Benefits and fiscal incentives available to organisations which set up back office operations in Malta have been particularly successful in attracting back office operations to Malta. It is a policy of the Maltese authorities to encourage the setting up of Malta based operations that offer back office administration and support services to foreign enterprises.
Malta's success in attracting operations of this nature is also attributable to the availability of a well-educated and skilled multilingual workforce, highly qualified professionals, state-of-the-art telecommunication facilities and comparatively low office and employment costs.
Back office services include routine administrative and clerical services such as the processing and recording of invoices, sales transactions, book keeping and accounting services, management information reporting, data processing, computer bureau, database and computer outsourcing. Should the back office and support services be provided to financial services operators, authorisation from the Malta Financial Services Authority to provide such back office services would be required.
Taxation
A company providing back office services may enjoy the fiscal benefits available in Malta.
The shareholders of the Company, whether physical or corporate shareholders, may avail themselves of the refundable tax credit system available under Maltese law. Furthermore, due to the imputation tax system provided for under Maltese legislation, the shareholders will not pay further tax on the dividends received from the Company. For further details kindly refer to our fact sheet titled "Malta Companies and Taxation".
It may be opportune for the shareholders to interpose a Maltese holding company between themselves and the Malta company, so that dividends and tax refunds are paid to this company instead of to the shareholders directly, thus possibly avoiding an immediate tax liability in the shareholder's country of residence. Such intermediate company can also be used as a vehicle for other investments.
The Company may also avail itself of Malta's extensive double tax treaty network as well as from other forms of double taxation relief (kindly refer to our fact sheet titled "Malta Companies and Taxation").
Companies which already provide back office services in other jurisdictions may re-domicile to Malta without the need to be dissolved and wound up in the jurisdiction where they are registered. Furthermore, upon re-domiciliation being finalised, they may also benefit from the above-mentioned fiscal incentives.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
