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Company Formation Types in Malta

Contributed by Welcome Center Malta
10 June, 2020

There are a number of different company formation types in Malta, with some able to hold up to 50 shareholders renowned as limited liability companies (LLC or LTD), and depending on your situation, many are eligible for attractive tax refunds. In Malta, you can find a number of professional agents that will assist you through the process of any company formation in Malta.

Companies Eligible For Tax Exemptions

The majority of types of companies in Malta currently trading are either holding companies or LLCs (limited liability companies). There are other variations of companies too, but these two kinds offer the most appealing factors to those looking to invest from abroad. Indeed, foreign businesses may be attracted to the tax system in particular, as these types of companies in Malta often allow for a broad range of tax exemptions.

Limited Liability Companies (LLCs) In Malta

When opening an limited liability company in Malta, your business can either be a public or private entity. Your private company will be mandated to change to a public company if you list more than 50 shareholders, but under this number it can remain private. Limited liability companies are very appealing to foreign investors as they provide the opportunity to not pay tax on any dividends or profits received as a result of your business's holdings in Malta. This is known as a participation exemption. The standard tax rate in Malta is 35%, however, with tax refunds, the overall effective tax rate can be as low as 5%. This is one of the most utilisted company formation type in Malta.

Holding Companies In Malta

For foreign businesses looking to hold assets, then one of the best types of company to register, is a holding company. A holding company owns a stake in other companies, allowing them to make profit without providing their own services. In order to become a holding company in Malta, your business will need to provide a minum amount of shared capital, regardless of whether or not your company is public or private.

Business Tax Rates In Malta

When setting up a company in Malta, there is also the opportunity to apply for a complete imputation system in order to avoid paying a duplicate rate of tax. A situation of paying twice as much tax often arises when shareholder's dividends are taxed, resulting in an overall increase in the company's tax, that the business may have to pay. No matter whether your business is public or private, such types of companies in Malta are eligible to apply for a tax refund.

Now that you have an idea of what type of company formation you would like to open in Malta, check out this step by step guide on how to how to register a company in Malta.


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