Malta

Assuming the 5% rate applies automatically to all Malta companies

Fix: The 5% effective rate only applies when dividends are distributed to qualifying non-Maltese shareholders who then claim the 6/7ths refund. A Malta company that retains profits pays the full 35%. You need a proper holding structure — typically a non-Maltese parent company — and must actually distribute dividends and file the refund claim. Work with a Malta tax advisor to set up the structure correctly from day one.

Underestimating the administrative burden of the refund system

Fix: The refund process involves paying 35% corporate tax, distributing dividends, filing a refund application with the Malta Commissioner for Revenue, and waiting for the refund to be processed (typically 2–6 weeks but can be longer). Budget for a local tax administrator to manage this process. The refund is paid to the shareholder, not the company, so cash flow planning is important.

Not planning for banking challenges in gaming and crypto sectors

Fix: Malta banks apply enhanced due diligence to gaming, crypto, and fintech companies. Bank of Valletta and HSBC Malta may decline accounts for certain business models. Start the banking conversation before or during incorporation, not after. Consider having a Malta-resident director attend the bank meeting in person. Budget banking alternatives (EMIs, fintechs) can provide interim payment processing.

Ignoring substance requirements after the FATF grey-listing

Fix: Malta was grey-listed by the FATF in 2021 and removed in 2022, but the experience led to significantly tightened substance and compliance requirements. Ensure your Malta company has a real registered office, local directors who are genuinely involved in management, and proper beneficial ownership declarations. Malta authorities now scrutinise companies more carefully than before.