Maltese Offshore Company Formation

Summary: Maltese offshore company formation comes either in the form of the creation of an International Holding Company or an International Trading Company and the effective net rate of tax these companies are liable for can be as low as 0%.

The original Maltese offshore company structure ceased to be incorporated after December the 31st 1996 with the proviso that companies incorporated as offshore entities had a further ten years in which to operate – this means that the last of the old school Malta offshore company structures have to cease to trade by the end of 2006.

But fear not, the good news is that two new company structures came into being and now Maltese offshore company formation comes either in the form of the creation of an International Holding Company or an International Trading Company and the effective net rate of tax these companies are liable for can be as low as 0%.

A Maltese based International Trading Company may only enter into trading activities with entities outside of Malta and may not hold any form of foreign investment or equity.  A Maltese based International Holding Company on the other hand may engage in activities relating to foreign equity participation.

Both International Holding Companies (IHC) and International Trading Companies (ITC) have to pay tax on their worldwide income at a corporate tax rate of 35%, but a series of automatic and simple to implement refunds and credit systems exist to reduce this taxation burden down as low as 4.2% for International Trading Companies and between 0% and 6.5% in the case of International Holding Companies.

The use of nominee shareholders and directors is permissible in Malta which means that the absolute privacy of those establishing Maltese offshore companies can be assured as can the most beneficial taxation treatment of the IHC or ITC structure.

Both International Holding Companies and International Trading Companies can be incorporated in about two weeks although some service providers offering offshore company incorporation services state that they can establish a company in just a few days.  The majority of service providers also offer nominee directors and shareholders and can assist with the preparation and filing of annual returns and audited accounts as well as the provision of a local Maltese registered office address.

For those for whom confidentiality and privacy are of paramount importance, Malta has earned a reputation as a stable and secure offshore jurisdiction where confidentiality is protected by the 1994 Professional Secrecy Act and those who violate the act will be prosecuted.

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