There might be various reasons why a company may need to re-domicile, these including: legal, political, economic and fiscal circumstances as well as the global drive towards transparency and compliance. In this blog, we explain this process and why Malta can be the right country for re-domiciliations.
Choosing the right country
Once a company decides to re-domicile, the next step is to choose the right second country for the re-domiciliation. Such process will entail looking at the country's:
Sovereign credit rating;
Business friendliness and openness to innovation;
Markets access opportunities;
Operating costs; and
Main Reasons to re-domicile to Malta
EU Member state
Malta is an EU member state offering political and economic stability as also certified by the main credit rating agencies. Registering a company in Malta will allow passporting rights and EU market penetration.
When re-domiciling to Malta, a company will become subject to Maltese law and regulations and is treated as ordinarily resident and domiciled in Malta for tax purposes. This will allow it to benefit from Malta’s extensive double-taxation treaty network with over 70 countries.
The country is also the only EU member state which adopts the full imputation tax system through which shareholders are entitled to claim refunds on the tax paid by companies. Refunds vary in line with the source out of which the dividend is being distributed, this potentially enabling shareholders to reduce the effective tax rate to 10%, 5% or have such income exempted from tax.
Dividends received and capital gains derived from the disposal of participating holdings will benefit from the Participation Exemption, provided certain conditions are satisfied. In the asset management space, tax planning is also possible on management and performance fees, possibly resulting in zero Malta tax.
The continuation of a foreign company to Malta does not trigger any Maltese tax, nor is it subject to any stamp duty or entry tax.
The country offers a well-developed telecommunications and IT infrastructure, a highly productive, multi-lingual and well-educated workforce. Office space is offered at relatively low rents and employee remunerations are cost competitive, especially when compared to other developed EU jurisdictions. Malta also ranks in the top positions when it comes to the best places to live and work in and is a leader on innovative technologies such as Blockchain.
Examples of companies re-domiciling the business
Malta's continuous success in keeping its regulatory framework in line with EU regulations whilst also offering quick solutions to changing industry demands, is facilitating a commercially secure business environment. This in turn is helping international investors setting up or transferring their businesses to Malta, including:
Companies looking for cost-effective and tax efficient solutions for their international structuring or headquarters;
New technology business, particularly on Blockchain for which Malta was the first jurisdiction to issue a set of laws and regulations;
M&A transactions, this including an increasing interest from outside the EU;
Securitization transactions enabling a number of possible advantages to project originators and investors;
Investment funds and asset managers, particularly the property and private equity type of business;
Ship and aircraft registration;
Wealth management, this combining the economic and fiscal advantages with the high quality of life.
The re-domiciliation process
The general steps will include the re-domiciling entity to provide:
A certificate of good standing issued by the Registrar of the first country;
A Board resolution confirming the intention to re-domicile and the person(s) who will be authorised to execute the change; and
The latest 3 sets of audited financial statements.
Once all the required documentation has been accepted by Malta, the Registrar will issue a provisional registration certificate. Following the strike-off of the entity from the first country, Malta will issue a final registration certificate. In cases where the entity carries out a licensed activity, such as for example investments, additional requirements would be applicable.
For further information please contact Fiduscorp:
Mario Buttigieg - Managing Director
Email or Skype: firstname.lastname@example.org
Tel or Whats App: 00356 99829824
Copyright Notice: ©2018 FIDUSCORP Limited. The contents of this article have been prepared for informational purposes only and do not constitute or contain any type of advice. Neither the publication of such information nor your receipt of it will create a commercial or legal relationship. Consequently, you should not act or rely upon the information contained in this article without seeking professional council. All rights reserved.