How to set up a company in Malta (2026): steps, tax & cost

Overview

Malta is an EU and eurozone member with a full-imputation corporate tax system that is genuinely unusual: the company pays 35% tax, but shareholders can then claim a refund of most of it. For trading income distributed to non-resident or non-domiciled shareholders, the refund is 6/7ths of the Malta tax paid — dropping the effective rate to roughly 5%. This is the entire reason people incorporate here, and it is a transparent, EU-reviewed system rather than a loophole.

The catch is that the headline rate is real: the company actually pays 35% first, and the refund flows to the shareholder only after the profit is distributed and a claim is filed. Making the 5% work in practice usually means a two-company structure (a Malta holding company owning a Malta trading company) or a non-resident shareholder — plus enough substance in Malta to withstand a challenge from your home country. Done casually, the structure can be taxed where you actually live.

Who it's for

Malta suits founders who want a credible, EU-based operating company with a low effective tax on distributed profits, and who are prepared to run it with real substance and professional advisers. It is a poor fit for anyone hoping to run a paper company from their kitchen table in a high-tax country and pay 5% — that arrangement invites a place-of-effective-management challenge at home.

• Trading and service businesses (SaaS, consulting, e-commerce, IP licensing) with genuinely international, non-Malta customers.
• Founders who are themselves non-resident in Malta, or willing to build local substance (director, office, staff).
• Groups that want an EU holding company to receive dividends and capital gains under Malta's participation exemption.
• Owners comfortable with a two-company structure and the cash-flow gap while the refund is processed.

It does not suit those who need cash immediately (the tax is paid up front and refunded later), who cannot demonstrate substance, or whose home country has aggressive CFC and management-and-control rules that would simply pull the profits back.

Types of company

The vehicle nearly every foreigner uses is the private limited liability company (Ltd), registered with the Malta Business Registry (MBR). A public limited company (plc) exists for larger, capital-raising ventures but carries higher capital and disclosure requirements.

Corporate tax & key taxes

The company is taxed at 35% on its worldwide profits. The refund is claimed by the shareholder after a dividend is distributed, and its size depends on the type of income and whether double-tax relief was already claimed. The most common result — trading income to a non-resident shareholder — is a 6/7ths refund, i.e. an effective ~5%.

How to set it up, step by step

1. Engage a licensed corporate service provider (CSP) — mandatory in practice for KYC, incorporation and ongoing filings. Decide single-company vs two-company (holding + trading) structure with a tax adviser first.
2. Reserve the company name and prepare the Memorandum & Articles of Association, defining objects, share capital, shareholders, directors and company secretary.
3. Complete due diligence (passport, proof of address, source-of-funds) for all beneficial owners — Malta's KYC is thorough and often the slowest step.
4. Deposit the paid-up share capital: at least 20% of ~€1,165 (about €233) into a Malta bank or an interim account, and obtain the deposit confirmation.
5. File the incorporation documents and pay the registration fee to the Malta Business Registry (MBR); receive the certificate of incorporation.
6. Register for tax with the Commissioner for Tax and Customs (income tax number) and, if you exceed the turnover threshold or trade cross-border, register for VAT.
7. Register the shareholder(s) for the tax refund and set up the refund claim process (or the holding-company mechanism).
8. Open a corporate bank account (or use an EMI/fintech) — plan for this to take weeks and to require a substance and business-rationale narrative.

Costs & timeline

Figures vary by provider and by the substance you build. Treat these as planning ranges and verify the current MBR registration fee and CSP quotes before committing.

Substance, banking & the reality

The single biggest mistake is assuming incorporation in Malta means Malta taxation. Most countries — and Malta itself — look at where a company is effectively managed. If you live in Berlin or Madrid and make all the real decisions there, your home country can argue the company is tax-resident with them, apply CFC rules, and tax the profits regardless of the Malta certificate. Malta has fully transposed EU ATAD anti-hybrid and CFC rules and maintains its own economic-substance requirements, with annual reporting to the MBR and the tax authority.

Corporate banking is the other hard reality. Maltese banks apply strict onboarding and may decline non-resident-owned companies with thin local substance; many founders end up combining a local bank with an EMI/fintech account. Expect weeks of due diligence and a clear business rationale.

Common mistakes

• Assuming 5% is automatic — it requires distribution, a filed refund claim, and non-resident/non-domiciled shareholders or the holding structure.
• Running the company from a high-tax country with no substance, then being reassessed at home under management-and-control or CFC rules.
• Forgetting the cash-flow gap: you pay 35% first and wait for the refund, which strains working capital.
• Underestimating audit and compliance costs — every Malta company must file audited accounts, unlike some other jurisdictions.
• Treating the participation exemption as covering all income — it applies to qualifying holdings (dividends and gains), not to ordinary trading income.
• Opening no proper bank account and stalling operations — solve banking before you commit to trading through the entity.