Company Law

Royalty Structures & Royalty Routing Companies

Malta offers effective tax structures for the ownership of the intellectual property and the channelling of fees generated from licensing rights. The Malta Company is a very effective international tax-planning vehicle and is suitable for:

  1. licensed investment services activities;
  2. brokerage activities & commission income;
  3. management and consultancy activities;
  4. international trading business;
  5. e-commerce activities;
  6. licensed online gaming & betting activities;
  7. ownership & licensing of patents, copyrights, trademarks, franchises, domain names and other intangible assets;
  8. property ownership & project management;
  9. ownership and leasing of machinery, foreign registered motor vehicles and trucks;
  10. hold assets and investments of all kinds (intellectual property, real estate, shares & securities, bank accounts, etc).

Malta IP Holding Company receiving Passive royalties

Malta Company structure may either trade in Royalties and generate trading income or Royalty income received can arise to a Malt could arise may be either passive income or income arising from actively trading in intellectual property. Passive royalties income defined

The Income Tax Act defines passive interest and royalties[1] as interest or royalties income which is not derived, directly or indirectly, from a trade or business, and

(1) such interest has not suffered any foreign tax, or

(2) such interest has suffered foreign tax, directly, by way of withholding or otherwise, lower than 5%.

Tax refunds on Passive Royalties Income

Shareholders of IP holding companies receiving passive interest income benefit from a 5/7ths refund of Malta tax suffered by such IP holding company, effectively a refund of 25% (see tax computations below).