The ITC is itself a very tax efficient instrument for shareholders not resident in Malta. At the end of the accounting year, the ITC being a normal onshore company, pays company tax at the normal rate of 35% on trading profits; however a system of tax refunds and imputations made to the non-resident shareholders ensures that once the profits are distributed to the non-resident shareholders, they directly receive a refund of 30.83% and therefore the effective tax rate is only 4.17%. For more information about the taxation of ITCs, please click here.

International Holding Companies

An International Holding Company (IHC) is not allowed to trade. IHCs are set up as onshore companies and their purpose is to "hold" shares in one or more overseas companies. An IHC may also be set up to own and manage its own assets held outside Malta.

As in the case of the ITC, the IHC is a normal company and therefore pays corporate tax at 35% on its world-wide income, but shareholders can then benefit from a full tax refund for qualifying holdings (either at least 10% or US$ 1,250,000 of equity in a foreign company. For more information about the taxation of IHCs, please click here.

Apart from the obvious tax advantages, ITCs and IHCs can have nominee shareholders and directors, thereby ensuring the privacy of the beneficial owners of the company. Corporate directors are permitted. Click here for an overview of ITC/IHC corporate features.

How to establish an ITC or IHC

The minimum issued share capital of an international trading or holding company is MTL 500 (US$ 1,250) to be expressed in any foreign currency. On incorporation, 20% of the issued share capital must be paid into the company's bank account which we will set up for you with a local bank for this purpose. Where the ITC or IHC utilises nominee directors, the full share capital must be paid up. An ITC or IHC can be registered by Henley & Partners Malta usually within 24 hours of receiving all the necessary documents.

It is possible to have a single share holder for an ITC and there must be at least one director. The director of an ITC is given a Work Permit to be able to work as a director of the ITC while living in Malta. If the directors do not live in Malta, they do not need work permits. Since all companies must have a registered office in Malta, the ITC or IHC can make use of our own legal address if own premises in Malta are not required. Moreover all ITC or IHC companies must have a local company secretary, which can also be provided by Henley & Partners Malta. Company meetings need not be held locally and can also be conducted over the telephone.

Registration of every ITC or IHC must be renewed annually and audited accounts must be prepared annually. Henley & Partners can take care of both these requirements. We are also able to claim the tax refunds due to the ITC/IHC by the Inland Revenue Department on your behalf and prepare any papers you might need in connection with the avoidance of double taxation.

Click here for an overview of ITC/IHC corporate features and a detailed schedule of costs and fees.

Establishing a business in Malta

Malta, through the Malta Development Corporation, offers incentives to companies setting up their business in Malta, independently of whether they are Maltese or foreign owned.

Companies which export more than 95% of their production are exempt from income tax for a period of ten years, but tax would be payable if the target of 95% exportation is not reached. The Malta Development Corporation may also exempt companies from Customs Duty on goods imported into Malta for the use of the company. There are various other incentives available. Please contact us if you are interested in setting up your business in Malta and we shall be pleased to advise you on each particular incentive and tax exemption available.

Maltese Registered Trusts

Until very recently, trusts were unknown to Maltese law, but with the development of the country as a financial services centre, a special law was enacted to allow for the setting up of trusts.

The advantage of trusts in Malta are multiple: favourable taxation, confidentiality, control of assets, no probate (both in the country of citizenship and residence and also in the country where the assets are); the investment income from funds can be accumulated tax-free. Trusts established in Malta are exempt from succession duty and stamp duty; the property forming the trust can be freely imported to Malta without customs duty and there are no exchange control restrictions. Moreover, income tax and capital gains tax are fixed at MTL 200 each year. The law also provides for a Governmental guarantee against future or retroactive revocation of rights and exemptions.

Trusts must be created in writing, either by will, by unilateral declaration of trust or other written instrument. A unilateral declaration of trust is made by a nominee company acting as trustee and containing all the terms of the trust as well as information enabling the identification of the beneficiaries.

Neither the settlor nor the beneficiaries of a trust may be resident in Malta. Moreover, the trust property shall not include immovable property situated in Malta or shares of a company registered in Malta unless it is an ITC or IHC company.

Registration is effected by a Nominee Company acting as a trustee. The trust instrument is a highly confidential document and no person may be ordered to divulge to any authority (including any court) any matter relating to a trust.

Under the Professional Secrecy Act 1994, a number of professions, amongst which are lawyers, bankers, stock brokers, accountants, etc., cannot divulge any information about their clients unless international criminal activity (money laundering, drug dealing, etc.) is involved. Licensed Nominee Companies fall under the Malta Financial Services Centre Act 1988 which also requires such companies to protect the confidentiality of the beneficial owners they represent. All services of Henley & Partners Malta fall under these strict professional secrecy provisions.

The Services of Henley & Partners

We advise on all aspects of moving your personal residence to Malta. This not only involves immigration law, but also international private law, taxation, and more. We specialise in the world's top locations for private residence in view of personal taxation, the business environment, and the overall quality of life. Like our clients, we place emphasis on a practical approach, high-quality work and reliable, efficient service.

To establish yourself or your business in Malta will require securing relationships with key partners such as government officials, bankers and corporate professionals. You need experienced consultants to build a network of contacts and to help you to become established in your new environment. Henley & Partners works with the two leading real estate agents in Malta and will be pleased to personally introduce its clients, making sure they receive a personal and efficient service.

The specialised services of Henley & Partners are a resource and complement to other law and consulting firms. We can help other firms and their clients with the unique and specific details required by the immigration and business relocation process and tax planning involving Malta and other key jurisdictions worldwide.

Further Information

Through its offices in Malta, Henley & Partners assist foreign individuals in obtaining residence status, and advise corporations and investors about all aspects of investing and doing business in Malta, including efficient company incorporation and management. Please contact us for more information or to arrange for an initial personal consultation.