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Malta foreign Investments incentives













Malta has put foreign investment in Malta at the top of its economic list of priorities, in utilizing the Maltese technological, financial and marketing expertise for foreign investments.
To this end, they have also set up a government company, "The Maltese Development Company" to assist with investments. Among other matters, the company is responsible for the operation and management of 10 industrial parks.
There are as well agreements for the protection of investments. Such an agreement was signed with the United States of America and a number of other countries, mainly in Europe. The object of the agreement is to protect the investors against loss of their investments as a result of a natural disaster. The agreements similarly regulate the matter of recovery of capital and profits for foreign investors.
In general, there are no restrictions concerning investments in the industrial sector. Nevertheless, investments in commercial non-industrial ventures that are aimed only at the local market, encounter many difficulties. The energy market is, in actual fact, closed to foreign investors.
A foreign investor may obtain financing for his investment from private and public sources. Loans are usually given for a period of 25 years.
New investors are able to receive a loan of up to 33% of the total amount of the investment at preferential terms of interest.
The tax laws in Malta are particularly creative in all that concerns taxation of foreign companies whose main business is not within Malta. These laws, including special benefits to shipping companies attract many foreign companies to Malta.


Malta Benefits to Investors


Companies who meet the terms of the "Business Promotion Act" are eligible for benefits that include, among others:
  • Reduced income tax rates, 5% for the first 7 years, 10% for the next 6 years and 15% for the next 5 years.
  • An additional tax credit, 50% of the investment is granted.For SME companies the credit is 65%.


Malta "Off-Shore" Investment
The activity of an "Off-Shore" company is classified as a "trading company" or a "non-trading company" (International Holding Co. - IHC International Trading Co. - ITC). The rate of effective tax to shareholders of holding companies is zero, as when calculating the dividend, the shareholder may offset any company tax that the company paid on its profits. The effective rate of tax for shareholders in an "operational" company after offset is only 4.16%.
The main classes of company are:
1) IHC Company.
2) ITC Company.
Trusts registerd under the old trusts act pay only annual tax of LM 200 for 10 years from their registration.


Shipping Companies in Malta
In order to encourage the registration of ship-owning companies, Malta adopted a special encouragement law.
The benefits are attributed mainly to ships registered in Malta with a minimum tonnage of 1,000 tons.
The main benefits are:
  • Complete exemption on operating profits and dividends.
  • Exemption from capital gains (sales of ships/shares).
  • Exemption from interest for foreign residents on shipping activities.
  • Exemption from registration taxes (registration of ships, share allocations and more).









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