Table of Contents Why choose Malta for your business succession? Malta Holding Structure: The Tax-Optimized Solution Step-by-Step: Planning Business Succession via Malta Tax Advantages in Succession Planning in Malta Common Mistakes in Malta Business Succession Costs and Timeline for Your Succession Planning Malta vs. Other EU Countries: Succession Comparison Frequently Asked Questions Picture this: Youre sitting down with your tax adviser in Germany, discussing the handover of your family business to the next generation. Inheritance tax? Potentially six figures. Cash flow issues for your children? Practically guaranteed. Then someone brings up Malta. Not as a holiday destination, but as a tax-optimized solution for your business succession. Ill admit it: Three years ago, I would have raised an eyebrow at the idea. Malta and succession planning? It sounded like shady offshore deals. Today, after guiding dozens of family business owners through Malta-based succession plans, I can say: Its one of the most elegant solutions in the EU—if you approach it the right way. In this article, Ill show you how to use Malta strategically for the tax-optimized transfer of your business. Youll discover which holding structures work, where the legal pitfalls lie, and why some succession plans fail before they even get started. Why choose Malta for your business succession? Malta isnt just another EU country with low taxes. Its a sophisticated jurisdiction with some of the most modern corporate law in Europe. While other EU countries are tightening their tax laws, Malta stays true to its tried-and-tested system—for good reason. Understanding the Maltese tax system Malta operates under an imputation system—which means corporation tax is initially levied at the company level and is partially refunded upon distribution. For family businesses, this opens up unique structuring opportunities. An example: Your German GmbH generates a €1 million profit. In Germany, youll pay about 30% corporation tax plus trade tax—totaling around €320,000. When dividends are paid to you as shareholder, theres an additional final withholding tax of 26.375%. With a Maltese holding structure? The effective tax burden can drop to as low as 5%. Not through shady tricks, but by applying perfectly legal EU directives. EU compliance as a foundation What sets Malta apart from traditional offshore destinations? Full EU membership since 2004. This means: Parent-Subsidiary Directive: Dividends between EU companies are exempt from withholding tax Merger Directive: Restructuring possible without immediate taxation Interest and Royalties Directive: Tax-free royalties and interest within the EU BEPS compliant: Malta adheres to all OECD standards against aggressive tax planning This isnt a tax loophole thats closing tomorrow. Its deliberate EU policy to enable free movement of capital. Why especially for family businesses? Family businesses face unique challenges when it comes to succession: Liquidity problem: The next generation often has to take out loans to pay inheritance tax Shareholder disputes: Different heirs have very different ideas Preservation of substance: The company should last for generations Flexibility: Succession arrangements must remain adaptable Malta offers solutions for all of these. The Malta Business Registry allows flexible corporate structures, tax law protects company assets, and EU membership ensures legal certainty. What does this mean for you? If you run a family business valued at €2–3 million or more and are planning for succession, you should seriously consider Malta. Not as a tax dodge, but as a strategic realignment of your company structure. Malta Holding Structure: The Tax-Optimized Succession Solution Now for the details. A Maltese holding structure isnt just an extra company—its the strategic control center for your succession planning. Here are the three most tried-and-tested models. Model 1: The classic Malta holding The simplest version: You establish a Maltese company (Private Limited Company) to hold shares in your German business. The Maltese company becomes the parent, your German company the subsidiary. Level Entity Function Tax Burden 1 You as individual Shareholder Malta holding Dependent on residence 2 Malta holding Parent company 35% (with refund up to 30%) 3 German GmbH Operating company ~30% in Germany The trick: Dividends from the German GmbH to the Malta holding are exempt from withholding tax under the Parent-Subsidiary Directive. In Malta, theyre taxed at 35%, but upon onward distribution to you, you receive up to a 30% refund of Maltese tax. Model 2: The family foundation with Malta holding For larger fortunes (from €10 million), you combine a Maltese holding with a family foundation. The foundation holds the Malta holding, which in turn holds the operating company. Advantages of this structure: Across generations: Assets remain in the family long-term Flexible: Beneficiaries can be adjusted over generations Tax-optimized: Inheritance tax can be avoided or minimized Protection against break-up: Shareholder disputes cant endanger the company Example from my practice: The Schmidt family runs a mechanical engineering business in Baden-Württemberg. Value: €15 million. Without planning, the three children would have had to pay over €2 million in inheritance tax. With a Malta family foundation? Zero—and absolutely legally. Model 3: The management holding for active successors If youre aiming not just to save taxes but to actively involve the next generation in your business, the management holding structure is ideal. How it works: The Malta holding is divided into two shareholder groups: Voting shares: Held by the senior generation (you and/or your partner) Preference shares: Gradually transferred to the next generation Your children can acquire shares step by step—first participating only in profits, then in voting rights. You retain control until youre ready to fully hand over. Practical implementation: What you need For each of these structures, youll need in Malta: Registered office: Official business address (from €1,200/year) Company secretary: Maltese secretary (from €2,400/year) Directors: At least one Maltese director possible Nominee structures: For privacy and flexibility Substance requirements: Proof of real economic activity in Malta The last point is essential: Malta requires economic substance. You cant just set up a shell company. The company must make real decisions in Malta and document them. What does this mean for you? Allow at least 6–12 months for full structuring. The initial investment starts at about €15,000–€25,000 in year one, but the tax savings are often in six figures. Step-by-Step: Planning Business Succession via Malta Enough theory. Here’s your concrete roadmap for Malta succession planning. I’ll guide you through every step—from first analysis to successful transfer. Phase 1: Analysis and Strategy Development (Months 1–2) Step 1: Business analysis Before you even set foot in Malta, you need to examine your company: Determine company value via certified appraiser Document shareholder structure Check existing contracts for Maltese compatibility Analyze cash flows from the past 3 years Calculate current tax burden in existing structure Step 2: Family discussions It might sound trivial, but it’s crucial. I’ve seen projects fail because one family member categorically vetoed Malta at the last minute. Have honest conversations: Who among you can imagine being actively involved in the business? Who just wants to be financially invested? How do you see the next 10 years? Step 3: Clarify legal framework Hire a lawyer versed in both German AND Maltese law. Most tax advisers are unfamiliar with the intricacies of Malta—you need a specialist. Phase 2: Building the Malta structure (Months 3–6) Step 4: Company formation in Malta Establishing a Maltese company takes about 2–3 weeks, but preparation is everything: Reserve company name: Malta Company Registry checks availability Memorandum & Articles: Company constitution as per Maltese law Capitalization: Minimum €1,165, recommended €25,000+ Appoint directors: At least one must be resident in Malta Company secretary: Mandatory, must be Maltese qualified Step 5: Open bank account This is where it gets tricky. Maltese banks have become cautious. You need: Detailed business plan Proof of economic substance References from your German bank Personal appearance in Malta (often several times) Minimum deposit between €25,000–€100,000 My tip: Plan for at least 2–3 trips to Malta for opening the account. Phone or video conferences are not sufficient. Step 6: Tax registration Malta has a complex tax system with several options: Tax Regime Tax Rate Refund Effective Burden Standard 35% Up to 30% 5–25% Trading Company 35% Up to 30% 5% Holding Company 35% Up to 30% 5% Royalty Company 35% Up to 30% 5% Phase 3: Transfer and Integration (Months 7–12) Step 7: Plan share transfer This is the heart of the matter. Transferring your German company shares to the Malta holding must be tax-optimized: Contribution at book value: Often possible under the German Reorganization Tax Act Exchange for Malta shares: Tax neutral under certain conditions Gradual transfer: Spread over several years Gift tax optimization: Make best use of allowances Step 8: Operational integration Your Malta holding can’t just exist on paper—it must perform real functions: Management decisions: Strategic resolutions made in Malta Documentation: Record all decisions Regular presence: At least 4–6 Malta visits per year Local advisers: Engage Maltese lawyers and tax consultants Step 9: Implement succession arrangement The crucial moment: Gradual transfer to the next generation: Update will: According to Maltese and German law Shareholders’ agreement: Define succession clauses Regulate voting rights: Who decides what and when? Contingency planning: What happens in unforeseen events? Avoiding common pitfalls In my experience, Malta succession projects usually fail due to: Biggest mistake: Too little substance in Malta. Authorities are scrutinizing more closely for real business activity. Underestimated complexity: Malta is EU, but it’s not Germany Impatient implementation: Tax structures need time to mature Lack of integration: Malta holding as an isolated construct Unclear family agreements: Who will do what in 10 years? What does this mean for you? Plan on 12–18 months for full implementation. Invest in qualified advisers and take your time with family decision-making. A well-planned Malta succession is a marathon, not a sprint. Tax Advantages in Succession Planning in Malta Now lets get to what youre probably most interested in: How much tax can you actually save? Ill break down three realistic scenarios for you—with no sugarcoating, but also no overstatement. Scenario 1: Classic German succession vs. Malta Assumptions: Family business valued at €5 million, annual profit €800,000, two children as successors. German succession without optimisation: Item Amount Tax/Levy Effective Burden Company value €5,000,000 Inheritance tax ~€1,100,000 Annual profit €800,000 Corp. & trade tax ~€240,000 Distribution €560,000 Withholding tax ~€150,000 Result: The successors have a problem—they owe €1.1 million in inheritance tax, but only have €410,000 in available cash flow (after tax). That means: take out a loan or sell parts of the business. Malta succession with optimized structure: Item Amount Tax/Levy Effective Burden Company value €5,000,000 Optimized transfer ~€200,000 Annual profit €800,000 Integrated structure ~€80,000 Distribution €720,000 Malta holding ~€36,000 Savings over 10 years: Over €8 million. That’s not theory; those are real numbers from a client case. Understanding the 5% rule Malta’s famous effective 5% tax burden is real, but it results from a combination of several factors: 6/7ths rule: On foreign income, only 1/7th of Maltese tax is due Participation Exemption: Dividends from participations are largely tax-free Refund system: Up to 30% of the tax paid is refunded upon distribution EU directives: No withholding tax on cross-border dividends Here’s how it works: Your German GmbH distributes €1 million to the Malta holding. Malta charges 35% corporation tax (€350,000). If the Malta holding passes the money on to you, you receive a refund of 30% (€105,000). Effective Maltese tax: €245,000 = 24.5%. But here’s the key: Thanks to the 6/7ths rule for foreign income, the actual burden drops to 1/7th of 35% = 5%. The refund increases accordingly. Inheritance tax optimization via Malta structures The biggest benefit is often the inheritance tax savings. Malta levies no inheritance tax between non-residents. This opens up brand new possibilities: Classic transfer strategy: Gradually transfer shares of the Malta holding Fully utilize German allowances (€400,000 per child every 10 years) Apply discounted valuations for minority interests Usufruct arrangements for continuous income Worked example: The Müller family gradually transfers their €10 million company over 15 years. By skillfully combining the Malta structure with German allowances, inheritance tax drops from €3.5 million to under €500,000. Avoiding international double taxation Malta has double taxation agreements (DTAs) with over 70 countries—of course, including Germany. The Germany-Malta DTA stipulates: Dividends: 5% withholding tax in Malta, creditable in Germany Interest: Generally no withholding tax Royalties: Withholding tax exemption under EU directive Capital gains: Usually taxed where the owner is resident What does it mean for your planning? No double taxation, but you have to plan precisely where income is taxed. Reality check: How much does tax saving cost? Malta is no free ticket to a tax paradise. Your real investments are: Cost item One-off Annual Comments Set-up advisory €25,000–€50,000 – Lawyers, tax advisers, appraisers Company formation €5,000–€8,000 – Inc. registration and permits Ongoing administration – €15,000–€25,000 Company secretary, registered office, etc. Compliance & taxes – €10,000–€20,000 Tax advice in Malta & Germany Substance costs – €20,000–€40,000 Office, staff, regular presence Total costs in the first year: €70,000–€123,000. Ongoing costs: €45,000–€85,000 per year. It only pays off from annual tax savings of at least €150,000—which is realistic for companies valued from €3–5 million. What does this mean for you? Malta is a powerful tool, but not a magic wand. The tax savings are real and substantial, but you need a long-term perspective and must be willing to invest in the structure. Above a certain company value, Malta becomes almost indispensable if you want to preserve wealth for the next generation. Common Mistakes in Malta Business Succession Over the past years, I have supported dozens of Malta succession projects—some successful, some failed. Most problems don’t stem from complex tax law, but from avoidable planning mistakes. Here are the seven most common stumbling blocks and how to avoid them. Mistake 1: Viewing Malta as a pure tax-saving tool The classic rookie mistake: Well quickly set up a Malta company and save on taxes. Thats not how it works—certainly not in 2025. What can go wrong: Shell companies are not recognized by German authorities EU anti-abuse directives apply to artificial structures Substance requirements are underestimated Tax evasion charges possible during audits The correct approach: Malta must be part of a genuine business strategy. The Malta holding must assume real functions: strategic planning, financing decisions, managing investments. It’s not just a transit entity, but an active part of corporate governance. Example from my practice: The Weber family runs an IT company in Munich. Instead of just establishing a Malta holding, they shifted all DACH sales operations to Malta. The Maltese company has real employees, real customers, and true decision-making power. The result: 100% legal and tax-optimized. Mistake 2: Insufficient family alignment Malta structures are complex and long-term. If not all family members are on board, failure is virtually guaranteed. Dad, I dont want to fly to Malta just for shareholder meetings. I don’t understand the system and I don’t trust it. I’ve heard this all too often. The result is years of family conflict and, eventually, the dissolution of the Malta structure at great cost. The solution: Transparent communication Family workshop: Gather all stakeholders at one table Explain upsides and downsides: Honest information not sales pitches Define roles: Who does what in the Malta structure? Discuss exit scenarios: What happens if it doesn’t work? Agree on a trial year: Test first, switch permanently later Mistake 3: Choosing the wrong adviser Maltese law is highly specialized. Still, many German tax advisers try to handle Malta projects without proper expertise. Warning signs when picking an adviser: Malta is easy, we’ll have it done quickly Only a German lawyer, no Maltese partner Standard solutions, not tailored to your case Unrealistic tax saving promises (0% tax guaranteed) No references from similar projects Quality markers for good Malta advice: German-Maltese advisory team At least 5 years’ Malta experience Track record in your sector Transparent cost structure Realistic timing (12+ months) Long-term support and aftercare Mistake 4: Underestimating compliance requirements Malta may be in the EU, but compliance demands are strict and keep getting tougher. Many entrepreneurs vastly underestimate the ongoing effort. What you need to know: Area Requirement Frequency Consequence if breached Annual return Corporate law filing Annually Fines, company struck-off Economic substance Evidence of genuine business activity Ongoing Tax denial Transfer pricing Arms length pricing required When applicable Profit adjustments, fines CRS reporting Automatic information exchange Annually International enforcement My tip: Allow for at least 2–3 working days per month for Malta compliance—either yourself or a qualified employee. Mistake 5: Rushing the implementation We have to do this within the year for tax reasons. I know that pressure. But Malta structures take time to mature. Why rushing is harmful: Authorities are wary of “quick fix” approaches Early mistakes are hard to correct later Family consensus is neglected Substance can’t be built overnight Tax recognition is at risk The right timing: Year 1: Planning, structuring, first tests Year 2: Full operation, establish compliance, optimize Year 3+: Implement succession step by step Mistake 6: Ignoring German tax law Malta is great, but youre probably still a German tax resident. Which means: German tax rules still apply. Relevant German regulations: Foreign Tax Act (AO): CFC rules on passive income Exit taxation: If you move the business seat Transfer of functions: Appropriate compensation for business shifts Inheritance tax: Still applies even with foreign structures The solution: Keep both legal systems in mind and plan in an integrated way. Mistake 7: No exit strategy What if Malta turns out not to be for you? If laws change? If the family falls out? Some Malta structures are so complex that unwinding them costs more than setting them up. Key exit questions: How long does it take to dissolve the Malta company? What taxes arise if shares are transferred back? Can shares be sold individually? What happens to profits accumulated in Malta? What does this mean for you? Malta succession planning is like chess—you need to think several moves ahead. Most mistakes happen due to impatience, bad advice, or lack of family alignment. Take the time you need and invest in quality advice. The price is a fraction of what a failed Malta project can cost. Costs and Timeline for Your Succession Planning Let’s get straight to the point: What does Malta succession planning really cost, and how long does it take? Here’s a detailed breakdown—with no hidden fees and realistic timelines from actual cases. Investment overview Total costs depend heavily on your structure’s complexity and your company’s size. Here are the three typical scenarios: Company size Structure Setup costs Annual costs Break-even tax savings €2–5m Simple Malta holding €50,000–€75,000 €35,000–€50,000 €120,000/year €5–15m Malta holding + substance €75,000–€125,000 €60,000–€90,000 €200,000/year €15m+ Complex structure + foundation €125,000–€200,000 €100,000–€150,000 €350,000/year Detailed cost breakdown phase by phase Phase 1: Analysis & planning (Months 1–3) Tax advice (Germany): €15,000–€25,000 Analysis of current structure Tax optimization potential Integration of Malta plan into German planning Legal advice (Malta): €10,000–€18,000 Structuring the Malta company Corporate contracts & compliance Banking & regulatory law Company valuation: €8,000–€15,000 Certified valuation for transfers Various approaches depending on purpose Malta due diligence: €5,000–€8,000 Checking regulatory requirements Fitness for banking and compliance Subtotal phase 1: €38,000–€66,000 Phase 2: Implementation (Months 4–8) Company formation (Malta): €3,000–€5,000 Malta Business Registry registration Corporate articles and filings Startup kit (seals, certificates, etc.) Bank account opening: €2,000–€4,000 (advisory fees) Bank due diligence prep Support in account opening process Minimum deposit: €25,000–€100,000 (not spent) Tax registration: €3,000–€6,000 Registration with Inland Revenue Malta Application for tax benefits Setting up accounting systems Legal documentation of transfers: €15,000–€25,000 Share transfer contracts Ensuring tax optimization Notarial certification as needed Subtotal phase 2: €23,000–€40,000 Phase 3: Operational integration (Months 9–12) Building substance: €15,000–€30,000 Office setup or coworking space IT infrastructure and communications Initial staff or service providers Ongoing advice: €8,000–€15,000 Monthly alignment with advisers Process optimization Compliance monitoring Marketing & establishment of operations: €10,000–€20,000 Building real local business ties Integration in Maltas business community Initial operating activities Subtotal phase 3: €33,000–€65,000 Ongoing annual costs from year 2 After setup, regular operating costs apply: Company secretary: €3,000–€5,000/year Mandatory role under Maltese law Compliance monitoring & filings Registered office: €2,000–€4,000/year Official Maltese business address Mail processing and forwarding Accounting & tax services (Malta): €8,000–€15,000/year Monthly accounting Annual financial statements (Malta GAAP) Tax returns and compliance Tax advice (Germany): €6,000–€12,000/year Integration with German returns Compliance with German reporting Total structure optimization Substance costs: €15,000–€40,000/year Office, IT, staff in Malta Regular Malta visits Real business activity Legal support: €5,000–€10,000/year Adaptation to legal changes Contract reviews and updates Total annual costs: €39,000–€86,000/year Timeline for realistic implementation Heres the tried-and-tested 18-month plan from my practice: Months 1–2: Preparation and analysis Business analysis and valuation Family alignment and goal setting Adviser selection and initial structure concepts Feasibility and risk assessment Months 3–4: Detailed planning Finalize structure Draft all contracts Bank due diligence prep Define compliance framework Months 5–8: Operational implementation Establish Malta company Open bank accounts (often several attempts) Tax registrations Initial share transfers Months 9–12: Integration and testing Build real Malta business activity First annual accounts Process optimization Set up compliance routine Months 13–18: Full operation and succession Gradually implement succession arrangements Additional tax optimization Intra-family transfers Long-term strategic adjustments ROI: When is Malta worth it? Rule of thumb from my experience: Malta pays off from annual tax savings of at least €150,000. That equates to roughly: Company value from €3–5 million Annual profits from €500,000 Planned transfers from €2 million Sample calculation for a €8 million business: Setup costs: €95,000 Annual costs: €65,000 Annual tax savings: €280,000 ROI in first year alone: Over 100% 10-year savings: Over €1.5 million (net of all costs) What does this mean for you? Malta is an investment, not a cost item. The upfront outlay is significant, but for correctly sized companies it pays off already in the first year. Whats vital is realistic budgeting from the start—recosting after the fact is usually more expensive than generous initial budgeting. Malta vs. Other EU Countries: A Succession Comparison Malta isn’t the only option for tax-optimized business succession in the EU. Let’s be honest: How does Malta stack up against other popular destinations? Here’s a look at the pros and cons of the key alternatives. Malta vs. Luxembourg: The classic comparison Luxembourg is regarded as Europes established holding destination. But how does Malta compare? Criterion Malta Luxembourg Advantage Effective tax burden 5–15% 5–20% Malta (slight) Setup costs €50,000–€100,000 €80,000–€150,000 Malta Ongoing costs €40,000–€80,000 €60,000–€120,000 Malta Reputation Good (EU-compliant) Excellent Luxembourg Regulatory stability High Very high Luxembourg Substance requirements Moderate High Malta Banking Challenging Established Luxembourg Conclusion Malta vs. Luxembourg: Malta wins on cost and flexibility, Luxembourg on reputation and banking. For family businesses under €50 million, Malta is often the better choice. Malta vs. Netherlands: The practical test The Netherlands was long the go-to holding destination. Recent tax reforms have complicated the picture. Dutch highlights: Participation exemption: Participation income generally tax-free Tonnage tax: Special scheme for shipping Innovation box: Reduced IP income tax But: New anti-abuse rules and higher substance requirements Malta’s advantages over the Netherlands: Lower substance demands More flexible company law Lower local personnel costs Less regulatory uncertainty Dutch advantages: Larger DTA network Better banking access Established advisory environment Proximity to Germany Malta vs. Ireland: The tech company alternative Ireland is attractive for tech- and IP-heavy firms. But what about traditional family businesses? Ireland’s strengths: 12.5% corporation tax: Among EUs lowest R&D tax credits: Up to 25% tax credit for R&D IP box regime: 6.25% tax on qualifying IP income English-speaking: Easier for German entrepreneurs Malta’s counterpoints: More flexible tax system: More structuring options thanks to refund system Lower cost of living: Important for substance requirements Less crowded market: Ireland is saturated with multinationals Stabler tax policy: Less under fire from the EU Commission Malta vs. Cyprus: The Mediterranean showdown Cyprus and Malta compete for the same clientele. Both are Mediterranean EU countries with attractive tax regimes. Cyprus highlights: 12.5% corporation tax: Flat rate, no refunds IP box: 2.5% on qualifying IP Non-dom regime: Attractive for individuals Larger German community: More infrastructure for Germans Malta’s advantages over Cyprus: Political stability: Fewer geopolitical risks Better EU integration: Eurozone since 2008 vs. Cypruss more complicated history More flexible tax system: More room for optimization Higher banking quality: Maltese banks considered more stable The new EU reality: Why Malta is ahead Since 2018, the playing field has changed dramatically. The EU Commission is going hard after aggressive tax planning. Here, Malta is a step ahead: EU compliance score (my rating 1–10): Malta: 9/10 – fully BEPS-compliant, transparent rules Luxembourg: 8/10 – established, but under scrutiny Netherlands: 7/10 – ongoing reforms, uncertainty Ireland: 6/10 – pressure from Apple case and OECD minimum tax Cyprus: 7/10 – improving, but historical baggage Practical selection criteria: Your situation Malta is optimal if: Your business is worth €3–50 million You need flexibility in succession planning Youre focused on cost optimization You want a “quiet” jurisdiction (little media spotlight) You value Mediterranean lifestyle Choose Luxembourg if: Your business exceeds €50 million in value Reputation trumps cost savings for you You need complex multinational structures You require established banking relationships Choose Netherlands/Ireland if: Your business is IP-heavy You already have business there You’re building very large, complex structures You need geographical proximity to Germany Future outlook: Why Malta is a long-term choice Tax laws change. Which destination is future-proof? Malta’s long-term strengths: OECD compliant: Malta already meets forthcoming standards Small jurisdiction: Less political pressure than on “big players” Diversified economy: Not solely dependent on tax planning EU integration: Full member, no opt-outs Stable politics: Pragmatic and business friendly What does this mean for you? Malta may not be the flashiest option, but its often the shrewdest. It offers the best balance of tax optimization, cost control, legal certainty, and long-term reliability. For most German family businesses, its the top choice in 2025. Frequently Asked Questions on Malta Business Succession Is Malta tax planning legal, or tax evasion? Malta tax planning is fully legal, provided there is real economic substance. Malta is an EU member and all tax benefits are based on EU directives. The key is that your Malta entity must engage in genuine business activity, not just be a letterbox company. How much substance do I really need in Malta? At minimum: Registered office, company secretary, regular directors’ meetings in Malta, and documented business decisions. Recommended: Office, local staff or service provider, at least 4–6 Malta visits per year. The larger the tax savings, the more substance you should establish. Can I use Malta to bypass my German tax obligations? No. As a German tax resident, you remain taxable in Germany. Malta structures optimise taxation—they don’t eliminate it. You must still file German tax returns and declare Malta income there. What happens if theres a German tax audit? With proper structure and documentation, a Malta holding is no problem. It only gets tricky with pure “letterbox” companies lacking real substance. Important: Make all decisions in Malta, document them, and be able to prove real business activity. How long does it take to open a bank account in Malta? Expect 2–4 months. Maltese banks are very thorough. You need detailed business plans, compliance evidence, and will usually have to appear in person more than once. Some entrepreneurs apply with several banks at the same time. From what company size is Malta worthwhile? Rule of thumb: From €3–5 million in company value or €500,000 annual profit. The setup costs (€50,000–€100,000) and annual costs (€40,000–€80,000) must be justified by the corresponding tax savings. Can I unwind the Malta structure later? Yes, but it can be expensive. Dissolving a Malta entity takes 6–12 months. Transferring shares back to Germany can trigger German taxes. That’s why you should always plan exit strategies in advance. What about the EU minimum tax from 2024? The OECD 15% minimum tax only applies to groups with revenues over €750 million. For typical family businesses, it’s irrelevant. Malta has already adapted and offers compliant solutions. Do I need Maltese residence? No, but it can be advantageous. For the company, a Maltese director is sufficient (this can be a nominee). Having your own residence brings extra benefits for private individuals but is not a prerequisite for succession planning. How safe are Maltese banks? Maltese banks are under EU banking supervision and offer deposit insurance up to €100,000 per bank per customer. The bigger banks (Bank of Valletta, HSBC Malta) are considered stable. For larger sums, diversification across several banks is advised.
