MTOperating in Malta
Payroll, accounting, employment, immigration, entity setup, and corporate compliance managed locally through a single international coordination model.
Request a country assessmentThe regulatory landscape
Malta taxes resident companies at a flat 35% on worldwide profit — the highest nominal corporate rate in the EU. The mechanism that makes this headline figure misleading on its own is the full imputation and refund system: once a company distributes dividends after paying the 35% tax, shareholders can claim a refund of 6/7ths of that tax for trading income (5/7ths for passive interest and royalties, 2/3rds for certain other categories), bringing the effective combined rate down to approximately 5% for most operating businesses. Since 2025, companies may instead elect the Final Income Tax Without Imputation (FITWI) regime — a flat 15% rate with no refund mechanism — a simpler alternative for companies that prefer not to navigate the refund claim process.
This system has been legally and politically vetted for decades, but it has also drawn increased scrutiny in 2026: Maltese tax authorities have tightened requirements around "letterbox" companies, requiring genuine evidence that commercial decisions are made in Malta, alongside stricter Controlled Foreign Company and transfer pricing documentation rules. Companies relying on the refund system without demonstrable local substance face a real risk of refund denial and investigation.
Official language
Maltese, English
Legal forms
Private limited company · Public limited company
Corporate tax rate
35% nominal · ~5% effective for trading income via 6/7 shareholder refund · 15% flat under FITWI (no refund, since 2025)
Currency
EUR
Employer social security
Fixed weekly amount, matched by employer — up to ~€50/week each (2026), not percentage-based
VAT rate
18% standard — among the lowest in the EU
Minimum directors
1 for private companies, 2 for public companies — non-resident company secretary permitted
Integrated services in Malta
Each service is delivered as part of an integrated service model, coordinated across functions under a single point of accountability. Clients engage one team, not a coordination layer between independent providers.
Accounting & Tax Compliance
Statutory accounts (audited), corporate tax filings, and shareholder refund claim documentation aligned with Maltese standards, including substance and transfer pricing compliance.
Explore Accounting & Tax CompliancePayroll & Workforce Management
Full-cycle Maltese payroll including fixed-amount social security contributions, income tax withholding, and employment terms under Maltese labour law.
Explore Payroll & Workforce ManagementCompany Formation & Entity Setup
Private and public limited company incorporation, Malta Business Registry filing, and post-formation compliance setup including refund-system or FITWI regime election.
Explore Company Formation & Entity SetupWorkforce Mobility
Work permit and residence programme coordination, including Global Residence Programme and Nomad Residence Permit pathways where relevant to company structuring.
Explore Workforce MobilityClient profiles in Malta
HR & Employment Advisory
Multinationals establishing or restructuring Maltese operations
Company Formation & Entity Setup
Holding companies and trading entities evaluating Malta's refund system for effective tax planning
Workforce Mobility
Companies entering Malta for the first time, requiring entity setup and initial compliance infrastructure
Payroll & Workforce Management
Companies already operating in Malta consolidating fragmented HR, payroll and accounting providers under a single governance layer
At the center of your HR operations
What clients say about our services in Malta
We had assumed our effective rate would simply be 5% once we set up in Malta, without realising the refund claim required us to demonstrate that real commercial decisions happened here, not just our registered address. Building that substance properly from the outset, rather than retrofitting it after a refund question, made the whole structure far more defensible.
Finance Director, Holding Group — Maltese OperationsInsights on Malta
Selected articles on regulatory developments and operational frameworks relevant to companies in Malta.
The full imputation system refunds part of the tax paid when profits are distributed, and the fraction depends on the income type. The mechanism step by step, with the three refund fractions.
Read articleRefund claims increasingly turn on evidence that commercial decisions are genuinely taken in Malta. What documentation supports the claim, and what undermines it.
Read articleThe traditional 6/7 refund route and the flat 15% FITWI alternative reach different outcomes depending on income type and shareholder position. How to compare them.
Read articleFrequently asked questions
Questions raised most often by companies entering or operating in Malta.
What services does HTLC Network provide in Malta?
HTLC Network provides Payroll & Workforce Management, Accounting & Tax Compliance, HR & Employment Advisory, Company Formation & Entity Setup, and Workforce Mobility services in Malta through a coordinated international service model.
Why do international businesses choose Malta?
Malta is often selected for international operations for its EU membership, its English-speaking business environment and its strong services sector.
Can I hire employees in Malta without creating a Maltese company?
In some situations yes. Employment, payroll, tax and registration obligations should however be assessed before hiring local staff.
What payroll obligations apply in Malta?
An employer generally manages income tax withholding, social security contributions, payroll reporting and employee registration requirements.
How does Malta's tax refund system actually work?
A Maltese company pays the standard 35% corporate tax on its profits. Once dividends are distributed, shareholders can claim a refund — typically 6/7ths of the tax paid for trading income — bringing the combined effective rate down to roughly 5%. The system has operated for decades and is fully compliant with EU and OECD standards, but requires correct documentation of the dividend distribution and refund claim.
What is the FITWI regime and when should a company choose it?
Final Income Tax Without Imputation, available since 2025, lets a company pay a flat 15% rate with no refund mechanism at all. It suits companies that prefer filing simplicity over the lower effective rate, or whose shareholder structure makes the refund process more complex than the FITWI alternative.
What does Malta mean by "substance" for refund purposes?
Maltese tax authorities require evidence that genuine commercial decisions — board meetings, management activity, operational direction — actually take place in Malta, not merely that the company is registered there. Companies unable to demonstrate this risk having their refund claims denied, reverting effectively to the full 35% rate.
Are Maltese social security contributions percentage-based?
No. Unlike most EU markets, Malta calculates social security contributions as a fixed weekly amount — up to approximately €50 per week for 2026 — matched equally by employer and employee, rather than as a percentage of salary. This makes employer cost predictable regardless of an employee's actual compensation level.
Talk to a Malta expert
For companies structuring a market entry or consolidating an existing Maltese operation under a single governance model.