Participation Exemption & Malta Holding Companies
A Malta Holding Company is a company incorporated in Malta with the object of holding shares in other subsidiary companies or also of holding any other assets including movable and immovable property, cash and intellectual property both in and outside Malta. Malta companies benefit from a participating exemption based on the participating holding rules both on dividends from such holdings and gains arising on the disposal of such holdings. Recent amendments have extended Malta's participation exemption also to domestic holdings of shares and capital gains arising from the transfer of a participating holding in a Malta company are also eligible for the participation exemption.
Malta has fast become the holding company jurisdiction of choice for a growing number of multinational groups who opt to set up their holding company in Malta. Malta’s full participation exemption applies to both profits (namely dividends) derived
Malta Participating Holdings
Malta holding companies can be structured to hold shares in other companies. Such participations in other companies held by Malta holding companies qualify as participating holdings if they meet either of the following conditions:
- The holding is at least 5% of the equity shares of a company whose capital is wholly or partially divided into shares and such holding gives right to at least 5% of 2 of the following:
- Rights to vote
- Right to profits upon distribution
- Rights to assets available for distribution on winding up
