Malta Branch of a foreign Company

Following recent amendments to the law a foreign company may opt to establish a branch in Malta. Oversea companies setting up branches in Malta are required to register the branch in Malta with the Maltese Registry of Companies within one month from establishing a branch or a place of business in Malta. In terms of the Maltese Companies Act, a foreign or ‘oversea company‘ is a body corporate which is constituted or incorporated outside Malta.

The Maltese Companies Act covers the provisions concerning ‘oversea companies‘ (or bodies corporate, incorporated outside Malta) which set out to establish a branch or place of business within Malta. In particular, Section 385 of the Companies Act details the documents which must be delivered to the Registrar of Companies for registration within one month of the establishment of the place of business.

Benefits of setting up a Branch in Malta

A branch of an oversea company (managed and controlled outside Malta) would be taxable in Malta only on income arising in Malta and on income arising outside Malta but remitted to Malta. The taxable income of a Maltese branch shall be subject to the same corporate tax system as Maltese Companies: The income of the branch would be taxed at the same rate as that of a Maltese company. Non-resident shareholders of overseas companies may qualify for refunds of tax.

Double Tax Agreements: Subject to any particular conditions in a particular double tax treaty, branches of foreign companies may use the provisions of a relevant Malta double tax treaty with another jurisdiction.

No withholding taxes: Branch office profits are not subject to any withholding taxes at the time of transfer or later. A branch‘s profits are only subject to the corporate tax charge at the domestic rate.