Doing Business in Malta Guide

Overview of the legal and tax framework for Doing Business in Malta

Dr. Priscilla Mifsud Parker co-authored with Steve Muscat Azzopardi | 08 Feb 2020

Doing Business in Malta Report

There is no question that Malta is an attractive business jurisdiction for a multitude of strategic and innovative industries. As a small island nation, Malta has refused to let geographical restraints hinder its potential, but rather it has invested in its resources to hone a competitive edge on different fronts. 

Doing Business in Malta equips investors who are setting their sights on the Maltese Islands with critical insight on lucrative investment sectors and local business formation procedures. The publication familiarizes the reader with some of the most promising and successful industries in the Maltese economy, while also addressing some of the questions investors might have when setting up in Malta. 

Setting up your Business in Malta 

Foreign companies setting up operations in Malta find the procedure efficient and predictable.  A host of government incentives are available to encourage research and innovation in key sectors.

Taxation on Doing Business in Malta

Doing business in Malta isn't heavy on taxation.  Malta does not levy withholding tax on dividends, interest and royalties paid to non-residents, subject to certain criteria being met. Upon receipt of a dividend, shareholders of a Malta company may claim a refund of all, or part of the Malta tax paid at the level of the company on such income. Qualifying investments may also have related income or gains exempt from tax in Malta under the Participation Exemption regime. Having over 70 double taxation agreements with countries around the world, Malta may in certain cases also offer relief on foreign source income or gains. 

Legal Framework for Doing Business in Malta

The country’s highly developed logistics sector at the crossroads between East and West, North and South also allows companies to operate smoothly, avoiding any disturbances in the supply of raw materials or finished products.  Entrepreneurs wishing to safeguard their intellectual property rights can find security in Maltese directives and regulations and a number of international conventions and treaties for which Malta is a party to.   Furthermore, employment is comprehensively regulated in Malta. Not only is the local workforce English-speaking and vastly qualified but employment matters such as work permits, licence to operate as an employer, the payment of employment income, fiscal considerations, business permits, and employment of foreign nationals, are all specifically addressed in the law.

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Financial Services & Fintech Companies Doing Business in Malta

Multiple sectors have been growing at remarkable speed within Malta in response to recurring waves of investment and a robust demand. Financial Services, for instance, have become a hallmark of the Maltese economy, thriving with the aid of flexible yet secure regulatory frameworks. Some of the innovative structures that can be accommodated for on Maltese shores include Protected Cell Company (PCC) or Incorporated Cell Company (ICC) formations, especially interesting for operators in the insurance sector. A range of investment fund structures are possible such as Professional Investor Funds (PIFs), Alternative Investment Funds (Aids) and the EU hallmark UCITS. The Malta Stock Exchange offers a number of attractive listing and trading platforms including a Prospects MTF, an Institutional Market as well as the main Exchange. 

One development is the increased reliance of the financial services sector on innovative technology which has given rise to the Financial Technology or Fintech industry. Interest and investment in technological advancements such as blockchain technology, crypto-currencies, Artificial Intelligence (AI) and the Internet of Things (IoT) amongst others has skyrocketed in Malta, and the country has been among the first in the world to start regulating this fast-evolving space. 

Malta has also attracted international firms of the highest calibre in other areas of the economy, such as Pharma, advanced manufacturing, Maritime and Aviation. Malta has long offered foreign investors advantages through its logistical infrastructure and historical reputation, and has continuously devoted itself to strengthening the jurisdiction as a key hub in these industries. A variety of measures include up-to-date standards, professional support services, infrastructure, and fiscal benefits.

Immigration for Investors Doing Business in Malta

Malta has also delved into other sophisticated sectors, one of which being residence or citizenship by investment. In response to the eagerness of EU and non-EU nationals to obtain Maltese residency or citizenship, the country introduced its own residency and citizenship by investment programmes to further bolster its economy and wealth. Such programmes include the Malta Individual Investor Programme (MIIP), the Malta Residency and Visa Programme (MRVP), and the Malta Global Residence Programme. The Maltese islands also cater to esteemed individuals and affluent families through an expert and diversified wealth and asset management industry, offering services ranging from succession planning to philanthropy, legacy planning, and corporate structuring, amongst others.Chetcuti Cauchi’s Doing Business Team in Malta

With over 15 years’ experience, Chetcuti Cauchi is geared to provide advice on Doing Business in Malta beyond conventional corporate and commercial concerns. Our lawyers work closely with other practitioners and subject experts in the firm and are renowned for identifying and resolving legal and financial issues. We provide effective solutions for scenarios involving personal and corporate tax, franchising, intellectual property, employment law, capital market transactions, immigration and relocation, corporate finance and banking, real estate and leasing, and personal wealth structuring.

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