Setting up a Holding Company in Malta
A prime destination for Foreign Investors

Since the introduction of the participation exemption regime, Malta has become a destination of choice for foreign investors wanting to set up holding companies. Holding companies are the best solution to hold assets and participations in other companies in Malta.

Registering a holding company in Malta can be highly attractive for foreigners due to a mix of tax efficiency, EU membership, and a business-friendly legal environment.

Why Registering a Holding in Malta?

Attractive Tax Regime

Malta taxes corporate profits at 35%, but shareholders (including foreigners) may receive a tax refund of up to 6/7, reducing the effective tax rate to about 5% or less in many cases.
No Withholding Tax on dividends, interest, and royalties paid to non-residents (subject to conditions).
Dividends and capital gains from qualifying holdings in foreign companies can be completely tax-exempt in Malta.

EU Membership and Compliance

Malta is a member of the European Union, offering:

• EU directives (e.g. Parent-Subsidiary Directive, Merger Directive).
• Easier cross-border operations within the EU.
• Access to the European single market.

English-Speaking Legal System

Based on a mix of common law and civil law, the legal system is transparent and business-oriented.
English is an official language, and all laws and company documentation are available in English.

Stable and Reputable Jurisdiction

Malta has a stable political and financial system.
It’s a reputable onshore jurisdiction with a good international standing — not a tax haven.
Compliant with OECD and EU regulations on transparency and anti-money laundering.

Efficient Company Setup and Administration

Fast incorporation (typically within a few days).
Low minimum share capital (€1,165 for private limited companies; only 20% must be paid up).
Possibility of 100% foreign ownership and non-resident directors.

Strategic Location

Malta is well-positioned geographically between Europe, North Africa, and the Middle East, which is useful for holding or managing subsidiaries in these regions.

Double Taxation Treaties

Malta has over 70 double taxation treaties, minimizing tax leakage on cross-border investments.

Tax Benefits

Registering a holding company in Malta offers several advantages and tax benefits for non-residents, making it one of the most efficient jurisdictions in the EU for international structuring.

100% Foreign Ownership Allowed

No restrictions on non-residents owning shares.
Directors and shareholders can be entirely non-Maltese.

No Exchange Controls

Free movement of capital and dividends in and out of Malta.

Tax Refund System

Malta operates a full imputation system:

• Corporate tax rate: 35%, but non-resident shareholders can claim a tax refund of up to 6/7 on distributed profits.
• Effective tax rate after refund: 5% or lower (in many cases).

Example:
Profit: €1,000
Corporate tax paid: €350
Shareholder refund: €300
Final tax burden: €50 → Effective rate = 5%

Participation Exemption (0% Tax)

A Malta holding company can benefit from a full exemption from corporate tax on dividends from qualifying subsidiaries, and capital gains on disposal of shares in subsidiaries.

Conditions (at least one must be met):

• Holding at least 10% of the equity.
• Holding value of at least €1.164 million for an uninterrupted period of 183 days.
• Option to fulfill anti-abuse conditions instead.

This results in 0% tax on certain foreign dividends and capital gains.

No Withholding Taxes

No withholding tax on outbound dividends, interest, or royalties paid to non-resident shareholders (in most cases).
Applies even if the shareholder is in a non-EU country, provided no PE in Malta.

No Capital Gains Tax on Share Transfers (if structured right)

Sale of shares in a Malta holding company by a non-resident is not subject to capital gains tax, if the company does not own real estate in Malta.

No CFC (Controlled Foreign Company) Taxation for Shareholders

Malta does not impose CFC rules on foreign shareholders — your local tax laws may still apply, but Malta does not automatically tax you on undistributed foreign earnings.

Typical Use Cases for Malta Holding Companies

Holding shares in EU or international subsidiaries.
Centralizing dividend income and capital gains.
IP holding (intellectual property structuring).
Asset protection and estate planning.

Establishing a Holding Company in Malta
Easy Steps

Here are the steps to establish a holding company in Malta:

Choose the Right Structure

Most common – Private Limited Liability Company (Ltd)
Can be used as a pure holding company for owning shares in other entities
Minimum share capital – €1,165 (only 20% needs to be paid up: €233)

Appoint Directors and Shareholders

At least one director and one shareholder (can be the same person)
Can be non-residents and corporate entities
Appoint a company secretary (mandatory – often provided by a local firm)

Engage a Licensed Corporate Services Provider (CSP)

Malta requires that companies be registered through a licensed CSP or law/accounting firm
The CSP helps with:

• Drafting the Memorandum & Articles of Association
• Submitting all paperwork
• Providing a registered office address
• Acting as liaison with the Malta Business Registry (MBR)

Prepare and Submit Incorporation Documents

Memorandum and Articles of Association
Identification documents of directors/shareholders
Proof of address (e.g. utility bill)
Due diligence (KYC/AML) checks

Register the Company with the Malta Business Registry (MBR)

Submit documents via your CSP
Incorporation usually takes 2–5 working days
Company receives a Certificate of Incorporation

Apply for a Tax Identification Number (TIN)

Issued by the Commissioner for Revenue
Needed to claim tax refunds or apply for participation exemption

Open a Corporate Bank Account

Often done after incorporation
Some banks require in-person visits; others allow remote onboarding via fintech or international banks

Register for Tax Refund System (Optional)

If you plan to distribute dividends, your CSP or tax advisor will:

• Register you for Malta’s shareholder tax refund mechanism
• Help manage refund claims (refunds usually paid within 2–3 months)

Maintain Ongoing Compliance

Annual requirements:

• Financial statements (audited if above thresholds)
• Annual return to MBR
• Corporate tax return

A CSP typically handles all of this on your behalf

TBA services

We have 2 decades of experience in the incorporation and management of asset holding companies, whether it be for owning property, or for other reasons such as holding an investment portfolio.

We do not simply incorporate Holding companies in Matla, we always take a client’s needs and personal circumstances into consideration before deciding upon which jurisdiction of incorporation will be best and most suitable.

Owning your assets through a company can reduce or eliminate the inheritance tax, capital gains tax and income tax, and afford confidentiality (seen as a major benefit for those clients residing in high-risk countries). Asset holding companies can also circumvent the need for the granting of probate, an often time-consuming and expensive process, and play a vital role for long term family financial planning.

We are happy to examine possibilities with you for as long as it takes, in order to find the best solution for you and your family.

Please do not hesitate to contact us for more information on how we might be able to benefit you in the ownership of your assets.