Jurisdiction spotlight: The Republic of Malta

The third installment in the Jurisdiction Spotlight series will be the Republic of Malta. This idyllic, bilingual little Mediterranean island nation has a lot to offer the international investor, aspiring online gambling operator, bankers, and ecommerce ventures.

These paragraphs are being written on the terrace in a hotel room under the warm Maltese sun with a breeze of air constantly coming in from the north-east.


Flag of MaltaMalta has a rich and well recorded history. While a small nation, it has played a big role in many events across the Mediterranean.

There is evidence of Malta being inhabited since as early as 5200 BC with Neolithic farmers and fishers arriving from Sicily. These people lived primarily in caves, though they built megalithic temples, such as the Tarxien Temples, which are believed to be from around 3100 BC.

Recorded history begins somewhere in the 10th century BC with the arrival of Phoenicians. It remained a Phoenician hub for a few hundred years, before becoming a Carthagian and ultimately Roman outpost during the 300s BC. It remained Roman for nearly 800 years, during which it prospered and saw dramatic growth.

At the end of the Roman reign of Malta in 440, it was taken over by Vandals, though this was short-lived as the Byzantine Empire conquered Malta in 533. This saw a period of stability, where Malta was a province of Sicily until 870 when Malta again changed ownership, this time invaded by an Arabic people known as the Fatimids.

In 1194, following a Norman conquest, Malta became a part of the Kingdom of Sicily. It remained an appendage of Sicily until 1479. During this time, Malta abandoned the Arabic alphabet and Maltese became the sole still surviving Semitic language to be written in the Latin alphabet.

The end of the Sicilian rule in 1479  saw Malta become a part of the Spanish Empire, after first being handed around as a gift by various barons and feudal lords.

During the 15th and 16th centuries, the Ottoman Empire was expanding and expelled the Knights Hospitaller from Rhodos and they ultimately settled in Malta. The Knights Hospitaller – or Knights of Malta – made Italian the official language of Malta and made significant improvements to the infrastructure. The Ottoman Empire tried to capture Malta but after a failed siege, they were thwarted by the Knights and retreated.

Malta was again under sieged 1798 – 1800 by Napoleon and his forces. Napoleon himself spent six days on the island, during which he enacted drastic reforms and divided the nation into twelve provinces. Napoleon’s rule was short-lived. The French were ousted by the British who took control of Malta in 1800.

Malta remained British until 1964. During this period, Malta grew tremendously. It played a minor role in World War II, when it was besieged by Nazi German forces. The Maltese managed to keep Hitler’s forces away. For their bravery during the Nazi German siege, Malta was awarded the George Cross, which can be seen in the Maltese flag.

In 1964, Malta left the British Empire and became an independent nation within the Commonwealth, similar to Canada and Australia. The country fell under oppressive, though democratically elected, leftist rule until 1987, when the conservative Nationalist Party took over and transformed the proud island nation into a financial masterpiece. Since 2013, the republic is governed by the Labour Party, which is lightyears from the party’s dark days.

Overview Data

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Malta Incorporation

Forming a company in Malta is easy and relatively cheap, though more expensive than an IBC. Despite the higher cost, however, it is in many cases cheaper to utilize a Maltese company, given the nation’s wide selection of tax treaties. The ultimate beneficial owner (UBO) of a company need not be on public record. Company formation can usually be completed in a few days for EU nationals. It will take a bit longer (a couple of weeks) for other nationalities.

Maltese companies pay 35% corporate tax (some sectors pay less); one of the highest in the world. The trick is to utilize Malta’s cleverly-written tax code to get a tax rebate. Companies can get up to 100% tax rebate, making for an effective tax rate of 0%, but the most common figure is for companies to pay an effective tax rate of just under 5%. Couple this with Malta’s impressive collection of Double Taxation Agreements (70 as of writing) and a superb international reputation, and you have one of the world’s premier jurisdictions for incorporation.

It is important to note that in order to get a tax rebate, a Maltese company needs to be structured and operated correctly. It is beyond the scope of this article to explain the details. Speak to a law or accounting firm. I have experience with the following firms:

Different company forms are available, but nearly all Maltese companies are formed as private limited.

As a testament to its strength, the number of registered companies in Malta increased by over 50,000 in 2011.

Both holding and trading companies are formed in Malta. There is no distinct holding company legislation.

It is also common to form a company in Malta and then use the company to own a ship, to make use of Malta’s advantageous taxation and fees for owning a ship or other maritime vessel. Despite being one of the smallest countries in Europe and the world, it is the largest registry of ships in Europe and seventh largest world-wide.

Malta also has an attractive legislation for airplane registration.

iGaming in Malta

Online gambling, igaming, e-gaming, remote gambling – whatever you choose to call it, Malta is Europe’s premier jurisdiction. The LGA (Lotteries and Gaming Authority) has put together strict but reasonable legislation which protects players and operators alike.

Malta licenses all forms of gambling products: casino, sportsbook, live betting, poker, bingo, games of chance. There are no restrictions on players, other than players from sanctioned countries. Operators must abide by strict AML (Anti Money Laundering) regulation.

There are hundreds of igaming operators, software suppliers, and auxiliary services providers in Malta. Some of the biggest names in the industry are licensed in Malta.

Malta is also home to land-based casinos, which are of quite high quality. They are mostly visited by expats and tourists.

Banks and Economy of Malta

Malta and Maltese banks have remained strong throughout the Eurozone crisis. While Malta’s credit rating has been downgraded, it was done mostly as a consequence of the whole southern Eurozone being downgraded.

The Maltese economy is diverse, far beyond that of for example Cyprus, to which it is often wrongly compared. While the smallest in the EU, it is one of the strongest; by far the strongest in the southern EU. The Maltese economy is made up of a wide of industries:

  • Tourism
  • Financial services
  • Gambling (remote and land-based)
  • Manufacturing (electronics, textiles, toys)
  • Aviation
  • Shipping (dockworks, import/export)
  • Biotechnology
  • Pharmaceuticals
  • Agriculture
  • IT services

Similar to Scandinavian and German banks, Maltese banks are solvent and take a conservative approach to investments. Deposits are insured up to 100,000 EUR per person per bank. Interestingly, Malta also operators an Investor Compensation Scheme. Details can be found at http://www.compensationschemes.org.mt/.

Unofficially, there are four tiers of banks: the two big banks, the medium banks, small banks, and special banks.

The two big banks are Bank of Valletta (BOV) and HSBC Malta. These banks have a dominant part of the market. A foreign, non-resident investor or entrepreneur looking to open an account in Malta will often have more luck with BOV than HSBC.

The medium banks include banks such as the Banif Bank, APS Bank,Sparkasse Malta, FIM Bank, Medbank, and Lombard Bank.

Among the smaller banks, the Austrian-Liechtenstein bank Volksbank is present in Malta. Private banking is available at a rather humble 25,000 EUR last I checked. Superb service.

Opening a bank account in Malta remotely is possible in some situations, but you are much more likely to get an approval if you visit the bank in person.

Then we have the special banks. This is not an official term, but it refers to banks which are prohibited from taking deposits from the general public. These banks are used for treasury, investment, and asset protection purposes within a company or group of companies.

While strictly regulated and in line with EU regulations, getting a banking or financial services license in Malta is relatively easy.

There is no explicit banking secrecy, but there is the Professional Secrecy Act of 1994. This protects banking information from private individuals snooping around, but banks will disclose information when lawfully requested by authorities.

All banks are licensed and regulated by the Malta Financial Services Authority (MFSA).

Getting a banking license in Malta is a relatively easy process; probably the easiest of any EU jurisdiction. There are a large number of small in-house and treasury purposes banks. Capital requirements are five million EUR for regular banking and one million EUR for electronic money institutions. The application fee is 18,000 EUR and license fee is 22,000 EUR. Annual fees are reasonable, especially when coupled with the jurisdiction’s congenial tax code.

The number of investment funds and pension funds has grown over the last couple of years and continues to grow.

Living in Malta

Malta is attractive to live in for entrepreneurs, workers, and retirees alike. The government has special programmes for high-network retirees.

There are several tax advantages to living in Malta. Only income remitted to Malta are subject to taxation, meaning you can own offshore investments and not pay a dime in tax. Furthermore, remittance of capital gains into Malta is tax free.

Malta has no inheritance tax, wealth tax, or annual property tax.

Put low taxation, low costs of living, and year-round sunshine, and it becomes clear why Malta is very attractive to live and work in.

EU nationals do not need any residence permit, although having a Maltese ID card will make life a lot easier. Other nationals are subject to some more bureaucracy.

Final Words

Malta is a highly reputable, low-tax jurisdiction with conservative and solvent banks. Its population is well-educated and speaks English. Few days pass without sunshine, even during the chilly winter months.

Whether you are looking to form a financial services company, igaming company, investment firm, bank, or you are just a regular entrepreneur or investor, Malta might have something for you. It is a jurisdiction well worth looking into.

Click here to see other posts in the Jurisdiction Spotlight series.

Further Reading






22 Comments on "Jurisdiction spotlight: The Republic of Malta"

  1. The Overview Data table is garbled. Thanks!

    • It’s due to a missing plugin. I think these really old articles were using a tables plugin that I replaced without updating old articles. Malta is due for an overhaul anyway when I go back to writing articles.

  2. Hi,
    i am german living in germany. I was thinking about moving to malta. I earn my living with websites and a seo agency.

    I know someone else asked nearly the same question but could i make an offshore company live in malta and pay only tax for the money i transfer in my private malta bank account or is it a problem that i operate the offshore company from malta?

    • Technically, no, probably not. The Maltese tax code is very convoluted and there might be special circumstances in your case that make it different.

      However, Malta is not exactly known for being tough on foreigners not paying full tax. Structures where nominee director and shareholders are used rarely get pierced by Maltese authorities. There are many foreigners in Malta who get by just not being abusive (i.e. not falsely claiming taxes back), paying tax on what is remitted to Malta, and generally keeping a low profile.

      I would suggest speaking to a tax adviser in Malta for more details.

  3. Hello Streber,

    Whats your opinion on what happened in Cyprus with the banking situation will ever happen in Malta?

    TBH, I dont even really know what happened in Cyprus apart that depositors money was confiscated in some way, surely Cyprus has lost all credibility now for foreign investment and it must have been the death of many law/accounting/immigration firms when they took the steps they did to name just a few businesses who suffered.

    • The similarities between Malta and Cyprus extend very little beyond the two being islands, the two being in the Mediterranean, and the two having large financial services sectors (which aren’t even all that similar).

      Contrary to Cyprus, Malta has a diversified economy: tourism, financial services, gambling, pharmaceutical, aerospace engineering, large harbour, manufacturing, and so on. Malta is likely far more resilient than Cyprus. For one, it’s public debt is under around 60 to 70% compared to Cyprus’ well over 100%.

  4. Just a link providing good information on Taxation and Investments in Malta


  5. Hi Streber, Just recently signed up and trying to educate and work my way through all the great information on here.
    I have recently come to the conclusion that I am being taxed far to much and want to get some things in place where I can reduce this burden in the future and this site will be a great help for me I think for starters.

    Malta has been one I have taken an interest in. I have dual citizenship, an EU country and Australia where i currently work and reside, which taxes at almost 50% for the top tier. I enjoy my freedom/travelling and want to find a stable country where I can become a resident cheaply for tax purposes but also not be stuck to that country for an extended period of time. I read about a self sufficiency test for EU citizens in Malta whereby having a minimum of E14,000 capital for singles allows residency, is this the case or are there other things that need to be satisfied also?

    As a Malta resident:

    Are there any advantages on setting up a company of some sort to carry out offshore investments as opposed to doing so as an individual?

    Is it true that there is no tax applied to foreign income but once it is remitted it gets taxed at 15% flat rate, in other words I could have all my foreign income directed to an offshore bank account and just use my credit cards/debit cards etc to pay any bills I have in Malta, or anywhere else for that matter, thus not actually remitting this money to a personal Malta bank account and hence not getting taxed on that income?

    With an offshore bank account, due to the fact that I ( possibly in the future) am resident of Malta, using an offshore bank to buy shares on the Australian Stock Exchange, noting that I would be a non-resident for tax purposes in Australia, would I be liable to pay taxes in Australia on any income or gains I would make or would this not be considered Australian income because it been purchased through an offshore bank account?

    • I have said it before but it bears repeating: the Maltese tax code is as complex as it is clever. What the Maltese have set up is a very attractive tax milieu, which is honed to bring in just enough tax revenue while still remaining attractive to foreigners – but without penalizing the locals, which so often happens elsewhere.

      That said, it’s well worth sitting down with a good tax adviser and discuss your particular situation. It takes a lot of finesse to make the most out of Malta. Bear that in mind as I go through your questions.

      Are there any advantages on setting up a company of some sort to carry out offshore investments as opposed to doing so as an individual?

      From the point of view of Maltese taxation – no, not that I can think of off the top of my head.

      Is it true that there is no tax applied to foreign income but once it is remitted it gets taxed at 15% flat rate, in other words I could have all my foreign income directed to an offshore bank account and just use my credit cards/debit cards etc to pay any bills I have in Malta, or anywhere else for that matter, thus not actually remitting this money to a personal Malta bank account and hence not getting taxed on that income?

      It depends on how the income is earned, but generally speaking – yes.

      Again, you’ll need to confirm with a tax adviser who has looked at every aspect of your finances. You’d be surprised by how many fringe “that would never happen” cases I run into on an almost daily basis.

      With an offshore bank account, due to the fact that I ( possibly in the future) am resident of Malta, using an offshore bank to buy shares on the Australian Stock Exchange, noting that I would be a non-resident for tax purposes in Australia, would I be liable to pay taxes in Australia on any income or gains I would make or would this not be considered Australian income because it been purchased through an offshore bank account?

      You would have to make sure that you really and truly aren’t tax resident in Australia. Generally speaking – this shouldn’t make you subject to tax, but if you for example are buying a controlling interest in a company, Australian authorities could potentially consider you to have close ties to Australia still and deem you liable for tax there.

      Tread carefully and seek advice. You got the general picture about Malta right. If your income is all abroad and you only remit what you need into Malta, you can end up living a very comfortable life there.

  6. I’ve found Malta to be a frustrating jurisdiction in a lot of respects. They have weird particularities for example I’ve run into the requirement for a reference from a Maltese lawyer, I’ve also had Apostille documents not accepted and the bank instead requiring certification by a Maltese lawyer if the Apostille doesn’t come from an equivalent regulatory jurisdiction. Service can be frustrating in terms of them getting back to you (this is true for BOV, Banif, and Medbank, APS doesn’t seem to open for offshore companies). Medbank offers no card services, Banif has limited card services BOV is definitely the best choice with 24×7 operating call hours, a wide range of cards, etc. but extremely selective about their clients and won’t open accounts for companies in quite a range of offshore jurisdictions and everyone I know describes them as quite slow, which is fairly consistent with my experiences in spite of them having a specific department for international corporate banking and the lawyers I’ve dealt with there are saying it keeps getting tighter and tighter. Perhaps it’s better if you use a known referrer but there seem to be relatively few of these unless you’re talking about a CSP or trust company.

    • The nation’s second biggest banks, HSBC, is a fairly competent bank, especially when compared to smaller ones like Banif and APS. I’ve had some bad experiences with HSBC Malta’s customer service but it’s generally a good bank. Worth looking into if BOV is being problematic.

      Maltese banks and financial service providers take due diligence very seriously. On one hand, you have a highly reputable jurisdiction that strikes a good balance between compliance (upfront and recurring) and ease of doing business. On the other hand, the upfront compliance can be a hassle even for legitimate operators. AML/CFT courses and seminaries in Malta tend to be at full capacity, whereas in many other jurisdictions you can help yourself to both two and three biscuits during the breaks.

      Having a local lawyer or accountant helping you out is almost a requirement.

  7. I have just received a reply to my questions to BOV in Malta and I was surprised to hear that they do not offer multi currency accounts. Just thought I’d share that.

    • It’s quite easy to open accounts in other currencies, though. Each currency account will just have its own IBAN/account number. As I recall, there are no extra maintenance fees for these accounts.

  8. In your experience, what are the main differences between Andorra and Malto for personal non resident offshore banking? I guess what I’m asking is pros/cons for each country.

    Andorra seems more expensive but very stable and has an excellent reputation. Malta seems more up and coming?

    Also I’ve heard Andorra will start taxing non residents now (or soon)? Is this true?

    Both countries SEEM to be good on the surface but I am still undecided!!

    • The customer service at Maltese banks can leave a bit to be desired for personal accounts. The same question to a Maltese and an Andorran bank will yield two very different types of answers. The Maltese answer will be full of empty phrases, whereas the Andorran bank will answer you in a direct and concise manner. This may seem rude at first but I prefer it.

      Malta is a SEPA jurisdiction. This makes wires to and from other SEPA jurisdictions both cheaper and faster.

      I find that Andorran banks (at least Crèdit Andorrà) give you greater control of your funds when it comes to investments, trading, and securities. Maltese banks tend to oversimplify things.

      While Andorra has anounced intentions to add further taxation, it is beyond the scope of this blog to give detailed tax information.

  9. That’s useful to know.

    Is it worth considering the medium sized banks as a non resident?

  10. Can you use Volksbank as a day to day account? Ie: ATM withdrawals, debit card etc?

  11. Forgot to say… excellent article BTW!

  12. If you had to choose between Volksbank or BOV which one would you choose and why?

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