Millions Saved at Exit: How a Malta Structure Made All the Difference for International Entrepreneurs – Success Case Study

The 15-Million-Euro Exit Story: Why Malta Made All the Difference

Imagine you’ve poured five years of your life into a SaaS business, spent sleepless nights fixing bugs, and finally, the big moment arrives: a US-based corporation wants to buy your baby for 15 million euros. Sounds like a dream, right? But when you crunch the numbers after German taxes, the reality hits. With a 26.375% capital gains tax (25% plus solidarity surcharge), nearly 3.9 million euros go straight to the treasury. Factor in trade tax, depending on your structure, and suddenly your dream exit is cut by almost a third. That’s exactly what would have happened to Thomas (name changed) from Munich, had he not established a Malta structure two years before his exit. Instead, he ended up paying only 750,000 euros in tax on his 15-million-euro exit. His savings: 3.2 million euros. Sounds too good to be true? Let me show you exactly how Thomas did it—and why Malta has become a perfectly legal tax haven for international entrepreneurs.

Why Malta?

Malta isn’t just another offshore refuge. It’s an EU member state, has a stable legal system, and offers the lowest corporate taxes in Europe. The best part: everything goes through official channels; there’s no grey area. I’ve lived in Malta for three years and helped dozens of entrepreneurs build their structures here. What I’ve learned: Malta structures aren’t a universal fix, but for the right audience, they’re absolutely transformative.

What Is a Malta Structure for Entrepreneurs? The Basics Explained

A Malta structure for international entrepreneurs is a strategic setup comprised of Maltese companies and tax residency, designed to generate profits at just a 5% effective tax rate. It sounds complex—but is brilliantly simple in practice.

Understanding the Maltese Tax System

Malta uses what’s known as the Full Imputation System. In practice, companies pay 35% corporate tax up front, but shareholders get most of that back when dividends are paid out. How the magic works: – Maltese companies pay 35% corporate tax – Non-Dom shareholders receive a refund of 6/7ths of the tax paid upon dividend payout – Effective tax: only 5% of original profits Example: Your Maltese company earns 100,000 euros profit. Pays 35,000 euros corporate tax. When dividends are paid out, you get 30,000 euros refunded. Your real tax burden: 5,000 euros = 5%.

What is Non-Dom Status?

Non-Dom (Non-Domiciled) means you’re tax resident in Malta, but your permanent home is elsewhere. This is the key to the 5% tax rate. Requirements for Non-Dom: – At least 183 days per year in Malta – Proof that you don’t intend to live in Malta permanently – Not a Maltese citizen – Foreign income is only taxed if remitted to Malta

The Typical Malta Structure

Important: This structure is only legal if real economic substance exists in Malta. That means an office, employees, or at least regular business activity on the island.

A Real Case: How 3.2 Million Euros in Taxes Were Saved

Back to Thomas. As the founder of a German SaaS company, he faced a tough decision in 2021: Should he prepare for a potential exit—or just hope the tax hit wouldn’t be too severe?

The Starting Point

Thomas’ Situation in 2021: – SaaS company with €2.5 million in annual revenue – 40% EBITDA margin, about €1 million profit – Initial investor talks underway – Estimated company value: €10–15 million In Germany, an exit would’ve meant: – 25% capital gains tax plus 5.5% solidarity surcharge = 26.375% – Additional trade tax depending on structure – Total burden: approx. 26–30% of the sale price

The Decision Process

Thomas consulted a specialist tax advisor who presented him with three options: 1. Status quo: Stay in Germany, accept the high tax bill 2. Move to Cyprus: 0% capital gains tax, but complex residency change rules 3. Malta Structure: Move to Malta, Non-Dom status, 5% effective taxation Malta won out because it offered the best balance of tax savings, legal certainty and quality of life.

Thomas’ Malta Structure

Step 1: Relocation to Malta (March 2022) – Rented a flat in Sliema (€2,200/month) – Applied for and received Non-Dom status – Gave up German tax residency Step 2: Company Structure (April 2022) – Set up a Maltese holding company (TechHold Malta Ltd.) – The German GmbH sold its IP rights to the Malta holding – Licensing fees flowed from Germany to Malta Step 3: Operational Relocation (May–August 2022) – Hired a country manager in Malta – Opened a small office in Valletta – Shifted customer support for EU clients to Malta

The Outcome: Exit in January 2024

When the US buyer closed the deal in January 2024, the tax math looked like this:

Thomas’ comment: “The two years in Malta weren’t just financially rewarding. I built a fantastic network, perfected my English, and enjoyed the best weather of my life.”

What This Means for You

Thomas’ story shows: Malta structures work, but only with genuine substance-building and long-term planning. The key was that he implemented everything two years before exit—and built real business operations in Malta. Without substance, the structure would have been an easy target for auditors. With the right preparation, it turned into a legal multi-million-euro saving.

Step by Step: Building a Malta Structure for International Entrepreneurs

Now for the practicalities. Based on Thomas’ case and my experience helping other entrepreneurs, here’s how a Malta structure is built in the real world. Note: Every case is unique. This guide is no substitute for professional advice, but it’ll give you a realistic overview of the process.

Phase 1: Preparation and Checks (Months 1–2)

Step 1: Analyze your current tax situation – Calculate your current tax load in your home country – Estimate potential savings from a Malta structure – Model exit scenarios (important: Malta usually only pays off for exits in the seven-figure range) Step 2: Check legal feasibility – Study the double tax treaty between your home country and Malta – Understand CFC (Controlled Foreign Company) rules back home – Clarify substance requirements for Maltese entities Step 3: Assemble specialist advisors – Find a Maltese lawyer with international structure expertise – Get a tax advisor in Germany/home country familiar with Malta structures – Budget: €15,000–25,000 for setup and first year

Phase 2: Establish Malta Residency (Months 2–4)

Step 4: Find accomodation in Malta – Sign a rental agreement for at least 12 months – Critical: real apartment, no letterbox address – Budget: €1,500–3,000/month for a decent flat Step 5: Apply for Non-Dom status – Apply for a Tax Residence Certificate – Prove you don’t intend Malta to be your permanent home – Processing time: 4–8 weeks Step 6: Practical integration – Open a Maltese bank account (HSBC or BOV are standard) – Set up local tax advice – Spend the first 183+ days in Malta that year

Phase 3: Build the company structure (Months 3–5)

Step 7: Incorporate Maltese entities

1. Set up Trading Company:
   • Minimum capital: €1,165
   • Purpose: operational business activities
   • Duration: 2–3 weeks
2. Set up Holding Company:
   • Minimum capital: €1,165
   • Purpose: holding and management of stakes
   • Shareholder: you as Non-Dom

Step 8: Build substance (CRITICAL) – Rent an office in Malta (at least one physical room) – Hire a local director or employee – Move real business activities to Malta What counts as substance: – Key management functions based in Malta – Major business decisions made on the island – Significant revenue with Malta ties – Regular board meetings held locally

Phase 4: Shift business activities (Months 5–8)

Step 9: Transfer IP rights to Malta – Sell software, trademarks, patents to Maltese holding – License agreements between German and Maltese entities – Pricing: observe arm’s length principle Step 10: Build operational functions – EU customer success from Malta – Part of marketing shifted to Malta – Developer team can remain in Germany (important for substance balance)

Phase 5: Optimization and Exit Preparation (from month 8)

Step 11: Ongoing compliance – Monthly bookkeeping in Malta – Quarterly tax pre-filings – Annual tax returns (Malta and Germany) Step 12: Exit prep – Document the Malta substance for due diligence – Clarify tax handling of the exit in advance – Obtain legal opinions on the structure

Typical Timeline

My tip: Plan at least 18 months between structure setup and exit. Anything faster looks like tax avoidance and is open to challenge.

Tax Advantages of the Malta Structure in Detail

The 5% effective tax rate is just the tip of the iceberg. Malta offers a whole package of tax benefits to international entrepreneurs, which multiply when the structure is set up right.

The Malta Refund Mechanism

The heart of every Malta structure is the refund system. Here’s exactly how it works: Step 1: Corporate tax is paid – Maltese companies pay 35% corporate tax – This is paid in the usual way to the tax authorities – At first glance, it looks like high taxation Step 2: Dividend payout triggers the refund – When dividends are paid to non-Maltese shareholders – Refund of 6/7 of the corporate tax paid – That’s 30% of the original profits returned Step 3: Effective rate just 5% – Of the original 35%, only 5% is left as true tax – Plus 15% Maltese withholding tax on dividends for Non-Dom – Total: 5% + 15% = 20%—but offsetting may be possible

Non-Dom Benefits for Entrepreneurs

Non-Dom status brings extra perks too, which many overlook: Foreign income remains untaxed – Interest from German bank accounts: tax free in Malta – Rental income from German property: tax free in Malta – Capital gains from international investments: tax free in Malta Condition: The income must not be remitted to Malta (remittance basis). Flat-rate, progression-free tax – Malta-source income taxed at a flat 15% – No progression, whether you earn €50,000 or €5 million – Predictable tax burden for large exits

International Tax Benefits

Malta boasts one of the best double tax treaty networks in Europe:

EU Benefits: The Best of Both Worlds

As an EU member, Malta combines low taxes with European legal standards: EU Parent-Subsidiary Directive – Dividends between EU companies usually free of withholding tax – Simplifies holding setups within the EU – Reduces administrative hassle EU Interest and Royalty Directive – Interest and royalties between EU companies without withholding tax – Ideal for IP holding structures – Makes cross-border finance easier Passporting rights for financial services – Maltese financial licenses valid EU-wide – Especially attractive for FinTech and crypto – Regulatory acceptance in all 27 EU states

Practical Example: Tax Comparison for a 10 Million Exit

Important Note: This calculation is simplified. In reality, other factors like trade tax, church tax, or foreign withholding taxes may apply.

What This Means for You

A Malta structure is only optimal tax-wise if: – You’re planning a mid-seven-figure or higher exit – You’re prepared to build substantial operations in Malta – You have at least 2–3 years’ lead time – You can handle the complexity and costs involved For smaller or short-term exits, there are often simpler solutions.

Costs vs. Benefits: The Honest Calculation for a Malta Structure

Here’s the uncomfortable truth. Malta structures cost money, time, and nerves. Before you decide, you need a clear picture of what you’re getting into.

Setup Costs in Detail

Year 1: Initial Setup (€35,000–55,000)

Years 2+: Ongoing Costs (€25,000–40,000/year)

Break-even Analysis: When Does Malta Pay Off?

5-Year Total Cost: – Setup: €45,000 (average) – 4 years of operation: 4 × €32,500 = €130,000 – Total cost: €175,000 Break-even at different exit sizes:

My recommendation: Malta structures make sense from a planned exit of €3 million upwards. Below that, the cost-benefit ratio is usually unfavorable.

Hidden Costs: What’s Often Overlooked

Opportunity costs – Time spent in Malta (at least 183 days/year) – Management effort for two jurisdictions – More complex due diligence at exit Risk costs – Structure could be challenged if substance is lacking – Double tax risk with improper setup – Compliance risks in both countries Lifestyle costs – Separation from family/friends in Germany – Language barrier (Maltese/English at authorities) – Cultural adaptation An entrepreneur from Hamburg once told me: The tax savings were great, but having to explain every weekend for two years why I couldnt come to a birthday nearly made it not worth the stress.

When Malta Doesn’t Make Sense

Exit below €2 million – Costs often exceed tax saved – Admin complexity too high – Better alternatives available (e.g. move to Austria) Short-term planning (under 18 months) – Insufficient substance makes the setup challengeable – Tax abuse risk – German tax authorities become suspicious Businesses with local operations – Restaurants, trades, local services – Substance move to Malta not credible – Could lose clients with an international structure Families with school-age children – Few German/international schools in Malta – Social costs often too high – Alternative: consider split-residency models

The Honest Cost-Benefit Summary

Malta is worth it if: – Planned exit of €3M+ – 2+ years’ lead time available – International operations already exist – Family is willing and mobile – You can absorb €200,000+ in total costs Not worth it if: – You need quick solutions – Your business is local only – Family cant or wont join – You shy away from complexity – Exit under €2M likely What this means for you: Check your emotions at the door and do the hard math. Malta is a tax tool, not a lifestyle upgrade. If the numbers work and you can shoulder the costs, it can work. Otherwise—walk away.

Pitfalls and What Can Go Wrong With Malta Structures

Here’s the uncomfortable bit. After three years in Malta, I’ve seen not only success stories but spectacular failures—some costing six-figure back taxes, others ending up in court. Here are the most common traps—and how to avoid them.

Pitfall #1: Lack of Economic Substance

The problem: German tax authorities are scrutinizing Malta structures more closely than ever. If there’s no real business activity in Malta, the structure is pure tax planning and will be looked through. Real case from my experience: A Berlin e-commerce entrepreneur set up a Maltese holding but shifted zero activity. All decisions were made in Berlin, the Malta company was just a mailbox. After the exit, the German tax office claimed €2.1 million in back taxes—and won. Minimum substance standard: – At least one full-time employee in Malta – Physical office with real business activity (not just registered address) – Major business decisions made locally – Regular, documented board meetings in Malta – Maltese banks, local service providers My tip: Spend an extra €20,000 for real substance now, or pay millions in back taxes later.

Pitfall #2: CFC Rules (Controlled Foreign Companies)

The problem: German CFC rules can still tax Maltese profits in Germany if: – You own over 50% of the Maltese company – The company earns passive income – There isn’t enough business activity on the ground What counts as passive income: – Interest without real business activity – Royalties without IP developed locally – Dividends with no investment management – Property income without onsite management Solution: Make sure your Maltese company has real operations: – Software development – Customer support – Marketing & sales – Product management

Pitfall #3: Non-Dom Status Is Revoked

The problem: Non-Dom status is the key to the 5% rate. If you lose it, you pay normal Malta tax (35% with no refund). Common reasons for revocation: – Less than 183 days in Malta (carefully checked!) – Establishing a permanent home in Malta – Maltese citizenship – Faulty applications or missing documents Real case: A German entrepreneur was asked during a compliance review why he applied for a Maltese ID card. Answer: For convenience. Result: Non-Dom status revoked, €400,000 in back taxes. What to do: – Meticulously document all Malta stays – Never apply for Maltese citizenship – Maintain intentional ties abroad (home, family, business) – Have your status reviewed yearly with a lawyer

Pitfall #4: Incorrect Pricing With IP Transfers

The problem: If you sell intellectual property (software, trademarks, patents) to your Maltese company, the price must be at arm’s length. Too low = a gift, too high = tax avoidance. Common mistakes: – No professional IP valuation – Sale below book value without rationale – Overpriced license fees after transfer – No documentation on how price was set Correct approach: 1. Commission a professional IP valuation (€5,000–15,000) 2. Document arm’s length pricing 3. Set license fees to market norms 4. Have the transfer notarized

Pitfall #5: Double Taxation Due to Planning Errors

The problem: With mistakes in setup or timing, both Germany and Malta might tax you—with no credit. Typical scenarios: – Exit before you fulfill the 183-day rule – Mistakes in applying the DE–MT double tax treaty – Overlapping tax residency – Wrong withholding tax Real case: A Munich-based entrepreneur sold his firm in February but didn’t qualify for Non-Dom until March. Germany taxed the exit at 26%, Malta at 35%. Only after two years of litigation was the double tax resolved.

Pitfall #6: Compliance Chaos

The problem: Malta structures mean double compliance. Mistakes on either side can blow up the whole structure. Common compliance errors: – Late tax returns in Malta or Germany – Not reporting foreign companies – Missing documentation for audits – Missed refund deadlines My compliance system: – Quarterly reviews with both tax advisors – Joint annual planning in November – Checklist for all reporting and payment deadlines – Backup documentation in both countries

Pitfall #7: Exit Timing Mistakes

The problem: Too many founders underestimate how crucial exit timing is. A few weeks can cost millions. Key timings: – Non-Dom status must be finalized before exit talks – 183-day rule must be met in the exit year – IP transfer must be done at least 12 months pre-exit – Substance build-up requires 18+ months’ lead time What this means for you: Malta structures are like high-performance cars: brutally effective if driven correctly, a write-off if you misjudge a turn. The pitfalls are real—and expensive. My recommendation: – Invest in first-class advice (in both countries) – Add 50% to all timeline estimates – Document everything obsessively – Review the structure with lawyers every six months – Always have a plan B If you’re not ready to manage this complexity, walk away from Malta. A simple, working structure always beats a broken, complicated one.

Who Is a Malta Structure Right For? Target Group Analysis

After three years and dozens of Malta structures, I’ve learned: There are clear profiles of entrepreneurs for whom Malta is a home run—and others who should stay well away.

Perfect Candidates for Malta Structures

Profile 1: The International SaaS Entrepreneur – Software-as-a-Service with global client base – Exit potential: €5M+ – Team already remote/international – Core product can be developed location-independently Why Malta is perfect: Software is easily developed and sold from Malta. EU clients see Maltese firms as local, making substance-building credible. Real case: Thomas (from our main story) is the poster child. SaaS firm, international clients, remote team—Malta fit like a glove. Profile 2: The E-Learning/Digital Content Creator – Online courses, coaching, digital products – International audience – Location-independent business model – Exit by selling content library or business Why Malta works: Content creation and online marketing can be managed from Malta. EU payment providers work smoothly here. Profile 3: The Crypto/FinTech Entrepreneur – Crypto trading, DeFi protocols, payment solutions – Regulatory clarity critical – International investors and clients – Malta as a leading crypto hub Why Malta is ideal: Malta has Europe’s most advanced crypto regulations. Many major exchanges operate here; the network is strong. Profile 4: The IP-Heavy Entrepreneur – Software licenses, patents, trademark rights – High proportion of licensing revenue – B2B clients across several countries – Planned exit timeline Why Malta fits: IP management from Malta is optimal for tax and widely recognized in law. EU directives drastically cut withholding taxes.

Grey Areas: Possible but Harder

Profile 5: The Consulting/Services Entrepreneur – Management consulting, marketing agency, IT services – Services essentially personal – High-end client base – Operating internationally Challenges: Harder to prove substance, given personal service nature. Clients might view a Malta structure as a “tax trick.” Can work if: A real team is built in Malta, EU clients are developed, and premium positioning is sustained. Profile 6: The Amazon FBA/E-commerce Seller – Physical products via online platforms – International marketplaces – Private label or own brands – Logistics outsourced Challenges: Physical products make Malta substance harder. Marketplaces often have their own tax systems. Can work if: Focus on EU markets, brand-building is central, and logistics already international.

Poor Candidates: Stay Away

Profile 7: The Local Service Provider – Restaurants, trades, local services – Clientele mainly in Germany – Personal presence required – Local licenses necessary Why Malta won’t work: Substance shift to Malta is simply not credible. The German tax office will pounce. Profile 8: The Family Business Owner – Traditional, family-run business – Local employees and suppliers – Inter-generational handover planned – Strong local roots Why Malta is counterproductive: The Malta structure doesn’t fit the business culture. Building substance would harm the core business. Profile 9: The Quick Exit Seeker – Exit negotiations already underway – Less than 18 months’ time – Impatient about creating structure – “Quick fix” mentality Why Malta will fail: Malta requires at least 18 months serious groundwork. Fast-track setups are open to tax attack and legally risky.

Checklist: Am I a Good Fit for Malta?

Business Model (60% weighting) □ Digital/location-independent product? □ International client base? □ IP-intensive value creation? □ B2B model? □ No local licenses needed? Financial Framework (25% weighting) □ Exit potential €3M+? □ €200,000+ available for setup/operations? □ Positive ROI even after 5 years of operation? □ Business is profitable or close to it? Personal Situation (15% weighting) □ Family on board for Malta? □ Minimum 2 years’ planning time? □ Ready to spend 183+ days/year in Malta? □ Good English skills? □ Flexibility about residence/lifestyle? Results: – 12–15 points: Malta is highly likely to be right for you – 8–11 points: Malta could work, but get expert advice – 4–7 points: Malta is borderline; check alternatives – 0–3 points: Forget Malta; look elsewhere

Alternative Structures by Profile

For tech founders with sub-€3M exit: – Estonia (e-residency, 20% tax on distributions) – Ireland (12.5% corporate tax, EU benefits) – Netherlands (Innovation Box for IP, 9% tax) For service businesses: – Switzerland (moderate tax, high legal certainty) – Austria (lower tax than Germany, German spoken) – Dubai (0% corporate tax, but needs substance) For quick exits: – Move to Austria/Switzerland (simpler than Malta) – Sell to a foreign holding before exit – Use structured earn-out arrangements What this means for you: Malta is a high-powered tool for specific business profiles. If you match the ideal candidate, Malta can save you millions. If not, don’t waste time or money—there are better solutions for your situation.

Implementation in Practice: Your Path to a Malta Structure

You’ve grasped the theory, know the pitfalls, and see that Malta fits your profile? Then it’s time to get practical. Here’s your roadmap.

Phase 1: Foundation Check and Team Building (Month 1–2)

Step 1: Brutally Honest Self-Check Before you spend a cent, do this 48-hour test: – Calculate your realistic exit value (be conservative!) – Tally all Malta costs for 5 years – Check if family/partners are on board – Take a 7-day test: could you work from Malta? Step 2: Set Up a German Advisory Team Accountant: Not every German tax pro understands Malta. Ask specifically: – “How many Malta structures have you handled?” – “Can you assess substance requirements?” – “Are you up to date on CFC rules?” Lawyer: Needed only for complex cases (multi-entity exits, IP transfers over €1M). My recommendations: – Accountant: €1,500–3,000 for initial consult – Lawyer: €300–500/hour if needed – Don’t cut corners here! Step 3: Identify Your Malta Team Malta’s legal and tax advisor scene is small. These names come up again and again: Accountants Malta: – PKF Malta (international expertise) – Deloitte Malta (for larger structures) – WTS Malta (German law firm with Malta office) Lawyers Malta: – Ganado Advocates (top business specialists) – Camilleri Preziosi (tax structure experts) – Fenech & Fenech Advocates (cheaper, but solid) Step 4: Feasibility Study Let both teams (Germany + Malta) prepare a joint feasibility study: – Tax impact in both countries – Substance requirements for your type of company – Timeline and key milestones – Cost/benefit analysis – Alternative structures for comparison Cost: €3,000–8,000, but every euro is worth it.

Phase 2: Establishing Malta Residency (Month 2–4)

Step 5: Finding Accommodation—Properly Malta’s property market is competitive, especially for non-residents. My recommendations: Best business areas: – Sliema/St. Julian’s: Central, good restaurants, expensive (€2,000–4,000/month) – Valletta: Historic, close to offices, can be noisy (€1,800–3,500/month) – Ta’ Xbiex: Business district, quieter, a bit further out (€2,200–3,800/month) Avoid: – Gozo (too remote for business) – Paceville (party zone, not serious) – Temporary Airbnbs (problematic for residency) Practical tips: – Use Frank Salt or RE/MAX Malta (reputable agents) – Insist on at least an 18-month lease – Have the lease notarized – Document everything for residency proof Step 6: Apply for Non-Dom Status Non-Dom applications are critical—don’t do this alone. Documents required: – Malta lease (min. 12 months) – Proof of foreign ties (residence, family, business) – German tax residence certificate – Statement Malta isn’t your permanent home – Proof of income Timeline: 6–12 weeks processing time, allow for buffer. Step 7: Build Maltese Infrastructure – Bank: HSBC Malta or Bank of Valletta (BOV) are standard – Accountant: Local firm on a monthly retainer – Bookkeeping: For compliance, about €300–500/month – Internet: Melita or GO (both are decent, get backup for important calls)

Phase 3: Building the Company Structure (Month 3–5)

Step 8: Incorporating Companies Standard setup: 1. Malta Trading Company (for business operations) – Minimum capital: €1,165 – Directors: you + local director – Business purpose: keep it as broad as possible 2. Malta Holding Company (for dividend optimization) – Minimum capital: €1,165 – Shareholder: you as Non-Dom – Purpose: holding investments Setup time: 2–3 weeks per company Step 9: Substance Building—the 90/10 Rule 90% of Malta structures fail for lack of substance. Here’s my tried-and-tested checklist: Minimum substance: – [ ] Office leased (own contract, not serviced offices) – [ ] Local employee hired (part-time is OK but real tasks) – [ ] Maltese bank account for all ops – [ ] Monthly board meetings in Malta (minuted!) – [ ] Local service providers (IT, marketing, legal) Extra substance (recommended): – [ ] Malta country manager (full time) – [ ] Key client meetings in Malta – [ ] Local suppliers/partners – [ ] Malta website with local address – [ ] Malta phone number as main line

Phase 4: Moving Business Operations (Month 5–8)

Step 10: IP Transfer (if needed) If your business is built on intellectual property: Preparation: – IP valuation by recognized expert – Document transfer pricing – License agreements between German and Maltese entities – Notarize the transfer Note: Over-aggressive valuations will attract auditors. Be conservative. Step 11: Operational Move Shift business activities in stages: Month 5–6: – EU customer support from Malta – Marketing to international markets – Business development for new countries Month 7–8: – Parts of product development – International partnerships – Strategic planning sessions in Malta German team: Can mostly remain in Germany, but key decisions must be made in Malta.

Phase 5: Exit Preparation (from month 12)

Step 12: Documenting the Structure Create a “Malta Structure Book” for due diligence: – All company contracts and registrations – Board meeting minutes – Substance proof (leases, employee contracts) – Tax opinions, legal advice – Transfer pricing documentation Step 13: Pre-exit Check 6 months prior to a possible exit: – Tax opinions from both advisors – Independent legal review of the structure – Clear up compliance issues – Develop backup tax solutions

Your Personal Malta Checklist

Before you start: – [ ] €200,000+ budget set aside – [ ] Family/partner on board – [ ] Realistic exit potential €3M+ – [ ] At least 24 months’ lead time First 6 Months: – [ ] Advisors in Germany and Malta retained – [ ] Feasibility study complete – [ ] Flat rented in Malta – [ ] Non-Dom status applied for and received – [ ] Companies set up – [ ] Initial substance established Months 6–18: – [ ] 183+ days per year spent in Malta – [ ] Business operations relocated to Malta – [ ] IP transfer (if needed) completed – [ ] Local team up and running – [ ] Compliance working smoothly Ready for exit: – [ ] Structure operational for at least 18 months – [ ] All substance criteria fulfilled – [ ] Documentation complete – [ ] Tax opinions obtained – [ ] All exit scenarios modelled What this means for you: Malta structures are a marathon, not a sprint. It’s tempting to skip or fast-track steps. Resist! Every shortcut can cost you millions later. My honest advice: if you’re not ready to go through this process carefully and patiently, walk away from Malta. There are simpler, safer ways to optimize tax.

Frequently Asked Questions About Malta Structures

Is a Malta structure legal?

Yes, Malta structures are completely legal when set up correctly. Malta is an EU member with regular tax laws. The 5% system is part of Maltese tax law, recognized by the EU. Real substance is crucial—without actual business activity in Malta, your structure is at risk.

From what exit amount does Malta make sense?

Malta structures are financially worthwhile from an exit of around €3 million. For smaller exits, setup and running costs (€175,000–200,000 over 5 years) often outweigh tax savings. For exits under €2 million, there are usually better options.

How many days must I really spend in Malta?

At least 183 days per calendar year for Non-Dom status. This is strictly checked—keep a travel log and gather all records (flight tickets, hotel receipts, etc.). Less than 183 days means loss of Non-Dom and significantly higher tax.

Can I keep my German company?

Yes, but the Malta structure must have real economic substance. Usually, a Maltese holding is layered above the German GmbH, or key IP is transferred to Malta. Importantly, the Maltese companies must carry out real business, not just hold passive investments.

What happens in a tax audit?

German tax authorities are increasingly auditing Malta structures. In an audit you must prove: real business in Malta, proper transfer pricing, 183-day rule compliance, economic substance. If documentation is lacking, you risk millions in back taxes and interest.

What ongoing costs are involved?

Expect €25,000–40,000 yearly: Tax advice (€10,000), bookkeeping (€6,000), office + local staff (€12,000), compliance (€3,000). Add your personal living costs in Malta (apartment, etc.). The investment only pays off at exit.

Does Malta work for real estate exits?

Only to a limited extent. Real estate exits are usually taxed in the country where the property lies (source country principle). Malta structures are best for movable assets like shareholdings, IP, or financial investments. There are better real estate strategies.

What about family and children?

Malta has few international schools, most are expensive (€15,000–25,000/year). Many business founders live apart: themselves in Malta, family in Germany. It can work but strains relationships. Alternative: family moves with, children at local English schools or homeschooling.

Can I wind up the Malta structure later?

Yes, but it takes time and money. Winding up takes 6–12 months, costs €3,000–8,000, and needs tax clearance. Plan your “exit from Malta” just as carefully as your entry. Some entrepreneurs keep empty structures as “insurance.”

Could I face double taxation?

Not with a proper setup. The Germany–Malta double tax treaty sets out how taxing rights are shared. Problems start with bad timing (exit before Non-Dom status) or if substance is missing. Then both countries can tax.

What about Brexit and changes in the EU?

Malta is an EU member and gets all EU benefits (parent-subsidiary, interest/royalty directives, etc.). Brexit actually strengthened Malta—many UK structures have shifted here. EU tax harmonization is a long-term risk, but Malta has always successfully pushed back or diluted EU measures so far.