Holding Company Advantages Can Surprise Foreign Investors
Setting up a Malta holding company takes hardly 2 to 3 working days after you submit your documents. You can set up a Maltese holding company, either creating a new structure or by the re-domiciliation. It is a smooth process that usually results in several holding company advantages for investors.
If you go for this option, there are usually no Maltese taxes or any stamp duty to transfer your present subsidiaries to Malta. For instance, moving subsidiaries of an existing company located in an offshore jurisdiction to a Maltese holding company, from Malta side has not entry stamp duty and taxes involved.
Malta adopts a participation exemption regime, which brings a desirable future for holding companies’ owners, subject to meeting some conditions. Thanks to this attractive feature, Malta continues to enjoy its full membership in the European Union to quality said tax treatment. While subsidiaries do not need to be European, they need to engage in active trading to obtain tax exemption on dividends in Malta.
Apart from this, Malta concludes double tax agreements with more than 70 countries in the world, leaving a possibility to mitigate withholding tax. If the underlying subsidiaries are within Malta and do not have a double taxation agreement in hand, they will have to pay a 10 percent tax on the capital gain.
Ideally, the tax rate is less than the reduced settlement rate of the agreement with other countries. Consequently, countries that do not have a treaty with Malta have a less tax impact than those countries with negotiated treaty rates.
Seeing the increasing due diligence requirements and a demand for a criminal-free record, offshore companies have pressure. Maltese tax systems are accommodating the European non-discrimination rules. It also has approval from OCED and the EU level.