branches in Malta
A foreign company may opt
to establish a branch in Malta.
In terms of the Maltese
Companies Act, a foreign or "oversea company" is a body corporate which is
constituted or incorporated outside Malta. Oversea companies setting up
branches in Malta are required to
register the branch with the Maltese Registrar of Companies within one month from
establishing a branch or a place of business in Malta.
A branch of an oversea company
(the business of which is managed and controlled outside Malta) would be taxable
in Malta only on income arising in Malta and on income arising outside Malta but
received in Malta.
Same corporate tax system as
Maltese Companies: The income of the
branch would be taxed at the same rate as that of a Maltese company (currently
35%), and the computation of the income would follow that adopted by a domestic
company. Non-resident shareholders of overseas companies may qualify for
refunds of tax, provided that the relevant conditions are satisfied.
No withholding taxes:
Branch office profits are not subject to any withholding taxes at the time of
transfer or later. A branch's profits are only subject to the corporate
tax charge at the domestic rate.
Double tax treaties:
Subject to any particular conditions in a particular double tax treaty, branches
of foreign companies may use the provisions of a relevant Malta double tax
treaty with another jurisdiction.