Malta E-Commerce Companies
Moving your e-commerce company’s tax residence to Malta: a well respected –low tax – jurisdiction in the EU
Benefits of online E-Commerce
One of the major benefits of an online e-Commerce business is that it may be run from virtual cyberspace giving its promoters the option of living anywhere in the world. Very often it also allows them to choose the most preferable legal system and tax base. In fact the E-commerce company is one of the best examples of a company which typically does not have a strong connecting factor with any particular country. This often allows it to be selective when it comes to choosing the jurisdiction in which it will be resident for tax purposes.
An e-commerce company does not necessarily imply a physical presence in any particular jurisdiction, as opposed to, industrial activities which must be necessarily be physically located in a particular place. Nevertheless, even in the case of larger businesses with industrial operations, activities may very often be segregated into separate companies located in different jurisdictions, for example by using one company for manufacturing and another for distribution. This model allows most businesses - whether they sell goods or services - to benefit the creation of an e-commerce company.
There can be innumerable forms of e-business companies trading or providing their services over the Internet. Typical examples of e commerce companies are betting companies and casinos, travel and tourism companies, pharmaceutical and herbal remedy e-tailers, online consultancy providers, ezines, e-learning institutions and online bookshops.
Malta: a jurisdiction of choice for e-commerce companies
The choice of a legal system /tax base is probably the most important consideration when incorporating an e-commerce company. Business promoters are not only after a low tax jurisdiction, but also a reputable one. The move to a jurisdiction with tax haven connotations makes it more likely that the move will be seen as a tax avoidance measure. Moreover, the stability of the legal and banking system is of paramount importance, since it gives the investor more peace of mind that his investment will not be prejudiced. Likewise, the privacy which the legal system can offer is also a key consideration. Finally, the cost effectiveness and reliability of the services infrastructure, especially the IT and company incorporation and maintenance services, are also very important.
Malta – an EU Member State in the Eurozone - addresses all of the above considerations:
- theMalta tax system allows shareholders to benefit from an effective tax rate which can be as low as 5%;
- An excellent international reputation abroad (on the OECD white list – not considered offshore);
- Legal system is stable with the Maltese banking system ranked as the 10th soundest banking system in the world by the World Economic Forum - Global Competitiveness Report;
- Excellent professional services infrastructure.
- Privacy of investors may be safeguarded, interalia by the use of trusts /nominee arrangements
