Declaring Your Malta Limited to Tax Authorities

When I talk to friends or family back home about my work at Dr. Werner & Partners, I usually keep it brief: our core business is helping clients with company formation in Malta for tax optimization and to leverage the island's other strategic advantages.

Nowadays, most people get the gist, but I still see that look of skepticism. There’s this lingering idea that having a company abroad is somehow shady or legally grey. One question I hear a lot is: "Is it really that easy to get one past the tax man?"

My answer is always the same: You don't. And you shouldn't. The worry that this is some sort of evasion scheme is unfounded for two reasons: firstly, a Malta Limited is completely legal, and secondly, strict reporting obligations exist for shareholders in their home countries.

The Malta Limited is Legal Thanks to Freedom of Establishment

The legality of the structure isn't a loophole—it's a fundamental right within the EU known as the Freedom of Establishment. The EU has worked hard to cut red tape and simplify international trade, just as a single market should.

Today, a company based in any EU member state has the right to offer its services or goods in other member states without jumping through endless bureaucratic hoops. This is one of the massive advantages we enjoy within the EU: you can live in one country and legally own a business in another.

You Must Declare Your Malta Limited at Home

Leaving the legal framework aside, there’s a practical reason why a Malta Limited has nothing to do with tax evasion: you have to declare it.

If you set up a company here—whether through us at Dr. Werner & Partners or anyone else—you generally need to inform your home tax authority. You cannot simply open a company in Malta and keep it a secret from the taxman back home.

For example, strict rules apply in high-tax jurisdictions like Germany or the UK. In Germany, acquiring 10% or more of a foreign company must be reported to the tax authorities (Finanzamt) within the deadline set by Section 138 of the Fiscal Code (Abgabenordnung). If you miss that deadline, you are looking at fines of up to EUR 25,000 under Section 379 AO, not to mention the risk of a tax evasion investigation. Similarly, in the UK and other countries, failing to declare foreign interests to authorities like HMRC can lead to severe penalties and criminal charges.

If you run your Malta Limited properly and don't try to play hide-and-seek with the authorities, you have nothing to worry about. At Dr. Werner & Partners, we always ensure our clients establish sufficient transparency. It’s the only way to sleep soundly at night while legally enjoying the benefits of the Malta tax system.