About Malta

Situated in the heart of the Mediterranean, Malta’s location has helped it forge effective international business contracts and despite lacking natural resources, the country’s main assets reside in its human capital, its international business contacts and innovation.

Local companies have always harnessed international business with both local and global companies. As a result, Malta has transformed into a truly globally competitive country with specialisation in particular niches such as finance, ICT, online gaming, pharmaceuticals, healthcare and high value-added manufacturing amongst others, whereas its professional workforce is internationally qualified and is experienced in diverse areas.

From a finance perspective, Malta is internationally recognised as a major financial jurisdiction with a well-regulated but business-friendly environment. This is vouched by the ever-increasing number of international financial operators that are establishing a presence locally. The country offers excellent possibilities for low-cost financing of investment transactions and international activities. All domestic and foreign transactions are handled quickly and reliably by Maltese and foreign banks with the latest technology.

Housing a number of global players, it constantly invests in infrastructure. The islands enjoy world-class telecommunication systems, state-of-the-art equipment, modern dwelling, efficient transport system and excellent international flight connectivity. It has a high standard of living, as well as comparatively low running costs for business operations.

Maltese standard time is one hour ahead of Greenwich Mean Time (GMT) and six hours ahead of US Eastern Standard Time (EST), allowing for excellent business operations with the international community.

Nature has also endowed the country with a truly warm Mediterranean climate, fascinating beaches and a diverse cuisine, while it is considered as one of the safest countries in Europe. In addition, despite its limited size, Malta offers all sorts of attractions ranging from entertaining nightlife to world heritage sites and everything in between.

Financial Services in Malta

Malta’s financial services are regulated by a strong but flexible single regulatory body, the Malta Financial Services Authority (MFSA). The MFSA is responsible for all financial services licensing and its structure is based on international best practices.

The MFSA also consistently works to operate a positive legislative framework that balances strict compliance (particularly in view of money laundering and the funding of terrorism) with a non-standardised approach to dealing with financial services operators.

Malta is also actively engaged in international developments of regulatory policy with engagements at OECD, EU and Commonwealth levels. According to the Global Competitiveness Index of 2019 Malta ranks 68.5th from a total of 141 countries, while the country’s financial system ranked 32nd and the soundest of the banking system 50th.  
Malta also benefits from a taxefficient environment with a full imputation system, double taxation treaties with over 50 countries and refundable tax credit schemes on revenues as dividends to shareholders, resident and non-resident.

Over the years, the country has established itself as a globally recognised and highly developed financial services centre. In effect, financial services and financial intermediation and related sectors currently account for 12% of the country’s GPD. Malta has attracted numerous financial services operators due to a combination of low-cost financing of investment transactions, as well as international business connections. Financial services operators are additionally advantaged through the efficient and reliable handling of both domestic and foreign transactions performed by Maltese and foreign banks using the latest technology.

Tax and Regulation

Malta’s memberships to the European Union in 2004, as well as its adoption of the Euro in 2008, have transformed the country into a jurisdiction of choice for investors. Over the last decade, the islands have seen an increasing number of companies relocate their business operations to Malta due to an advantageous corporation tax system.

A major benefit of incorporating companies in Malta is that the local tax legislation provides a number of incentives to shareholders of Maltese companies deriving income from their investments or trading activities. This applies irrespective of whether the income is obtained from Maltese companies or those registered outside the country. Locally registered businesses also benefit from tax relief through the extensive network of double taxation agreements. This ensures that the same income will not be subject to tax twice in two different jurisdictions.

Maltese registered companies can also benefit from a tax refund on income that is generated from investments or trading activities and is distributed by way of dividends. The refund applies only if such dividend or income distribution is paid out of profits allocated to foreign income accounts (that is, profits or related income which is generated outside Malta. This includes dividend income, interest, capital gains, royalties, income generated from rent, business profits and investment income) or to the Maltese taxed account based on whether the investment constitutes a participating holding as defined by the Income Tax Act and the Income Tax Management Act. Tax refunds are also available to shareholders receiving dividends from their foreign companies, distributed out of profits arising in Malta through an overseas branch registered in Malta.

These statutory refunds are legally guaranteed and are payable efficiently by the Inland Revenue Department to the shareholders within 14 days from the last day of the month in which the request made to the Department. An exception for immovable property acquisition exists however.

Maltese tax regulations do not apply withholding taxes, stamp duties or exchange control restrictions on the distribution of profits or dividends to the shareholders. There are also no taxes or restrictions on the exportation of the dividends from a Malta registered company.

Investing with Calamatta Cuschieri

For more information you can contact one of our financial advisors

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