OECD implemented BEPS (Base Erosion and Profit Shifting) to curb the use of tax avoidance strategies that exploit gaps and mismatches in tax rules to avoid paying tax. As an OECD jurisdiction, Malta abides by this legislation. Therefore, if you’re a foreign entity looking at Malta company formation and registration, you need to consider what substance you require when setting up your Malta company.
Without a confirmed definition of the management and control requirement, Papilio Services recommend the below measures when setting up a Malta Company:
However, it would help if you considered that different jurisdictions and countries vary with what substance they require when setting up a corporate structure. Therefore, we suggest taking a tailor-made approach according to the operations of the company.
Here are Papilio Services tips to producing substance when planning to set up a new corporate structure or a Malta holding company.
Malta substance requirements will increase the costs for a company that lacks substance. However, being challenged by the tax authorities for the lack of substance will, without a doubt, be more costly and damaging in the future.
As Malta Company Formation specialists, our primary focus is that all businesses we advise in Malta are up to the highest level of compliance in order to reduce future issues. Contact our Malta tax advisors today for our opinion on how you can gain substance for your business in Malta but also how you can be as compliant as possible.