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Relocating Your Business to Malta? Some Helpful Advice

Malta is a Mediterranean paradise enjoying year round sunshine and a buoyant economy. Once a British colony it still retains that quintessential British flavour and is a much favoured holiday resort offering budget breaks all year long. It may only be small, but this island packs a huge punch as you are about to discover!

 

Why Set up Business in Malta?

Malta is strategically placed to make the most of trade ties with mainland Europe, North Africa and the Middle East. English is widely spoken as is Italian and many can also converse in French and German. It has full EU membership and an excellent port infrastructure which is vital for foreign imports and exports. It also benefits from regular flight services to all major European cities, including links to global airports, so for the investor it offers real business opportunities.

 

Economy in Malta

Malta may not have escaped the global recession but neither did it completely succumb to it and thanks to its forward planning government plus tax incentives for investors, it is actually experiencing some growth.

The Maltese government are keen to point out that Malta was "one of the last countries within the European Union to enter the recession and was also one of the first countries to rebound from the economic downturn."

The government also states that they enjoy 'Foreign Direct Investment' from the UK, Germany, Italy, France, Spain and the US and have been very successful in attracting foreign investors to their shores. This is largely thanks to their movement away from labour based industries and into graduate industry.

In 2011, Malta experienced a GDP growth of 2.7% that was, according to the Telegraph, driven by tourism and manufacturing exports.

 

Real estate is also a major key growth industry.

 

Growth Industries in Malta

The Maltese government have set up Malta Enterprise and are focusing on a number of sectors for growth development including:

Advanced Manufacturing Creative Industries Financial Services International Education Life Sciences Tourism Transportation and Advanced Logisitics

Other new industries attracted to Malta's shores are BlueChip Companies (igaming, poker, casinos), yacht and boat industries such as Super Yacht and the media.

 

Government Initiatives

As mentioned above, the government are keen to encourage foreign investment and so a number of incentives have been put in place to do just that. The Business Development Scheme is available for large projects that are likely to offer significant contributions to the Maltese economy and aid job creation. The scheme will offer support for development phases and various other activities.

Business advisory services will offer a team of consultants advising you on how best to enter the market, how to manage effectively and advice on funding. This is a valuable service for start-up businesses who are not yet familiar with business practices in Malta and need a little help in penetrating the market.

Other business support services include:

Tax Credits for Digital Applications Development Trade Promotion Network Support Grant Scheme MicroInvest Innovative Start-Ups and many more

 

Visit the Malta Enterprise website to find out more about business schemes and how you can apply.

 

Malta Tax Incentives

Corporate tax is 35% which might sound high but once the dividends are distributed, shareholders are entitled to a refund of a large part, if not all of the tax paid by the company (this amount is generally 6/7th which means that tax paid is only 5%). Only immovable property in Malta is not subject to tax refunds. This tax exemption is applicable to non-Maltese residents and those related to trading outside of Malta where the income is remitted to Malta.

Furthermore, if you are not a resident of Malta (say your permanent home is elsewhere) you are not taxed on the refunds you receive.

Tax treaties with a large number of countries ensures that profits made in Malta are not subject to tax in the residence country of the investor or, they are eligible to a tax credit thanks to some of the incentives Malta provides.

Tax agreements are in place in 58 countries worldwide with a further 12 countries currently engaging in negotiation.

 

Business Licences in Malta

If you are trading you will need a trading licence from the Division of Commerce. Gaming companies will also need either a Malta Remote Gaming Licence or Non-Malta Remote Gaming Licence and will also need to pay gaming taxes both of which are low in comparison to most other EU countries. For more information on gaming licences and directives in Malta visit the Lotteries and Gaming Authority (LGA).

 

Malta Workforce

Malta offers a highly educated, ambitious and enthusiastic workforce. Workers from all over the globe are attracted to Malta thanks to the Malta Permanent Residents Scheme.

Other incentives include:

Transferable pension funds No capital gains tax on a primary residence No inheritance tax No tax on worldwide income Wealth and low stamp duty

 

Such low tax rates attract a high number of migrants from all over the world, which means that you have a wide range of staff to choose from who can effectively communicate with clients and customers worldwide.

Malta also has the highest number of computer graduates amongst 27 EU member states and attracts many foreign students due to their low tuition fees and an established and well respected University.

 

Foreign Investors in Malta

Many notable companies have already chosen Malta as their base including:

Baxter HSBC Bank Playmobil Malta Siegfried Generics Toly Products Uniblue Systems Ltd Trelleborg Sealing Solutions Lufthansa Technik Actavis Malta Dedicated Micros Methode

These are just a few of the many businesses operating within Malta's shores.

 

Suitable Business Locations

Many factors need to be considered when looking at business location but the main ones are:

Transport

Development Limitations

Expense

Transport in Malta is generally good but obviously you will find it harder to get around in the more rural areas than the city. However, central locations do come with a hefty price tag. New resorts such as Tigne Point and Portomaso offer luxury accommodation along with commercial premises and these projects have proved so popular that many development companies are using them as blueprints for other development projects.

Valetta is the capital of Malta and the admin hub but this is probably the most expensive option plus there is the fact that it is a registered UNESCO site so there are strict rules on new developments.

As ever the government are keen to solve such issues and to this end you will find a number of specialised business developments being constructed around Malta such as SkyParks which is located near Malta's main transport hub and is a self-contained office development. Also SmartCity is being described as a "state-of-the-art information technology and media city on the models of Dubai Internet City and Dubai Media City" according to the developers. Offices are being opened now and the entire project should be completed by 2021.

N.B. All information contained within this article was correct at time of publish. Ask one of our experienced real estate agents for the latest on relocating to Malta.