Operating Companies | KPMG | Malta

Operating Companies

Operating Companies

The definition of a ‘company registered in Malta’ has been widened.

The definition of a ‘company registered in Malta’ has been widened.

Setting up an Operating Company or Branch in Malta

The definition of a ‘company registered in Malta’ has been widened so that local branches of foreign companies can benefit from the same advantages applicable to Maltese companies. This allows business operators to carry on business in Malta using an existing foreign entity.

For tax purposes, local branches of foreign companies are treated the same as companies registered in Malta. The net fiscal impact is typically 5%.

Other benefits of setting up an operating company in Malta include:        

  • No withholding tax on outbound dividends, interest and royalties both to individuals and to entities, based in or out o fthe EU
  • A participation exemption for dividend income and capital gains
  • No thin cap or transfer pricing rules
  • No exit taxes
  • No capital, inheritance or wealth taxes
  • No requirement for tax rulings, though this is also possible
  • Flexibility in financing (use of interest free loans and shareholder contributions) with low minimum share capital required - € 1.165
  • Step up to market value of assets upon moving to Malta via re-domiciliation, transfers of fiscal residence or cross border mergers
  • Quick incorporation of companies
  • Several double taxation treaties
  • Unilateral tax relief where there is no tax treaty in force with source country
  • Second lowest VAT rate in EU at 18%
  • Use of IFRS financial statements as adopted by the EU or local GAPSME prepared in any convertible currency

How can we help you?

Our qualified and experienced advisors are available to assist you with advisory and compliance services from the word “Go” that is, with the initial registration and throughout the life of the company or branch in Malta.

Should you wish to find out more about setting up a company or branch in Malta, do feel free to get in touch. We would very happy to help you.

Should you have any queries, please feel free to ask.