Malta

Malta is a small, densely populated country in the Mediterranean Sea. Broke free from the United Kingdom in 1964, Malta was able to become independent republic 10 years later. Malta joined the European Union in 2004 and became a part of the eurozone in 2008. The warm climate, the world’s oldest free standing structures and many more architectural and historical monuments, make Malta a popular tourist attraction. 

Language

The official languages of Malta are Maltese and English. The English is mostly used for business, the Maltese is spoken fluently by the most of the population and also a large part of the population is fluent in Italian.

Economy

In the past the economy used to consist of the export of such goods as tobacco and cotton. Since then the country’s economy state has improved heavily, now being classified as an advanced economy. The International Monetary Fund already has classified 32 countries in the list of advanced economy. Malta produces only around 20% of the food necessary for consumption and the dense population makes the freshwater supplies quite scarce. Today's economy of the country is mainly composed of the widely available limestone, the tax made form being a freight trans-shipment point, manufacturing of electronics, textiles and other consumer goods and also as stated in the beginning of the article - tourism. 

Incorporation

The list of acts in the corporate legislation is quite vast, the following acts are included:

• Companies Act

• Trusts and Trustees Act

• Malta Financial Services Authority Act,

• Investment Services Act

• Banking Act

• Financial Institutions Act

• Financial Markets Act

• Business Promotion Act

Private Limited Liability is the type of the company available for offshore incorporation in Malta. A registered office and an agent must be held in Malta. The minimum number of directors is one; the director may be of any nationality and reside anywhere in the world. The same is with the shareholders; only the minimum amount of is two. The name of the company may be is any language as long as it uses Latin alphabet as long as its not a name similar to one already in use and the government does not find the use of such a word offensive. The usual time of incorporation ranges from 2 to 3 business days. 

License fees

A fee of 245Eur must be paid upon incorporation. After that the annual fee for companies with the share capital of no bigger than 1500EUR, is 100EUR.

Company upkeep

After the annual fee also the company’s annual return must be filed and also the counts must be prepared and audited. 

Taxation

The taxation system of the government is quite complicated. Only the profits of the company are taxes at the standard rate of 35%, the rest of the tax may have to be paid, but then its imputed in to the shareholder in the event of the dividend distribution.

Double taxation

A general credit system is in place in Malta that offers the possibility of relief of the double taxation. There are 4 types of double taxation relief available:

• Double taxation relief - Operates exactly the same as any double tax treaty. The tax may not be paid in one of the countries involved.
• Commonwealth Income Tax relief - If a commonwealth tax has been paid in another country of a double taxation agreement, the tax may not be paid in Malta.
• Unilateral Relief - A system that operates in similar conditions as the double taxation treaty.
• Flat rate foreign tax credit - A tax relief that may be used if none of the other three systems are available. 

A part of the income tax paid by a Maltese company may be paid back to the shareholders on the profits out of which the dividend was distributed.

There is some more information on the economic system of Malta that may be added in the future. Now I have started to see why the Malta’s economical system is called advanced. Although some parts of the system may be difficult to grasp at first, there are many things that may offer great advantages over companies incorporated in different countries.