A holding company in simple terms is a company that doesn’t have any operations or activities. However, a holding company is created to hold, own and protect assets. Holding companies also let individuals and investors protect their personal assets. This is called a Personal Holding Company (PHC). Their assets are protected because the corporation technically holds those assets, and not by the person. Therefore, shielding the individual or investor from potential liabilities and risks.
A personal holding company in Malta generally consits of assets that produce a passive income. However, investors can also protect their personal assets in a PHC. Assets can include:
- Real Estate Holdings
- Fixed Assets
- Private Aircraft
- Pleasure Yacht
- Investments
- Bank Accounts
- Intellectual Property
- Dividends
- Royalties
- Income from Estates and Trusts
Personal Holding Companies in Malta offer fantastic tax planning and strategic planning opportunities for investors. Here are four benefits of having a PHC in Malta.
By structuring a personal holding company correctly, you’re protected not only the parent company but also, limits loss if a subsidiary were to fail.
The Malta tax system is designed to attract investors and high net worth individuals. There is no inheritance tax, no gift tax and no wealth tax in Malta. Moreover, Stamp Duty is only applied to the transfer of an immovable property (5% tax rate) and the transfer of marketable securities (2% tax rate).
Furthermore, for income generated from a passive nature, investors could be elegible for a 5/7th tax refund, lowering the effective tax rate on profits to 10%.
By consolidating all assets within one group, it allows for greater efficiency in reporting obligations.
When a person sets up a personal holding company, the investor who holds the assets at the time of death can transfer the assets to the heirs in a simple and effective process. This helps a family avoid the probate process.
Creating a Personal Holding Company in Malta can be a very simple and straightforward process. Contact us for a free no-obligation consultation and we will discuss any queries you have. Enquire with our team directly by filling out our short enquiry form below and we will get back to you within 24 hours.
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