Opening a holding company in Malta is an attractive option for investors because of their tax participation exemption by the Maltese Government. While Malta has no dedicated legislation to incorporate holding companies, it has a unique taxation system to facilitate foreign entrepreneurs.
Besides tax relaxation, the advantages of holding company in Malta include the freedom of operating the business in and outside of the European Union. Holding companies have great flexibility to offer. For instance, you can use your Maltese holding company for real estate assets and holding securities and shares to obtain intellectual property rights.
Depending on your requirements, the Maltese Commercial Code allows you to register a holding company as a public or private limited liability corporation. Registration of a company will require the minimum share capital, depending on the holding company you intend to open in Malta. It is a quick process and takes up to three days to complete.
Maltese taxation system may exempt tax on the income gained from qualifying participation holdings. A participating holding company, however, may enjoy tax exemption benefits if they have at least ten percent of the equity share of the corporation. The same goes true for those holdings that not only allow to vote but also enable them to distribute profits and assets in the case of the dissolution of the company.
Any income that your holding company in Malta derives from participating holdings or by transferring these holdings is tax-exempted. Similarly, the capital gains and dividends that you obtain from shares under a participating holding have no tax. If your company derives dividends from a participating holding, you can enjoy tax exemption if you can meet any of the required conditions. These include being resident or having incorporation in an EU country, are subject to any foreign tax at 15 percent, or if you do not have more than 50 percent of your income obtained from the passive interest of royalties.