Updated: June 16, 2022 | 6 minute read

    What is Malta Holding Company Taxation like? 

    Firstly, let us understand what Maltese Holding Companies are all about. A Malta Holding Company is formed with the purpose of holding shares in other companies or any other asset, including real estate, cash, movable valuables, shares & securities and intellectual property. When it comes to select a suitable jurisdiction to set up a holding company factors such as legislative framework, economic stability as well tax efficiency are all highly valued considerations. 

    Malta Holding Companies

    Why set up a Holding Company in Malta? 

    Here are the top reasons why you should set up a holding company in Malta: 

    • The ease of the initial setting-up of the Malta Holding Company 
    • The ongoing advantages of operating a Malta Holding Company 

    Two Options of Setting Up a Malta Holding Company 

    When there's a transition from an existing structure, e.g. having an offshore holding company moving to Malta, the entry into Malta can be done either by: 

    • A continuation of an existing holding company; OR 
    • Through the setting up of a new Malta Holding Company. 

    The Tax Treatment 

    Participation Exemption 

    Malta offers a highly attractive and flexible participation exemption whereby dividend income and capital gains derived by the Maltese Holding company may be exempt from tax, subject to certain conditions being satisfied. 

    Double Taxation Agreements and EU Directives 

    Holding companies which are set up in Malta will also be able to able to benefit from an extensive double taxation treaty network as well as EU directives in force. Currently, Malta has in excess of double taxation treaties in force with jurisdictions across all the continents. Malta’s tax systems are also compliant with the EU non-discrimination principles.  

    On Non-resident Shareholders 

    In addition, Malta typically does not impose any withholding taxes on dividends, interest and royalties payable to non-resident shareholders irrespective of whether the shareholders are a corporate entity, trust or individual. 

    Summarising Initial Benefits 

    Tax advantages for Malta holding companies are definitely worth exploring. 

    To summarise, there are two options for setting up a Malta Holding Company: 

    • Redomiciliation  
    • Creation of a new Malta structure 

    Redomiciliation and creation of a new Malta structure can be smooth processes through the assistance of specialists. If you’re interested in setting up a holding company in Malta, we would love to assist you.