Malta

Malta emerges as a European model, strategically positioned as a frontier state in the EU and a mere 290 kilometres north of the African coast, facilitating seamless trade between continents. Its pivotal location in the Mediterranean naturally bridges the gap between Europe, Africa and the Middle East, establishing strong connections with neighbouring countries and positioning Malta as a hub for various business endeavours. Additionally, Malta’s accession to the EU in 2004, followed by joining the Schengen Area in 2007 and adopting the euro in 2008, underscores its commitment to European integration and freedom of movement. Access to the single EU market with 500 million consumers, EU funding programs, and a vast talent pool of 200 million employees further solidifies Malta’s standing as a premier destination for business growth within the EU. With a supportive business environment and highly qualified personnel, Malta offers an exceptionally attractive jurisdiction for companies aiming to expand their operations and thrive in the European market.

The Island takes pride in its robust economy, which is highly rated amongst credit agencies. Moreover, the World’s Market Research Centre has assessed the island as having minimal overall risk.

Malta has consistently maintained impressive economic indicators, with a real GDP growth rate consistently ranking among the top 5 highest in Europe. Furthermore, Malta boasts one of the highest GDP per capital figures in Europe, reflecting its prosperous economic landscape. The country also enjoys one of the lowest inflation rates in Europe (consistently among the lowest 3), ensuring stability and confidence in its financial system. Additionally, Malta is recognised as one of the least complex jurisdictions globally, offering a streamlined and business-friendly environment conducive to investment and growth. These factors collectively underscore Malta’s standing as a dynamic and resilient economy within the European Landscape.

Malta’s legal system is rooted in Roman law with significant French influence, particularly from the Napoleonic code. Additionally, English common law shapes Malta’s legislation. Laws are drafted in both Maltese and English, and court proceedings can be conducted in the latter.

While Maltese and English serve as the official languages, English is predominantly used in business and education. Italian is widely spoken, with German, French, Spanish, and Arabic also present, albeit to a lesser extent. Translation services are readily available to accommodate linguistic diversity.

At the heart of Malta’s allure lies its favourable company taxation regime, which serves as a cornerstone for businesses seeking to thrive in the region. Key determinants of a company’s tax liability include its residency status, determined by factors such as incorporation in Malta or the location of management and control, and the applicable corporate tax rate, currently set at 35%.

The Refundable Tax Credit System: At the core of Malta’s tax benefits lies the Refundable Tax Credit System, enabling shareholders to request tax refunds when profits are distributed. Usually equivalent to 6/7ths of the company’s tax payment, these refunds effectively lower the effective tax rate to as little as 5%, positioning Malta as an advantageous tax destination for businesses. Utilising this system, companies can strategically manage their tax liabilities and augment shareholder returns.

The Full Imputation System: Malta stands out for its embrace of the full imputation system, a strategy aimed at preventing economic double taxation and fostering tax effectiveness. Within this framework, shareholders of Maltese companies receive a tax credit matching the company’s tax payment when profits are distributed. This approach safeguards against dual taxation, bolstering investor trust and encouraging further investment in the economy.

Double Tax Relief Mechanisms: To facilitate cross-border trade and investment, Malta provides various mechanisms for double tax relief, aiming to reduce the impact of double taxation. These mechanisms encompass double tax agreements, unilateral relief, and the flat-rate foreign tax credit (FRFTC), offering businesses options to navigate their international tax responsibilities efficiently. By easing the challenges of double taxation, Malta strengthens its competitiveness worldwide, drawing investors looking for a favourable tax environment for their enterprises.

Malta’s attractive jurisdiction reflects its proactive efforts to attract foreign direct investment, particularly targeting high value-added companies engaged in Leith and advanced manufacturing, research and development, and specific sectors like IT, pharmaceuticals, marine, and aviation. Furthermore, Malta’s status as a hub for diverse industries including iGaming, fintech, AI, eCommerce, life sciences, blockchain, and green and blue economy further enhances its attractiveness to investors seeking opportunities in these thriving sectors.

Malta’s workforce is highly skilled and adaptable, with fluency in English and a knack for innovative problem-solving. These qualities have contributed to Malta’s remarkable position as the 3rd in the EU and 12th globally in attracting talented individuals from abroad. Furthermore, Malta’s ability to retain its skilled workforce is evident, as it ranks 7th in the EU and 30th globally in talent retention. Additionally, free education up to tertiary level supports the development of a talented workforce, further establishing Malta as a centre for excellence and innovation.

Malta boasts robust infrastructure, offering subsidised rent for innovative businesses and full coverage of ultrafast networks, making it the sole EU member state with such comprehensive connectivity. Its impressive 6th ranking in the EU Digital Economy & Society Index 2022 reflects Malta’s dedication to advancing digital infrastructure, bolstering its competitiveness in the global arena.

To enhance the competitive edge of businesses, Malta has implemented a range of incentives aimed at promoting and expanding industries and fostering the growth of innovative enterprises. These incentives are accessible to all companies, whether they are startups or established entities. Companies can benefit from cash grants, tax credits, or financing at preferential interest rates.

These incentives can be utilised for various purposes, including direct investment in acquiring buildings, machinery, and equipment, as well as for recruitment, establishing e-commerce platforms, developing business plans, and conducting research and development projects. While some of these incentives are fully funded by local resources, others are co-financed by EU funds, reflecting Malta’s commitment to supporting business development and innovation.

Malta’s global connectivity is unparalleled, exemplified by its award-winning Malta International Airport, consistently recognisedly AIC as “Europe’s Best Airport” from 2018 to 2022. With less than a 4-hour flight to any European destination, North Africa, and the Middle East, Malta serves as a strategic gateway between continents.

Additionally, it stands as the third-largest transshipment and logistics centre in the Mediterranean region, with connections to around 120 ports in over 50 countries. Ranked as the world’s 10th most connected by DHL, Malta’s global connectivity is further bolstered by its diverse workforce, with 27.9% comprising non-Maltese individuals. This interconnectedness positions Malta as a vital player on the global stage, facilitating trade, travel, and collaboration across continents.

Malta offers an exceptional quality of life, ranking 4th in the EU and 15th globally for political stability and the absence of violence. The universal healthcare system is renowned, ranking 9th globally, ensuring residents receive top-quality care for free. The country’s dedicated network of Expat Centres ensures a smooth transition for newcomers, while its education system fosters global connections and nurtures bright minds.

Residency programs provide long-term stability, complemented by over 300 days of sunshine and a safe environment. With 10 UNESCO World Heritage Sites, Malta boasts a vibrant, multicultural atmosphere. Consistently ranked 1st in the ILGA Europe Equality Index, Malta upholds principles of equality and inclusivity. Additionally, it ranks in the top 15% globally for wealth, happiness, and health, solidifying its reputation as a premier destination for quality living.