Table of Contents Malta as a Tax Haven for Consultants: Why I Took the Leap Malta Non-Dom Status: The Key for International Consultants and Coaches Tax Planning Opportunities for Consulting Businesses in Malta Invoicing as an International Service Provider: A Practical Guide Malta Residency for Consultants: Requirements and Pitfalls Cost and Time: What Moving to Malta Really Costs My Experience: 18 Months as a Consultant in Malta Frequently Asked Questions Malta as a Tax Haven for Consultants: Why I Took the Leap When I moved my management consulting business from Munich to Malta in 2023, my colleagues thought Id spent too much time in the sun. Malta? Where even is that? The answers simple: right in the Mediterranean, right in the EU – and with a tax system that makes international consultants and coaches dream big. After 18 months on the island, I can tell you: The decision was spot on. Not just because of the 300 days of sunshine, but above all due to the tax opportunities Malta offers especially for consulting services. If you’re a coach, consultant, or trainer thinking about going international, read on. Why Malta is Especially Attractive for Consultants Malta has become a real hot spot for international service providers in recent years. That’s not just down to the Non-Dom Status (Non-Domiciled Status – a tax status for foreigners living in Malta but who aren’t Maltese by origin), but to a whole host of factors: EU Membership: Full EU rights, no restrictions English as Official Language: No language barrier with authorities Strong Financial Services Sector: Established infrastructure for international business Double Tax Treaties: Malta has over 70 DTAs worldwide Time Zone: CET – perfect for European and African clients The Difference to Other Tax Havens Forget Dubai, Cyprus or the Caribbean. Malta offers something most other jurisdictions don’t: Full EU membership paired with genuine tax advantages. As an EU citizen, you can settle here without visa stress or complicated residence permits. The key point: Malta is not your classic tax haven setup but a regular EU country with a legal, transparent tax system. That’s what makes the difference if you’re planning long-term and don’t want to constantly live in fear of changing laws. Who Malta Is Worthwhile For Not every consultant should move to Malta. The system works best for: International consultants with clients in various countries Coaches with a digital business model Trainers working mainly online Experts with passive income (licenses, royalties) Consultants with annual revenues above €150,000 If most of your clients are in Germany and your revenue is below €100,000, the costs of moving to Malta are likely higher than any tax savings. Malta Non-Dom Status: The Key for International Consultants and Coaches The Non-Dom Status is the heart of Maltese tax planning for international service providers. But beware: the term is often misunderstood. Non-Dom doesn’t mean “tax free”, it means “remittance-based taxation” – you only pay tax on income you remit to Malta. What Exactly Does Non-Dom Status Mean? As a Non-Dom Resident in Malta (Non-Domiciled Resident – someone who lives in Malta but isn’t Maltese by origin), you benefit from a special tax system: Maltese income: Taxed normally (15–35%) Foreign income: Only taxed if remitted to Malta Capital gains: Not taxed if realized abroad Minimum tax: €5,000 per year (since 2021) Sounds complicated? It is. Here’s an example from my own practice: I consult for companies in Germany, Austria and Italy. My fees go to a German business account. I only transfer the amount to Malta that I need for my living expenses – about €3,000 per month. Only these €36,000 are taxed in Malta, not my full €180,000 in consulting revenue. Requirements for Non-Dom Status Non-Dom status is granted automatically, so long as you meet the following conditions: Maltese tax residency: At least 183 days per year in Malta Non-Maltese origin: You were not born in Malta No Maltese domicile: Malta is not your permanent home Registration with tax authorities: Formal application required The third point is crucial: Domicile is a complex legal concept. Put simply, you retain your original domicile (usually Germany) as long as you don’t clearly intend to stay in Malta forever. The €5,000 Minimum Tax: What You Need to Know Since 2021, every Non-Dom pays at least €5,000 in tax per year – regardless of how little you remit to Malta. Sounds a lot, but compared internationally, it’s reasonable. Jurisdiction Minimum Tax Special Notes Malta €5,000 EU membership Cyprus €0 More complex rules Monaco €0 High cost of living Switzerland (Lump-sum) from 150,000 CHF Varies by canton Pitfalls of Non-Dom Status The most common mistake: Consultants think they can just run everything through a Maltese company and pay only 5% corporate tax. It doesn’t work if the business is primarily managed from Malta. Other pitfalls: Substance requirements: Shell companies don’t work Remittance timing: When is income considered “remitted to Malta”? Offshore accounts: Complex rules for third-country accounts German CFC rules: Can apply (Controlled Foreign Company rules) My tip: Invest in professional advice before you transfer the first euro. Maltese tax advisers know the pitfalls and can help you avoid costly mistakes. Tax Planning Opportunities for Consulting Businesses in Malta The real art isn’t in Non-Dom status alone, but in the smart combination of different strategies. After 18 months of digging deep into the Maltese tax system, I can tell you: There are several ways to the goal, but not all are equally safe. Understanding Malta’s Full Imputation System Malta has a full imputation system that’s unique internationally. In short: corporate tax is later credited against personal tax. For consultants, this opens up some interesting opportunities: Corporate tax: 35% on company profits Tax refund: 6/7 of paid tax refunded upon profit distribution Effective rate: 5% on distributed profits Sounds too good to be true? In a way – unless you’re careful. The system works only if certain criteria are met. Participation Exemption for Consulting Profits This is where things get interesting: Malta offers a participation exemption for certain foreign income. That means: profits from foreign holdings or licensing activities can be fully tax-free. Of note for consultants: Royalties: Sales of consulting methods or tools Intellectual property income: Earnings from IP Investment income: Dividends from foreign investments Capital gains: Sale of business shares Practical Structuring Models Model 1: Pure Non-Dom Structure You operate as a sole trader or via a foreign company. All income stays abroad, and only living expenses are remitted to Malta. Advantages: Simple, low-cost, flexible Disadvantages: Fewer structuring options, higher German tax risks Model 2: Maltese Company with 6/7 Refund You set up a Maltese Ltd and pay out profits. Thanks to the imputation system, your effective tax rate is 5%. Advantages: Low tax burden, EU-compliant structure Disadvantages: Substance requirements, higher costs Model 3: Hybrid Model with IP Holding A combination of a Maltese consulting company and an IP-holding for royalties. Advantages: Optimal tax rate, scalable Disadvantages: Complex, high setup costs What I’ve Learned After 18 Months The reality differs from what the tax advisers promise. Here are my honest findings: You’ll only achieve the 5% tax rate if everything is set up perfectly. In practice, you’ll end up at 8–12%, depending on your structure and substance. Still excellent, but be realistic in your expectations. Substance Requirements: The Key Issue Malta demands real economic substance locally. Specifically, this means: Office space: Not just a postal address, but real premises Staff: At least one qualified person on site Business activity: Key decisions must be made in Malta Board meetings: Regular shareholder meetings on site These requirements cost money. Budget at least €15,000–€20,000 per year for a substantial structure. Tax Risks and Safeguards The main risk is German CFC (Controlled Foreign Company tax rules). These apply if: You hold more than 50% of the Maltese company The company mainly earns passive income The tax burden is under 25% Ways to mitigate include: Treaty shopping: Use the Germany-Malta double tax treaty Proof of activity: Demonstrate real business operations in Malta Structural optimisation: Distribute company shares strategically Important: Get advice from both German and Maltese tax advisers. The rules are complex and change often. Invoicing as an International Service Provider: A Practical Guide Here’s where it gets down to business: How do you, as a consultant in Malta, invoice your services correctly? After endless talks with accountants, lawyers, and the Maltese tax office, I finally got the system. Spoiler: It’s more complicated than you might think, but doable. VAT in Malta: The Basics Malta’s standard VAT rate is 18%. But for consultants, there are various exceptions and exemptions: B2B services EU: Reverse charge – 0% VAT B2B services to third countries: Usually 0% VAT B2C services EU: Complicated – depends on various factors Local services Malta: 18% VAT The EU-VAT Nightmare for Coaches If you’re a coach or trainer working with B2C clients in the EU, you face a dilemma: EU VAT rules are a real maze. Here are the main pitfalls explained: Place of supply for consulting services: B2B: Location of the customer (reverse charge) B2C: Location of the service provider (Malta) – with exceptions Online courses: Electronic services – complex special rules Live trainings: Location where delivered In practice: For pure B2B consulting, the rules are manageable. As soon as you offer online courses, webinars or coaching programmes, things get complicated. MOSS vs. One Stop Shop: What You Need to Know for 2025 Since 2021, the One Stop Shop (OSS) system has replaced the old MOSS system. If Malta is your tax residence and you have EU-wide clients, you need to be aware of: Type of Service Threshold VAT Rate B2B Consulting Unlimited Reverse charge B2C Consulting local Unlimited 18% Malta B2C Online Services EU Above €10,000 Local VAT rate B2C Online Services EU Below €10,000 18% Malta How I Invoiced in Practice After 18 months, I’ve devised a system that is both effective and compliant: For German B2B clients: Invoice without Maltese VAT, with the note: Service subject to the reverse charge rule. The client is liable for VAT. The client pays their German VAT directly. For Austrian B2B clients: Same as Germany. Important: The client’s VAT ID must be on the invoice; otherwise, reverse charge does not apply. For German B2C clients: This is where it gets tricky. Pure consulting is billed at 18% Maltese VAT. Online courses may be subject to German VAT if sales exceed the €10,000 threshold. Invoicing Software and Tools These tools have worked well for me: Lexoffice: German software with Malta support Sevdesk: Good EU-VAT features Xero: International, Malta-compatible Sage: Professional, but expensive Important: Make sure your software is compliant with Maltese VAT requirements. Not all German tools can handle this. Special Notes on Currencies As an international provider, you’ll likely invoice in various currencies. Malta uses the Euro, but your clients may pay in CHF, USD or GBP. Tax-relevant exchange rate: ECB rate: Official reference rate Relevant date: Date of supply or invoice Documentation: Rates must be verifiable My tip: Use software that automatically pulls and documents ECB rates. It’ll spare you headaches with the tax office. Invoicing vs. Incoming Payments A common mistake: Consultants think tax is due once money arrives. Its not. In Malta, accrual accounting (Soll-Versteuerung) applies: Service provided = tax due Regardless of payment receipt Exception: Doubtful debts This means: You must pay VAT even if the client hasn’t paid yet. Factor that into your cash-flow planning. Malta Residency for Consultants: Requirements and Pitfalls In theory, getting Maltese tax residency is simple: Spend 183 days a year on the island, done. In reality, it’s not that easy. Based on both my own and other consultants’ experiences, there are pitfalls that can get expensive. The 183-Day Rule: More Than Just Presence Malta follows the classic residence test: spend more than 183 days per calendar year in Malta and you’re tax liable. Sounds simple, but the devil’s in the detail: Calendar Year: January 1st to December 31st, not 365 days from entry Presence days: Partial days count as full days Documentation: You must prove your presence Travel breaks: Short trips abroad don’t break residency My first year was a disaster counting days. I thought three days in Germany for work didn’t count. Wrong – the Maltese tax authority is very strict here. Alternative Residency Tests Malta also recognizes alternative routes to tax residency that can be relevant for consultants: Ordinary Residence Test: Habitual residence in Malta Even possible with fewer than 183 days Depends on personal and economic ties Center of Vital Interests: Center of life interests Family, home, business activity Can apply even below 183 days Important: These alternative tests can make you taxable in Malta even if you didnt plan for it. If you buy a property and run your business from there, it might be enough – even at only 150 days. Avoiding Double Tax Residency The main risk: You become taxable in both Germany and Malta. This can happen more quickly than you think, especially if you don’t plan the transition cleanly. Exit German residency: Deregister from your local authority: Official move abroad Give up your flat: Don’t just sublet Move your center of life: Family, friends, clubs Dissolve economic ties: Businesses, accounts, insurance Secure Maltese residency: Register with Identity Malta: Apply for residence card Rent/buy property: Official residence Open bank accounts: Local financial ties Tax registration: Apply for a tax number The Pitfalls of EU Freedom of Movement As an EU citizen, you can basically settle in Malta freely. Still, there are bureaucratic hurdles: Residence card: Required for stays over 90 days Must be applied for within the first 90 days Proof of financial resources required Processing time: 3–6 months Required documents: Valid ID card or passport Rental contract or property deed Proof of health insurance Proof of funds (approx. €14,500 per year) Police clearance certificate (no older than 6 months) Practical Challenges What the brochures don’t mention: Malta is a small country with limited infrastructure. You’ll notice this especially in the residence application process: Identity Malta Offices: Appointments are booked out for weeks or months Online booking system is often overloaded Processing times vary widely Inquiries are difficult My tip: Hire a local lawyer or adviser. They know the shortcuts and often have preferred access to appointments. Tax Registration Alongside the residence application, you’ll need to register with the Maltese tax office: Tax Compliance Certificate: Required for business activities Needed to open a bank account Must be renewed annually VAT Registration: Mandatory from €35,000 in sales Voluntary registration possible Essential for B2B business Pitfall: Returning to Germany If you ever want to return to Germany, things can get tricky tax-wise: Exit tax: Deemed sale of company shares Lock-in period: 5-year Non-Dom status provides some cover DTAA: Double tax treaty issues can arise Plan your exit when you enter Malta. It’ll save you a lot of money and stress down the line. Cost and Time: What Moving to Malta Really Costs Time for concrete numbers: What does it really cost to move to Malta as a consultant? After 18 months on the island, I can give you a breakdown. Spoiler: It’s pricier than I thought, but still cheaper than Switzerland. One-off Setup Costs The first shock comes with lawyer and consultant fees. Malta is a common law system – you need professional help: Item Cost Notes Tax advice (setup) €3,000–5,000 Structuring Lawyer (residency) €1,500–2,500 Residence application + documentation Company formation €1,200–2,000 If Ltd needed Bank account opening €500–1,000 Service fees Rental deposit €2,000–6,000 2–3 months’ rent Moving/furnishing €5,000–15,000 Depending on comfort level Total: €13,000–31,000 for a professional setup. Yes, that’s a lot. But compared with optimising for tax in Switzerland or setting up in Dubai, Malta is still moderate. Ongoing Annual Costs Here are the honest numbers from my own books: Professional services: Tax advice: €4,000–8,000 per year Bookkeeping: €2,400–4,800 per year Company secretary: €1,200–2,000 per year (for Ltd) Lawyer (ongoing): €1,000–3,000 per year Government fees: Minimum Tax (Non-Dom): €5,000 per year Company fees: €245 per year (for Ltd) Residence renewal: €230 every 5 years VAT returns: €0 (if self-filed) Cost of living: 2-bedroom rent: €1,200–2,500 per month Utilities: €200–400 per month Internet (fiber): €50–80 per month Groceries: €400–600 per month Car (optional): €300–600 per month The Hidden Costs Here’s what never shows up in brochures: Malta quality premium: Anything that actually works costs extra. Fast internet, reliable air conditioning, a mold-free apartment – expect a 30–50% premium over standard offers. Island markup: Electronics: 20–30% more expensive than Germany Quality tradesmen: Rare and pricey German products: Luxury at luxury prices Flights: For client meetings in Germany/Europe Time is money: Red tape: Everything takes twice as long Tradesmen appointments: “Between 8am and 6pm” is normal Internet outages: Happen more often than you’d expect Traffic: Jams are as bad as the island is small Break-even Analysis for Consultants When does Malta become worthwhile, financially? Here’s my math: Example: Business consultant, €200,000 annual revenue Scenario Germany Malta (Non-Dom) Savings Tax €75,000 €15,000 €60,000 Advisory costs €2,000 €8,000 -€6,000 Cost of living diff. €0 €6,000 -€6,000 Net savings €48,000 With €200,000 in revenue, you save roughly €48,000 per year. That clearly justifies the effort. With €100,000 in revenue, it’s another story: Tax savings: ~€20,000 Extra Malta costs: ~€15,000 Net savings: ~€5,000 Here, the business case is weak. That €5,000 in savings doesn’t justify the stress and lifestyle compromises. Time: The Underrated Factor Malta eats up time. That’s something you need to factor in: Year one: Setup phase: 2–3 months of intense work Red tape: 1–2 days per month Tax adviser: 2–3 hours per month Compliance: 5–10 hours per month Following years: Routine compliance: 2–4 hours per month Annual tax filing: 1–2 weeks Travel for German clients: 10–20 days per year As a consultant, your time is your most precious asset. Don’t forget to factor in these hours when calculating whether Malta is right for you. ROI Optimization: My Tips How to get the most out of your Malta move: Scale your business: Malta only makes sense above a certain revenue Invest in quality: Good advisers save you money in the long run Automate processes: Use software for accounting and compliance Leverage the location: Use Malta as a hub for EU/MENA business Plan your exit: Have a strategy for moving back for tax purposes My Experience: 18 Months as a Consultant in Malta Time for real talk: What’s it actually like to live and work in Malta as an international consultant? After 18 months on the island, I’ve seen the sunny side and the shadows. Here’s my honest account – no sugar coating. The First Shock: Welcome to Reality My first day in Malta was a disaster. The apartment that looked perfect online turned out to be damp, dark, and had Internet from the Stone Age. The landlord just said, Welcome to Malta! Yes – welcome to reality. Malta isn’t Germany with sunshine. It’s a southern European country, with all the pros and cons that brings. If you expect German efficiency and punctuality, you’ll be disappointed. The first three months were tough. Endless bureaucracy, communication issues despite English being the official language, and the feeling that everything needed explaining three times. Then the summer heat – I wasn’t prepared for 35°C in the office with the air conditioning down, again. Business Setup: Longer Than Planned My tax adviser had promised: “Six weeks and we’re done.” It ended up taking four months. Here’s the reality: Bank account opening: 8 weeks instead of the 2 promised Tried three different banks Endless documents submitted Face-to-face meetings at every level Ultimately settled for a German bank in Malta Tax number: 6 weeks instead of 1 Forms incorrectly filled (not my fault) System was “temporarily unavailable” Enquiries took weeks VAT registration: 12 weeks instead of 4 Documents “lost” Had to submit everything twice Phone support basically nonexistent Working in Malta: The Highs and Lows The advantages: Time zone: Perfect for EU clients, also covers North Africa/Middle East well Internet: When it works, it’s very fast (fibre up to 1 Gbit) Language: English works everywhere EU access: No visa hassle for client meetings Network: Lots of international businesspeople The disadvantages: Island isolation: Can be mentally tough in winter Infrastructure outages: Experienced power, internet, and water failures Summer heat: July/August makes focused work hard Traffic: Absurd for the island’s size Tradesmen: Getting things fixed is hit or miss Tax Reality vs. Theory I don’t achieve the advertised 5% tax rate. My real burden is about 8–12%, depending on the year. Here’s why: Substance costs: Office, staff, meetings cost money Minimum tax: €5,000 plus local taxes VAT payments: Up-front cash burden German CFC rules: Partial CFC taxation Still: 8–12% beats the German 42% plus solidarity surcharge any day. Lifestyle: Not Just Sun and Beaches What works: Weather: 300 days of sunshine aren’t a marketing gimmick Safety: Malta is extremely safe Food: Mediterranean cuisine at a high level History: 7,000 years of history on 316 km² Community: Big expat scene, international atmosphere What’s annoying: Size: Know every corner after 6 months Prices: Everything more expensive than expected Traffic: Rush hour on a 27km island Bureaucracy: Southern European casualness Summer: Too hot, too touristy, too crowded Client Reactions: Mixed Bag My German clients’ reactions to my Malta move varied: Positive: Wow, Malta! That’s cool. Can we do the next meeting at the beach? – Startup founder, Munich Skeptical: Is this just for tax reasons? Can you still take proper care of us? – Mid-size company CFO Neutral: We don’t care where you’re based as long as the quality’s right. – Board member, PLC Important: Be proactive explaining how Malta benefits your clients (time zone, EU access, international perspective). My Personal Assessment After 18 Months Would I do it again? Yes – but differently. What I’d do better: Longer trial period: 6-month test run before moving for good Better prep: More due diligence on apartment/infrastructure Realistic expectations: Malta isn’t Germany with sunshine Back-up plans: For internet outages, broken AC, etc. Social life: Invest more in local contacts My Advice for Other Consultants Malta works for you if: Your annual revenue is at least €150,000 Your clients are internationally distributed You’re flexible and adaptable You can handle southern European “chill” You don’t mind paperwork and costs Malta does NOT work for you if: You need German-style efficiency and punctuality Your business is rooted in Germany Your revenue is under €100,000 You can’t spare at least €15,000 for setup costs You’re not ready to commit for at least 2–3 years Bottom line: Malta is a real option for international consultants, but not a panacea. Tax advantages are real, but so are the challenges. Weigh it up, plan carefully – and keep your expectations realistic. Frequently Asked Questions About Malta for Consultants and Coaches Can I just move to Malta and work there as an EU citizen? Yes, as an EU citizen you have the right to free movement. But you need to register with Identity Malta and apply for a residence card if you stay longer than 90 days. Processing takes 3–6 months. What is the real tax burden for consultants in Malta? With Non-Dom status and optimal structuring, you’ll achieve a total tax burden of 8–12%. The advertised 5% is theoretically possible, but hard in practice. You’ll pay at least €5,000 minimum tax per year. Do I absolutely need a Maltese company? No, you can also work as a sole trader or via a foreign company. However, a Maltese Ltd offers tax advantages and more flexibility for structuring. How does VAT work for international consulting services? B2B services within the EU are subject to reverse charge – you invoice without Maltese VAT. With B2C services, things get more complicated. Online services can fall under the One Stop Shop system. What does a full setup in Malta cost? Expect €15,000–30,000 for a professional setup, including advice, company formation, bank account and initial setup. Ongoing costs are €10,000–15,000 a year. How long does the full setup take? Realistically, 4–6 months for a complete, functional setup. Bank account opening alone often takes 6–10 weeks. Allow more time than is promised. Can I continue serving German clients? Yes, but watch out for the CFC rules (Controlled Foreign Company taxation). For pure service activities, that’s usually not a problem; for passive income, it gets more complicated. Is Malta just a tax loophole or a secure long-term option? Malta is an EU member state with a regular, transparent tax system. It’s no tax trick, but legal tax optimization. The rules are stable but do change over time – as everywhere. What alternatives are there to Malta? Cyprus (more complex), Portugal (NHR scheme ending), Ireland (for large companies), Estonia (for tech). Malta remains one of the best EU options for consultants. Is Malta attractive for lower revenues? With less than €100,000 annual revenue, Malta usually doesn’t make sense. The fixed costs (minimum tax, consulting, higher living expenses) eat up any tax savings. From €150,000, it starts to get interesting.
