Licensed by the Malta Financial Services Authority and authorised to act as a trustee or co-trustee in terms of Article 43(3) of the Trusts and Trustees Act, N Trust Limited is able to boast an experienced in house team of dedicated lawyers, accountants and other professionals in order to provide the discretion and expertise required by our clients.
N Trust Limited operates from the offices which house the law firm Naudi Mizzl & Associates. Its core business is the administration of trust and corporate affairs as trustee through trusts, foundations and holding companies and the provision of fiduciary services to resident and non-resident persons. We provide professional and independent trust and corporate management services on an international scale.
Both companies and trusts play a very important role in international tax and estate planning. Our close association with Naudi Mizzi & Associates, ensures that a wealth of knowledge and experience is readily available, which allows us to meet the individual needs of our clients and in doing so establish a long term relationship based on trust, discretion and efficient service.
We can help with:
(1) Incorporation of companies with the Malta Financial Services Authority
(2) Fiduciary cover
(3) Management and administrative services
(4) Procurement of Director services
(5) Procurement of Company Secretarial Services
(6) Procurement of annual audited accounts
(7) Preparation and submission of VAT, Recap and Income Tax returns
(8) Applications for tax refunds
N Trust Limited
Malta is a small island nation consisting of an archipelago of three islands in the middle of the Mediterranean Sea. It lies directly south of Sicily, east of Tunisia and north of Libya. The country's official languages are Maltese and English, and Roman Catholicism is the predominant religion.
Malta has been a member state of the European Union since May 1, 2004 and is currently the smallest EU country in both population (approximately 410,000) and area (approximately 316 square kilometres).
Being in an ideal geographical position in the centre of the Mediterranean Sea, Malta has a typical Mediterranean temperate climate, with mild winters and warm dry summers. Effectively there are only two seasons, which makes the Maltese Islands attractive for visitors especially during the drier months.
EU Membership means that any company registered in Malta may trade under the harmonious passporting system, which means that any licence or authorization issued by a Maltese authority is automatically recognized in the other EU member states.
Malta has a very stable political climate. The system is a parliamentary one and public administration is closely modelled on the Westminster system. The unicameral House of Representatives is elected by direct universal suffrage through the single transferable vote every five years. The main political parties are the Nationalist Party (currently at the helm of the government), which is a Christian democratic party, the Labour Party, which is a social democratic party and Alternattiva Demokratika ("Democratic Alternative"), which is the Green party. The current Prime Minister is Dr. Lawrence Gonzi, and the Leader of the Opposition is Dr. Joseph Muscat. The economy is also a relatively stable one. The average annual inflation rate is 2.4% (as of February 2012), the GDP Annual Nominal Growth Rate is 1.9% (as of the third quarter of 2012), the Real Growth Rate is 2.5% (as of 2011) and the GDP per inhabitant is approximately € 15,300 (at current market prices as at end of March 2012).
The Maltese Government entered ERM II in May 2005, and adopted the euro as the country's currency on 1st January 2008. Malta is also a a member of the Schengen Treaty. The legal system is based on Common Law and Roman Civil Law, although commercial law is heavily based on English Common Law. Malta has also a very advantageous and tax-efficient system.
Why choose Malta?
Malta is the only EU member state which adopts the full imputation system of taxation meaning that both resident and non-resident shareholders are entitled to a full credit of the income tax paid by the company on a distribution of dividends.
Prior to 1st January 2007, it was possible to set up international Trading Companies (ITC's) and International Holding Companies (IHC's) which restricted the tax advantages to non-resident persons. Changes were effected to Maltese law to eliminate the discrimination between resident and non-resident shareholders and these changes were in turn approved and endorsed by the EU Commission.
This EU recognition and approval together with Malta having adopted the EU's Parent-Subsidiary directive and the Interest and Royalties Directive renders Maltese companies excellent vehicles for conducting international business and provides a very healthy tax environment for shareholders of such companies.
A Maltese company is subject to a rate of tax equivalent to 35% on all its worldwide income. Nonetheless, due to the full imputation system of taxation adopted by Malta, upon a distribution of profits from the company to its shareholders, the shareholders are entitled to claim tax refunds of the tax paid by the company. The amount or the refund varies according to the source of the profits from which the distributions are made.
• 6/7th's refunds in respect of active income.
When dividends are made from profits arising out of active income, the shareholders are entitled to claim 6/7th's of the 35% tax paid by the company. This effectively means that the effective tax rate in Malta would only be 5%.
• 5/7th's refunds in respect of passive interest and royalties.
When distributions are made from profits earned from passive interest and royalties income, the shareholders are entitled to claim 5/7th's of the 35% tax paid by the company. This effectively means that the effective tax rate in Malta would only be 10%.
• 2/3rd’s refunds
The 6/7th's and the 5/7th’s refunds referred to above are only applicable in the event that a Maltese company has not claimed any form of double taxation relief. lnfact when dividends are paid out of profits allocated to the foreign income account and out of which double tax treaty relief has been claimed, the shareholders may only apply for a 2/3rd's refund of the tax paid by the company.
Holding companies that derive dividend income or capital gains from a participating holding are entitled to claim a full refund of tax paid by the company when distributions are made to its shareholders. The effective tax rate paid in Malta in similar cases would be 0%. A Maltese company is considered to have a "participating holding" if it holds equity shares in a non-resident company or a qualifying body of persons and it:
- has at least 10% of the equity shares in the non-resident company; or
- is an equity shareholder in the non-resident company and is entitled to purchase the balance of the equity shares of the non resident company, or has the right of first refusal to purchase such shares; or
- is an equity shareholder in the non-resident company and is entitled to either sit on the Board of Directors or appoint a person on the Board of that subsidiary as a director; or
- is an equity shareholder which invests a minimum in the non-resident company of Euros 1,164,686.60 and such investment is held for at least 183 days; or
- holds the shares in the non-resident company for the furtherance of its own business and the holding is not held as trading stock for the purpose of trade.
Light anti-abuse provisions apply for all companies which acquire a "participating holding" after 1st January 2007. In any such event the foreign subsidiary must satisfy any one of the following three conditions:
- It must be resident or incorporated in the EU
- It must be subject to foreign tax of a minimum of 15%,
It must not derive more than 50% of its income from passive interest and royalties.
or alternatively must satisfy both of the following conditions:
- the shares in the non-resident company must not be held as a portfolio investment;and
- the non-resident company or its passive interest or royalties must have been subject to tax at a rate which is not less than 5%.
Dividends derived from a participating holding after 1st January 2007 may qualify for a "participation exemption" if the light anti-abuse conditions referred to above are met. In any such case, the Maltese company has the option not to declare the income in its income tax return with the end result being that no tax is paid In Malta.
If the company elects to declare its income from the ''participating holding" in its income tax return, it would still qualify for a full refund of the tax paid by the Maltese company with the refund given within fourteen days following the end of the month in which the claim is made.
It is interesting to note that under the new tax system, branches of overseas companies are treated like any other company registered in Malta and the tax accounting system and tax refund system may also apply.
Other information and summary
• Malta has no capital duties and wealth taxes;
• No stamp duties on share transfers in companies owned by non-residents;
• Non-residents are exempt from any capital gains on certain share transfers;
• Maltese companies may benefit from the EU Parent-Subsidiary Directive and the Interest and Royalties Directive apart from a wide tax treaty network;
• Under the re-domiciliation provisions it is possible to migrate companies into and out of Malta without the need of winding up or liquidation costs;
• No exchange control regulations and business may be conducted freely in any currency.
• The submission of annual audited accounts to the Inland Revenue Department proves that the company is not a tax evasion structure;
• Complete anonymity of the beneficial owners;
• EU VAT number for EU Trading companies;
• No withholding taxes on distribution of dividends to the shareholders;
• No withholding taxes on interest, licence fees and royalties;
• 24 hour registration from the moment all documents are in hand;
• No requirement to have meetings in Malta;
• No disclosure of beneficial owners to the Company Registrar if using a fiduciary arrangement.
Malta is therefore well positioned as a growing financial centre of repute and the recent changes to our tax legislation will continue to enhance Malta's position as an efficient and effective jurisdiction for international business activities.