Mergers, acquisitions, and corporate divisions are key tools for business growth, restructuring, and investment. In essence, mergers and acquisitions (M&A) involve one company acquiring or combining with another, whether through a share purchase, an asset acquisition, or a merger – either by absorption or through the formation of a new entity.
Corporate divisions, or demergers, involve the separation of a company into distinct entities. These are commonly used to restructure corporate groups, isolate risk, or prepare part of a business for sale or investment.
In Malta, such transactions are primarily governed by the Companies Act, together with EU legislation, including the EU Merger Directive as implemented locally.
The Role of Tax Structuring
Tax structuring plays a central role in shaping these transactions. In Malta, it often serves as a starting point, supported by participation exemptions on dividends and capital gains, the absence of withholding taxes in many cases, shareholder-level tax refund mechanisms, and various group restructuring reliefs. In addition, mergers and divisions may benefit from tax neutrality, provided certain conditions are met.
Accordingly, a key consideration at the outset of any transaction is how to structure it in a way that is both tax-efficient and fully compliant.
A Multi-Dimensional Approach
While tax is fundamental, successful transactions are built on a combination of legal, financial, and strategic considerations.
Legal structuring determines how the transaction is carried out – whether as a share or asset deal, a merger, or a division – and encompasses regulatory approvals, contractual frameworks, and risk allocation mechanisms.
Tax structuring focuses on preserving value by addressing capital gains treatment, VAT implications, stamp duty exposure, and cross-border tax considerations.
Financial and valuation analysis ensures that the transaction is commercially sound, taking into account business valuation, potential synergies, financing structures, and expected returns.
Finally, every transaction is driven by a clear strategic purpose, such as market expansion, group reorganisation, risk management, or facilitating an exit.
How We Can Help
Tax advisory is at the core of what we do. Led by our Managing & Tax Director, Mr. Griffiths, we advise on mergers and corporate divisions in Malta. We provide end-to-end support across the transaction lifecycle, from structuring and lead advisory through to execution and post-close integration.
For cross-border transactions, we combine local expertise with a strong international network. Griffiths + Associates is the sole Maltese member of PrimeGlobal, one of the world’s leading associations of independent accounting and advisory firms. Through this platform, and Mr. Peter J. Griffiths’ leadership roles within the organisation – serving as Council Member of the PrimeGlobal Southern European Region and Chair of the EMEA Council – we collaborate with carefully selected member firms worldwide to deliver coordinated international support.
