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The conditions for entrepreneurship in Malta are of the most favorable in the European Union, there are many benefits. Let’s talk about the benefits of Malta as a place to live and do business.

To reside in Malta and conduct business, you must obtain a residence permit or citizenship of the country. The Maltese Citizenship Law provides an opportunity to obtain citizenship for special merit in the field of direct investment for 14 months or more. To do this, you need to invest in the country’s economy from 690,000 € and pass a strict due diligence check.

About Malta’s economy: what to invest in

The Maltese Islands, south of Italian Sicily, are located on trade routes from Asia to Europe, Africa to Europe, and vice versa. There are developed logistics marine businesses and financial services for various enterprises.

In total, a little more than 400 thousand people live in Malta, and 1.2 million tourists visit the country a year. Tourism provides 35% of the country’s GDP, and most of the real estate here is apartments that are rented. Tourist service is a whole industry, where almost any well-organized business is considered profitable.

Among the industries that are developed in Malta are electronics and programming.

It is profitable for investors to invest in a Maltese business for several reasons:

  • A stable economy in Malta with minimal losses is going through a crisis. For example, in 2020, despite the dire economic impact of the pandemic, rating agencies assigned Malta A or A + ratings.
  • International Business Center. Representative offices of well-known corporations and large companies operate in Malta;
  • Hard currency zone and reliable banks. Since 2008, the country has been part of the Eurozone, so you no longer need to worry about the safety of your assets;
  • Personal safety. Malta is recognized as one of the safest countries in the European Union in terms of crime;
  • Government support for business. There are programs here that aim to help develop entrepreneurship;
  • Favorable taxation. If you become a resident of Malta, you will receive several tax benefits;
  • Second citizenship. Malta grants vetted investors Citizenship for Excellence in Private Equity. A second passport can be obtained within a year and a half.

Malta company: taxation features

On the face of it, the Maltese 35% income tax is not conducive to attracting investors. At the same time, this rate is valid only if the company does business in Malta and its income grows by more than 10% per year.

If the Maltese company is used as part of an international structure that accumulates profits from other countries, then the lion’s share of the tax is refunded. The state keeps only 5% for itself, which looks attractive to any international company.

Part of the tax is refunded during the distribution of dividends. In this case, income is taxed at an effective rate of 10%. If an international company pays dividends to the owners of the Maltese company, then such payment will not be subject to any tax in Malta.

A company can become a Maltese tax resident by registering in Malta or by opening its head office here.

Funding incentives

The Government of Malta is involved in financing business projects in Malta. You can get a concessional loan – up to 33% of the project costs. Sometimes the state provides up to half of the loan amount. Malta Enterprise, the state-run organization for the support of entrepreneurship in Malta, can provide funding for the project up to 75%.

Entrepreneurs in Malta gain access to funds from the European Regional Development Fund, which can provide up to 50% of approved project costs. Business start-ups can receive grants of up to € 200,000 for business development on the islands.

Forms of legal entities in Malta

There are three main forms of companies in the country:

  • Private Limited Liability Company: Shares owned by all members of the company are allocated to the entire capital of the business;
  • Partnership with unlimited liability: all partners are equally responsible for debts and obligations;
  • Limited Liability Partnership: along with general partners, there are partners whose liability is limited to their share in the capital of the enterprise.

How to start a business in Malta?

To open a business in Malta, it is necessary to register the articles of association with the Malta Financial Authority and pay the registration fee. The registration fee for setting up a company is calculated on a progressive scale depending on the declared share capital. With a minimum capital, it is 7.5% of its amount, and with a maximum capital, less than 1%. After that, a registration certificate is issued.

To receive financial assistance from the Government of Malta, it is necessary to register the company with the Department of Social Security.

A limited liability company can have a minimum share capital of 1250 €. Of this amount, you pay 20% when you apply for registration and put it in the bank as a deposit on behalf of the company. The director can be a legal entity, and the secretary must necessarily be an individual. There are no restrictions on citizenship.

By law, a company must have at least two shareholders – both individuals and legal entities. To receive tax deductions, a shareholder must not be a resident of Malta. A trustee may act as a holder of shares.

It usually takes 1 – 2 weeks to register a company. By this time, the company must have a registered office in Malta.

How to become a resident of Malta?

Maltese legislation from 2020 allows wealthy people to obtain citizenship for special merit in the field of direct investment. The investor draws up a residence permit and, after 12 or 36 months of maintaining the status, submits a citizenship application. In just 14 months you can become the holder of a passport from an EU country. You must pass a due diligence check. In Malta, it is the strictest among the countries that grant citizenship to investors.

Is it worth starting a business in Malta?

Malta attracts entrepreneurs from all over the world with its favorable taxation system and the prospect of doing business on a global level. Individual entrepreneurs receive many benefits. It is not customary to sell a ready-made business in Malta, so investors usually open their own companies.

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