Malta: a stronghold in the Mediterranean Sea

The strongbox; once, having a safe to keep your money and valuable items in was symbol of status. The world has of course changed dramatically since encyclopaedias were the shape of large cuboids and were brought with matching covers to compliment the chaise’s lounge. Nowadays, as encyclopaedias are online most safes have been moved to new locations.

It is a strange world, as David Lynch, Director and Screenwriter, would say. Once those desiring wealth were seeking their fortune in far flung foreign lands but now it is those with wealth are seeking safe havens for them. It is not too hard to guess why. Internationalization, fiscal pressure, tax savings, reduced VAT rates, the possibility to establish offshore companies; these are all benefits to anyone considering the purchase of high value assets such as a yacht or an aircraft. The Isle of Man, and Malta are two of the most economically viable jurisdictions and the reason why Abacus are strategically located there.

Beyond its wonderful weather and amazing sea, Malta has a safe and well-developed economy and one of the most favourable tax regimes in Europe. Its tax system is among the most envied   in Europe, Malta ensures full transparency and cooperation with other European States to be internationally compliant. This provides safety and security for those opting to place high value assets in this nation.

Malta’s tax system is designed in such a way so as to encourage investment from foreign countries. Thanks to an extensive network of double tax treaties as well as a comprehensive network of expert local financial service providers, which works together to ensure remarkable economic development.

The simplicity and efficiency of Malta are its strong points, this attracts new entrepreneurs and investors from all parts of the World.

The main strengths of the Maltese economy and tax system are;

  • Companies are taxed at the rate of 35%. However, Malta has adopted what is known as a full imputation tax system which in effect entitles shareholders to claim back part or even the whole amount of the tax paid by Malta companies in various forms of relief, up to 6/7th of the tax. In such a scenario, the effective tax liability is 5%.
  • Personal income is graduated with tax rate ranges from 0% to 35%. Individuals are subject to income tax and both employees and the self-employed are required to pay social security contributions.
  • No inheritance tax
  • No wealth tax
  • No annual property tax
  • VAT is applied to the sale of goods and services at a rate of 18%. There are a number of exceptions including (but not limited to): – VAT at 0%: National and International transport of persons; supply and repairs to airlines and ships, exports, intra-Community trade. – VAT 5%: Supply of electricity, printed matter, confectionery. – VAT 7%: Accommodation in a hotel or guest house or any premises, where for the purpose of that accommodation, it is required to be licensed in terms of the Malta Travel & Tourism Act.
  • Malta is member of the Schengen Area allowing Maltese passport holders free movement within the EU as well as to a number of non-EU countries.

It should not be forgotten that Malta also offers a robust legal system and a well-regulated politically stable environment. As a whole, Malta has a lot to offer and should be given serious consideration by all those who are seeking a safe haven to hold and manage assets in a country which offers low tax rates, a secure environment, a stable and expert financial services industry.

So why not consider the pearl of the Mediterranean as your next destination?

Written by Marta Bellamoli, Marketing Co-ordinator