Malta back office
administration for foreign companies
The Concept
Maltese law has recently introduced a system
whereby operations set up in Malta which service the back office
administration and support the needs of foreign enterprises benefit from a
guaranteed ten-year tax rate of 4.17%.
This incentive is applicable to a wide sphere
of activities as back office services are widely defined as “routine
administration services”, with unlimited application to any business or
professional activity.
There are no restrictions as to the type or
nature of the back office services that may be accepted for the purposes
of this tax benefit. Thus it is possible for the entrepreneurial and
professional class to identify activities which could be classified as the
provision of back office administrative or support services.
The services may be, for example, in support
of companies engaged in airlines, hotel or hospitality industry, or
administrative tasks in support of trust services, shipping and maritime
trade, insurance or fund administration business. Indeed most
administrative tasks can be out-sourced in a way as to qualify as a back
office activity for purposes of law.
Qualifications
There are only three basic requirements in
order to qualify.
(a) the services are to be provided to
foreign residents or entities;
(b) the services are to consist of routine
administrative, accounting or other support services or management
functions, and do not comprise services which are subject to specific
regulatory licensing or control, (e.g. the duties of a professional
lawyer, or trustee, or a fund manager, or an auditor) but may represent
the administration needs of such categories of licensable persons;
(c) the services are to be provided either by
a local company or by a local branch of a foreign established company.
There are no restrictions on ownership, thus
the back office operation may be owned by local or foreign interests, or
by both jointly. Neither are there any restrictions regarding the
beneficiaries or recipients of the services who may consist of one or more
undertakings involved in different activities and ownership structure.
The minimum paid up capital of this company
is Lm5,000 (12,000USD). There are no restrictions to the company having
foreign directors.
Benefits
-
Low rate of tax for back-office ITCs
-
An extensive range of double taxation
agreements which supports effective tax planning.
-
Training grants for approved programs are
offered to employees and management.
-
Factory and office space is available at low
rental costs.
Malta is in a good position to encourage
local set-ups of this nature because of a well-educated workforce and its
high number of professionally qualified and trained personnel.
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