Both Cyprus and Malta are popular choices for company registration due to their favourable tax regimes and business-friendly environments. Here is a comparison of company registration and tax aspects between the two jurisdictions:
Cyprus:
- **Corporate Tax Rate:** Cyprus has a corporate tax rate of 12.5%, making it one of the most competitive rates in the EU, also you can reduce the tax rate to 2.5%.
- **Dividend Income:** Dividends received by a Cyprus company from another Cyprus company are exempt from taxation. Dividends from foreign companies may also benefit from exemptions or reduced rates under double tax treaties.
- **Double Tax Treaties:** Cyprus has an extensive network of double tax treaties, which can be advantageous for companies engaged in international business.
- **EU Member State:** Cyprus is a member of the European Union, providing access to the EU market and benefits.
Malta:
- **Corporate Tax Rate:** Malta has a flat corporate tax rate of 35%, but eligible companies can benefit from refunds that effectively reduce the tax rate to 5% to 10%.
- **Participation Exemption:** Dividends received by a Malta company from a participating holding or a qualifying subsidiary are exempt from tax.
- **Imputation System:** Malta operates a full imputation system, meaning that tax paid by the company is imputed to the shareholder upon distribution of dividends.
- **EU Member State:** Like Cyprus, Malta is also a member of the European Union.
When choosing between Cyprus and Malta for company registration, it's important to consider factors such as your business activities, international operations, and specific tax planning needs. Both jurisdictions offer advantages and may be suitable depending on your individual circumstances. Consulting with our tax advisor or legal expert familiar with both jurisdictions can help you make an informed decision based on your business requirements.
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.