Overview of Financial services in Malta |
---|
Banking, iGaming, Financial Services and Company Formation |
Tweet Malta is reputed as an ideal choice for prospective investors and is constantly described as one of the best places to live in worldwide. Malta has been a member state of the European Union since 2004 and was admitted to the United Nations back in 1964. Malta is an archipelago, which lies virtually in the centre of the Mediterranean, 93 km south of Sicily and 288 km north of Africa. With a very low crime rate, a sound banking system and excellent political stability, it has been lauded as an ideal European hub that possesses strong connections to both North Africa and the Middle East. The country also enjoys sunny weather, attractive beaches, a thriving nightlife and 7,000 years of intriguing history. Malta thrives on foreign investment and has, over the years, created the ideal environment for foreign investors. Malta has a bilingual workforce, fluent and proficient in the Island’s official languages; English and Maltese. Furthermore, the majority of its inhabitants also speak a third language. This has facilitated business with other countries throughout the years. An ex-colony of Britain, Malta boasts a strong legislative infrastructure which has evolved to incorporate the most efficient systems from various other jurisdictions to facilitate and promote foreign investment. In fact, Malta has proved to be an ever-growing financial centre in the past decade introducing, for the first time world-wide, new legislation to regulate emerging niche markets such as iGaming. In turn, combined with the high productivity of its professional workforce, Malta has become a major player in the EU’s financial services sector servicing major industries such as Yachting and Shipping and now has, amongst other achievements, the largest ship registrar in Europe. The Maltese Companies Act states that the share capital of a new company may be denominated in any foreign currency and not necessarily Euro (€). There is a minimum capital requirement amounting to €1,165 in private companies with only 20% of the issued share capital necessary to be paid up. The number of shareholders is usually two, however a single member company may also be registered. In addition, the shares of a Maltese holding company may be held by a trustee who is duly authorised to act as a trustee in accordance with Maltese Law. One of the most convenient Malta based corporate structures involves a two tier structure. Through the two-tier structure, profits made by the Malta Trading Company are distributed as dividends (or bonus shares) to the Malta Holding Company which in return would be in a position to apply for the tax refunds. The corporate tax rate in Malta is set at 35%, depending on the type of income generated by the Company. However, non-residents opting for the aforementioned structure may benefit from numerous Malta tax benefits, reducing the said effective tax rate to a final rate ranging between 0% and 6.25% through the Malta tax refund system. In addition, Maltese law also provides for a highly attractive Participation Exemption which eliminates any Maltese taxation in a parent-subsidiaryrelationship. Thereby meaning that companies registered in Malta deriving dividend income or capital gains from its corporate share holding or from the disposal of such a holding may benefit from a 100% exemption.Furthermore Malta has over 60 double taxation treaties with numerous jurisdictions under which double taxation can be reduced or eliminated. Nonetheless, apart from Treaty Relief, the Maltese taxation system provides for numerous ways how to avoid double taxation. Particularly, a company may opt for Flat Rate Foreign Tax Credit which is a deemed credit on tax paid on foreign source income which can be applied even if no actual foreign tax would have been paid. In this regard, a Company is free to opt for the double taxation relief system which suits its needs the best. In addition, Malta does not impose any withholding taxes on interest, outbound dividend, discount, premium or royalty payments. Malta also does not have any thin capitalization rules, CFC rules or transfer pricing rules. The versatile structuring possibilities and tax benefits under Maltese law allows for Maltese companies to be used for a number of purposes. Banking in Malta There are many reasons for considering Malta as the ideal base for gaming operations such as:
The Malta Gaming Authority (MGA), is Malta’s regulator for remote gaming. The MGA may issue licenses to all types of providers of remote gaming, including those involved in casino style games, poker, sports betting, betting exchanges, P2P, skins and lotteries through all types of technological media including the internet, mobile, telephone and fax, among other media operators, excluding the licensee himself. Concluding Remarks |