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Recommendation Malta or Cyprus?

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devnull

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Dec 9, 2018
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#1
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Hello,

i recently moved to Malta and now i will be likely stuck here for 1-2 years, due to rent contract. (was an german citizen)

I am running an hosting provider, with dedicated servers, webhosting etc. I provide hosting services to the worldwide customers.

I wondering whats the better location for my company. Cyprus or Malta?

Whilst my company formation process in Malta, my lawyer tells me often different stories, every time when i come forward. At the beginning, i wanted everything on one MT company, they told me, i should seperate my grey-area business to external offshore company in Hong Kong and my MT company should be a web services and web administration company instead.

When MT company is formed, and was about to getting income from HK company, my lawyer told me again a different story, that the banks can get the income checked etc. Now i am not getting income into the MT company.

Also i noticed that my lawyer always make a turn over my goals that I desire... so what to do now?

Should i start an company in Cyprus instead and relocate my tax-residence to there as Non-Dom?

Your recommendations / feedbacks are welcome.
 
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#2
You can setup a company in Cyprus as non resident, so the company will be exempted from any tax. However, I'm not sure if this is the right decission now you are living in Malta! Whta lawyer have you found there? did you consider to change to some more professional service provider?
 
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#3
Thank you for the reply, Admin.

Well, here in Malta, i am not feeling to able to coming forward. My lawyer firm offer many various services, but many services of it were not completed, so i considered Cyprus, because it can lower tax, while in Malta, it needs to wait 2-3 year until the 30% corporate tax can get returned out of 35% corporate tax, when the structure is a holding.

Recently, i hear bad reviews about the lawyer and I would like to try different jurisdiction instead. I might want relocate my home as well too and hoping from landlord that i can get out of the rent contract sooner.

I have an offshore company in Hong Kong, which i want to make it "onshore" here, by forming new company.

My following interests are:

- UAE company + Living in Thailand
- Just Cyprus company + Crypus home residence, maybe the UAE company extra for saving tax.
- Or just everything in Malta with simple holding company structure
 
#5
Well i did not know about the befenits in Cyprus, but most of my contacts were choosing Malta due to their tax refund system and reducing corporate tax to 5%.
 
#7
Yaroslav said:
The UK may be a good option as well. If you are not going to sell your goods/services in the UK - you are fully exempt from the corporate income tax.
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Are you sure about this? never heard of it before? If you live in the UK as an foreigner and you own a offshore company and don't do business within the UK then it is possible to be exempted from tax the first 7 years you live in the UK. At least it was like that.
 
#8
Admin said:
Are you sure about this? never heard of it before? If you live in the UK as an foreigner and you own a offshore company and don't do business within the UK then it is possible to be exempted from tax the first 7 years you live in the UK. At least it was like that.
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Yes, you are right.
I mean you may be fully exempt from CIT in UK if you are living in other country.
 
#10
@devnull can you give a hint (first or last part of the name) of the lawyer / agency?

This isnt really very complicated. Make sure to have it one of the known lawyer / accountants looking it over. If you dont have the proper holding structure (which again is easy) you will not get your refunds etc.

Also who told you it is taking 2-3 years to get the refunds? While it is certainly taking longer than the 14days it is nowhere near as long especially since they digitized most of the tax / vat system etc. Every late month would also incur them 0.5-0.7% / month penalty in your favor.
 
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#11
Well, when the bookholding and taxation for one business year is finished, then it might can take up to 3 months time until the tax refund are approxed. So i assumed up to 2 years time.

FYI, my holding is an shottish LP.
 
#12
But you are not paying the taxes before your can request the refund. The 30% are not gone for 2 years or so. You file the refund the day you pay the taxes.

The 2 years+ leading up to the actual payment of the tax you can make that money work for you actually.
 
#13
jackfrost said:
But you are not paying the taxes before your can request the refund. The 30% are not gone for 2 years or so. You file the refund the day you pay the taxes.

The 2 years+ leading up to the actual payment of the tax you can make that money work for you actually.
Click to expand...

Good to know, thanks for the valuable info.
 
#14
You do of course have to keep in mind that at some point in the future you will have to pay 30% at least for that short period of time but until then you can do whatever you want with that money. Absolutely make sure you can pay those 30% on time after the approx 2 years though! There is some wording in there i think that the eligibility for the refunds depend on paying the taxes on time!

So it is a minor annoyance that you cannot fully blow that money away on risky stuff until the actual tax payment date but you can still beat inflation with it, ETF it or whatever not to risky stuff. Unless your business goes bust of course you are also sitting on a pile of money from your next earnings that you won't be paying taxes on for another additional year etc pp so after you are in the whole cycle that all doesn't really matter anymore since you will be sitting on new profits and the old refund etc pp.
 
#15
Can't you setup a company in the Seychelles as an holding and then transfer money from the HK corp as dividend to the Seychelles? Later on when tax apply close the company by simply resign as director of the company?
 
#16
you live in malta, thats a tax haven? You can setup up shop anywhere you like outside maltaa and pay yourself whatever you want from your corporate account to personal account. You got remittance basis, so as long as you dont bring any money in - you are 100% tax complaint and 100% tax free too in the EU because your domicile is German (Assuming German dad and not maltese).

same goes for UK for 7 years - but be prepared to give all foreign details and Ireland. MAlta doesnt even ASK for foreign income
 
#18
yup i used to life there, granted rules can change - however, Ireland, UK and MAlta are all remittance basis countries. Malta doesnt require (At least back then ) even details of your income and investments outside MAlta as long as you were a non dom. Likewise for UK, but you do need full details. IReland, not sure what they want, but its also clear its remittance based. In other words, why not live in the EU and be almost taxfree?

if you life in malta, and earn salary great, you pay normal. However dividends, and work performed OUTSIDE Malta is all not relevant for tax return whasoever. So if you earn 1Million usd , its tax free. IF you bring in of that 1M, 200k usd into malta, then you will add 200k to your "taxable income" etc.......

Not sure why not more people move to IReland or MAlta?
 
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#19
there were some incentives like the three years tax free in gozo, check if it's in force:
Three tax-free years for Malta companies relocating to Gozo - TVM News


"Not sure why not more people move to IReland or MAlta?"
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one: ireland weather is s**t and it's not for everyone. also the double sandwitch thing and various loopholes have been tightened.
Malta is small, too small for my needs, it's still too cold in winter, house are s**t, too hot in summer, the average quality on things is much lower than what I'm used to... I wouldn't last long there. But if it saved millions in tax, then I would live a year inside a shoes box and adapt :D
 
#20
challenge said:
Malta is small, too small for my needs, it's still too cold in winter, house are s**t, too hot in summer, the average quality on things is much lower than what I'm used to... I wouldn't last long there. But if it saved millions in tax, then I would live a year inside a shoes box and adapt :D
Click to expand...
but yeah, if you can fit into the legal loopholes that are there, malta is a nice to place to own a property. as you are in europe, there are flights to every big euro city nearly daily and they are cheap.
Also I knew that they didn't really check the 183days thing... ;)
state is small = less public employees = less money down the drain in respect to other countries.
only a thing, friends warned me that maltese are clever/cunning, especially when it comes down to money. So don't trust them blindly on money. i.e. rents, go to check in person as it's going to be different than pictures etc
same for deals and such, but they are friendly and the place is safe pretty much everywhere on the streets.
 
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