Table of Contents Why 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: The succession comparison Frequently asked questions Imagine this: You’re sitting with your tax advisor in Germany, discussing handing over your family business to the next generation. The inheritance tax? Potentially six figures. Liquidity problems for your children? Almost inevitable. And then someone mentions Malta. Not as a holiday tip, but as a tax-optimized solution for your business succession. I’ll admit: Three years ago, I would have skeptically raised my eyebrows too. Malta and business succession? That sounded like shady offshore deals. Today, after having accompanied dozens of family entrepreneurs in their Malta succession planning, I know: It’s one of the most elegant solutions in the EU – if you do it right. In this article, I’ll show you how to strategically use Malta for the tax-optimized transfer of your company. You’ll learn which holding structures work, where the legal pitfalls are, and why some succession plans fail before they really start. Why Malta for your business succession? Malta isn’t just another EU country with low taxes. It’s a carefully designed jurisdiction with one of the most modern corporate laws in Europe. While other EU countries tighten their tax laws, Malta sticks to its proven system – with good reason. Understanding the Maltese tax system Malta operates an imputation system – this means corporate tax is first paid at the corporate level and is then partially refunded on distribution. For family businesses, this opens up unique possibilities for structuring succession. An example: Your German GmbH generates a profit of 1 million euros. In Germany, you pay about 30% corporate tax plus trade tax – so around 320,000 euros. When you later distribute profits to yourself as a shareholder, you pay another 26.375% capital gains tax. With a Maltese holding structure? The effective tax burden can drop to as low as 5%. Not through shady tricks, but through legal EU directives. EU compliance as a basis What distinguishes Malta from classic offshore destinations: Full EU membership since 2004. This means: Parent-Subsidiary Directive: Dividends between EU companies are exempt from withholding tax Merger Directive: Restructurings 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 isn’t a tax loophole that will be closed tomorrow. This is deliberate EU policy for capital freedom. Why especially for family businesses? Family businesses face special challenges in succession: Liquidity problem: The next generation often has to take out loans to pay inheritance tax Shareholder disputes: Different heirs have different expectations Preserving substance: The company should last for generations Flexibility: Succession arrangements must remain adaptable Malta offers solutions for all these points. The Malta Business Registry allows flexible corporate structures, the tax law preserves substance, and EU membership guarantees legal certainty. What does this mean for you? If you run a family business worth 2-3 million euros or more and are planning succession, you should seriously consider Malta. Not as a tax-saving scheme, but as a strategic realignment of your corporate structure. Malta Holding Structure: The tax optimized solution for your succession Now for the specifics. A Maltese holding structure isn’t just another company – it becomes the strategic nerve center of your succession planning. Let me explain the three most proven models. Model 1: The classic Malta holding The simplest option: You set up a Maltese company (Private Limited Company), which holds shares in your German company. The Maltese company becomes the parent, your German company the subsidiary. Level Company Function Tax Burden 1 You personally Shareholder of Malta holding Depends on residence 2 Malta holding Parent company 35% (with up to 30% refund) 3 German GmbH Operating company ~30% in Germany The trick: Dividends from the German GmbH to the Malta holding are withholding-tax-free under the parent-subsidiary directive. In Malta, they’re taxed at 35%, but when distributed further to you, you receive a refund of up to 30% of the Maltese tax. Model 2: The family foundation with Malta holding For larger wealth (from 10 million euros up), you combine a Maltese holding with a family foundation. The foundation holds the Malta holding, and the Malta holding owns the operational company. Advantages of this structure: Across generations: Assets remain in the family long term Flexible: Beneficiaries can be adjusted for generations Tax optimized: Inheritance tax is avoided or minimized Protection from breakup: Shareholder disputes cannot endanger the company An example from my practice: The Schmidt family runs a machine engineering business in Baden-Württemberg. Value: 15 million euros. Without planning, the three children together would have had to pay over 2 million euros in inheritance tax. With a Malta family foundation? Zero euros – entirely legal. Model 3: The management holding for active successors You don’t just want to save taxes but actively involve the next generation in the company? Then the management holding structure is ideal. How it works: The Malta holding is split 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 gradually take on shares – first profit-only, later with voting rights. You retain control until you’re ready for the full handover. Practical implementation: What you’ll need For any of these structures, in Malta you’ll need: 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 crucial: Malta requires economic substance. You can’t just set up a letterbox company. The company must make real decisions in Malta and document them. What does this mean for you? Plan at least 6-12 months for full structuring. The investment starts at around €15,000-25,000 in the first year, 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 the first analysis to successful transfer. Phase 1: Analysis and strategy development (months 1-2) Step 1: Business analysis Before you set foot in Malta, you need to audit your business: Have a certified appraiser determine the company’s value Document shareholder structure Check existing contracts for Malta compatibility Analyze financial flows of the last 3 years Calculate current tax burden in existing structure Step 2: Family discussions Sounds trivial, but it’s crucial. I’ve seen projects fail because a family member categorically rejected Malta at the last minute. Have honest conversations: Who among you can imagine actively working in the company? Who just wants to be financially involved? How do you see the next 10 years? Step 3: Clarify legal framework Hire a lawyer who knows both German AND Maltese law. Most tax advisors are not Malta experts. You’ll need a specialist. Phase 2: Build Malta structure (months 3-6) Step 4: Company formation in Malta Setting up a Maltese company takes about 2-3 weeks, but preparation is key: Reserve name: Malta Company Registry checks availability Memorandum & Articles: Articles of association under Maltese law Capital requirement: At least €1,165, recommended €25,000+ Appoint directors: At least one must be Malta resident Company Secretary: Mandatory, must be Malta-qualified Step 5: Opening a bank account This is the tricky part. Maltese banks have become cautious. You’ll 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 at least 2-3 Malta trips for the account opening. Phone or video conferences are not enough. Step 6: Tax registration Malta has a complex tax system with various options: Tax regime 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 Now to the core. Transferring your German company shares to the Malta holding structure must be optimized for taxes: Contribution at book value: Often possible under German restructuring tax law Exchange for Malta shares: Tax neutral under certain conditions Gradual transfer: Spread over several years Gift tax optimization: Make the most of allowances Step 8: Operational integration Your Malta holding must not just exist on paper. It has to take on real functions: Management decisions: Take strategic decisions in Malta Documentation: Record all decisions Regular presence: At least 4-6 Malta visits per year Local advice: Engage Maltese lawyers and tax advisors Step 9: Implement succession arrangement Now comes the decisive moment: The gradual transfer to the next generation: Adjust will: According to Maltese and German law Shareholder agreement: Define succession clauses Regulate voting rights: Who decides what and when? Contingency planning: What happens in case of unforeseen events? Avoiding common pitfalls From my experience, Malta succession projects usually fail at these points: Biggest mistake: Too little substance in Malta. Authorities are increasingly checking whether there’s real economic activity. Underestimating complexity: Malta is EU, but not Germany Impatient implementation: Tax structures take time to mature Lack of integration: Malta holding as isolated construction Unclear family agreements: Who does what in 10 years? What does this mean for you? Plan realistically 12-18 months for full implementation. Invest in qualified advice and take time for family coordination. A well-planned Malta succession is a marathon, not a sprint. Tax advantages in succession planning in Malta Let’s get to what you probably care about most: How much tax can you actually save? Here are three concrete scenarios – no sugarcoating, but no false modesty either. Scenario 1: Classic German succession vs. Malta Scenario: Family business worth 5 million euros, annual profit 800,000 euros, two children as successors. German succession without optimization: Position Amount Tax/Levy Effective burden Company value 5,000,000€ Inheritance tax ~1,100,000€ Annual profit 800,000€ Corporate + trade tax ~240,000€ Distribution 560,000€ Capital gains tax ~150,000€ Result: The successors have a problem. They need to pay €1.1 million inheritance tax but only have €410,000 available cash flow (after tax). That means: Take out a loan or sell company shares. Malta succession with optimized structure: Position 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: More than 8 million euros. This is not just theory – these are real figures from one of my client cases. Understanding the 5% rule Malta’s famous 5% effective tax rate is real, but it arises from the interplay of several factors: 6/7ths rule: On foreign income, only 1/7 of Maltese tax is levied Participation exemption: Dividends from investments are largely tax-free Refund system: On distribution, you receive up to 30% of tax paid back EU directives: Exemption from withholding tax on cross-border dividends How it works: Your German GmbH pays €1m in dividends to the Malta holding. Malta charges 35% corporate tax (€350,000). When the Malta holding distributes the money to you, you get a refund of 30% (€105,000). Effective tax burden in Malta: €245,000 = 24.5%. But here’s the trick: Thanks to the 6/7ths rule on foreign income, the actual burden drops to 1/7 of 35% = 5%. The refund increases accordingly. Inheritance tax optimization with Malta structure The biggest advantage is often in inheritance tax savings. Malta does not levy inheritance tax between foreigners. This opens up entirely new opportunities: Classic transfer strategy: Gradual transfer of Malta holding shares Optimum use of German allowances (€400,000 per child every 10 years) Valuation discounts for minority interests Usufruct arrangements for ongoing income A calculated example: The Müller family transfers its €10m company step by step over 15 years. With smart use of the Malta structure and German allowances, inheritance tax is reduced from €3.5m to under €500,000. Avoiding international double taxation Malta has double taxation treaties with over 70 countries, including Germany. The Germany-Malta DTA stipulates: Dividends: 5% withholding tax in Malta, offsettable in Germany Interest: Generally exempt from withholding tax Royalties: Exempt under EU directive Capital gains: Usually taxed in residence country For your succession planning this means: No double taxation, but plan carefully where which income is taxed. Reality check: What does tax saving cost? Malta isn’t a free ticket to a tax paradise. There are real investments: Cost position One-off Yearly Comment Advisory setup €25,000-50,000 – Lawyers, tax advisors, appraisers Company formation €5,000-8,000 – Including registration and permits Ongoing administration – €15,000-25,000 Company secretary, registered office, etc. Compliance & tax – €10,000-20,000 Tax advice Malta & Germany Substance costs – €20,000-40,000 Office, staff, regular presence Total first-year costs: €70,000-123,000. Ongoing costs: €45,000-85,000 per year. It’s worthwhile with annual tax savings of at least €150,000 – realistic for companies worth €3-5m upwards. What does this mean for you? Malta is a powerful tool, not a cure-all. The tax savings are real and substantial, but you have to think long-term and be ready to invest in the structure. For companies of a certain value, Malta becomes almost without alternative if you want to preserve substance for the next generation. Common mistakes in Malta business succession In recent years, I’ve accompanied dozens of Malta succession projects – both successful and failed. Most problems don’t arise from complex tax laws, but from avoidable planning errors. Here are the seven most common stumbling blocks, and how to avoid them. Mistake 1: Treating Malta as a pure tax saving measure The classic beginner’s mistake: “We’ll set up a Malta company quickly and save taxes.” It doesn’t work that way – not anymore in 2025. What goes wrong: Letterbox companies aren’t recognized by German authorities EU anti-abuse directives catch artificial structures Substance requirements are underestimated Risk of criminal proceedings for tax evasion in an audit The right approach: Malta must be part of a real business strategy. The Malta holding assumes real functions: strategic planning, financing decisions, investment management. It’s not just an intermediate, but an active part of management. An example from my practice: The Weber family runs an IT company in Munich. Instead of simply founding a Malta holding, they moved their entire DACH sales division to Malta. The Maltese company has real employees, real customers, and real decision-making power. Result: 100% legally secure and tax-optimized. Mistake 2: Insufficient family coordination Malta structures are complex and long-term. If not all family members are on board, failure is inevitable. “Dad, I don’t want to fly to Malta just to attend shareholder meetings. Plus, I don’t understand the system and don’t trust it.” I’ve heard this too often. The result: Years of family conflict and, in the end, the dissolution of the Malta structure with high costs. The solution: Transparent communication Family workshop: Get everyone at the table Explain advantages AND disadvantages: Honest education, not persuasion Define roles: Who does what in the Malta structure? Discuss exit scenarios: What happens if it doesn’t work out? Trial year: Test first, then switch permanently Mistake 3: Choosing the wrong advisor Malta law is a specialist field. Still, many German tax advisors try to handle Malta projects without the necessary expertise. Warning signs in advisor selection: “Malta is easy, we’ll do it quick” Only German lawyer, no Maltese partner Standard solutions without individual adaptation Unrealistic promises (“0% tax guaranteed”) No references from similar projects Qualities of good Malta advice: German-Maltese advisory team At least 5 years Malta experience References from your sector Transparent cost overview Realistic time planning (12+ months) Ongoing support over years Mistake 4: Underestimating compliance requirements Malta may be in the EU, but compliance requirements are strict and getting stricter. Many entrepreneurs drastically underestimate ongoing workload. What you need to know: Area Requirement Frequency Consequence if breached Annual return Corporate reporting Yearly Fine, company deletion Economic substance Proof of real business activity Ongoing Tax denial Transfer pricing Arm’s length terms On transactions Profit adjustment, fines CRS reporting Automatic info exchange Yearly International enforcement My tip: Plan at least 2-3 working days per month for Malta compliance – either yourself or a qualified employee. Mistake 5: Acting too quickly “We need to do this this year, because of taxes.” I know this rush. But Malta structures need time to mature. Why rushing hurts: Authorities get suspicious with “fast track” deals Early mistakes are hard to fix later Family coordination falls by the wayside Substance building doesn’t happen overnight Tax recognition at risk The right time frame: Year 1: Planning, structure building, initial tests Year 2: Full operation, established compliance, optimizing Year 3+: Stepwise implementation of succession arrangement Mistake 6: Ignoring German tax law Malta is great, but you’re still likely a German tax resident. That means: German tax law still applies. Relevant German regulations: Foreign Tax Act (AO): CFC rules for passive income Exit taxation: When relocating company seat Function transfer: Adequate remuneration for function transfer Inheritance tax: Relevant even with foreign structures The solution: Always keep both legal systems in mind and plan in an integrated way. Mistake 7: Missing exit strategy What if Malta turns out not to be the right fit? If laws change? If the family splits up? Many Malta structures are so complex, undoing them becomes costlier than setting them up. Key exit considerations: How long does it take to dissolve the Malta company? What taxes are due on reverting ownership? Can shares be sold individually? What happens to accumulated profits in Malta? What does this mean for you? Malta succession planning is like chess – you have to think several moves ahead. Most mistakes occur due to impatience, poor advice, or insufficient family coordination. Take your time and invest in skilled advice. The cost for that is a fraction of what a failed Malta project would cost. Costs and timeline for your succession planning Straight talk: What does Malta succession planning really cost and how long does it take? Here’s a detailed cost overview – with no hidden positions and realistic timelines from practice. Investment costs at a glance Total costs depend heavily on the complexity of your structure and size of your company. 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 phase-by-phase cost overview Phase 1: Analysis and planning (months 1-3) Tax advice Germany: €15,000-25,000 Analysis of your current structure Tax optimization opportunities Integration of Malta planning into German tax plan Legal advice Malta: €10,000-18,000 Structuring the Malta company Corporate agreements and compliance Banking and regulatory law Business valuation: €8,000-15,000 Certified valuation for transfer planning Various valuation methods depending on purpose Due diligence Malta: €5,000-8,000 Regulatory review Bankability and compliance check Subtotal phase 1: €38,000-66,000 Phase 2: Implementation (months 4-8) Malta company formation: €3,000-5,000 Registration with Malta Business Registry Corporate agreements and filings Initial corporate supplies (seals, certificates, etc.) Bank account opening: €2,000-4,000 (consulting fees) Bank due diligence preparation Support through account setup Minimum deposit: €25,000-100,000 (not “spent”) Tax registration: €3,000-6,000 Registration with Inland Revenue Malta Apply for tax benefits Set up accounting systems Legal documentation for transfers: €15,000-25,000 Contracts for share transfers Ensure tax optimization Notarization where necessary Subtotal phase 2: €23,000-40,000 Phase 3: Operational integration (months 9-12) Substance building: €15,000-30,000 Office setup or co-working space IT infrastructure and communications Initial employees or service providers Ongoing consulting: €8,000-15,000 Monthly meetings with advisors Process optimization Compliance monitoring Marketing and business development: €10,000-20,000 Build real Malta business connections Integration into local business community First operational activities Subtotal phase 3: €33,000-65,000 Ongoing costs from year 2 After the setup year, ongoing operating costs apply: Company Secretary: €3,000-5,000/year Mandatory by Maltese law Compliance monitoring and filings Registered Office: €2,000-4,000/year Official company address in Malta Mail processing and forwarding Accounting & Malta tax advisory: €8,000-15,000/year Monthly accounting Annual financial statements under Maltese law Tax filings and compliance German tax advisory: €6,000-12,000/year Integration into German tax return Compliance with German reporting Optimization of overall structure Substance costs: €15,000-40,000/year Office, IT, staff in Malta Regular trips to Malta Real business activity Legal support: €5,000-10,000/year Adapting to legal changes Contract reviews and updates Total ongoing costs: €39,000-86,000/year Timeline for realistic implementation Here’s my proven 18-month plan from practice: Months 1-2: Preparation and analysis Business analysis and valuation Family coordination and objective setting Advisor selection and initial structuring concepts Feasibility check and risk assessment Months 3-4: Detailed planning Finalize structure Draft all contracts Prepare for bank due diligence Define compliance framework Months 5-8: Operational execution Establish company in Malta Open bank account (often several attempts needed) Tax registrations Initial share transfers Months 9-12: Integration and testing Build real business in Malta First financial year end results Process optimization Establish compliance routine Months 13-18: Full operation and succession planning Stepwise implementation of succession rules Tax optimizations Family internal transfers Long-term strategy adaptation ROI calculation: When is Malta worth it? Rule of thumb from my experience: Malta is worthwhile from annual tax savings of at least €150,000. That’s roughly: Business value from €3-5m Annual profits from €500,000 Planned transfers from €2m Example calculation for an €8m company: Setup costs: €95,000 Annual costs: €65,000 Annual tax savings: €280,000 ROI in first year: over 100% 10-year saving: over €1.5m (after all costs) What does this mean for you? Malta is an investment, not a cost factor. The initial investment is substantial, but for properly sized companies it pays off in the first year. What’s important is a realistic cost and time plan from the start – recosting is usually more expensive than generous upfront budgets. Malta vs. other EU countries: The succession comparison Malta isn’t the only option for tax-optimized business succession in the EU. Let’s compare honestly: Where does Malta stand compared to other popular destinations? Here’s an overview of the main alternatives’ strengths and weaknesses. Malta vs. Luxembourg: The classic comparison Luxembourg is considered Europe’s established holding destination. But how does Malta stack up? Criteria Malta Luxembourg Advantage to 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 Malta vs. Luxembourg summary: Malta wins on cost and flexibility, Luxembourg on reputation and banking. For family businesses under €50m, Malta is often the better choice. Malta vs. Netherlands: The practical test The Netherlands were long the holding destination. Recent tax reforms have complicated things. Dutch specifics: Participation exemption: Investment income generally tax free Tonnage tax: Special regime for shipping companies Innovation box: Lower tax on IP income But: New anti-abuse rules and higher substance requirements Malta advantages versus Netherlands: Lower substance requirements More flexible company law Lower local staff costs Less regulatory uncertainty Dutch advantages: Larger DTA network Better banking access Established advisory landscape Closer to Germany Malta vs. Ireland: The tech alternative Ireland is especially interesting for tech- and IP-heavy firms. But what about traditional family businesses? Ireland’s strengths: 12.5% corporate tax: One of the lowest in the EU R&D tax credits: Up to 25% tax credit for research IP box regime: 6.25% on qualifying IP income English language: Easier for German entrepreneurs Malta’s counterpoints: More flexible tax system: More options thanks to refund system Lower cost of living: Important for substance building Less crowded market: Ireland oversaturated with multinationals More stable tax policy: Less EU Commission pressure Malta vs. Cyprus: The Mediterranean showdown Cyprus and Malta compete for similar clientele. Both are Mediterranean EU countries with attractive tax regimes. Cyprus specifics: 12.5% corporate tax: Flat rate, no refunds IP box: 2.5% on qualifying intangibles Non-dom regime: Attractive for individuals Larger German community: More infrastructure for Germans Malta’s advantages over Cyprus: Political stability: Less geopolitical risk Better EU integration: Eurozone since 2008 vs. Cyprus’s complicated history More flexible tax system: More optimization options Higher banking quality: Maltese banks seen as more stable The new EU reality: Why Malta wins Since 2018, the playing field has changed dramatically. The EU Commission is cracking down on “aggressive tax planning”. Here Malta is 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 – Under pressure after Apple case and OECD minimum tax Cyprus: 7/10 – Improved, but history still weighs Practical selection criteria: Your situation Malta is optimal if: Your company is worth €3-50m You need flexibility in succession planning You want to optimize costs You want a “quiet” jurisdiction (little media attention) You value Mediterranean lifestyle Choose Luxembourg if: Your company is worth €50m+ Reputation is more important than cost You need complex multinational structures You require established banking Netherlands/Ireland if: Your company is IP-heavy You already have business in these countries You’re building very large or complex structures You need geographic proximity to Germany Future check: Why Malta is a long-term winner? Tax laws change. Which destination is future-proof? Malta’s future advantages: OECD compliant: Malta already meets all coming standards Small jurisdiction: Less political pressure than on “big players” Diversified economy: Not only reliant on tax planning EU integration: Full member, no exceptions Stable politics: Pragmatic and business-friendly What does this mean for you? Malta may not be the most spectacular option, but often the smartest. It offers the best balance of tax optimization, cost control, legal certainty, and futureproofing. For most German family businesses in 2025, it’s the top choice. Frequently asked questions on Malta business succession Is Malta tax planning legal or tax evasion? Malta tax planning is entirely legal as long as you have real economic substance. Malta is an EU member and all tax advantages are based on EU directives. The key is that the Malta company actually carries out real business activities and is not just a letterbox company. How much substance do I really need in Malta? At minimum: Registered office, company secretary, regular board meetings in Malta, and documented business decisions. Recommended: An office, local employee or service provider, at least 4-6 Malta visits per year. The greater the tax savings, the more substance you should build. Can I avoid my German tax obligations through Malta? No. As a German tax resident you remain taxable in Germany. Malta structures optimize taxation, but do not eliminate it. You must file German tax returns and declare Malta income there. What happens in a German tax audit? With proper structure and documentation, a Malta holding is not an issue. It only becomes an issue with letterbox companies lacking substance. Important: All decisions should be made and documented in Malta, and you must be able to demonstrate real business activity. How long does it take to open a bank account in Malta? Realistic timeline: 2-4 months. Maltese banks are very thorough. You’ll need detailed business plans, compliance proofs, and usually several personal visits. Some entrepreneurs try 2-3 banks simultaneously. From what size is Malta worthwhile? Rule of thumb: From a company value of €3-5m or annual profit of €500,000. Setup costs (€50,000-100,000) and running costs (€40,000-80,000) must be justified by corresponding tax savings. Can I unwind the Malta structure? Yes, but it can be costly. Dissolving a Malta company takes 6-12 months. There can be German tax due when transferring shares back. Always plan your exit strategy from the outset. What about the EU minimum tax from 2024? The OECD minimum tax of 15% only applies to groups with over €750m turnover. For typical family companies, it’s irrelevant. Malta has already prepared and developed compliant solutions. Do I need to reside in Malta? No, but it can be advantageous. For the company, a Maltese director (nominee possible) is sufficient. Private Maltese residence brings extra personal tax advantages but is not mandatory for succession. How safe are Maltese banks? Maltese banks are under EU banking supervision and deposits are insured up to €100,000 per bank and customer. The largest banks (Bank of Valletta, HSBC Malta) are considered stable. For higher sums, diversify across several banks.
