You can set up a Malta holding company to hold shares and securities, as well as your business assets in any form like bank accounts, intellectual property, and real estate. It can also let you hold personal assets, such as yachts, works of art, and residential property.
While you may not find any specific holding regime, your company benefits from participation exemption and affordable domestic tax treatment. It means capital gains or income that a Malta holding company derives from qualifying participating holdings may get tax exemption in Malta.
Your investment may qualify as a participating holding if your company has a five-percent of the equity shares. The company should also divide its capital partly or wholly into shares. It lets the holding company get the right to gain profits for distribution, hold assets to distribute on a winding up the company, and vote in the political activities of Malta. You can also maximize the income tax on your overall earnings.
To get your holding company classified as a participating holding, you need to meet either of the following conditions.
- Your company should hold 5% of the equity shares of a business outside Malta, or it has an equity shareholder who does not reside in Malta but has the choice to acquire all the equity shares.
- A holding company with an equity shareholder who is not a resident of Malta and can refuse proposed disposal, redeem or cancel the equity shares of that particular company can also classify itself as a participating holding.
The Maltese tax system does not impose a capital gain tax if you decide to sell the shares of your Malta holding company. Likewise, you do not need to pay any withholding taxes on the distribution of dividends to the parent company or shareholders of the same. Malta does not charge capital duty on the issuance of share capital or impose stamp duty on subsequent transfer.