The Republic of Malta is an archipelago consisting of three inhabited islands Malta, Gozo and Comino. The Maltese islands are situated in the middle of the Mediterranean Sea about 100 km South of Italy.
Malta is a Civil Law jurisdiction, however, all modern legislation including company, tax and maritime laws are modeled on their UK counterparts.
Malta & Maltese Company
International Trading Company (ITC) and International Holding Company (IHC).
Taxation
ITCs and IHCs pay tax on their world wide income at a rate of 35% but there is a system of credit and refunds available to the shareholders which, in simple terms, reduces the net rate of tax to 4.2% in the case of ITCs and between 0 and 6.5% in the case of IHCs. This is an attractive system of taxation because the 35% rate is actually paid at the corporate level and it is thought that tax treaty benefits will thereby be assured.
Directors
A minimum of one director is required, either corporate or individual, and details appear on the public file in Malta. In order to establish a company as a tax resident in Malta, and gain tax treaty benefits, it will be necessary to have the majority of directors based in Malta.
Shareholders
A minimum of two shareholders are required who may be corporate or individual.Details of the shareholders appear on public file but anonymity can be retained by the use of nominee shareholders.
Annual Reporting
Companies must file an annual return and must also prepare audited accounts.
Local Requirements
Under Maltese company law every Malta Company must maintain a registered office address in Malta and must also appoint a Maltese secretary. Although there is no strict requirement that the director(s) be resident in Malta it is likely that tax treaty relief would not be afforded to any company which did not have a majority of directors resident in Malta. For most practical purposes it will therefore be necessary to appoint Malta resident directors.
Secrecy
Confidentiality is governed by the Professional Secrecy Act which has established a high common standard of confidentiality for all professional practitioners. Those who violate professional secrecy may be prosecuted under Section 27 of the Criminal Code and on conviction may be liable to a maximum fine of LM20,000 and/or a 2 year prison sentence.
