Onshore Status of Maltese International Companies
Prior to
1996, Maltese law admitted two basic forms of corporate structure which
were available to non-residents who wished to register a Maltese company
for commercial or asset trading purposes. These were [i] the onshore
company with an issued share capital of Lm10,000 (USD25,000) and [ii] the
low-tax (5%) offshore trading or zero-tax non-trading company.
In 1996, the
offshore regime was transformed into a new onshore regime. Malta adopted a
new Companies Act and amended the Income Tax Act to create the
International Holding Company (IHC) and the International Trading Company
(ITC) of today. These are normal Maltese onshore companies taxed on a
worldwide basis at the normal corporate tax rate (35%) and are
therefore not perceived to be tax avoidance structures. Significant tax
savings can be achieved by refunds received by non-resident shareholders
bringing the overall tax liability down to 4.17% and in some cases to 0%.
See also:
Double
taxation treaties
International Trading Companies
International
Holding Companies
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