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Dip.Tax, B.A., LL.M.(Warwick), LL.D., MIT, TEP

International Tax & Legal Counsel

MALTA

 

 

 

 

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MALTA BACK OFFICE ADMINISTRATION FOR FOREIGN COMPANIES

The Concept

Maltese law has recently introduced a system whereby operations set up in Malta which service the back office administration and support the needs of foreign enterprises benefit from a guaranteed ten-year tax rate of 4.17%.

This incentive is applicable to a wide sphere of activities as back office services are widely defined as “routine administration services”, with unlimited application to any business or professional activity.

There are no restrictions as to the type or nature of the back office services that may be accepted for the purposes of this tax benefit. Thus it is possible for the entrepreneurial and professional class to identify activities which could be classified as the provision of back office administrative or support services.

The services may be, for example, in support of companies engaged in airlines, hotel or hospitality industry, or administrative tasks in support of trust services, shipping and maritime trade, insurance or fund administration business. Indeed most administrative tasks can be out-sourced in a way as to qualify as a back office activity for purposes of law.

Qualifications

There are only three basic requirements in order to qualify.

(a) the services are to be provided to foreign residents or entities;

(b) the services are to consist of routine administrative, accounting or other support services or management functions, and do not comprise services which are subject to specific regulatory licensing or control, (e.g. the duties of a professional lawyer, or trustee, or a fund manager, or an auditor) but may represent the administration needs of such categories of licensable persons;

(c) the services are to be provided either by a local company or by a local branch of a foreign established company.

There are no restrictions on ownership, thus the back office operation may be owned by local or foreign interests, or by both jointly. Neither are there any restrictions regarding the beneficiaries or recipients of the services who may consist of one or more undertakings involved in different activities and ownership structure.

The minimum paid up capital of this company is Lm5,000 (12,000USD). There are no restrictions to the company having foreign directors.

Benefits

  • Low rate of tax for back-office ITCs

  • An extensive range of double taxation agreements which supports effective tax planning.

  • Training grants for approved programs are offered to employees and management.

  • Factory and office space is available at low rental costs.

Malta is in a good position to encourage local set-ups of this nature because of a well-educated workforce and its high number of professionally qualified and trained personnel.

   Malta Back Office Administration for Maltese ITCs & IHCs

See also:

International Trading Company

International Holding Companies

Double taxation treaties

A Malta base for Internet Betting Operations

 

 

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