Are you a UK contractor with your own UK Ltd Company? Are you thinking about using your Ltd Company in Malta for contracting work?
There are clear benefits to using your own Ltd Company, but there are also some problems that need to be addressed beforehand.
Benefits of using your own UK Ltd Company
- You’ll be dealing with a familiar tax process, provided you and the company don’t become liable for tax in Malta.
- You can claim expenses for travel, relocation, etc.
- You’ll maintain revenue continuity.
Downsides of using your UK Ltd Company
Despite these potential advantages, using your Ltd Company can incur further tax liability and cause substantial immigration and visa setbacks. Specifically, some of the downsides include:
- Creating permanent establishment in Malta.
- Being in Malta for more than 183 days triggers tax residency for UK citizens. Once this happens, you’re required to be on a local payroll.
- Preventing the use of Double Taxation Agreements.
- Possibly paying corporation or company tax in Malta and in the UK.
- Creating exposure to more tax rates
- Possibly needing to register for VAT/sales tax in Malta.
- Registering yourself on a local payroll as the company’s employee.
- Doing your UK administration from overseas, which can be excruciating.
- Possibly being required to register your company within the tax system in Malta(not recommended!).
- Having to de-register your company, and ensuring everything is complete to the satisfaction of both tax authorities.
Using your Ltd Company in Malta can open you to further costs, taxes, and admin.
Possibly even more of an issue will be securing the right work permit while using your own Ltd Company. In general, you won’t be able to sponsor yourself, meaning it will be best to explore other options for your contract in Malta. You can learn more about permits and sponsorships in our FAQ.