Source: Adrian Corfmat¸ April 2014¸ PKF Malta
Malta is a major European financial center which is governed by stringent regulatory standards and has informed attitude towards business and commerce. The financial sector has grown rapidly since 2004¸ when the country joined into the EU and the island is now rightly regarded as having a reliable and sophisticated financial system.
For this reason¸ several companies choose to settle in Malta¸ including hedge funds¸ captive insurance companies¸ fund managers¸ providers of investment services¸ credit institutions¸ and intermediaries of insurance. With its accession to the EU¸ its low tax rate¸ its English-speaking workforce and its location¸ Malta play the role of international financial center which is particularly well suited to serve as a platform and base of operations for companies seeking to enter the European and North African markets.
Malta ranks as the fifth most attractive tax in the world and the first in the EU¸ in terms of taxes and social security contributions paid by businesses.
Malta does not levy withholding tax on dividends¸ interest or royalties and has no capitalization rules or minimum capital ratios. It does not tax capital and no stamp duty on transfers of equity held by non-residents. Taxpayers may benefit of the exemption participatory recently introduced¸ which exempts them from tax on dividends and capital gains¸ subject to certain conditions. In addition¸ EU directives are applicable and the court found a network of double taxation treaties.
Malta may be ideal for foreigners who are looking for an attractive jurisdiction in which to settle. As the United Kingdom¸ Malta makes distinction between the concepts of residence and domicile and adopts the concept of remittance Basis. Foreigners who are qualified as “permanent residence in Malta” are taxed at a reduced rate. The Maltese tax is payable on income Maltese source income and non- Maltese source¸ when such income is effectively repatriated to Malta. There is no tax on capital gains generated outside Malta¸ whether repatriated to Malta or not. In addition¸ Malta does not provide capital tax¸ wealth or gift and inheritance.
Island’s main advantages:
- A multilingual workforce and highly skilled
- Very modern amenities distribution
- Incentives to interesting companies
- Excellent telecommunications structures
- Specific human resources at competitive costs
- Easily accessible to decision makers
- A state socially and economically stable¸ providing a safe environment and a good standard of living
- Sustainable and favorable government policies on trade
- High levels of productivity
- A positive and winning business environment
- A sophisticated international financial center of strategic importance
- The fastest growing markets are quickly accessible from Malta
- A strategic location providing benefits in terms of marketing
- A competitive corporate tax
- Presence of all major audit firms
- Attract t