🇲🇹 Malta Company Formation
Effective 5% CIT via the 6/7 shareholder refund system. EU membership with full directive access, 80 tax treaties, and IP Box at ~1.75%.
Updated April 2026
Effective CIT
5%
IP Box
~1.75%
WHT All Categories
0%
Tax Treaties
80
Passport Rank
186 countries
Tax System
Rates and incentives
| Tax | Rate | Note |
|---|---|---|
| Corporate income tax (headline) | 35% | Paid by the company on worldwide income. Shareholder refund reduces effective rate. |
| 6/7 refund — trading income | 5% effective | Shareholder claims 6/7 refund on distributed trading profits. Statutory right under ITA. |
| 5/7 refund — passive income | 10% effective | On passive interest and royalties. Shareholder refund of 5/7 of tax paid. |
| IP Box — qualifying IP income | ~1.75% | Patent box regime for qualifying IP. One of the lowest IP rates in the EU. |
| Withholding — all categories | 0% | No WHT on dividends, interest, or royalties paid to non-residents. |
| Participation exemption | 0% | Full exemption on dividends and capital gains from qualifying holdings (10%+ or EUR 1.16M+). |
Why Malta
Key advantages
5% effective CIT via shareholder refund
Malta's unique full imputation system: company pays 35%, shareholder claims 6/7 refund on trading income. Effective rate of 5% — the lowest in the EU for trading companies. OECD-compliant and not on any blacklist.
0% withholding tax on all outbound payments
No WHT on dividends, interest, or royalties paid to non-residents. Regardless of treaty. Combined with EU directive access, Malta is one of the cleanest conduit jurisdictions in the EU.
IP Box at ~1.75% — lowest in the EU
Patent box regime providing effective rate of approximately 1.75% on qualifying IP income. OECD modified nexus approach compliant.
EU membership with full directive access
Parent-Subsidiary Directive, Interest & Royalties Directive, and full EU treaty network. UCITS and AIF passporting. MiCA-regulated crypto licensing via MFSA.
80 double tax treaties
DTA network covering UK, US, Germany, Italy, France, UAE, China, Singapore, and all major trading partners.
What We Build
Full scope of implementation
- ✓Malta Ltd company registration with Malta Business Registry
- ✓Shareholder refund structure — holding and trading company setup
- ✓MFSA-licensed Corporate Service Provider engagement
- ✓Malta-resident director provision and board meeting coordination
- ✓Corporate bank account — full KYC file and compliance dossier
- ✓Annual statutory audit, tax filing, and 6/7 refund claim submission
- ✓IP Box application and qualifying IP transfer coordination
Who This Is For
Ideal client profiles
2025 – 2026
What has changed
⚠ Pillar Two — 15% minimum tax for large MNE groups
GloBE rules implemented. For groups with consolidated revenue above EUR 750M, the 5% effective rate may be topped up to 15%. SMEs and mid-market structures are unaffected.
Election for Final Income Tax Without Imputation — March 2026
New option for companies to elect a final income tax without using the imputation/refund system. Provides an alternative pathway for certain structures.
Enhanced AML/CFT compliance — post-FATF grey list
Malta was removed from the FATF grey list in 2022 but banks and regulators now apply heightened compliance standards. Expect thorough KYC and longer onboarding timelines.
Common Questions
FAQ
How does the Malta 5% tax rate actually work?
The company pays 35% CIT on profits. When dividends are distributed, the shareholder applies for a 6/7 refund of the tax paid — reducing the effective rate to 5%. The refund is a statutory right under the Income Tax Act and is typically processed within 14 days. The system requires actual dividend distribution and proper shareholder documentation.
Is the refund system under threat from Pillar Two?
For MNE groups with consolidated revenue above EUR 750M — yes, the effective rate will be topped up to 15%. For SMEs and mid-market companies below the threshold, the 5% effective rate continues unchanged. The vast majority of Malta structures operate below the Pillar Two threshold.
How long does bank account opening take in Malta?
Traditional Maltese banks (Bank of Valletta, HSBC Malta) take 3–6 months for non-EU corporate clients. The realistic path is to open with a Malta-based EMI first (7–14 days) for operational purposes, then pursue traditional banking in parallel.
Do I need a Malta-resident director?
Not legally required, but strongly recommended. For the 5% refund to withstand scrutiny, the company must be managed and controlled in Malta. At least one Malta-resident director and regular board meetings in Malta are the practical minimum for substance.
Is Malta still considered a reputable jurisdiction?
Yes — Malta was removed from the FATF grey list in 2022 and is a full EU member state. The refund system is OECD-compliant. However, banking and compliance standards have been raised significantly as a result, which increases onboarding time and substance requirements.