Malta Asset Holding

Malta is a popular choice for asset holding vehicles as it is a member of the European Union with an excellent tax environment and an extensive network of tax treaties. Income from underlying assets is either not taxed or taxed at 5 or 10% as explained below.

Income from foreign or Maltese subsidiaries received by Maltese companies, trusts and foundations and funds is not subject to tax in Malta provided that the holding vehicle holds at least 10% of the assets. Income received from smaller holdings will be subject to tax at an effective rate of 10% (under the five sevenths refund system) when received by companies, trusts and foundations but will generally not be taxable when received by a fund. Malta is a popular choice for holding because of its beneficial tax environment and because it has an extensive network of tax treaties which may make it more beneficial to interpose a Maltese holding than to draw dividends from underlying companies directly in many circumstances.

Gold, Silver and Platinum
Malta is not a traditional choice for the holding of precious metals directly but is used for clients wishing to buy into shared vaults or precious metal funds.

Direct Holding
Some local banks offer the use of safety deposit boxes for clients wishing to hold precious metals in Malta.

Shared Vault
Clients wishing to buy into shared vaults such as may wish to do so via a Maltese company for reasons of anonymity, favourable tax treatement and favourable treatment of receipt of dividends by beneficial owners.

Funds Linked to Metals
Maltese vehicles can be used to hold funds generally including funds related to precious metals.

Trading Accounts
Malta can be used to hold trading funds and even where local directors are appointed the client can retain trading rights over the account. The benefits of this may be the lower tax rate (effective rate of 10%), anonymity, the deferral of tax by retaining it in a holding vehicle rather than in the beneficial owners’ name directly and the more favourable treatment of income from a Maltese company than other alternatives (especially for clients in the EU). Trading accounts (whether Maltese or international) may be held by online or traditional stock brokers by Maltese vehicles.

Managed Portfolios
Any portfolio (whether managed by the client or a fund manager) can be owned by a corporate vehicle in Malta and clients often prefer to hold their funds in this way. Such funds can be held either by a local broker (whether online or not) or any foreign broker. This may be especially beneficial for Hedge Funds and Venture Capital funds where the client may anticipate the possibility of a substantial gain on which they may otherwise be taxed more aggressively tha the Maltese rate of 10% for companies, trusts and foundation or 0% for certain funds.

Real Estate
Maltese companies are ideally suited to holding of real estate in Malta and the holding of real estate in other European countries (whether or directly or through a local subsidiary as may be necessary by law). Malta is a highly popular holding destination and in recent years has seen the transfer of many hundreds of offshore companies holding European real estate to take advantage of Malta’s status as the lowest tax rate in the European Union as offshore companies increasingly come under attack from within the EU.

Fine Art
Malta is not a traditional destination for the holding of fine art but a number of small galleries have been established in recent years and the area is beginning to grow. There may however be many advantages to the holding of collections elsewhere in a Maltese company or other vehicle such as the exemption from capital gains tax applicable to foreign owned Maltese companies and the generally excellent tax environment.

Fixtures (Banking)
Malta has an excellent banking centre which has shown continued growth amidst global recession. The more old-fashion risk-averse attitude of the main local banks has ensured their stability and a number of new banks are taking root in Malta offering savings products. Fixtures held in Malta may be held either personally or via a Maltese vehicle. Income from Maltese earned interest will be taxed at an effective rate of 10% if held by a Maltese vehicle or exempt from tax if held by a non-resident. Malta is a popular destination for the holding of foreign fixtures especially in light of recent issues in Cyprus and the movement of cash (especially Austrian and German funds) out of Switzerland.

Malta’s maritime registry is the largest in Europe and Malta is a world leader in this area. The appropriate vehicle for the holding of a vessel is a Merchant Shipping Act company which is exempt from tax arising from its vessels and merely pays a nominal tonnage tax. For a full discussion of the benefits of Malta for vessel registration please see our main article on Malta’s maritime sector.

Malta has an emerging aviation sector which supports the registration of commercial and pleasure craft. For a full discussion of this area please see our main article on Malta’s aviation sector.