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lory

Mentor Group Gold
@BlueMist that is super interesting. What about declaring taxes because you hold a Malta ID card, Malta will expect that won't they, if you don't file a tax return they'd fine you or??
do you really think they will go after you if you don't live there?
 

BlueMist

Entrepreneur
Just curious, the Maltese consolidated accounts setup, how does it work out in practice - so you have A Ltd. and B Ltd. both on Malta, A owns B, and you own A Ltd., and you are a tax resident on Malta only. B can then conduct any business (e.g. sell consulting services, facilitate sales, whatever), and you then pay out the profits as dividends to yourself, with 5% total company tax. Are you due any other taxes on top of this in Malta e.g. personal income tax?
I don't think that Malta trading + holding setup is advisable for residents living in Malta. It is fine to use such setup of Malta holding + Malta trading if you are not living in Malta. That's why usually the most common scenario for people living there is Malta trading + Cyprus holding. Such dividends received from Malta trading company should not be remitted back to Malta to your personal account. You should pay them out somewhere else to your personal account and wait some time if you necessarily want to bring them back to Malta.

But honestly I have yet to see Maltese authorities cracking down on people breaking these rules. There are people who gets dividends to Cyprus holding, withdraw to personal account outside of Malta, use ATM to get cash from these non Malta accounts and nobody has questioned anything.
 

jackfrost

Entrepreneur
always foreign holding. dont do holding + active trading both on malta just for the instant 5% and not paying 35 + getting refund scheme if you live there (which you should for the whole thing). there are ways to do it but not worth it especially given the current climate.

you can remit the money to malta tax free after some time as savings. officially something like minimum of 6 months is being floated but most decent accountants / lawyers will advise you to 1-2 years.

like bluemist said i have not found anyone cracking down yet either but there is zero reason to own a maltese bank account really... you likely will not get one anymore anyways without considerable expenses / knowing someone.
 

Paper Chaser

New member
I don't think that Malta trading + holding setup is advisable for residents living in Malta. It is fine to use such setup of Malta holding + Malta trading if you are not living in Malta. That's why usually the most common scenario for people living there is Malta trading + Cyprus holding. Such dividends received from Malta trading company should not be remitted back to Malta to your personal account. You should pay them out somewhere else to your personal account and wait some time if you necessarily want to bring them back to Malta.
always foreign holding. dont do holding + active trading both on malta just for the instant 5% and not paying 35 + getting refund scheme if you live there (which you should for the whole thing). there are ways to do it but not worth it especially given the current climate.

you can remit the money to malta tax free after some time as savings. officially something like minimum of 6 months is being floated but most decent accountants / lawyers will advise you to 1-2 years.
Seems like no one really appreciates the instant 5% taxation scheme, which ofcourse is quite a bit more expensive yet you will be done with taxes in no time. I might overthink going for the 3-way-structure I guess.

What do you guys think of some Asian Holding+MT Trading, like a HK Holding? Might be better for businesses involved in Cryptos. I'm currently thinking about a HK+MT-way, because EU regulations seem to get worse by the day and I'd lose most of my clients if it really does get worse.
 

BlueMist

Entrepreneur
always foreign holding. dont do holding + active trading both on malta just for the instant 5% and not paying 35 + getting refund scheme if you live there (which you should for the whole thing). there are ways to do it but not worth it especially given the current climate.
It doesn't seem matter if you have MT holding + MT trading or CY holding + MT trading for instant 5% taxation scheme.

What do you guys think of some Asian Holding+MT Trading, like a HK Holding? Might be better for businesses involved in Cryptos. I'm currently thinking about a HK+MT-way, because EU regulations seem to get worse by the day and I'd lose most of my clients if it really does get worse.
That's interesting, I would also like to hear about such setup in practice. I once thought about making Singapore holding for my Malta company, but never really ventured into details of doing it. It still seems Cyprus holding is the more popular choice.
 

jackfrost

Entrepreneur
It doesn't seem matter if you have MT holding + MT trading or CY holding + MT trading for instant 5% taxation scheme.


That's interesting, I would also like to hear about such setup in practice. I once thought about making Singapore holding for my Malta company, but never really ventured into details of doing it. It still seems Cyprus holding is the more popular choice.

I have not looked into it in detail yet but i was being told MT trading + GIB holding does not qualify or has problems tax wise with the instant 5% scheme as in not even paying the 35%.

PS: that might have been in context of tax credits / 0% income tax / foreign income etc so the 5% scheme might be working with those constellations anyways.
 
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biz1

New member
@BlueMist @jackfrost @Paper Chaser thank you for your excellent thoughts.

So for me, I will have a Malta ID. This automatically means that I am "ordinarily resident" for tax purposes in Malta doesn't it, even if I only am on Malta even just 2 days per year, doesn't it.

This in turn means that likely any activity I do in any country, will be deemed a "permanent establishment in Malta" and a "significant function" is in Malta and therefore any business I own or control will be subject to Malta CFC rules (per legal notice 411: presuming its tax rate is <50% of Malta's and its profit exceeds 750k€/75k€ and profitability is >10%). I guess this is pretty crap really - as long as I'm below the 750k€ threshold it's fine but I'd need to time unregistering from Malta well before hitting that cap.

Do you see any way that I can keep my malta ID while not having my "whole business realm" sucked into the Malta CFC black hole??

Just to invent an interesting example, say I would also concurrently be a legal resident in Dubai, could that somehow offset this drama of all-of-me becoming CFC-taxable in Malta.

Also, is there some structural feature I could apply to any company/entity anywhere in the world that I control, that at least would bring it down to being taxed at 5% by Malta? E.g. "have all your structures out there conform to the consolidated tax method by simply having any company ownerd by another company, this way Malta CFC will prescribe a 5% tax rate just in case the structure is based in a jurisdiction with <2.5% tax"

Please let me know what you think. I also presume this is such a specific situation that normally it wouldn't even come to mind for advisors.
 
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jackfrost

Entrepreneur
I cant really give specific advice on your cfc problem but just holding an ID does not automatically make you tax resident. It makes you tax liable for your time that you spent on Malta depending on DTTs with your citizenship country etc.

Being considered fully tax resident on Malta needs the tax certificate which comes with providing receipts etc that you actually live on the island and have spent the 183+ days there unless you opt for one of the other residency schemes which will give you that after 3 days or so per year for the exchange of approx 25k + 20k rent or i think 400k or so buy.

This will usually also be the rules in the DTT.

You will get a tax id however (if you request one) either way so in theory you could tell other countries you are tax resident there and provide a tax id. What happens if anybody does indeed check that e.g. your home country - i have no idea.
 

biz1

New member
(I presume I don't care about tax credits, why would I.)


@jackfrost thanks for sharing your thoughts. Interesting. As for me, I am already resident from before in a pretty-much-zero-tax jurisdiction, so I don't have the problem most have of "what about when my home country wants taxes/asks questions", which could motivate them to stay 183 days in one place only for that reason - I moved out years and years ago.

What you are asking me in a way is the nomad's dilemma, "to want to be counted as being 183 days on Malta per year, or not to be counted as being".

I think mostly in Europe you can stay as a tourist with no tax obligations for 179 or 89 days per year, so if you are going around like that, you don't get sucked into tax residency in Europe - successful nomadism.


When I read Malta's materials, it appears to me like they kind of presume of me as ID card holder, that I am "ordinarily resident" as they call it. They don't even have a definition for ordinarily resident, so I simply "am if I say I am" plus I don't spend more than 6 months away from Malta (some rule says something to that effect doesn't it), so come for a weekend every 179 days.

Do you see any reason why I would *not* be ordinarily resident on Malta, while never spending more than 179 days away from Malta, though while not paying the "Global Resident" program's 15k€+9.6k€ rent?

I guess to keep the ID I would need to maintain that I am indeed ordinarily resident on Malta?

If I like to make a case that I'm *not* ordinarily resident on Malta, what would I fill out on the self-assessment tax form?


Last, if I am counted as ordinarily resident, how should companies I control (in zero and low tax jurisdictions) be structured, is the point to structure them just like the Malta 5%-without-refund-procedure is setup?

Your thoughts on these points are much appreciated.
 

xipoid

New member
Btw planning for more than 5 years with any EU setup is
unrealistic. Expect things to change 2025 on. Of course MT & Co will try to uphold similar structures for longer but it will likely be a lot harder. The time is ticking for these budget setups that you can pull off so easily with so little money.
Case in point, Cyprus now has an 8 billion euro hole in its budget thanks to having to suspend its passport for sale program.

The leaks are all coming from Al Jazeera, so there's speculation that this is an even easier way for Turkey to inconvenience its neighbour than drilling for oil off its shores.
 
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