Benefits of company incorporation in Malta
1. Lowest corporate taxes in the EU
Corporate taxes in Malta are 35%, a flat rate, which is the highest in the EU. However, you can reduce it to an effective tax rate of 5-7% by distributing all of the holding company’s profits.
2. Reasonable income taxes
Income taxes are not very low (compared to their EU neighbors), so higher salaries will lead to rather high tax pressure.
Previous income is deducted from the tax rate, so the tax rate applies only to the difference. For example, a salary of € 14,400 (€ 1,200 / month) would be taxed at € 885 per year, which is approximately 6-7% tax.
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Tax rates from IRD Malta
3. Low minimum wages
The minimum wage in Malta is 720 euros. So we can draw a conclusion about the situation with wages in the country. Employees can be happy with salaries ranging from € 1,000 to € 2,000 for the most common jobs, which can be beneficial if you plan to run your company in Malta directly from the island.
4. The required amount of the authorized capital is only 1165 euros.
The minimum share capital required to open a business in Malta is € 1165, but only 20% of this amount must be in your bank account. In other words, it takes less physical money to open a Malta LLC. There is also an annual fee of EUR 100.
5. Small social security
Social security is paid to all employees and amounts to 10% of employee salaries, plus another 10% paid by the company. So basically the effective rate is 20%, but half of it comes from the employee’s share.
6. Fewer restrictions on spending
The policy on using your company’s money to pay for business expenses is not strict.
Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information. Also, please visit our website for further updates.