Relocating your Business to Malta - Tax and Legal Advice

Strong Financial Services Sector

Furthermore, Maltas service industries, particularly the financial services sector, are consistently emerging as very strong and innovative, facilitating and adding value to the whole process of conducting business in Malta. A trained and highly motivated workforce and relatively low costs of labour also make Malta an ideal location of choice in this respect.

Tax and Legal Framework

Malta is one of the few European countries to adopt a full imputation system, which is one of the main advantages of Malta’s tax system along with the fact that Malta has an extensive network of double taxation agreements and the refundable tax credit scheme.

A company which is set up in Malta would be chargeable to tax on a worldwide basis and typically taxed at our standard corporate tax rate of 35%, however, upon a distribution of dividends to the shareholder, such shareholder becomes applicable to an income tax refund on the Malta tax paid at company level.

With the full imputation system, profits taxed at the level of the company are not subject to further tax at the level of shareholder, since the latter receive full credit for any tax paid by the company distributing the profits.

The rate of refund depends on various factors and can be either a 2/3, 5/7 or 6/7, with a 6/7 refund applicable for companies carrying out a trading activity. Malta also adopts the participation exemption regime, meaning any dividends or capital gains derived by a Maltese company from a qualifying “participating holding” in a subsidiary would be exempt from tax in Malta. Lastly, Malta does not withhold any tax on dividends paid to its shareholders.

Business Infrastructure in Malta

Malta is a small island, yet it is equipped with infrastructure of high standards that anyone wanting to open a company in Malta would expect to find.

Commercial and Residential Property

With the construction industry being a very strong one, the island is not short of modern and highly finished property that can meet different budgets. The most popular business areas in Malta are the ones closest to the Marsamxett Harbour area that would include Sliema, Gzira, Ta’ Xbiex, Msida, Pieta, Valletta and St. Julians, however, other areas conveniently located in well-connected areas, like Swatar and Mriehel, are also in high demand.

Anyone looking for residential property can rest assured that a vast selection of property is available for sale or rent at various budgets and in any desirable location.

IT Infrastructure

Malta is quite advanced when it comes to IT infrastructure. Such types of services include co-location and hosting services, data centres and cloud services and internet services. Robust government information systems architecture together with established service providers, ensure that anyone interested in doing business in Malta will have access to secure, affordable, efficient and reliable system in place.

Business Support Services

Outsourcing any support required to ensure that all business needs are met is a highly cost saving exercise. Malta boosts a number of professional service providers that can efficiently handle corporate requirements such as submission of annual returns to the Malta Business Registry or directorship or secretarial services, auditing and accounting, payroll, recruitment, employment law, compliance and regulatory advice.

Human Resources

The workforce in Malta in 2025 is highly renown for its qualified and multi-lingual population that consists of both local and foreign workers. Besides the Maltese language, English is also an official language in Malta, making communication easy within the business itself but also with clients worldwide. Italian is also widely spoken and candidates with a good grasp of French, German, Spanish and other language are significantly common too.

Despite being an island, Malta is highly accessible via both sea and air transport links to main and subsidiary airports in mainland Europe and North Africa. Regular and frequent flights to and from Malta are operated by numerous airlines that make use of Malta International Airport.

In addition, the island’s small size is convenient for short commuting times from all locations across the island. Other than public buses servicing routes across the island, numerous transport companies offer immediate, 24-hour transportation services to any location in Malta, particularly upon arrival at the airport.

Immigration and Investment Incentives

A number of citizenship and residence programmes are available, allowing qualifying persons that satisfy a robust due diligence process, to take up citizenship or residency in Malta. While some programmes grant residency to Highly Qualified Persons (HQP) and professionals in Key Employment, other programmes are an investment incentive that would grant an EU passport or residency permit to qualifying persons that are interested in making advantageous investment in Malta.

Maltas Business Culture

Maltas history of serving as a commerce and trading hub for foreign rulers throughout the centuries has perhaps donated Malta and the Maltese an inherited gene and propensity for discussing and doing business. Inevitably marked by the legacy of 150-year long British rule, traditional British ways are still very much evident in the Maltese way of conducting official business.

Cross-border Mergers of Limited Liability Companies

The Cross-Border Mergers of Limited Liability Companies Regulations 2023 (Subsidiary Legislation 386.28), which came into effect as from January 31, 2023 (the ‘2023 CBM Regulations’) following the repeal of the 2007 regulations previously governing cross-border mergers (Subsidiary Legislation 386.12). A cross-border merger, a company re-domiciliation and a liquidation are distinct legal processes serving different purposes and governed by different legal frameworks.

The 2023 CBM Regulations cater for four types of cross-border mergers:

• Merger by acquisition: whereby one or more companies being acquired will be dissolved without going into liquidation and as a result of the merger, transfer all their assets and liabilities to the acquiring company which is already in existence. The consideration for this transfer is the issue to the members of the company or companies being acquired, of securities or shares representing the capital of the acquiring company. In addition, a cash payment of not more than 10% of the nominal value (or the accounting par value, as applicable) of those securities or shares, may also be made;

• Merger by formation: whereby the merging companies involved will both be dissolved as a result of the merger, without either company surviving as it were. Rather, all the assets and liabilities of the merging companies are transferred to a new company altogether which they form for the purposes of the merger. In this case, the members of the merging companies will be issued securities or shares representing the capital of the new company and, if applicable, a cash payment not exceeding 10% of the nominal value (or the accounting par value, as applicable) of those securities or shares;

• Merger by absorption between a parent company (company A) and its wholly owned subsidiary (company B): whereby merging company B (the fully owned subsidiary), on being dissolved without going into liquidation, transfers all its assets and liabilities to company A (its direct parent) in a typical upstream merger scenario; and

• Merger by acquisition between companies having the same ownership without the issue of new shares: this is a new type of merger introduced by the 2023 CBM Regulations, which contemplates the scenario where one or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to the acquiring company, without the issue of new shares by the acquiring company. In order to avail of this type of merger, the merging companies must have the same ownership, and one of two conditions must subsist, namely:

1. one person must hold directly or indirectly all the shares in the merging companies; or

2. the members of the merging companies must hold their securities and shares in the same proportion in all merging companies.

Our qualified accountant (Member of the Institute of Financial Services Practitioners in Malta) will help you in all aspects of relocating your business to Malta, as our services do not stop at registering a company in Malta on your behalf. Our coporate lawyers and accountants will provide you all information regarding corporate tax and incorporate in Malta under maltese companies act.