Malta
Malta's unique 6/7ths shareholder refund drops the effective corporate tax to ~5%. EU member state, 81 tax treaties, 0% withholding tax.
Foreign Ownership Eligibility
Malta welcomes 100% foreign-owned companies
Fully remote formation — you never need to set foot in the country.
- 100% foreign ownership allowed
- No residency requirement for shareholders
- Remote formation possible
- EU member state — access to single market
- Company secretary must be MT resident
- Registered office in Malta required
Ownership
100% Foreign OK
Formation
100% Remote
Tax at a glance
Malta Tax Overview
35%
Headline CIT Rate
Flat rate paid by the company; shareholders reclaim most of it through the refund system
~5%
Effective Rate — Trading Income
Company pays 35%, shareholder claims 6/7ths refund net 5% retained by Malta
~10%
Effective Rate — Passive Income
5/7ths shareholder refund applies to interest and royalties allocated to the passive income account
15% flat
FITWI Option (from 2025)
Alternative to the 35%+refund system; final tax, no shareholder refund; irrevocable for 5+ years
0%
WHT on Dividends (non-resident)
No withholding tax on dividends to non-residents; tax is settled at company level
0%
WHT on Interest & Royalties
Exempt for non-residents subject to standard anti-avoidance conditions
18%
VAT (Standard)
Reduced rates: 12% (securities management), 7% (accommodation), 5% (electricity, publications, medical)
≥5% equity
Participation Exemption
Dividends and capital gains from qualifying holdings fully exempt; investee must not be on EU non-cooperative jurisdiction list
Bond rate + 5%
NID Deduction
Notional Interest Deduction on risk capital (share capital, premium, reserves); max 90% of chargeable income
81 treaties
DTA Network
One of the widest DTA networks among low-effective-rate EU jurisdictions; covers all major trading partners
Pros & cons
Advantages & Considerations
Key Advantages
~5% effective corporate tax rate on trading income — the 35% headline rate drops to ~5% through the 6/7ths shareholder refund system, one of the lowest effective rates in the EU with full EU legal and regulatory compliance
Full EU member state since 2004 — access to the EU single market for goods, services, and capital; EU passporting for financial services (MiFID II, PSD2), insurance, and gaming licences
English is an official language — all company law, contracts, court proceedings, and government filings conducted in English, eliminating translation costs for international investors
0% withholding tax on dividends, interest, and royalties paid to non-residents — maximises after-tax returns in holding and royalty structures
81 active double tax agreements — near-comprehensive DTA coverage combined with a ~5% effective rate is a combination no other EU member state offers
Notional Interest Deduction (NID) — reduces taxable income by a notional return on equity capital (20-year government bond rate + 5%), stacking additional tax efficiency on top of the refund system
Participation exemption at just 5% equity threshold — dividends and capital gains from qualifying subsidiary stakes fully exempt, ideal for holding company structures
MGA gaming licence — EU-issued authorisation, passported across all EU/EEA member states; the most widely held gaming licence among operators targeting European players
New FITWI option (September 2025) — companies can elect a 15% flat final tax instead of 35%+refund, useful for complex ownership chains or companies reinvesting profits
Tax losses carried forward indefinitely — beneficial for early-stage companies before reaching profitability
Patent Box regime aligned with OECD BEPS modified nexus approach — qualifying IP income benefits from additional deductions; R&D grants cover up to 80% of eligible costs
Pillar Two deferred for up to 6 years — Malta's refund system remains fully intact for the deferral period; sub-threshold groups (revenue <€750M) unaffected
Considerations
Bank account opening is the biggest bottleneck — Maltese banks apply intensive EU AML/KYC screening; traditional bank accounts take 8–16 weeks and are regularly declined for high-risk sectors (gaming, crypto, fintech)
The 6/7ths refund is claimed by shareholders after distribution, not the company — processing by MTCA can take 6–12 months or more, creating a significant cash flow timing gap
FATF grey list history (June 2021 – June 2022) — residual reputational sensitivity in some correspondent banking relationships, particularly with German, Luxembourg, and UK counterparty banks
Small domestic market — population of ~569,000 limits consumer-facing businesses; Malta is a structuring and regulatory hub, not a destination market
Physical substance increasingly required — genuine management and control in Malta is needed to defend tax residency, treaty access, and EU parent benefit claims against home-country CFC challenges
Pillar Two uncertainty for MNEs — groups with consolidated revenue ≥€750M must monitor EU Pillar Two transposition; the IIR/UTPR deferral is not permanent
MBR processing delays for complex structures — foreign documents requiring apostille authentication and non-standard articles extend timelines beyond the standard 2–5 day registration window
MGA-licensed operators face significant ongoing compliance burden — system audits, compliance contributions, AML reporting, GDPR compliance, and player protection requirements demand dedicated resources
Small professional services ecosystem — while skilled, the tax, legal, and gaming professional community is smaller than London, Amsterdam, or Dublin; very large transactions may require external expertise
Structural Comparison
PRIVATE LTD
HOLDING CO
Incorporation Process
The process is strictly digital. Each stage builds on the previous one.
Check company name availability in MBR's BAROS online system and confirm no regulatory approval is needed for the proposed business name or activities
Prepare Memorandum and Articles of Association in compliance with the Companies Act (Cap. 386) — professional drafting by a Maltese lawyer or licensed CSP is standard practice
Sign and authenticate documents; non-Maltese shareholders may need to notarise and apostille signatures and provide UBO declarations under Malta's AML framework
Submit registration application to the Malta Business Registry (MBR) via the eBusiness online portal, including Form A (share capital) and Form T (directors/secretary)
Receive Certificate of Registration with C-number from MBR — the company is a legal entity from this date
What you'll pay
Cost Architecture
Government Fees
Annual Ongoing
Professional Services
Still unsure about costs?
These are estimates — your actual cost depends on your structure
Every Malta setup is different. A 15-minute call with one of our specialists will give you a personalised cost breakdown — completely free.
Fintech & Banking
Can non-residents open accounts without visiting? YES.
Banking options for non-resident founders in Malta. Remote account opening availability varies by institution.
| Institution | Type | Ease for Non-Residents | Notes |
|---|---|---|---|
| Bank of Valletta (BOV) | Full-service commercial bank (state-majority owned) | Low (Visit Required) | Malta's largest bank; widest retail and SME network. Conservative KYC requirements; high-risk sector companies are regularly declined. In-person attendance or certified meeting generally required. |
| HSBC Malta | Subsidiary of HSBC Group | Low (Visit Required) | Strong for international business and cross-border transactions; access to HSBC's global correspondent network. In-person identification typically required for new corporate accounts. |
| APS Bank | Full-service local bank | Low (Visit Required) | Community-focused bank with growing corporate banking capability. Conservative approach to AML/KYC. |
| Lombard Bank Malta | Listed commercial bank (Malta Stock Exchange) | Low (Visit Required) | Corporate and trade finance focus. Listed on the MSE. |
| MFSA-Licensed EMIs (Fintech) | Electronic money institutions | High (Remote) | Several MFSA-licensed payment institutions offer video-identified business account opening. Typically 4–8 weeks vs 8–16 weeks for traditional banks. Suitable for iGaming, fintech, and internationally focused companies. Verify current licence status at mfsa.mt/financial-services-register. |
Regulatory requirements
Annual Compliance Matrix
| Requirement | Deadline | Details |
|---|---|---|
Annual Return to Malta Business Registry (MBR) | Within 42 days of the anniversary of the company's registration date | Confirms current company details: directors, shareholders, registered office, and share capital. Financial statements must be attached (audited if not qualifying as a small company). |
Corporate Income Tax Return | Later of: (a) 9 months after end of accounting period, or (b) 31 March following the year of assessment. Electronic filers may receive a 1–2 month extension for filing (not payment). | Self-assessment CIT return filed with Malta Tax and Customs Administration (MTCA). Provisional tax paid in three instalments during the year (April, August, December) based on the prior year's liability. |
VAT Return | Quarterly, by the deadline set by MTCA for each quarter | Quarterly VAT return and payment filed with MTCA. EC Sales List (recapitulative statement) and IntraStat declarations required if above applicable thresholds. B2B e-invoicing requirements follow EU mandatory e-invoicing timeline. |
Statutory Audit | Completed before financial statements are filed with the MBR annual return | Required unless the company qualifies as a small company under the Companies Act (Cap. 386). Public companies (plc) are always required to be audited. Auditor must be a Maltese-registered CPA or approved audit firm. Accounting standards: IFRS for listed/larger companies; GAPMT (based on IFRS for SMEs) for smaller companies. |
Employer FSS (Final Settlement System) & Social Security | Monthly remittance to MTCA within deadlines set for each month | Employer withholds income tax and social security contributions from employee wages monthly and remits to MTCA. Employer social security contribution: 10% of employee basic weekly wage (up to maximum of €55.93/week for employees born on or after 1 January 1962). |
Change Notifications to MBR | Within 14 days of the change | Any material change (directors, address, shareholders, share capital) must be notified to the MBR promptly with supporting board resolutions and documentation. |
Operational Highlights
Malta Enterprise — Investment Aid
Cash grants, tax credits, and subsidised interest rates of 10–35% of qualifying expenditure
Projects in manufacturing, pharmaceuticals, R&D, software development, audio-visual production, and industrial services. Applications must be received by Malta Enterprise by 30 September 2026 for projects commencing 2024–2026.
R&D Grant (2024 Regulations)
Tax credit or cash grant covering up to 80% of eligible R&D costs
Experimental development and industrial research projects. Collaborative R&D receives additional assistance. Applications accepted until 31 December 2026.
Micro Invest Scheme
Tax credit of 45% of eligible capital expenditure and/or wage costs (65% in Gozo); maximum €50,000 over 3 consecutive fiscal years (€70,000 for Gozo, family businesses, or female-owned businesses)
Companies with fewer than 50 full-time employees; de minimis aid applies.
Seed Investment Scheme
35% tax credit for qualifying investors on investments in start-up companies; maximum €250,000 per annum, carried forward until absorbed; capital gain exemption on disposal after 3+ years
Qualifying angel or seed investors in innovative start-up companies registered in Malta.
Business Start 2021 Scheme
Grants of up to €10,000 for early-stage start-ups developing business proposals
Early-stage start-ups; applications accepted until 30 October 2026.
MGA iGaming Licensing
EU-passported B2C licence for €5,000 application fee + €25,000 annual fee; gaming tax 5% of gaming revenue
Maltese-incorporated entities; B2C Types 1–4 (casino, sports betting, peer-to-peer, skill games). B2B licences available for game developers and back-office providers.
Patent Box Regime
Deduction on qualifying IP income (patents, utility models, software, qualifying medical IP); OECD modified nexus approach
Companies with qualifying IP developed through their own R&D activity; available from 1 January 2019.
Tonnage Tax Regime
Shipping income exempt from income tax; gains on transfer of tonnage tax ships also exempt
Qualifying shipping companies operating Maltese-flagged vessels or qualifying non-EU vessels meeting additional criteria.
Frequently Asked
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