A Malta Company: A Suitable Investment

For those interested in incorporating an offshore company, forming a Malta company is a good choice. Malta is an island nation in Southern Europe and is bordered by Italy, Tunisia and Libya.

Due to its geographical location, overall business friendly environment- Malta is a member of the Commonwealth and European Union- and conducive tax regimen, Malta is one of the favorite destinations for those looking for incorporation of an offshore company.

Offshore operations in Malta are categorized into International Trading Company, International Holding Company, Trust and SICAV. Earlier there was another category termed 'Offshore Company'. However, it has been defunct for a long time.

From the point of view of taxation, presently only two categories - International trading Companies (ITC) and International Holding Companies (IHC) - are of interest and mostly only these forms are used for forming an offshore company these days. The taxation structure for these companies is planned in such a manner that it is advantageous. The regulations allow making full advantage of the tax treaties Malta has signed.

The international trading companies are meant to carry out business dealings from Malta with individuals outside Malta. Their objects are exclusively limited to carry out such business activities only. An international trading company in Malta is not permitted to hold foreign equity or investments.

The international holding companies' activities are basically limited to participation of foreign equity or other similar activities that generate income in a passive manner. Such companies enjoy very helpful taxation terms as the income is considered to be received from 'participating holdings'.

For incorporation of an IHC or an ITC, the Maltese regulations require the company to have at least two shareholders. These shareholders can be individuals or corporates. The information on these shareholders is placed on public files; however, if one wishes then confidentiality can be maintained.

The company is required to have at least one director. The director can be either an individual or a corporate. The details of the director are placed on public files. To get the benefits of the tax treaties the company would need to establish that it is a tax resident of Malta. For this it will be essential for the majority of the directors of the board to be Malta-based.

It is mandatory for all the companies incorporated in Malta to have an office address in Malta and get the same registered. The company must also have one of the licensed Maltese companies as its nominee as sole director or company secretary. This nominee company is statutorily liable for every activity of the company it represents. As such it will be necessary for it to be closely involved with all the trading operations.

The suitable taxation terms and simple formalities for incorporation, make forming a Malta Offshore Company a good option for international business.