Luxembourg or Malta: where should your business be based?
Malta ranks higher in the index, =12 against 23. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Corporate income tax is 16% on income above €200,000 and 14% up to €175,000. With the 7% solidarity surcharge and Luxembourg City's 6.75% municipal business tax, the combined rate is 23.87%. VAT is 17%.
The headline rate is 35%. Trading profits reach about 5% effective only through shareholder refunds on distribution. VAT is 18%.
Set-up
An SARL is formed before a notary, who files the deed with the Trade and Companies Register. The registry fee is €105.91 plus VAT, and publication in the RESA follows on acceptance, normally the day of filing.
Registration can take 24 hours once the file is complete. Fees start at €100 and the annual return at €85, both rising with authorised capital.
On the ground
Every company needs a registered office in Luxembourg. A business permit for commercial, craft and some professional activities needs a physical establishment and a manager present day to day.
A registered office in Malta and a company secretary are mandatory. Authorised capital must be at least €1,164.69, with 20% paid up.
Ownership
The beneficial ownership register closed to the public after the EU Court of Justice ruling of 22 November 2022. Authorities and obliged professionals have access, and journalists, AML organisations and likely counterparties can apply.
General public access to the beneficial ownership register was suspended after a November 2022 EU court ruling; others must show a legitimate interest.
Residence
A non-EU owner who will run the business in person can apply for a self-employed residence permit, with a business plan, proof of resources and the business permit agreement in principle. A reply is due within 3 months.
The Start-up Residence Programme requires at least €25,000 invested in a Malta company and a business plan approved by Malta Enterprise.
Living and working
Currency
Euro.
Euro.
Time zone
UTC+1, or UTC+2 in summer.
UTC+1, or UTC+2 in summer.
Personal tax
Progressive rates rise to 42% on income above €234,870. With the 9% solidarity surcharge for higher earners, the top marginal rate is 45.78%.
Top rate 35% on income above €60,000 (single, 2026). Capital gains tax applies, but there is no inheritance or wealth tax.
Flights
Luxembourg Airport at Findel offers more than 100 non-stop destinations.
Malta International Airport served 109 destinations in 2024; Delta flies to New York three times a week from June to October 2026.
Language
Maltese and English are official languages. The courts use Maltese, although Parliament can provide for the use of English.
Luxembourg vs Malta: common questions
Luxembourg: Corporate income tax is 16% on income above €200,000 and 14% up to €175,000. With the 7% solidarity surcharge and Luxembourg City's 6.75% municipal business tax, the combined rate is 23.87%. VAT is 17%. Malta: The headline rate is 35%. Trading profits reach about 5% effective only through shareholder refunds on distribution. VAT is 18%.
Luxembourg: An SARL is formed before a notary, who files the deed with the Trade and Companies Register. The registry fee is €105.91 plus VAT, and publication in the RESA follows on acceptance, normally the day of filing. Malta: Registration can take 24 hours once the file is complete. Fees start at €100 and the annual return at €85, both rising with authorised capital.
Luxembourg: Every company needs a registered office in Luxembourg. A business permit for commercial, craft and some professional activities needs a physical establishment and a manager present day to day. Malta: A registered office in Malta and a company secretary are mandatory. Authorised capital must be at least €1,164.69, with 20% paid up.
Luxembourg: The beneficial ownership register closed to the public after the EU Court of Justice ruling of 22 November 2022. Authorities and obliged professionals have access, and journalists, AML organisations and likely counterparties can apply. Malta: General public access to the beneficial ownership register was suspended after a November 2022 EU court ruling; others must show a legitimate interest.
Luxembourg: A non-EU owner who will run the business in person can apply for a self-employed residence permit, with a business plan, proof of resources and the business permit agreement in principle. A reply is due within 3 months. Malta: The Start-up Residence Programme requires at least €25,000 invested in a Malta company and a business plan approved by Malta Enterprise.
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