In 2007, when the Government introduced the participation exemption, Malta became one of the most attractive destinations for setting up holding companies in Europe. Even if it does not have a legislation dedicated to the incorporation of holding companies, Malta has an unique taxation system which turns the country into an ideal location for setting up companies with the purpose of holding shares in other business structures. Maltese holding companies may operate both in and outside the European Union.
One of the main reasons to open a holding company in Malta is the flexibility it offers. Maltese companies can be used for several purposes, among which:
Holding companies can be registered as private or public limited liability companies, as established by the Maltese Commercial Code. The minimum share capital for registering a Maltese holding company will depend on the type of company selected and it is EUR 1,165 for a private company and approximately EUR 46,000 for a public company. Holding companies are usually registered in two or three days, especially when requesting the services of company formation agents in Malta.
Based on the Maltese taxation system, the incomes or capital gains resulted from qualifying participation holdings may benefit from tax exemptions. Participating holdings qualify for tax exemptions in Malta if the Maltese holding company owns at least 10% of the equity shares of a company and the holding offers the following rights:
Additionally, the participating holdings must meet at least one of the following conditions:
The video below shows the main advantages of Maltese holding companies:
Apart from the participating holding regime, Malta is a preferred destination for setting up a holding company because it offers other advantages among which:
For complete information about the taxation of holding companies, please contact our Maltese company registration agents.