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Maltese Legislation on Foreign Investments

Maltese Legislation on Foreign Investments

Updated on Tuesday 19th April 2016

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Ever since its accession to the European Union, Malta has started attracting direct foreign investments through its pro-business legislation and adoption of new laws that would attract foreign businessmen. As a small country with low natural resources, Malta has directed its economy towards the private sectors for which the government has created a very stable environment. Among the most developed industries in Malta, foreign investors will most likely be interested in tourism, pharmaceuticals, financial and IT&C sectors.

Our lawyers in Malta will provide you with all the relevant information about the legal framework on foreign direct investments.

What are the laws encouraging foreign investments in Malta?

Malta has very strong regulations that encourage foreign investors in opening companies in the country. The oldest legal document promoting foreign investments in Malta dates back in 1948 - the Income Tax Act that states an unique corporate tax rate of 35% applies to limited liability companies.

In 1988, Malta enabled the Industrial Development Act, that was amended in 2001, which included new incentives for companies in the manufacturing sector. The Investment Services Act was adopted in 1994 with the purpose of regulating investment services and financial institutions, but also to attract more foreign investors interested in the financial sector. However, the primary source of law for companies is the Maltese Commercial Code that sets out the regulations for company registration in the country.

Incentives for foreign investors in Malta

Perhaps the main reason why Malta keeps attracting foreign investors is its taxation system. Malta’s taxation system is very different from other tax systems in the EU. But the Maltese government tries to boost foreign investment by providing other incentives also. Among these incentives, there are investment allowances that can go up to 50% for machinery in industrial facilities, incentives for companies creating job opportunities and even work permits for foreign shareholders provided if certain requirements are met.

Tax benefits for foreign enterprisers coming to Malta

Malta provides numerous tax incentives to foreign entrepreneurs compared to other EU countries, among which:

  • -       preferential rates on the income tax than can decrease to 5%;
  • -       investment allowances of 50% of the taxes paid on the employees’ salaries for the first two years;
  • -       reduced rates on profits reinvested in other businesses;
  • -       reduced tax rates for companies working in Malta FreePort, the country’s customs free zone.

Recently, Malta has also introduced various citizenship and residency programs based on investments. One of the most successful programs is the one based on investments in real estate.

For detailed information about the existing regulations and incentives for foreign investors, you can contact our law firm in Malta.




  • Delia 2015-02-20

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