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Choose a Name: Select a unique name for your company. It must not be identical to any existing company name.
 
Draft Memorandum and Articles of Association: These documents outline the company’s purpose, share capital, and internal regulations.
 
Appoint Directors and Shareholders: You’ll need at least one director and one shareholder. They can be the same person.
 
Registered Office
 
Designate a registered office address in Malta.
 
Capital Requirements
 
The minimum share capital requirement is EUR 1,165 (or equivalent in another currency). However, you can choose to issue more shares if needed.
 
Company Registration
 
Submit the necessary documents to the Malta Business Registry (MBR). These include the memorandum, articles of association, and details of directors and shareholders. Pay the registration fee.
 
Tax Considerations
 
Consult with a tax advisor to optimize your tax structure
 
Bank Account Opening
 
Open a corporate bank account in Malta
 
Provide the required documents, including the certificate of incorporation and memorandum.
 
Ongoing Compliance
 
File annual returns with the MBR
Maintain proper accounting records
Comply with tax obligations
 
Remember that professional advice is crucial during the setup process. Consult with a local lawyer, accountant, or corporate service provider to ensure compliance with all legal requirements.
 
Malta offers several tax advantages for holding companies, making it an attractive choice for international trading groups. Here are some of the key benefits:
 
Double Tax Treaty Network
 
Malta has an extensive network of over 70 double tax treaties. When a Malta company owns more than 10% of the issued share capital of an overseas subsidiary, the withholding tax on dividends received from a treaty partner is typically reduced to 5%. Additionally, as Malta is part of the EU, it benefits from the EU Parent/Subsidiary Directive, resulting in zero withholding tax on dividends from many EU countries.
 
Participation Exemption
 
Qualifying dividends and capital gains derived from a “participating holding” are exempt from Malta tax. Recent changes have reduced the applicable tax rate from 10% to 5%. A holding qualifies as a “participating holding” if it meets specific criteria, such as holding at least 5% of equity shares in a non-resident company or having the option to acquire all equity shares.
 
Exemption from Capital Gains Tax
 
Malta holding companies enjoy exemption from capital gains tax on the disposal of participating holdings. This means that profits arising from the sale of shares in the holding company by non-resident shareholders are not subject to capital gains tax.
 
No Withholding Tax
 
Malta does not impose withholding tax on distributions from the holding company to its parent or shareholders. Additionally, there is no capital duty on the transfer of shares.
 
Maintaining a Malta holding company involves several ongoing costs. Let’s break them down:
 
Annual Compliance Fees
 
Each year, you’ll need to pay annual fees to the Malta Business Registry (MBR). These fees cover the cost of keeping your company registered and maintaining its legal status.
 
Accounting and Audit Costs
 
You must maintain proper accounting records and prepare annual financial statements.
 
Depending on the size of your company, you may need to undergo an annual audit by a certified auditor. Audit fees can vary based on the complexity of your business.
 
Registered Office and Company Secretary
 
Your company must have a registered office in Malta. You’ll need to pay rent or fees for this office space. Appointing a company secretary is mandatory. Their fees will depend on the service provider you choose.
 
Tax Advisory and Compliance
 
Engage a tax advisor to ensure compliance with tax regulations. Their fees will vary based on the complexity of your business operations.
 
Bank Charges and Transactions
 
Maintain a corporate bank account in Malta. Banks charge fees for various services, including transactions, wire transfers, and account maintenance.
 
Legal and Professional Fees
 
Seek legal advice whenever necessary. Legal fees may arise from contract drafting, shareholder agreements, or other legal matters.
 
Miscellaneous Expenses
 
These include communication costs (phone, internet), office supplies, and any other operational expenses.
 
Remember that the actual costs can vary based on the size of your company, the complexity of its operations, and the service providers you choose. It’s essential to budget for these ongoing expenses to ensure smooth company operations.
 
In summary, Malta’s holding companies benefit from a favorable tax environment, making them an excellent choice for structuring international business operations.
 

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