An assessment of the business environment and start-up opportunities in Malta

An increasing number of foreign investors (both established and startups) are choosing to set up or relocate their businesses to Malta due to a number of financial and social benefits, including a highly advantageous corporate tax system offered by the Malta Tax Authority.

The special lifestyle that the island can offer, its location in the heart of the Mediterranean, the climate, English as the official language, and other factors also play an important role in attracting a number of investors.

Assessment of the Business Environment in Malta

Malta is considered a very attractive legal area for foreign investors who want to relocate their business to the island. These advantages include taxes, investment immigration opportunities, financial and social benefits, a special lifestyle, and a stable economic ecosystem.

Strong Financial Services Industry

Furthermore, Malta’s service industries, particularly the financial services sector, have consistently emerged as very strong and innovative, facilitating and adding value to the entire business process in Malta. The highly trained and motivated workforce, coupled with relatively low labor costs, also makes Malta an ideal location for this purpose

Tax and legal brackets

Malta is one of the few European countries to adopt a fully regulated system, which is one of the main advantages of Malta’s tax system along with the fact that Malta has an extensive network of double taxation treaties and a refundable tax credit program

A company incorporated in Malta will be subject to a global base tax and is generally taxed at the standard corporate tax rate of 35%, however, upon paying dividends to shareholders, that shareholder will be entitled to a refund of income tax on Maltese taxes paid at the company level.

Profits taxed at the corporate level will not be subject to additional taxes at the shareholder level, as shareholders will receive a full credit for any taxes the company distributes the profits payable.

The rebate rate depends on various factors, and a 6/7 rebate applies to companies that perform trading operations. Malta also applies an exemption from participation, meaning that any dividends or capital gains gained by a Maltese company from a qualifying “participation holding” in a subsidiary will be tax-exempt in Malta. In particular, Malta does not deduct any tax on dividends paid to its shareholders.

Business Infrastructure in Malta

Malta is a small island but equipped with high-standard infrastructure that anyone looking to open a company in Malta is eager to find.

Commercial and residential real estate

With the construction industry being a very strong industry, the island has no shortage of modern and highly finished properties that can meet different budgets. The most popular business areas in Malta are those closest to Marsamxett Port, including Sliema, Gzira, Ta’ Xbiex, Msida, Pieta, Valletta and St. Julians, however, other areas conveniently located in well-connected areas, such as Swatar and Mriehel are also in high demand.

Anyone looking for residential real estate can rest assured that there are plenty of properties for sale or rent at various budgets and in any desired location.

IT infrastructure

Malta is quite advanced in terms of IT infrastructure. These types of services include co-location and storage services, data centers, cloud services, and internet services. A robust government information system architecture coupled with reputable service providers, ensures that anyone interested in doing business in Malta will have access to a secure, affordable, efficient and reliable system in place.

Business Support Services

Outsourcing any necessary support to ensure that all business needs are met is a high cost saving. Malta enhances a number of professional service providers who can effectively handle corporate requirements such as filing annual reports with the Malta Business Registry or director or secretary services, auditing and accounting, payroll, recruitment, employment law, etc …

Convenient transportation

Despite being an island, Malta is very accessible via sea and air transport routes to major and secondary airports in continental Europe and North Africa. Regular and frequent flights to and from Malta are operated by many airlines using Malta International Airport.

In addition, the small area of the island is convenient for short-term travel from any location on the island. In addition to public buses serving trans-island routes, many transport companies offer instant, 24-hour transportation to any location in Malta, especially upon arrival at the airport.

Starting a business in Malta

Foreign investors will definitely tend to open a company in Malta as most types of companies do not require a license, which means less bureaucracy, the only activities that require a business license especially those that are regulated, such as financial services and professions, such as healthcare.

Foreign investors will benefit from a quick and simple registration procedure, and a wide choice of the type of business they can open, the most used type of business vehicle in Malta being limited liability companies and also small businesses, such as individual traders.

The workforce in Malta is well known for its qualified and multilingual population, including both local and foreign workers. Besides Maltese, English is also the official language in Malta, making communication easy within the business itself as well as with customers around the world. Italian is also widely spoken and candidates who have a good grasp of French, German, Spanish and other languages are also popular.

Economic environment

Malta has repeatedly been rated by major credit rating agencies such as Moody’s, S&P and Fitch as a strong and stable economy. As described by major economists, Malta’s economy is highly volatile, meaning that if the country is affected by a local or global crisis, such as the COVID-19 pandemic, Malta’s economic size could recover in a shorter period of time and grow quickly.

This leaves Malta with a safe economic environment that is also protected by highly formal industries, strong anti-money laundering systems and an extremely low likelihood of natural disasters.

Conclusion

Malta is an attractive destination for investors and businesses, especially startups. With a favorable business environment, preferential policies and many potential opportunities, Malta promises to be a launching pad for the success of startups.