Malta has become a very attractive place for people to set up their businesses. You will come across many who recommend opening a company in Malta than any other place in the European Union. But, why is this so? Let’s take a look at some of the top reasons to set up your company in Malta:
- Lowest effective tax rate
The flat corporate tax rate in Malta is 35% in the EU, which is the highest in the region. But, the good news is that it can be reduced to an effective rate of 5% to 7% when you distribute all profits to the holding company. A holding company can be set up in Seychelles, Cyprus or Gibraltar. Hence, you have to pay taxes on income remitted to Malta, allowing you to reduce the rate.
- Lower minimum wage
Malta’s minimum wage is €720, which gives you an idea of how much salaries have to be paid. Employees are willing to accept salaries between €1,000 and €2,000 for common tasks. This is beneficial if you want to open a company in Malta and run it directly from the island.
- Low share capital requirement
The minimum share capital that you need for setting up your business in Malta is just €1,165 and only 20% of this amount should be in your bank account. Hence, you need less physical money for setting up a company in Malta. An annual fee of €100 is applicable.
- Low social security
You have to pay social security to all employees, but it is quite low in Malta. You have to pay 10% of the employees’ salary and 10% on your own for social security. This makes it 20%, but 10% of it is deducted from the employees’ salary, so your contribution is just 10%.