10 reasons to relocate yourself and your business to Malta – Benefits of a Malta company (Ltd)

Last Updated on

Malta is a very attractive place for many people to move to and setup a business in, and not only for business reasons. You may also personally fall in love with the place, read my view on Malta for more information about living in Malta.

I have been living here for almost 4 years now, and been through the moving process of business and legal paperwork for various of procedures required for long term settlement.

Business first – I’ll jump right into it and list the actual upsides of setting up a Malta Limited Company:

1. Lowest effective corporate taxes in EU

The corporate taxes in Malta is 35%, flat rate, which is highest in EU. However, you can reduce it down to an effective tax rate of 5-7% by distributing all the profits to the holding company. Usually the holding company will be set up in Cyprus, Seychelles or Gibraltar.

Being a resident in Malta only makes you liable to pay taxes on income remitted to Malta. Having a Malta Company can therefore create a total tax pressure of 5% tax.

2. Sane income taxes

The income taxes are not very low (compared to EU neighbours), so taking out big salaries would result in a quite high tax pressure. If you take out a salary that’s just enough, the effective tax rate will be relatively low. The previous income stages are deducted from the tax rate, so the tax rate is only applied on the difference. For example, a salary of €14,400 (€1,200/m) would be taxed €885 per year, approximately 6-7% tax.

Income from Income to Tax rate
€0 €8500 0%
€8501 €14,500 15%
€14,501 €60,000 25%
€60,001 unlimited 35%

Tax rates from: IRD Malta

3. Lower minimum wage

Minimum wage in Malta is €720. which gives you an idea of the salary situation. Employees can be satisfied with salaries ranging €1,000 – 2,000 for most common work which can be beneficial if you plan on running your Malta company directly from the island.

4. Share capital requirement is only €1,165

The minimum amount of share capital that is required to open up a business in Malta is €1,165, but only a 20% of this needs to be in your bank account. In other words, less physical money required to setup a Malta Ltd. There is also an annual fee of €100.

5. Low social securities

Social security is paid to all employees and is 10% of the employees salary, plus another 10% that the company pays. So basically the effective rate is 20%, but half of it is taken from the employee’s share.

6. Less restrictions on expenses

I’m not going to get into details but generally the policies in regards to using your company’s money to pay business related costs are not strict.

Traveling on behalf of business errands are not questioned on any serious degree, so for us digital nomads who like to travel and work at the same time, we can deduct a lot of costs from our business – given that it’s a work related trip of course.

Now, lets get into the personal reasons why Malta might be the place for you.

7. Stay safe with low crime

Personally I feel really safe here, even out walking during nighttime. Throughout the years here on the island there has been very few crime related incidents happening to me.

8. Enjoy a decent climate

In Malta, the sun shines more than 300 days per year. Even though the island receives a lot of rain during winter time, most of it are falling in a concentrated period of time and usually passing by within a few hours.

Month Day °C Night °C Water °C Daily sun hours
January 16 13 17 7
February 16 13 16 8
March 18 15 16 9
April 20 17 17 11
May 24 20 19 12
June 29 24 22 13
July 32 27 26 14
August 32 28 27 13
September 28 25 26 10
October 25 22 24 9
November 21 18 22 8
December 18 15 19 7

9. Less of a language barrier

English, together with Maltese, are official languages of Malta. I would estimate that 90% of the Maltese speak fluent English, some of the older generations are not as fluent. But all papers & contracts, part of school, signs, instructions and food menus for example, are in English.

10. More like-minded entrepreneurs

The good business climate that Malta has to offer attracts  a lot of entrepreneurs from all over the world. Being an internet entrepreneur myself, it’s awesome being surrounded by people with a similar mind. There’s entrepreneurs from all over the world and you’ll easily make friends with people who’s waking the same path.

Is there any bad sides living in Malta?

All places have good and bad sides. There’s also bad sides about Malta of course, but most of them, I just see as too minor to mention.

If you swing by the island, let me know and we can have a chat over some coffee in the sun. If you need any help with formation of the Malta company, I’d suggest asking people who already established Malta companies. You can reach out to me as well: hello@johanneslarsson.com if you want.

Written by
Johannes Larsson
Join the discussion

15 comments
  • Hey,

    Great article! Got a couple questions – we’re considering Malta as we are 100% location independent with our business. We’re not big shots though so costs matter to some degree.

    How much does a structure like that cost to set up and maintain for you? I mean a Maltese company + a Gibraltar holding company for example.

    Thanks a lot!

    • Hey Mantas,

      Malta + Cyprus is cheaper setup. It costs about €3000-4000 EUR one time fee to setup both companies (including everything). It can differ between the legal companies that help you setup the structure but that’s what I paid.

      Then also expect to pay a yearly fee of €2000-6000 depending on the level of activity. That is payroll services, VAT, declarations and everything else you need.

      • Thanks – those numbers are very reasonable.

        Would using a Maltese holding company (instead of Cyprus) work or is there a catch somewhere? I guess Malta would fully tax all dividends paid out to you in that case. But if I were to use the holding company for investment back into the trading company that shouldn’t incur any extra taxes I guess.

        Dividends get taxed as normal income right (income tax + social security)?

        Lots of questions – sorry. Not many people around here with first-hand Malta company experience.

        • Sorry for late response.

          You can use a Maltese holding company if you are not planning to be resident in Malta. If you are resident, you need the holding company outside of Malta.

          Dividends gets taxed normally, but only if remitted to Malta. You don’t pay any tax on dividends if they are outside of Malta.

          • Thanks! I’ve been in contact with a accounting/law firm in Malta and I believe I have it all figured out now. Thanks for the nudge in the right direction. 🙂

        • Hi Mantas,

          You mentioned below you’ve made ‘contact with an accounting/law firm in Malta’. Would you recommend them and could you pass their contact details on to me?

          Thank you in advance.

  • Hey Johannes, I am an internet entrepreneur and i own a home in Malta, it really is a nice place. I am currently staying in the UK but I’m travelling back to Malta soon… be good to meet up for a chat my friend. Dan

  • Hi Johannes. I’ve found your article going to lots of other info about Malta – as I’m planning to move there…hopefuly this year. I would like to start an online shop there and I’m wandering if you know that they have any good and decent cost shipping deals to link with the continent in order to be able to sell all over the EU or worldwide. Thanks

    • Hey Alex,

      I was reading this article and found your comment on online shops. I have ab online shop myself and planning to move to Malta.

      Could you let me know if you figured everything out.

      Thanks and I look forward to your response.

  • HI, I am a British entrepreneur with an Internet business and I am currently resident in Sardinia with my partner and our two children. My business is registered as n LLC in Wyoming which has no corporation taxes and so I only pay income tax on profit that I bring into Italy, however Italian income tax is very high so I am looking to see if moving to Malta might be an option to lower my tax burden and also because English is spoken (at least on legal documents etc) I would find it much easier to deal with the bureaucracy then I do in Italy..

    I have some savings which I thought I might invest in a sail boat and wondered if becoming resident in malta while living and working on the boat would be a viable/possible option instead of renting or buying property. I do plan to spend most of the year in Malta but want the freedom to travel while keeping a base in Malta and seeing family in Italy and traveling further afield. What is mobile internet like there, is there good coverage?

    Thanks

  • Hi,
    Johannes
    I am interested to settle there. I am doing Cellphone business in my city last 10 years.My wife is as a Medical Laboratory Technician.Can possible to settle there?Please give me some idea or details about how to open company there and also extra expense there.

    Thanks

  • Hi Johannes;

    I am a female Portuguese South African, and read all your amazing comments about Malta, including experiences, pros and cons etc..
    I am not sure if you can help me, or direct me onto the right path, but I would really appreciate some indication regarding working in Malta, who to contact especially after reading that they are keen in people with foreign language skills. I am fluent, reading, writing and speaking English, Portuguese and Afrikaans, plus speak only Zulu.. and seeing that I love the warm weather and the Ocean, that seems to be my dream Land.
    Thanking you in advance.
    Kind Regards
    Maria

Attend the course

Sign up for the coming passive income (learn affiliate marketing) course. Yes, it’s free. Read more here.