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    • Business Related FACT Sheets

      • Malta Participating Entities

          • What is a Participating Holding (PH)? 

            A participation in another company shall constitute a participating holding when: 

            1. A Maltese company holds directly at least 10% of the equity of a company entitling it to at least 10% of any two of the following: 

            • Right to vote; 
            • Profits available for distribution 
            • Assets available for distribution on a winding up 


            2. A Maltese company is a shareholder in a company and has the option to acquire all the remaining shares in that company 

            3. A Maltese company is a shareholder in a company and is entitled to first refusal in the event of proposed disposal, redemption or cancellation of the remaining shares in that company 

            4. A Maltese company is a shareholder in a company and is entitled to sit or to appoint a person to sit on the Board of that company as director 

            5. A Maltese company holds an investment amounting to a least EUR 1,164,000 for an uninterrupted period of not less than 183 days. 

            6. A Maltese company holds shares in a company for the furtherance of the business of the Maltese company and the holding is not held for trading purposes 


            Participations in specific types of partnerships may also constitute a participating holding. 

            Anti-abuse provisions vis-à-vis participation exemption 

            Dividends received from participating holdings must satisfy one of the following conditions: 

            1. PH is resident or incorporated in a country which forms part of the EU 
            2. PH is subject to any foreign tax of at least 15% 
            3. PH does not have more than 50% of its income derived from passive interest or royalties 


            If none of the above conditions are satisfied then both conditions must be satisfied: 

            1. The equity holding by the MHC in the body of persons not resident in Malta is not a portfolio investment and for this purpose the holding of shares by the MHC in a body of persons not resident in Malta which derives more than 50% of its income from portfolio investments shall be deemed to be a portfolio investment, and
            2. the body of persons not resident in Malta or its passive interest or royalties have been subject to any foreign tax of at least 5% 


            This exemption shall also apply to gains or profits resulting from the transfer of PH in companies resident in Malta. 

            FOR MORE INFORMATION REFER TO OUR FACT SHEETS