The outlandish Malta island is home to the Mediterranean Sea, beautiful cuisine and an irresistible lifestyle. Over the last decade, it has also faced enormous transformation within the business sector, a move that has been seen to attract investors across Europe and around the world.
Investment immigration opportunities, tax, fiscal and social benefits, as well as, a stable economic ecosystem are some of the drivers of this positive trend. The financial service industry has particularly been on the spotlight as the most innovative sector. The island is also known to have a highly trained workforce, and presents low costs of labour, making it the ideal location for big businesses.
The Tax and Legal Framework
For corporate structures and tax planning, Malta has a highly competitive jurisdiction. The biggest advantage is the full imputation system. It means that while there is a flat rate of 35 percent company tax, the overall tax rate for companies incorporated in the island is 5 percent. Here, there is also a double taxation relief, including unilateral relief, flat rate foreign tax credit and treaty relief.
A combined imputation system and tax relief mechanism will thus reduce between 0-6.25 percent from 35 percent. Foreigners who work in Malta enjoy a 15 percent flat rate of the income tax. What’s more, they get to avoid all taxes on their income from capital gains and overseas work. For employees planning to stick around and start a family in the island, there is the advantage of a zero-inheritance tax rate.
Since becoming a full member of the EU in 2004 and later 2008 adopting the Euro, Malta has been seen to expand rapidly in the business sector. So far, the island has attracted over 35,000 foreign workers and investors for its attractive commercial climate. The construction industry has over the years been very strong, making Malta a top business area for its modern structures built to meet different budgets. Sliema, Msida, Valletta, St.Julians and Ta’Xbiex are some of the most popular commercial settings.
The island also boasts a collection of master planned business developments with a wide range of amenities, including fitness centres, restaurants, landscaped gardens and more. Multiple commercial developments come with a special designated area (SDA) status that allows the EU and non-EUnationals to purchase property within the island with similar acquisition rights as those of Malta citizens. It is also to mean that moving business here does not limit investors on the number of properties they can purchase. After ownership, the investor is granted the permission to lease without any restrictions.
Malta has in the past few years experienced a rise in its economic activities, and has so far registered the highest GDP in all of Europe. In 2017 alone, the growth rate shot up by 6.6 percent, recording a surplus of 3.9 percent. In 2018 through 2019, the island remained a top performer in the European Union.
For this reason, Malta has been on the global map, and has been credited by key players such as S&P and Fitch, who have rated the island’s economy to be stable and strong. The other reason most large enterprises choose Malta is because the economy is highly volatile. This is to mean that in cases of economic hiccups, such as the current coronavirus pandemic, the economic size of the island makes it easy to get back up quickly than is possible with large economies.
While Malta is considered one of the smallest islands in the world, it is equipped with high standards and a friendly business environment that has over the years attracted some of the world’s biggest players, such as Christian Ellul.