Investing in Gozo

Malta’s stable economy, access to European markets and global ties make it an attractive investment destination. The business environment is competitive with supportive measures, and the country has implemented effective policies and legislations to foster a pro-business environment.  

Despite international circumstances that have impacted economies from practical every angle in recent years, Malta’s economy has proven resilient, demonstrating its strong structural foundations. Positive credit ratings from various agencies further affirm its stability. 

Source: https://treasury.gov.mt/en/Pages/Debt_Management_Directorate/Malta_Credit_Ratings.aspx

The Maltese Islands have a favourable taxation system, making it one of the most attractive tax regimes in the EU.  Corporate tax is charged at a nominal rate of 35% on profits generated by a business entity from its different sources of income.  The effective tax rate for foreign-owned companies incorporated in Malta can decrease up to 5% as a result of Malta’s attractive refund system.

Malta and Gozo follow a full imputation system, where dividends distributed to shareholders are not subjected to further taxes. Shareholders receive an imputation credit that offsets any potential tax liability on dividends, and they may be eligible for a tax refund if their personal tax rate is lower than the 35% rate. 

Tax liability applies to taxable income generated by businesses registered in Malta and foreign undertakings operating in Malta. 

Gozo’s position as a business destination is driven by strong government support and assistance. The island offers a range of competitive incentives and schemes for businesses, which can be accessed through various government entities. More information on these support measures can be found here.

Significant investment has been made to ensure that the island of Gozo offers exceptional facilities for businesses willing to set up or expand their operations in Gozo.

The Gozo Innovation Hub, is the perfect choice for businesses seeking office space in Gozo. With its modern campus-style facilities, it offers advanced digital solutions for knowledge-based firms across various sectors, including finance, IT, market research and AI.  The hub provides an exceptional working environment with meeting rooms, conference halls, serviced offices, kitchenettes, and parking, all at competitive rates. Managed by INDIS Malta, the Gozo Innovation Hub efficiently supports new companies in setting up and operating their businesses in a short timeframe. 

Apart from the excellent office space available at the Gozo Innovation Hub, fully equipped private commercial office spaces are also available for rent or for sale in Gozo. 

Gozo boasts a strong ICT infrastructure with two fibre optic cables connecting it to mainland Malta, ensuring reliable and high-speed networking. This supports well-equipped office and industrial spaces on the island. Additionally, Gozo offers a wide range of venues and professional event services for collaborative meetings, conferences, conventions and corporate events. 

In addition, businesses operating from Gozo can also rely on different service providers offering a myriad of administrative and corporate support services ranging from financial reporting, advisory and consultancy services, taxation, auditing, IT support, administration, and other ancillary services.

Despite the lack of natural resources in Malta and Gozo, the islands have invested heavily in developing their labour force, which is now considered its most precious resource. As a result, within a broad range of industries, the islands boast a skilled, talented and qualified workforce proficient in multiple languages. 

Gozo’s economic growth and prospects attract foreign talented and skilled individuals from Europe and beyond.  This phenomenon further enhances the attractiveness of the island’s workforce to present and prospective investors.

The first step in starting a business is registration with the relevant entities. At this point, one must establish the business’s legal format, be it a Sole Trader, Partnership, Limited Liability Company or Cooperative.

One also needs to consider that certain types of business activities require a valid licence or permit before undertaking the business activity.  

The Business First portal assists users with the relevant business registration requirements and business licence/s or permit/s to be sought from the relevant competent authorities.

Another key step is registering and obtaining a tax identification number (TIN) and a VAT registration number.  Detailed information and registration requirements can be easily accessed on the Business First portal.

One must register with and notify Jobsplus, the national employment authority, about their employment status.  Before engaging employees, a business needs to obtain a PE number (Permission to Employ) by compiling and submitting an Employers Registration Form.  Once this PE number is obtained, newly engaged employees are to be registered with Jobsplus using the Declaration of Commencement of Employment form.  In this regard, the Business First portal assists users with the relevant requirements regarding employment registration.

Subsequently, a business will be required to compile and submit quarterly employment returns with the Inland Revenue Department.  This is necessary because the employer is responsible for deducting income tax (Final Settlement System/FSS) and Social Security (National Insurance/NI) contributions from the employees’ salaries.  Further detailed information on Employment Returns, reporting and employee deductions can be found on the Business First portal.

Businesses in Malta are required to maintain proper financial accounting records.  Whilst the islands follow the International Financial Reporting Standards (IFRS) as adopted by the EU, companies that do not exceed certain thresholds can opt to prepare financial statements in line with General Accounting Principles for Small and Medium-sized Entities (GAPSME).

Financial statements must be submitted at the end of every financial year.  Subject to a number of exemptions, certain private companies might also be required to submit audited financial statements in accordance with International Standards on Auditing.

Further detailed information on financial reporting can be accessed through the Business First portal.  

Businesses are encouraged to seek assistance from local established professional service firms offering consultancy, advisory, accounting, financial reporting and auditing services.

The Islands seek to promote a supportive business environment. The Gozo Business Chamber and the Gozo Tourism Association have been set up, with the aim of supporting, representing and safeguarding the common interests of businesses operating in Gozo.

Since its formation in 1999, the Chamber has advocated for Gozitan businesses at a national level, addressing regional (those affecting Gozitan businesses in particular), national (businesses in general), and international (those affecting businesses on islands).

The Gozo Business Chamber not only represents its members but also promotes commercial opportunities among its members, and also acts as a mediator between its members and the authorities to find common solutions. The Chamber also represents its members during discussions with regional, national and international organisations and authorities. It provides continuous education through information seminars and training. Along the years the Chamber has also played an important role within INSULEUR, the organisation that represents businesses within EU islands. Membership to the Chamber is open to all businesses operating from and in Gozo.

The Gozo Tourism Association was set up in 1999, to promote Gozo as an all-year-round distinct tourist destination, whilst protecting and lobbying for the interest of its members.

The Association incorporates all sectors in the tourism industry and has established itself as the regional tourism voice and representative at national level.

Along the years the Gozo Tourism Association has taken various initiatives to meet the aforementioned objectives. Some of these initiatives include several promotional publications, the commissioning of various studies covering the marketing, management and human resources of tourism in Gozo, as well as seminars, workshops, and conferences both for its members as well as other stakeholders.

Coming together was the beginning, keeping together is progress, working together is success. Membership to the Gozo Tourism Association is open to all operators within the tourism industry.