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How does one legally avoid paying more than 5% in taxes? Move your business to Malta!

Contributed by Sanemto
30 May, 2017

During the era of globalisation, we have long since forgotten about the physical borders between countries in the most direct sense of the term. However, for some time already the borders of business have been lost as well. Entrepreneurs manage international businesses from the Seychelles, Ibiza etc. They provide Moroccan coffee for Wall Street in New York, even without knowing where Morocco or Wall Street is.

Our possibility to choose where to live or work, or to choose our profession makes us raise the question of whether we can choose where to pay taxes. And I must say – yes, we can.

Therefore in the coming years, the EU and many other developed countries in the world will have to thoroughly scrutinise their tax policies to make the businesses stay. Of course, not everyone will be able to choose, as not every business allows choices to be made. But there is a growing number of entrepreneurs who can do it, for example, IT specialists – programmers, designers, SEO specialists, different freelancers, online businesses, consultants, and others, over which the countries will have to put up a fight to make sure that the taxes paid by those businesses end up in their treasuries.

The issue of tax payments is becoming increasingly topical, since offshores and tax evasion are no longer in style, at least not for small and medium sized businesses. The so-called tax havens are already starting to ring alarms, because company registration and servicing was one of the driving forces of their economies, but now it is slowing down. This is both due to stricter tax policies in countries where taxes are applied, and due to the banks, which are not welcoming to offshores anymore, and, basically, refuse to work with them.

What conclusions can we make then? Taxes must be paid, the only question left unanswered is – where and how much?

For those who can choose, I have to say that Malta is the place to consider. Malta has been an EU member state since 2004. It is a country with a stable and predictable tax system, which is one of the most important factors for any entrepreneur. For years, Malta has been working on improving its tax policy, reducing bureaucracy, making its accounting simple and comprehensible. Also, communication with state institutions is simple and predictable.

So, why is no one talking about Malta as much as about Cyprus, Ireland, or Hungary? The answer is simple – the Income tax in Malta is 35%, which is quite a considerable amount. HOWEVER, there is a law which provides that within 14 days the entrepreneur returns 30% of the taxes paid, which means that the corporate tax is 5%, the dividend tax is 0%. It is currently the lowest tax in the EU and most of the world. Malta is also the centre of online business licensing, it offers a very beneficial immigration programme, and, virtually, unlimited English language learning opportunities.

The above conditions make Malta a unique place for business. Low taxes, clear accounting requirements, the English language, low company maintenance costs and very advantageous geographical position are the factors that attract a modern entrepreneur to Malta.


Aigars Geiba

Sanemto Business



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