment towards the evolution of a financial service centre. Its legislative framework has been overhauled specifically to cater for this project together with the introduction of a regulatory body, Malta Financial Services Authority (MFSA). Amendments to Malta’s tax laws were made with the ultimate aim of promoting international investment in Malta, support international business and the development of a financial centre in Malta.

The island provides a secure base for banking, financial services, corporate and private trust activities. The financial services sector accounts for around 8% of Malta’s GDP and the sector is still dominated by banking. Non-resident deposits in banks doubled to over Lm 1 billion in 15 months and are set to increase. It seems that the country is closer to its goal than ever, and the presence of international banks is testimony to this fact.

Moreover, the investment and fund management sector is undergoing extensive growth and recognition. Malta has numerous licensed funds and Fidelity Investments mutual funds. Collective investment services licenses increased by 55% in the first half of 1999. Funds licensed under Malta’s Investment Services Act have the flexibility either to operate in a zero tax environment or else to waive their right to exemption and avail of the island’s extensive network of double taxation agreements. This same network provides opportunities for efficient tax planning through the use of investment holding companies and collective investment schemes, among other vehicles. In 1998, the Insurance Business Act, 1998 and the Insurance Brokers and Other Intermediaries Act, 1998 was enacted, presenting a number of opportunities to operators in the field. The new legislation is aimed at attracting international and reinsurance business and provides for the establishment of captive insurance companies and caters for most types of captive such as the single parent or the pure captive, the association captive and the mutual captive. The usual offshore delights-discretionary portfolio management, trust and corporate services, multi-currency checking and deposit accounts and private banking – are also available.

The country’s resilient population, conscious of the restraints arising from its lack of natural resources, has utilised its most important resource – human resources – to the maximum. The island has a high standard of skilled labour and highly qualified professionals. Moreover, the country has lower operating costs, namely rental charges and salaries, than most European jurisdictions.


The a number of substantial advantages of to both living and doing business in Malta. The Islands are entrepreneurial in nature and have produced a wide variety of business incentives to develop growth. Malta offers more than financial incentives to foreign investors; it offers a complete environment that is conducive to business. The island’s location in the Mediterranean, its excellent air and shipping facilities, a highly-educated and skilled and English speaking workforce, have all made Malta the location of choice for foreign investment and international trade. Relocation to the Maltese islands is the most effective

Malta's legislative and regulatory systems, formulated and implemented over the past years to create a solid yet flexible framework for business, its advanced telecommunications infrastructure and a multitude of highly skilled professionals in every field, have also helped Malta to win both investment and international recognition.

The Maltese islands can be found at the centre of the Mediterranean, with Malta 93km south of Sicily and 288km north of Africa. The archipelago consists of the islands of Malta, Gozo and Comino with a total population of 404,000 inhabitants over an area of 316sq km and a coastline of 196.8km (not including 56.01 km for the island of Gozo).

Malta is the largest island and the cultural, commercial and business centre. Gozo is the second largest island and is more rural, specialising in fishing, tourism, crafts and farming. Comino is largely uninhabited and largely of interest to the tourist market.