Malta

Malta, an archipelago in the heart of the Mediterranean Sea, is renowned for its rich history, strategic location, and vibrant culture. This southern European country consists of three inhabited islands: Malta, Gozo, and Comino, with Valletta serving as its capital city. Known for its warm climate, historical monuments, and crystal-clear waters, Malta is a popular destination for tourists from around the world.

The history of Malta is a tapestry of various cultures and civilizations. Its strategic location has made it a nexus of military and commercial activities throughout history, leading to its control by several powers, including the Phoenicians, Carthaginians, Romans, Byzantines, Arabs, Normans, Knights of St. John, French, and British.

Today, Malta is a republic with a parliamentary democracy. Its economy is diversified, focusing on tourism, manufacturing, and information technology. Malta's rich cultural heritage, combined with its modern economy and Mediterranean lifestyle, makes it a unique place to live, work, and visit. The Maltese people are known for their hospitality, multilingualism (Maltese and English are official languages), and vibrant traditions, reflecting a blend of the various cultures that have influenced the islands over millennia.

General Information

• Full Name: Republic of Malta
• Population: 531, 113 (World Bank, 2022)
• Capital: Valletta
• Primary Language: Maltese, English
• Main Religion: Christianity
• Monetary unit: Euro
• Main exports: Machinery and transport equipment
• GNI per capita: US $50,230 (World Bank 2022)
• Internet domain: .mt
• International Dialing Code: +356

How Do I Say in Maltese?

• Hello: Merħba
• Good morning: Bonġu
• Good evening: Lejl it-tajjeb
• Do you speak English?: Titkellem bl-Ingliż?
• Goodbye: Saħħa
• Thank you: Grazzi

Malta, a thriving hub in the heart of the Mediterranean, offers a dynamic and inviting environment for businesses looking to expand internationally. Known for its robust economy, strategic location, and favourable tax system, Malta has become a magnet for entrepreneurs and companies aiming for growth and innovation. 

Malta's strategic location at the crossroads of Europe, Africa, and the Middle East grants it unparalleled access to a variety of regional markets. This prime positioning makes it an ideal gateway for businesses aiming to tap into diverse markets. Coupled with Malta's favourable tax regime, which boasts attractive corporate tax rates and double taxation treaties with numerous countries, the country offers significant financial incentives for international businesses looking to expand.

The island nation is witnessing a surge in key industries such as iGaming, fintech, maritime, aviation, and tourism. These sectors are not only thriving but also offering abundant opportunities for investment and growth, highlighting the dynamic and robust nature of Malta's economy. Further enriching this business landscape is Malta's innovative ecosystem. The country has placed a strong emphasis on innovation and technology, particularly in areas like blockchain and artificial intelligence, backed by forward-thinking regulatory frameworks. This environment encourages businesses to explore and develop cutting-edge solutions.

Malta's membership in the European Union opens up further advantages. Businesses established in Malta enjoy the perks of access to the EU's single market, ensuring regulatory compliance and availing themselves of various funding opportunities. This EU membership amplifies Malta's appeal as a strategic hub for business operations, combining the benefits of a diverse market access, supportive tax structures, and a commitment to innovation and growth within the broader European framework.

Expanding into Malta offers businesses a unique combination of strategic advantages, from its geographic location to a pro-business regulatory environment. By leveraging Malta’s dynamic economy and supportive ecosystem, international businesses can achieve sustainable growth and access new markets within the EU and beyond. Begin your journey to business success in Malta by embracing the opportunities this Mediterranean gem has to offer.

Investing in Malta offers a unique blend of strategic advantages, making it an attractive destination for global investors and entrepreneurs. The Mediterranean archipelago stands out for its economic resilience, strategic geographic location, and favourable investment climate, all underpinned by its membership in the European Union. 

Strategic Geographic Location In Malta

Malta's position in the heart of the Mediterranean Sea serves as a bridge between Europe, Africa, and the Middle East. This strategic location provides seamless access to major markets, making it an ideal base for businesses aiming to expand their reach across different regions. The island's connectivity, through its advanced logistics and telecommunications infrastructure, further enhances its appeal as a central hub for international trade and commerce.

Robust Economy and Investment Incentives In Malta

Malta boasts a dynamic and diversified economy, known by steady growth, low unemployment, and a strong financial sector. The Maltese government actively promotes foreign investment through various incentives, including tax credits, grants, and assistance in innovation and development projects. These incentives, coupled with Malta's competitive corporate tax rates and extensive network of double taxation agreements, create a tax-efficient environment for businesses and investors alike.

Thriving Key Industries in Malta

Investors will find fertile ground in Malta's thriving sectors, including digital gaming, financial services, maritime, aviation, and healthcare. The country has also emerged as a leader in blockchain technology and digital innovation, supported by progressive regulations. This ecosystem not only fosters growth and competitiveness but also opens up a plethora of investment opportunities in cutting-edge technologies and services.

EU Membership and Access to the Single Market in Malta

As a member of the European Union, Malta offers businesses the advantage of operating within a stable legal and regulatory framework. Investors gain access to the EU's single market, benefiting from free movement of goods, services, capital, and people. This membership ensures regulatory compliance and offers a gateway to an expansive market of over 500 million consumers, providing a significant boost to potential growth and expansion efforts.

Skilled Multilingual Workforce in Malta

Malta's highly educated, multilingual workforce is another key asset for investors. English is an official language alongside Maltese, and many Maltese professionals are also fluent in other European languages. This linguistic proficiency, combined with the workforce's adaptability and skills, makes Malta an ideal location for businesses looking to establish or expand their operations in a competitive global market.

Quality of Life in Malta

Beyond the economic and strategic benefits, Malta offers an exceptional quality of life with its warm climate, rich cultural heritage, and safe, stable social environment. These factors not only make Malta an attractive place to live and work but also contribute to a positive and productive business climate.

Investing in Malta means tapping into a country that offers a harmonious blend of strategic business advantages, from its location and economic stability to its skilled workforce and quality of life. For investors and businesses aiming for growth, innovation, and access to European and global markets, Malta presents an unparalleled opportunity.

Foreign Direct Investment (FDI) in Malta is a cornerstone of the country's economic strategy, attracting investors from around the world with its favorable investment climate, strategic location, and comprehensive range of government incentives. Malta's approach to FDI is designed to support and encourage investment across various sectors, fostering growth, innovation, and development. Here's an overview of the FDI landscape in Malta, including government incentives and opportunities available to foreign investors. 

Government Incentives for FDI in Malta

Malta offers a robust package of incentives aimed at foreign investors to stimulate economic growth and enhance the competitiveness of its business environment. These incentives are tailored to support both established companies and startups across different industries, including technology, manufacturing, and services. Key incentives include:

• Tax Credits: Investors in Malta can benefit from tax credits based on investment in tangible and intangible assets and job creation. These credits can significantly reduce the effective corporate tax rate, enhancing profitability and return on investment.
• Grants and Soft Loans: The Maltese government, through various schemes and agencies such as Malta Enterprise, provides financial assistance in the form of grants and soft loans to support specific activities, including research and development, innovation, and the adoption of eco-friendly practices.
• Double Taxation Agreements: Malta has an extensive network of double taxation agreements with over 70 countries, minimising tax liabilities for companies operating in multiple jurisdictions and facilitating cross-border trade and investment.
• Investment Aid: Targeted investment aid is available for projects that contribute to regional development, improve competitiveness, and create high-quality jobs. This aid can cover a portion of the costs associated with setting up or expanding business operations in Malta.

Foreign Direct Investment (FDI) Opportunities in Malta

Malta's economy presents diverse opportunities for foreign investors, with several sectors identified as key drivers of FDI:

• iGaming and Digital Economy: Malta is a global leader in iGaming and has established a robust ecosystem for digital businesses, including blockchain, fintech, and cybersecurity, supported by progressive regulatory frameworks.
• Healthcare and Pharmaceuticals: The country is positioning itself as a hub for healthcare and pharmaceuticals, with opportunities in manufacturing, research, and health services.
• Maritime and Aviation: Leveraging its strategic location, Malta offers vast opportunities in the maritime and aviation sectors, including ship and aircraft registration, maintenance, and repair services.
• Tourism and Real Estate: With its rich cultural heritage and Mediterranean lifestyle, Malta continues to attract investment in tourism infrastructure, luxury real estate, and hospitality services.

Supportive Environment for Foreign Direct Investment (FDI) in Malta

Malta actively encourages Foreign Direct Investment (FDI) through a supportive ecosystem facilitated by various government bodies and institutions. These organisations play a pivotal role in attracting and assisting foreign investors, ensuring that Malta remains a competitive and attractive destination for international business. Here are some of the key government bodies in Malta that support FDI:

Malta Enterprise: Malta Enterprise is the country’s economic development agency, tasked with attracting new foreign investment as well as facilitating the growth of existing operations. It offers a comprehensive range of services and incentives designed to support businesses of all sizes. These include investment aid, tax credits, access to finance, and assistance with training and employment. Malta Enterprise acts as a one-stop-shop for investors, providing guidance through the investment process, from initial contact and exploration of opportunities to implementation and ongoing operation.

The Malta Financial Services Authority (MFSA): The Malta Financial Services Authority is the single regulator for financial services in Malta. It oversees all financial services activities, including banking, investment services, insurance, and pensions. For investors in the financial sector, the MFSA provides a clear regulatory framework and guidance, ensuring compliance with local and EU regulations. The MFSA’s proactive approach to regulation and supervision makes Malta an attractive jurisdiction for financial services FDI.

FinanceMalta: FinanceMalta is the public-private initiative set up to promote Malta as an international financial center. It aims to enhance Malta’s visibility and connectivity within the financial industry, both locally and abroad. FinanceMalta organises events, provides information, and supports financial services operators looking to relocate or expand their operations in Malta, making it a vital resource for FDI in the financial sector.

Identity Malta Agency: Identity Malta Agency handles citizenship, passports, residence, and visa processes. It plays a vital role in facilitating the mobility of foreign investors and their employees, offering various programs and services that ease the process of relocating to Malta for business purposes.

Foreign Direct Investment in Malta is supported by a blend of strategic advantages, government incentives, and diverse opportunities across various sectors. For investors looking to tap into the European market and beyond, Malta offers a compelling destination with its business-friendly environment, strategic geographic location, and commitment to innovation and growth. Whether in technology, manufacturing, services, or other industries, Malta is equipped to welcome and support foreign investment, driving mutual success and economic prosperity.

This information is currently being updated for 2024.

Banking hours are usually Monday to Friday between 8.30 a.m. and 12.30 p.m. Most banks are open until 12.00 p.m. on Saturdays.

Payments can be made to employees via cheque, direct deposit and cash. The authorities can be paid by cheque and direct deposit.

This information is currently being updated for 2024.

It is not necessary to have a Legal Entity established in order to process a payroll, there are various alternatives.

• You can create a Maltese company; once the company is registered as a Private Employer, you can set up the payroll for the employees.
• If you have a well-established business outside Malta, but you do not plan to have a physical office in Malta, then you should consider registering your foreign business as a Private Employer.

First, it is necessary to ask for a nonresident dormant tax number and a PE number. This is a Tax ID for a non-resident company without a permanent establishment.

The Tax Year in Malta runs from 1 January to 31 December.

This information is currently being updated for 2024.

An individual who is ordinarily resident and domiciled in Malta is subject to income tax on their worldwide income and taxable gains.

Taxable income is the aggregate amount of income of a person after allowing for exemptions and allowable deductions. Some of the major items included in an individual’s taxable income include:

• Salaries, wages, and other benefits from employment
• Profits or gains from a business
• Dividends, interest, royalties, rents, and other investment income
• Pensions and annuities

In Malta, income tax is withheld from salaries under the final settlement system, employers are required to deduct income tax from salaries/wages that are paid to their employees whether they are a resident or a non-resident. Contributions are due by the end of the month and must be made using the appropriate form, which will include both tax and social security contributions.

Contributions are usually paid using a cheque to the Inland Revenue Department.

This information is currently being updated for 2024.

Social security is compulsory for everyone who is employed in Malta between the ages of 16 and 65, including non-resident persons working in Malta.

The Social Security Contribution rate due is based on earnings derived from the basic weekly wage. The basic weekly wage does not include allowances, bonuses, and/or overtime earned in a particular week. There are different classes of contribution rates. Social Security Contributions by Employed persons are Class 1 Contributions and are paid by direct deductions from the same employees’ wages/salary. In a normal case scenario, an equivalent rate paid or deducted from the employee’s wage/salary, is also paid by the employer.

Part-time employees who work less than 40 hours per week and who earn less than the National Minimum (weekly) Wage can opt to have their share on social security contributions, paid at the rate of 10% of their basic weekly wage.

This information is currently being updated for 2024.

Monthly Income

Tax and Social Security on the appropriate form (FS5) must be submitted to the Inland Revenue Department by the end of the subsequent month.

Yearly

FS7 is an annual report submitted by the employer by the 15th February of the following year to the Inland Revenue Department. This form states all taxes and social security contributions made that year.

FS3 is an individual annual report provided by the employer to each employee with a summary of all taxes and social security contributions paid throughout the year. This form is submitted to the Inland Revenue Department along with the FS7. It is also due on 15th February each year.

This information is currently being updated for 2024.

All new employees must be registered with Inland Revenue Department and JOBSPLUS, the Employment and Training Department. Employees must be registered within 14 days of the engagement date.

All third country nationals must obtain a work permit before starting work in Malta.

This information is currently being updated for 2024.

JOBSPLUS must be informed of all terminations. In the case of expatriates, the Inland Revenue Department must be informed that the employee is leaving.

All termination documents and final salary payments must be made to the employee on the last day of employment.

The working week in Malta is Monday to Friday. As a rule, the maximum working hours are 40 per week.

Overtime is permitted but only up to 8 hours per week; overtime hours over and beyond the 8 hours per week are permitted only if agreed by the employee in writing.