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Uses of Maltese Holding Companies

A Maltese Holding company can be setup to fulfil various purposes, including:

  • holding shares and types of participations in resident and non-resident companies;
  • carrying out group financing activities and treasury operations;
  • holding and leasing brands, trademarks, trade-names and other intangible assets;
  • holding and leasing real estate situated in or outside Malta;
  • providing management and related services to related and non-related companies.

Benefits of using a Maltese Holding Company

  • Malta is an EU member state thus giving full access to applicable EU Directives;
  • Malta embraces a continually expanding network of double taxation treaties
  • The participation exemption enables Maltese holding companies to incur a 0% tax rate on income received;
  • A substantial portion of Maltese tax incurred could be claimed through tax refunds;
  • Malta withholds no tax on payments of interest, dividends, interest and royalties;
  • Generally, transfers of shares by non-resident persons are exempt from capital gains tax and duty;
  • Malta does not have any CFC, thin capitalisation or transfer pricing regulations
  • Incorporation thereof requires a minimum authorised and issued share capital of €1,165 out of which only 20% needs to be paid.

VAT Obligations of a Maltese Holding Company

Maltese VAT law is based on the provisions of the EC Sixth VAT Directive. Typically a company which simply holds shares (passive holding company) is not deemed to be a taxable person for VAT purposes and therefore does not need to register for VAT. However, if such a holding company receives services from suppliers established outside Malta, there is an obligation to register under a special VAT rule which requires the self-accounting of VAT in Malta when services are received from non-Maltese suppliers.