Holding Companies

holding companies

Maltese Holding companies are invariably becoming a highly effective tax vehicle within international structures. Maltese holding companies allow for a tax neutral scenario thanks to the possibility of benefiting from a very generous participation exemption, which basically applies when certain qualifying criteria are satisfied.

Any profits or gains received from a participating holding or from the disposal of such holdings are tax exempt in Malta. Apart from that, Maltese holding companies can benefit from the provisions of the EU Parent-Subsidiary Directive, EU Interest and Royalties Directive, Malta’s extensive double taxation treaty, and furthermore no tax is imposed on any distributions to shareholders (even when the latter are situated outside of the EU).

Any non-participating holding income may benefit from double taxation relief, when applicable, and also allows non-resident shareholders to claim tax refunds on tax paid at the level of the Holding Company.

Highlights of Malta Holding Companies:

•    Participation Exemption allows tax neutrality throughout

•    Non-Participation holding income results in low effective tax, between 0% to 10% depending on whether double taxation relief is being claimed and whether the foreign income is categorised as passive interest and royalties.

•    Eligible to benefit from EU directives and double taxation treaties.