• June 2015
    Written by Dr Mark Bencini B.A., M.A. (Fin. Serv.), LL.D., Dip. Tax.

  • John Dawson may very well be a fictional character, but the benefits enjoyed in Malta are nothing other than real.

    • John Dawson is sitting on his scheduled Air Malta flight looking forward to spending the weekend lounging by his hotel pool, basking in the Mediterranean sun. His ever more frequent travels to Malta are without a doubt his favourite business trips.

      He fondly fits these visits into his business schedule, knowing that he will be spending the first day of his journey discussing his international trade exploits in his Maltese Companies’ board meeting, wherein he shall receive the usual great news from his Maltese accountant and auditor that his Maltese office has worked efficiently and that the profits seen locally shall enjoy the best net effective tax rate in Europe. 

  • John sits back and relaxes, recollecting how easy it was to set up his corporate structure with the help of his trustworthy local advocate based in the Capital city of Valletta, who had explained how he could set up office in Malta, enjoy the benefit of competitive employment rates and corporate service costs, and this with the added perk of holding an office in a well reputed jurisdiction that enjoys decades of expertise in Financial Services. 

    His mind was at rest that his Maltese team enjoyed the necessary experience and international connectivity to properly manage and administer his business’ needs. Indeed, the sum of these benefits led him to seek establishment in Malta. His intention to physically establish an office on the island was received with great pleasure by his tax advisors who had emphasised the importance of having a physical presence and substance in order to comply with his international fiscal obligations and ensure that there was no doubt about the fact that the Mind and Matter of his companies are based locally. 

    John doses off and before he knows it the plane touches down on the warm tarmac of the Malta International Airport. Within one hour he is seated in the board room of his Valletta office, discussing figures and projections. Whilst he enjoyed the option to place the shares in trust under the name of a Trustee licensed to perform such duties by the Malta Financial Services Authority, John opted to place the shares directly in his name. After all, there was nothing to fear. The Maltese fiscal regime applies equally to everybody, and enjoys the seal of approval internationally. Being a member of the European Union, Malta is obliged to adopt a fiscal policy that is non-discriminatory in nature and acceptable to the Union. Indeed, he feels that he has found a perfect jurisdiction for his business requirements - with the added advantage of realistic and beneficial tax rates. 

    John enquires with his advocate about the benefit his international corporate structure may derive from the vast network of treaties for the avoidance of double taxation enjoyed by Malta. It is briefly but concisely explained that the network of over sixty treaties is aimed at avoiding the eventuality of the same income being taxed more than once where the companies carry on operations in more than one country. This suits John perfectly since he was intent on expanding his international business into new jurisdictions. 

    The Board Meeting is concluded before dinner time, all matters on the agenda are reviewed and John sees the minutes signed off with a smile on his face, knowing that his Maltese team will be taking care of all the Group’s corporate, fiscal and legal matters until his return. It’s now time to head to his hotel and relax for the remainder of the weekend. He leaves the office with the following thought in mind: ‘Maybe it’s time to buy an apartment with sea views on this pretty island.’ 

    The above is a fictional story that includes true facts about the benefits that foreigners and expats can enjoy by setting up corporate structures in Malta.
  • This Article was first published in Il-Bizzilla June 2015, AirMalta's in-flight magazine.