How to Setup a Malta Holding Company

Malta has earned a reputation as one of Europe’s most strategic corporate hubs — especially for investors, entrepreneurs, and multinational groups looking to establish a Malta holding company. With its favourable Malta holding company taxation regime, EU membership, extensive double-tax treaty network, and 0% effective tax possibilities through refunds and participation exemptions, it’s no wonder global firms are flocking to the island.

But here’s the catch — setting up a holding company in Malta isn’t always as smooth as it looks on paper. While Malta holding company formation is relatively quick (sometimes within a few days), navigating the Malta holding company tax rules, compliance requirements, and especially bank account opening can be a complex maze. 

Banks in Malta and across the EU now apply strict due diligence and AML standards, making corporate banking one of the biggest bottlenecks for non-residents. Add to that the need for substance compliance, VAT registration, accounting, and ongoing audit requirements — and suddenly your “simple” holding company Malta setup becomes a full-time project.

That’s where Binderr Concierge steps in

Why Choose Malta as a Holding Jurisdiction

Malta has emerged as one of Europe’s most trusted destinations for international investors establishing a Malta holding company. It combines a robust legal system, full EU membership, and one of the most advantageous Malta holding company taxation frameworks in the world. 

Below, we break down why setting up a holding company in Malta is such a compelling choice for global entrepreneurs and corporations.

Key Benefits of a Malta Holding Company

• Attractive Tax Regime – Full participation exemption on qualifying dividends and capital gains, with refund mechanisms that can reduce the effective Malta holding company tax rate close to 0%.
• Extensive Treaty Network – Over 70 double taxation treaties, ensuring reduced or zero withholding tax on dividends, royalties, and interest.
• EU Law Protection – As an EU member state, Malta guarantees business security through legal transparency, non-discrimination, and capital mobility.
• Flexible Ownership Rules – No requirement for local shareholders or directors; foreign investors can fully own and manage their Malta holding company remotely.
• Asset Versatility – A Malta holding company can hold subsidiaries, real estate, IP, investments, and even operate trading or financing activities.
• Cost Efficiency – Low incorporation costs (from €245) and modest ongoing compliance fees compared to other EU jurisdictions.
• Fast Incorporation – Streamlined Malta holding company formation process; companies can be registered within 24–48 hours once documents are ready.
• No Withholding Taxes – Dividends paid to non-resident shareholders are exempt from Maltese withholding tax under standard conditions.
• No Thin Capitalisation Rules – Greater flexibility in funding and debt structuring for international corporate groups.

In summary: A Malta holding company combines world-class tax efficiency, EU regulatory stability, and rapid setup — making setting up a holding company in Malta a smart move for global asset protection and cross-border investment planning.

Key Legal & Structural Considerations for a Malta Holding Company

When establishing a Malta holding company, understanding the legal, structural, and compliance framework is critical. The island offers an investor-friendly environment — but the right setup ensures your Malta holding company taxation benefits are protected under EU and OECD rules. 

Below is a breakdown of everything you need to know before proceeding with Malta holding company formation.

Entity Types & Minimum Capital

The most common structure for setting up a holding company in Malta is a Private Limited Liability Company (Ltd).

A private Malta holding company requires a minimum share capital of €1,200 (often cited as €1,165), of which at least 20% must be paid up upon incorporation. This makes it ideal for SMEs and investment vehicles with a lean setup.

Shareholding, Directorship & Company Secretary

Every Malta holding company must appoint at least one shareholder and one director — and the same individual can hold both roles. There’s no legal requirement for either to be Maltese residents, though having a local director can strengthen your Malta holding company tax and substance position.

A company secretary is mandatory and is responsible for statutory filings, record-keeping, and maintaining compliance with the Malta Business Registry (MBR).

This structure gives international investors flexibility while keeping governance aligned with EU standards — a major advantage for non-resident founders pursuing Malta holding company formation.

Registered Office

Every holding company in Malta must maintain a registered office within Malta. This can be a physical space, serviced office, or one provided by a licensed corporate services provider. The registered address is used for all official correspondence, MBR filings, and legal notices.

Binderr partners with accredited local agents to ensure your Malta holding company meets all legal and operational requirements right from day one.

Objects, Purpose & Scope

Unlike traditional passive holdings, a Malta holding company can engage in both investment and commercial activities. The company’s Memorandum and Articles can be drafted to allow flexibility — letting you manage subsidiaries, hold IP, or conduct intra-group financing.

This hybrid approach makes Malta holding company formation particularly attractive for dynamic sectors like fintech, crypto, iGaming, and family investment offices.

Participation Exemption Conditions

To unlock the full Malta holding company tax benefits, your entity must meet the participation exemption criteria. This regime allows dividends and capital gains from qualifying participations to be completely exempt from Malta holding company taxation.

To qualify, your Malta holding company must:

• Hold at least 10% of the equity shares in another company; or
• Own a participation with a minimum acquisition value of €1,164,000, held continuously for at least 183 days; and
• The subsidiary must be subject to foreign tax of at least 15% or derive less than 50% of its income from passive sources; and
• The investment must be held as a long-term asset, not trading stock.

Once these conditions are met, dividends and capital gains can be received tax-free, providing one of the most powerful Malta holding company tax advantages within the EU.

Anti-Abuse & Substance Requirements

To maintain eligibility for the Malta holding company tax benefits, it’s crucial to establish real economic substance. This means having credible operations — such as:

• A Maltese bank account
• Proper accounting and audited financials
• Active local directorship and management decision-making
• Physical or virtual office presence

The Malta holding company taxation regime is designed to comply with BEPS, EU, and OECD anti-avoidance frameworks. If the structure lacks commercial rationale or is purely tax-driven, authorities may deny the participation exemption.

Setting Up a Holding Company in Malta - Step by Step

Step 1: Pre-Incorporation Planning

Before you start, define the basic framework of your Malta holding company. You’ll need to:

• Decide on the share structure (share classes, voting rights, nominal value).
• Appoint the shareholders, directors, and company secretary.
• Prepare identification, address proof, and due diligence documentation for all officers.
• Choose and reserve a company name with the Malta Business Registry (MBR).
• Draft the Memorandum & Articles of Association (M&A) outlining the company’s purpose, internal governance, and share allocation.

Proper planning ensures your structure aligns with your intended Malta holding company tax benefits and future cross-border operations.

Step 2: Deposit Share Capital

After finalising your structure, you’ll need to deposit the share capital.

• Minimum authorised capital for a private company is €1,165, with at least 20% paid up.
• You can open a bank account in Malta or with an accepted EU/foreign institution.
• Obtain a bank deposit certificate confirming the paid-up capital — this is required for registration.

This step demonstrates financial readiness and is a key part of compliant Malta holding company formation.

Step 3: Submit Incorporation Documents to the MBR

Once capital is deposited, file your application with the Malta Business Registry. The incorporation pack typically includes:

• The signed Memorandum & Articles of Association.
• Declarations from directors and shareholders.
• Proof of paid-up share capital (bank certificate).
• Details of the registered office address in Malta.

You’ll also pay the registration fee (starting around €245, based on authorised share capital). If everything is in order, the company is approved within 1–2 business days, and you’ll receive the official Certificate of Incorporation.

Step 4: Post-Incorporation Formalities

Once your Malta holding company is registered, several legal and tax formalities must be completed:

• Register for a Tax Identification Number (TIN) with the Commissioner for Revenue.
• Apply for VAT registration, if applicable to your operations.
• Appoint auditors and open official accounting records.
• Maintain share registers and submit annual returns and audited financial statements each year.

These steps ensure your holding company Malta remains compliant under Maltese and EU corporate law.

Step 5: Dividend Distribution & Tax Refunds

This is where the Malta holding company taxation advantages come into play. To access the full Malta holding company tax benefits, ensure your shareholdings qualify as a participating holding. Once profits are distributed to shareholders, they can claim refunds of corporate tax paid by the company, effectively reducing the total burden to near-zero in many cases.

Always maintain:

• Proper resolutions for dividend declarations.
• Supporting documentation for refund claims.
• Timely filings with the tax authorities.

With the right guidance, setting up a holding company in Malta can be fast, compliant, and highly tax-efficient — giving global founders the EU credibility of a regulated jurisdiction with the fiscal flexibility of a modern holding structure.

Business Banking in Malta

Opening a bank account for a Malta holding company is often the most challenging part of the setup process. While Malta’s banking sector is stable and well-regulated, it operates on a relationship-based model, meaning approvals depend heavily on trust, transparency, and the perceived legitimacy of the client’s business.

Most Maltese banks follow strict EU AML and KYC standards, which can make onboarding lengthy — especially for non-resident shareholders or complex corporate structures. Expect detailed documentation requests covering ownership, source of funds, and business activity.

Banks tend to prioritise clients with:

• A clear business plan and operational footprint in the EU.
• Strong financial background and audited accounts.
• Demonstrable substance in Malta (local address, audit, or employees).

Some Malta holding company applicants face multiple rejections before securing approval, as banks prefer long-term, transparent relationships over transactional clients.

Because of this, many investors opt for pre-screened introductions or alternative EU financial institutions to fast-track access to multi-currency business accounts.

Cost of Setting Up a Malta Holding Company

Setting up a Malta holding company is cost-efficient compared to other EU jurisdictions, especially considering its EU credibility and strong Malta holding company taxation advantages. 

Below is a clear, single-view cost structure covering everything from incorporation to annual maintenance.

Malta Holding Company Taxation — How the System Works

Malta offers one of Europe’s most flexible and rewarding corporate tax frameworks — designed to attract international investors while remaining fully compliant with EU and OECD standards. 

The Malta holding company taxation system combines a relatively high statutory rate with powerful refund and exemption mechanisms that significantly reduce the effective tax burden.

The Core Structure

• Headline Corporate Tax Rate: 35% (standard rate for all Maltese companies).
• Effective Rate: Often reduced to 0–5% through Malta’s unique imputation and refund system.
• Participation Exemption: 100% exemption on dividends and capital gains from qualifying subsidiaries.
• No Withholding Taxes: Dividends paid to non-resident shareholders are not subject to withholding tax.
• No Capital Gains Tax: Gains from the sale of qualifying holdings are fully exempt under the participation regime.

In practice, this means a Malta holding company can legally achieve an effective tax rate close to zero on group dividends or asset disposals, provided the right structure and substance are in place.

How the Imputation & Refund System Works

Under Malta’s full imputation system, when a company pays dividends to shareholders, the tax it paid at the corporate level is credited to the shareholder. The shareholder may then apply for a refund from the Maltese tax authorities.

Typical refund scenarios include:

• 6/7 Refund – For trading or active income, reducing the effective Malta holding company tax rate to 5%.
• 5/7 Refund – For passive interest or royalties, resulting in about 10% effective tax.
• 2/3 Refund – For income that benefited from foreign tax relief.
• 100% Exemption – For qualifying participating holdings, where dividends and capital gains are completely tax-free.

Refunds are generally processed within a few weeks after filing and are paid directly to the shareholder’s account.

The Participation Exemption Explained

The participation exemption is the most powerful feature of Malta holding company taxation. It applies when:

• The holding owns at least 10% of the equity shares in another company; or
• The investment value exceeds €1,164,000, held for at least 183 days; and
• The subsidiary is subject to at least 15% foreign tax, or earns less than 50% passive income.

When these conditions are met, all related dividends and capital gains are fully exempt from Maltese tax.

This regime is particularly advantageous for multinational groups consolidating foreign subsidiaries or managing European investments through a holding company in Malta.

Example Structures & Use Cases for a Malta Holding Company

Malta’s flexible corporate framework allows investors to design holding setups that match their business goals — whether for tax efficiency, asset protection, or group structuring. 

Here are the most common models used when setting up a holding company in Malta:

Double Malta (Two-Tier Structure)

Many international groups use a two-tier Malta holding company model:

• The top company acts as a pure holding entity, owning shares in subsidiaries and receiving dividends.
• The lower company handles trading or operational activities.

This separation allows:

• Better risk management and protection of core assets.
• Simplified dividend distribution within the group.
• Optimised access to Malta holding company tax refunds and participation exemption benefits.

Ideal for: cross-border groups managing multiple subsidiaries or investment vehicles.

Re-Domiciliation (Continuation to Malta)

If you already operate a company elsewhere, you can re-domicile it to Malta under the Continuation of Companies Regulations — without liquidating your existing entity.

• The process allows your company to retain its legal identity, contracts, and banking relationships.
• You’ll gain access to Malta holding company taxation advantages and EU-level protections instantly.
• Perfect for groups relocating from offshore or low-substance jurisdictions seeking credibility and stability.

Ideal for: businesses in the Caribbean, Cyprus, or non-EU jurisdictions looking to move under the EU umbrella.

Intellectual Property (IP) Holding Structure

Malta is also popular as an IP holding hub due to its efficient Malta holding company tax benefits and treaty network.

• A holding company in Malta can own trademarks, patents, software, or other intangible assets.
• Royalties and licensing income can benefit from favourable withholding tax treatment and participation exemptions.
• Combined with real economic substance (local management, accounting, or R&D partnerships), Malta offers a compliant and tax-efficient base for IP management.

Ideal for: tech firms, licensors, and brand owners seeking EU protection and low effective tax exposure.

Whether you’re structuring for investments, IP, or group consolidation, a Malta holding company offers unmatched flexibility, legal certainty, and long-term tax optimisation — all under one compliant EU jurisdiction.

Bottom Line

A Malta holding company remains one of the smartest, most versatile corporate structures in Europe — blending EU credibility with world-class tax optimisation. When set up correctly, it can unlock near-zero effective tax rates, protect global assets, and streamline cross-border profit flows — all within a compliant and transparent framework.

However, the key lies in execution. Banking, compliance, and substance requirements in Malta are rigorous, and one misstep can cost months of delays or lost tax advantages.

That’s where Binderr comes in — we make Malta holding company formation simple, structured, and strategic. From incorporation and banking to accounting and tax filings, everything is handled under one roof with clear pricing, vetted partners, and zero red tape.

Common Risks & Pitfalls

• Failing the Substance Test – A Malta holding company that exists only on paper (with no local management, bank account, or activity) may lose access to Malta holding company taxation benefits and refunds.
• Ignoring Anti-Abuse Rules – If the company’s sole purpose is tax avoidance without genuine commercial reasoning, the participation exemption can be denied.
• Evolving International Tax Regulations – BEPS, DAC6, CFC rules, and the OECD’s Pillar 2 are constantly reshaping global taxation — what’s compliant today may not be tomorrow.
• Bank Account Difficulties – Malta’s banking sector is strict and relationship-driven. Without strong documentation and clear business rationale, opening or maintaining a corporate account can take weeks or even months.
• Misunderstanding the Tax Outcome – The effective 0% rate depends on proper structure, qualification, and execution — it’s not automatic.
• Cost vs. Scale – For small or dormant holdings, annual audits, filings, and compliance costs may outweigh tax savings.

✅ Best Practices to Avoid Issues

• Build Real Economic Substance – Maintain local management, hold meetings in Malta, and ensure operational decision-making takes place locally.
• Work with Experienced Advisors – Use vetted tax and legal professionals familiar with Malta holding company tax rules and refund mechanisms.
• Keep Documentation Ready – Maintain full records of ownership, transactions, and substance to prove compliance if audited.
• Plan Banking Early – Engage pre-screened banks or EMIs aligned with your industry to avoid delays.
• Review Your Structure Annually – Periodically assess compliance with changing Malta holding company taxation laws and international frameworks.
• Use an Integrated Setup Partner – Platforms like Binderr streamline incorporation, banking, accounting, and compliance — ensuring your holding company Malta remains fully optimised.

FAQs - Malta Holding Company