When starting a business in Malta, the share capital requirement is as low as 1164.96 Euros which is much lower than what many other countries require. Your fee for starting up a new business is only 245 Euros but if you do it electronically it will cost you even less. To start a company electronically you will need a Maltese e-identification though.
Low social security contributions
Your employer’s contribution is only 10 % of the employee’s gross salary. Because of this, in addition to lower salaries, your company will be more profitable and your business will grow faster.
The cost of living in Malta is fairly low, therefore the wages are low. Minimum wage for people who are 18 years of age or older is 165.68 Euros/week and according to Malta Times the average salary in 2011 was 14 466 Euros/year. As you can see, when taking into consideration the low employer’s contributions, it’s quite a lot cheaper to hire personnel in Malta than it is in most other countries.
Lower income tax
Social security contributions is always 10% of your salary but how much income tax you pay depends on how high your salary is, but compared to many other countries the percentages are low. If you give yourself an 8 500 Euro salary you will be paying no income tax at all and if your salary is 14 500 Euros/year your income tax is 15 %.
If you have a business registered in Malta you are entitled to many generous deductions, for example the cost of broadband, work related trips, computers and part of your rent if your company is registered to your home address.
Lower your corporation tax to 5 %
In Malta, corporation tax is 35 % of all profits taken out of the business but if you set up a holding company in a different country you will get an 86 % tax refund. This is because you’re not taxed in Malta, so you finally end up with a 5 % corporation tax.
A good way to get started is to hire a lawyer who is experienced in both the start-up of businesses in Malta and holding companies in Cyprus.