Malta is a member republic of the euro zone and located in the Mediterranean Sea just 2 hours 40 minutes from Paris. It is the smallest state in the European Union but the island has an optimum geographical position.
Most indicators reflect the economic dynamism of Malta which is classified as a developed country by the International Monetary Fund (IMF) then considered a high-income country by the World Bank and having an innovation-driven economy.
Former British possession, Malta declared its independence in 1964. The state is composed of eight islands in southern Sicily of which only four are inhabited, so its economy is largely dependent on foreign trade.
Compared to other European countries, the cost of professional services and the labor force are among the cheapest.
Malta in the European and international order
Malta has signed several tax assistance agreements and has concluded 60 double taxation treaties which is rather impressive for a low tax country.
Malta is a signatory to a double taxation agreement with France. A double taxation agreement is an agreement signed between two countries to prevent a natural person or a legal person from paying twice the same income.
In reality these conventions are to be taken with the tweezers because there are situations in which taxpayers can be doubly subject to taxation for the same income and especially the country that would have had the largest tax can in some cases ask for the difference between what was paid in the other country and what should have been paid in his country of residence.
In any event, if the double taxation agreement limits the damage to the taxpayer, it should not be taken as a fiscal optimization tool.
Is Malta a tax haven?
This is a big and controversial issue in the European Union, because while on paper Malta is perfectly compliant with European standards, there are nevertheless many tips that could requalify this island in a tax haven.
It is well known that transactions through a tax haven can attract the full attention of the French tax authorities, so it is legitimate to wonder whether Malta is a tax haven or at least if activities in Malta are likely to arouse the suspicions of the French tax administration.
In reality Malta is not considered by Europe as a tax haven, this small independent island has never been on the gray or black list of the OECD and meets all the criteria and standards by implementing all the measures of good cooperation adopted by the European Union.
These measures of good cooperation go for example by the transparency on the communication of the accounts because there exists in this country the equivalent of our obligation of declaration of the beneficial owners in France, even if this can be more easily circumventable in Malta thanks to the technique of the trust of which only the name of the nominee would be communicated.
This respect for European standards also requires the signing of tax and legal agreements on a European level, of which the Maltese state is very often a party to the convention.
Why does the island of Malta attract so many entrepreneurs?
- A geographical position
strategic & nbsp ;: only 2h40 from Paris, travel is facilitated,
fast and inexpensive. Thus for the companies selling goods, the deadlines
are potentially shortened, it is easy to go regularly
at the head office of his company, to create partnerships see eventual
employees. The island is located in the center of Europe which allows
easily interact with all of Europe and North Africa. In
Moreover, because of this geographical position, the Maltese speak of
many languages, English is among the official languages with Italian
and French and Spanish are commonly spoken.
- Political conditions
stable & nbsp ;: it is very important when one wishes to make
offshore investments to ensure the political stability of the country so
that your investments are not too exposed to a risk of loss or
disappearance & nbsp ;! Malta’s relations with foreign countries are also
stable and therefore conducive.
- A very high corporate tax
attractive: Malta is one of the most popular destinations for
French for offshore company mounts. A priori the tax rate
for companies in Malta is 35% which parenthetically should be
harmonized by the new European legislation but despite everything it is
possible to reduce by a few stratagems the tax rate on
companies at 5% by tax refunds or nothing at all if this happens
made by the creation of a holding company. The holding is indeed a very
interesting in Malta in so far as it is entirely exempt from taxation,
so it may be worthwhile to boost profits. VAT is
for its part, 18% for products and services rendered on site.
- Favorable conditions for starting a business: formalities are not particularly burdensome or costly, and deadlines for setting up a business can be quick. However, it is advisable not to make mistakes to be advised and to delegate all these formalities to a specialized company. Once the company is established, it is quite easy to create partnerships, to work with Maltese who are very open to foreign companies. In addition, the workforce is cheap, average wages are indeed lower than the European average, so it optimizes the costs and therefore the costs of the company. For all that, Maltese people have a decent standard of living, wages being correlated with the cost of living in Malta.
Taxation for an offshore company in Malta
To expatriate in a foreign country naturally implies to submit to its legislation and thus to its taxation. The tax rules in Malta are not the same depending on whether the taxable individual is a tax resident in Malta, whether domiciled or not.
The status of “domiciled & nbsp;”, in the fiscal sense because it is not enough to have one’s home there, can be obtained by a foreign investor when this person shows his intention to settle on this island permanently and without being attached to his country of origin (keeping a job or the management of a company or even his principal residence).
EEA (European Economic Area) nationals can apply for this domiciliation in Malta through the “& nbsp; Malta ordinary residence & nbsp;” program The Malta State grants residence status fairly easily provided that the steps are carried out properly. companies and the file ideally constituted, for this we recommend you to accompany you in these steps.
Another interesting information to know is that any shareholder with at least 40% of the shares of a company established in Malta will be able to benefit from an indefinite work permit in the territory.
How are the incomes of the people who obtained this domiciliation taxed? On the same model as in France, the income tax is progressive but the maximum amount is 35%, foreign source income will be taxed only if it is repatriated to Malta.
Indeed, if you get resident status, which will mean respecting the fact of living at least 183 days a year on the island, all your foreign source income will not be taxed in Malta as long as they are not repatriated, this is the principle of “& nbsp; Remittance Basis & nbsp;”
Moreover, capital gains on movable capital products made outside Malta as well as savings and investment products are not taxed by the Maltese tax authorities even if they are repatriated to the country. island. The installation is all the easier as personal effects can be imported free of customs duty within 6 months of your installation.
taxes are significant, there is no inheritance tax in Malta, there is no
also no property tax or housing tax and finally the tax on the
fortune does not exist.
Le « leasing maltais »
Why Maltese leasing indirectly attracts a lot of investors & nbsp; The island of Malta is also well known for its tax optimization schemes in yachts.
Indeed, many owners of yachts can take advantage of the “Maltese leasing & nbsp;” This device makes it possible to make a leasing, classic model known in France for cars that is actually a rental with option to buy.
This leasing is done through a Maltese company by renting the Yacht to itself via the company while benefiting from a favorable price and a reduced VAT (5.4% instead of 18%).
The natural person having rented the Yacht can then become the owner of the option to purchase for the benefit of the company held in Malta. This is already enough to attract a few millionaires.
Where do you start to start your Offshore Company in Malta?
First and foremost, and if you are thinking of creating an offshore company in Malta and possibly even going abroad, It is highly recommended that you be assisted and advised according to your situation to ensure that this business model is well suited to your profile and your projects.
We will also be able to advise you on the type of residency program that is best suited to your situation, the procedures for obtaining the resident card and for your tax number.
In addition, we can assist you with the formalities required to start your business by creating a company, developing partnerships and hiring.