Tax incentives for foreigners in the Republic of Malta
Tax incentives for foreigners in the Republic of Malta

aleqtisady .. A tax amendment on the island of Malta, and the approval of new tax incentives to attract foreign investment in the country in the coming period.

Malta is one of the most important centers in the world for attracting foreign investment due to its accession to the European Union in 2004, in addition to adopting the euro as the official currency in the country in 2008.

The Maltese government has been encouraging and encouraging foreign investment in the recent period, which led to the consolidation of Malta's position as one of the most important countries for investors from around the world.

The continuous efforts of the Maltese government in developing the tax sector for local and foreign investors have led to the advancement of the national economy, a significant decrease in the level of unemployment, in addition to the revitalization and diversification of the economy to include many different fields and sectors.

One of the main tax incentives that Malta offers to investors and shareholders in companies residing in Malta is the system of tax exemption for dividends, as dividends are not subject to the personal tax of shareholders.

This is because the company had previously borne this tax burden on its profits declared before the distribution, which prevents double taxation on dividends, unlike the traditional tax system that is subject to shareholders ’dividends for the two types of taxes, and it is worth noting that this tax system is applied in Malta and Australia New Zealand only.

Another reason that Malta has become one of the most tax-attractive European countries for foreign investment is the system called Participation Exemptions available for holding companies residing in the European Union or outside, so that this system exempts dividends received for these companies from the tax entirely if they are considered resident in the European Union.

The dividend is subject to non-resident companies in the European Union by only 5%, and the Maltese government reduced this percentage from 10% through the Budget Execution Law in 2018.

Also among the other tax incentives that distinguish Malta from other countries when studying it as a future destination for investors and businessmen are agreements to prevent double taxation signed with many countries around the world.

Where Malta until 2019 has double taxation prevention agreements in effect with 70 countries around the world, Malta also provides tax exemptions on capital gains from selling shares of companies residing in Malta, and does not impose a flat tax on the distribution of dividends to shareholders or parent companies.

And that the Maltese laws and legislations were developed effectively, so that these laws were directed to the advancement of economic sectors specifically targeted by the government, which may carry a high added value to the economy.

Such as exemptions and tax incentives provided to companies operating in the industrial field, export, and tourism through the renewal of restaurants and hotels, in addition to energy saving projects.

Investment is also being stimulated by various tax exemptions and incentives for SMEs, family businesses and female-owned companies.

The tax system in Malta has become a basic standard model, which many countries of the world aspire to reach its level, as the integration and development of this system has attracted foreign investment significantly in recent years.

This has led to a significant progress in the status of Maltese citizenship and also led to the establishment by the Maltese government of a program for Maltese citizenship in exchange for investment in 2014, which enables high net worth individuals and investors to apply for Maltese citizenship in exchange for participation in the National Development Fund, and real estate investment, in addition to To invest in government bonds.

We began at Rich Imagination to introduce this program since its establishment in 2014, where we have directed and served many of our clients towards the advancement of their future and the future of their families by obtaining the Maltese citizenship smoothly and as quickly as possible.