Startup Malta Foundation

We know that in recent years, especially thanks to the developments in the technology sector, there has been a serious competitive environment between countries to attract investors and entrepreneurs. We see that many countries have enacted encouraging legislation with the aim of turning investors and entrepreneurs their own way. Adding incentive laws to its advantages, Malta is one of the favorite countries of investors and entrepreneurs in the recent period.

So Why Malta?

• EU Membership

Malta has been a member of the European Union since May 1, 2004, and since 2007, it is one of the Schengen area countries that took its name from the Schengen Agreement. In addition, since 1 January 2008 the currency is the Euro, the common European currency.

It is an advantage that cannot be ignored that Malta is an EU country and can benefit from the economic advantages and incentives provided by the EU to its member states. Being an EU country and its official currency being the Euro, it ensures that all kinds of commercial relations with other EU countries are more comfortable.

• Tax System

When it comes to any venture plan, the tax system of the country of residence and the rate of tax to be paid on the profits, especially in the first stages, have an important place.

In addition, it is a country with many advantages in terms of taxation. Namely, the corporate tax rate in Malta is 35 percent on the annual profit. However, a tax refund system is applied to companies consisting of partners not residing in Malta in order to attract foreign investors to the country. The tax refund system can be expressed as the return of 30 percent of the company’s profit at the end of the fiscal year, after which 35 percent of the company’s profit is paid to the government as corporate tax. In short, the corporate tax rate for companies with foreign partners in Malta can be reduced to 5 percent after tax reductions are applied. This rate is compared to other European countries, Malta is a country that provides convenience in terms of corporate tax. In order to benefit from the tax refund system, the partners of the company must not reside in Malta and a dual company structure must be established.

In addition, the costs for the establishment of the company are also very low and the installation process takes place in 48 hours.

Thanks to the agreements Malta has signed with many countries, there is an exemption from double taxation. Moreover, thanks to the legislation it has on income obtained from abroad, even if there is no bilateral tax agreement with that country, incomes obtained outside of Malta are also exempt from tax. In this way, even if that country has no bilateral agreement with Malta, an exemption is provided on income earned in another country and these incomes are excluded from the scope of calculating the taxable amount.

In addition to the tax incentives the country has, the government in Malta plans to introduce a new tax deduction for people with an annual income of less than 60,000 Euros in 2018, especially in order to make it a more attractive country for entrepreneurs.

• Attitude of the Maltese Government
To establish a startup in any country, to move an already established startup to another country, or to invest in a company/enterprise located in another country; Looking at all of them in the long-term, it will be seen that the attitude of the government in that country is of great importance to all of them.

When it comes to Malta, it should be particularly noted that the government’s attitude towards attracting investors and entrepreneurs to the country and making it a center of attraction.

In Malta, encouraging plans are made for investors and entrepreneurs, as well as following the latest technological developments in the world by the government. For example, one of the 2018 plans of the Maltese government is to make Malta one of the key hubs of Blockchain technology.

Accordingly,

Establishment of Blockchain Laboratory within MITA (Malta Information Technology Agency),
Establishment of research and ICT Hub in Xewkija Industrial Zone and
Establishment of a web-portal as a communication point for related technologies,
These are just some of the 2018 plans announced by the government regarding technology. The government’s plans for Blockchain technology are not limited to these, but it is also planned to prepare and enact legislation on the subject. In this way, Malta aims to be among the first countries to have draft legislation on Blockchain.

Thanks to the government’s efforts to develop the country, Malta has become a country with stable economic growth. So much so that, according to the report of the National Statistical Institute, in the third quarter of 2017, the gross domestic product (GDP) grew by 7.2 percent. In this way, the fastest growth in the EU