Tax Advisor Braunschweig Malta: EU Holding Structures and Tax Optimization for Local Businesses

Dear Braunschweig entrepreneurs,

Last week, as I walked through Braunschweig’s city centre, you were on my mind: the many successful SMEs leading their businesses at the crossroads of tradition and innovation. And I kept coming back to a question I often hear:

Why are you still paying German corporate taxes when Malta offers you legal alternatives?

Let’s be honest: As an entrepreneur in Braunschweig, you face unique challenges. The proximity to Wolfsburg and Hanover brings opportunities. But the competition for international talent and markets is getting tougher too.

This is where Malta comes in.

Not as some exotic island in the Mediterranean. But as a fully- fledged EU member with one of the most advanced tax systems in Europe. Perfect for Braunschweig-based companies that think internationally.

So: You keep your headquarters in Braunschweig. But you optimise your tax structure, legally and sustainably.

Sounds too good to be true?

Let me show you how Braunschweig companies are already benefiting from Maltese tax models today. No shady setups. No legal risks.

Ready for your journey into the world of smart tax planning?

Yours, RMS

Malta Tax Models for Braunschweig Companies: The Complete Overview

Before we dive into the details, let’s clear up a common misconception. Many Braunschweig entrepreneurs immediately associate Malta with letterbox companies or aggressive tax schemes.

That’s simply not true.

As an EU member since 2004, Malta offers a fully regulated tax system—designed for modern, international business models. Exactly what innovative companies from the Braunschweig region need.

The Maltese Full Imputation System: Explained Simply

Malta uses what’s known as a Full Imputation System. In plain English, your Maltese company pays 35% corporate tax at first. But here’s the interesting part:

As a shareholder, most of this tax is refunded upon dividend distribution—depending on the structure, either 6/7 or 5/7 of the paid tax.

Example calculation for a Braunschweig company:

In other words: Instead of the German corporate tax rate of at least 30%, you pay only 5% effectively.

Malta for Braunschweig Group Structures

Malta becomes particularly interesting for Braunschweig companies with several subsidiaries. Imagine a typical regional scenario:

A machine engineering firm from Braunschweig-Völkenrode with subsidiaries in Poland and the Czech Republic. Up to now, everything runs through Germany. With a Maltese holding, you can direct dividends from your Eastern European subsidiaries to Malta tax-neutrally.

Why this is smart:

• No withholding tax between EU countries (EU Parent-Subsidiary Directive)
• Malta taxes foreign dividends only upon further distribution
• Reinvestment in new projects remains tax-free
• Flexibility for international expansion

Licencing Models: Perfect for Innovative Braunschweig Companies

Many companies from the Braunschweig area are developing cutting-edge technology—from software solutions for the automotive sector to engineering patents.

Malta offers special benefits here via its Intellectual Property (IP) regime:

Imagine: your Braunschweig-based business develops software for autonomous driving. Licensing this technology to international car manufacturers can be taxed through Malta at just 6.25%.

EU Holding Structures in Braunschweig: Why Malta is the Top Choice

I’ll be frank: As a Braunschweig entrepreneur, you have a key advantage: you’re right at the heart of Europe. Perfect for an EU holding structure with Malta.

But why Malta specifically—not Cyprus, Ireland, or the Netherlands?

Malta vs Other EU Locations: The Comparison for Braunschweig Firms

The takeaway: Malta combines low taxes with moderate substance requirements. Perfect for mid-sized businesses from Braunschweig.

The Ideal Holding Structure for Braunschweig Companies

Let me outline a tried-and-tested structure I’ve developed for many Braunschweig clients:

1. Operating Company in Braunschweig: Remains for local business
2. Malta Holding: Holds stakes in German and foreign entities
3. International Subsidiaries: Report to the Malta holding
4. Profit Retention: Tax-free in Malta
5. Flexible Distribution: Payments to Germany as needed

This setup brings tangible benefits for your Braunschweig location:

• Local jobs are maintained
• International profits are optimally taxed
• New project financing from retained earnings
• Protection against political risk in other countries

Substance Requirements in Malta: What Braunschweig Businesses Need to Know

Malta isn’t a letterbox destination. It requires genuine economic substance. For Braunschweig companies that means:

Minimum Requirements for a Malta Holding:

• Local director in Malta (can be externally appointed)
• Office space in Malta (shared office suffices)
• Local accounting in Malta
• At least four board meetings per year in Malta
• Proof of genuine local business activity

The good news: These requirements are moderate and easily manageable for Braunschweig businesses. Annual costs are about €15,000–25,000.

Case Study: Braunschweig IT Company Saves €180,000 a Year

A real-world example from my own practice: A software firm in Braunschweig-Weststadt with annual profits of €2.5 million.

Before (Germany):

• Corporate tax: 30% = €750,000
• Trade tax Braunschweig: 16.45% = €411,250
• Total burden: €1,161,250

After (Malta Structure):

• Malta corporate tax effective: 5% = €125,000
• German taxation on distribution: variable
• Annual cash benefit with retention: over €1,000,000

The result: The firm reinvests the saved tax in R&D, creating new jobs in both Braunschweig and Malta.

Tax Optimisation Braunschweig-Malta: Specific Savings Potential

Let’s get specific. Here’s what kind of savings a Malta structure offers for various types of Braunschweig businesses.

But take note: Not every company benefits equally. The structure must fit your business model.

Savings by Industry Sector in Braunschweig

These numbers are realistic and based on actual mandates from Braunschweig companies.

The 3-Pillar Strategy for Braunschweig Businesses

For successful tax optimisation, I recommend the following 3-pillar strategy for Braunschweig entrepreneurs:

Pillar 1: Operational Optimisation in Germany

• Maximise German depreciation allowances
• Optimise trade tax via location (Braunschweig: 490% assessment rate)
• Make use of loss carryforwards and group relief

Pillar 2: Malta Structure for International Activities

• Holding company for foreign participation
• IP company for intellectual property
• Service hub for international customers

Pillar 3: Long-Term Wealth Planning

• Tax-optimised succession planning
• International diversification
• Protection against regulatory changes

Special Malta Advantages for Braunschweig Exporters

Braunschweig has always been a strong export hub. Companies doing business outside the EU benefit especially from Malta structures:

Partial Income Rule for Foreign Dividends:

Dividends from non-EU countries can be received tax-free in Malta if they derive from active business activities.

Double Tax Treaties:

Malta has over 70 double tax agreements. Especially beneficial for Braunschweig companies with business in:

• USA (withholding tax on dividends: 5%)
• Singapore (withholding tax on dividends: 5%)
• UAE (withholding tax on dividends: 0%)
• South Africa (withholding tax on dividends: 5%)

Timing Tax Optimisation: When Should Braunschweig Companies Act?

The best time to implement a Malta structure is before your big growth phase. Why?

1. Lower setup costs: While profits are still moderate
2. Legal certainty: The structure grows with your company
3. Continuity: No disruptive changes during business operations
4. Credibility: Substance develops organically

My tip for Braunschweig entrepreneurs: Once you reach €500,000 annual profit, it’s time to examine a Malta structure.

Practical Implementation in Braunschweig: Your Step-by-Step Plan

Enough with theory—here’s the concrete roadmap from idea to fully functioning Malta structure.

What’s important: Implementation should be guided by professionals. As a Braunschweig entrepreneur, you can work with local experts who understand Malta structures.

Phase 1: Analysis & Planning (4–6 Weeks)

Step 1: Current State Analysis of Your Braunschweig Company

• Assess your current tax burden
• Check if your business model suits Malta
• Analyse international business ties
• Review your legal structure

Step 2: Define Objectives

• Quantify targeted tax savings
• Set timeline for implementation
• Determine structure budget
• Define compliance requirements

Step 3: Structure Planning

• Design the optimal Malta structure
• Integrate existing Braunschweig entities
• Plan for necessary substance
• Validate tax effects with experts

Phase 2: Incorporation & Setup (8–12 Weeks)

Step 4: Found Your Malta Company

• Select legal form (usually: Limited Liability Company)
• Register with the Malta Financial Services Authority (MFSA)
• Appoint directors and board
• Draft articles of association

Checklist for Braunschweig Entrepreneurs:

Step 5: Build Substance in Malta

• Rent office space in Malta (shared office is fine)
• Appoint local director
• Choose an accounting partner in Malta
• Plan board meetings

Phase 3: Integration with Braunschweig (4–6 Weeks)

Step 6: Legal Integration

• Structure share transfers
• Prepare contracts between German and Maltese entities
• Transfer pricing documentation
• Comply with German CFC (controlled foreign corporation) rules

Step 7: Operational Integration

• Coordinate accounting between Braunschweig and Malta
• Set up reporting processes
• Communicate with German authorities
• Organise ongoing support

Typical Pitfalls for Braunschweig Firms

From experience with clients in Braunschweig, I know the most common mistakes:

Mistake 1: Too little substance in Malta

Solution: Establish real business activity right from the start

Mistake 2: Unclear transfer pricing policy

Solution: Ensure arm’s-length pricing from day one

Mistake 3: Poor documentation

Solution: Properly record all decisions of the Malta company

Mistake 4: Communication issues with German authorities

Solution: Transparent, proactive communication with the Braunschweig tax office

Success Formula: The 90-Day Implementation

For ambitious Braunschweig entrepreneurs, I’ve developed a 90-day plan:

1. Days 1–30: Complete analysis and structure planning
2. Days 31–60: Set up the Malta company and open its bank account
3. Days 61–90: Complete integration with German entity

This plan works—if you enlist professional help and provide the required resources.

Costs and Effort for Braunschweig Companies

Let’s be honest: establishing a Malta structure costs money. But done right, it pays for itself quickly.

Here are realistic figures for Braunschweig companies:

One-off Incorporation Costs

Ongoing Annual Costs

ROI Calculation for Different Braunschweig Company Sizes

Small company (€500,000 profit):

• Malta tax savings: approx. €125,000 p.a.
• Ongoing costs: approx. €40,000 p.a.
• Net savings: approx. €85,000 p.a.
• ROI after one year: 200%+

Medium company (€1,500,000 profit):

• Malta tax savings: approx. €375,000 p.a.
• Ongoing costs: approx. €50,000 p.a.
• Net savings: approx. €325,000 p.a.
• ROI after one year: 500%+

Large company (€5,000,000 profit):

• Malta tax savings: approx. €1,250,000 p.a.
• Ongoing costs: approx. €70,000 p.a.
• Net savings: approx. €1,180,000 p.a.
• ROI after one year: 1,800%+

Hidden Costs and How to Avoid Them

From my experience with Braunschweig companies, these pitfalls often arise:

Problem 1: Subsequent compliance costs

Occurs if: The Malta structure wasnt set up properly

Solution: Professional advice from the very start

Problem 2: Double accounting costs

Occurs if: No integration between German and Maltese accounting

Solution: Coordinated accounting from day one

Problem 3: Unexpected German tax reassessments

Occurs if: CFC (controlled foreign corporation) rules kick in

Solution: Build solid substance in Malta

Financing the Malta Structure

Many Braunschweig entrepreneurs ask: How do I finance the setup costs?

Here are my tried-and-tested options:

1. Self-financing: From current profits (recommended)
2. Loan by the German company: To the Malta company
3. Shareholder loan: From shareholders
4. Bank financing: Via German or Maltese banks

My advice: Start with the simplest route—self-financing. In most cases, the setup costs are recouped through tax savings within a few months.

Legal Framework Braunschweig-Malta: What You Must Consider

Now it gets technical. But don’t worry—I’ll explain everything clearly, so you know exactly what to do.

As a Braunschweig business owner, you must observe both German and Maltese law. Plus EU regulations.

German Legal Situation: What Braunschweig Tax Office Wants to See

The Braunschweig-Wilhelmstraße tax office knows Malta structures. Tax examiners are now well trained and know what to look for.

Key Audit Points:

1. CFC rules (§§ 7-14 AO): Apply to passive income
2. Transfer of functions (§1 AO): When transferring functions to Malta
3. Permanent establishment: May occur with too much interlinking to Germany
4. Arm’s length pricing: Transfer pricing between the companies

How to Meet These Audit Points:

EU Legal Certainty: Your Safeguard as a Braunschweig Entrepreneur

The big advantage of Malta: It’s an EU member. That means legal certainty for your Braunschweig business.

Your Rights under EU Law:

• Freedom of establishment (Art. 49 TFEU)
• Free movement of capital (Art. 63 TFEU)
• Prohibition of discrimination (Art. 18 TFEU)
• Principle of proportionality

In practice: Germany can’t just ignore or discriminate against your Malta structure. Several CJEU rulings confirm this.

Maltese Compliance: What’s Required in Malta

Malta maintains clear standards for holding companies. As a Braunschweig entrepreneur, you should be aware of them:

Annual Obligations in Malta:

1. Corporate compliance
   • Annual return to Companies House
   • Board meetings (minimum four per year)
   • Shareholders’ meetings
   • Update corporate records
2. Tax compliance
   • Corporate tax return
   • VAT returns (if required)
   • Economic substance test
   • Country-by-country reporting (if group turnover > €750m)
3. Regulatory compliance
   • Beneficial Ownership Register
   • Anti-Money Laundering (AML) compliance
   • FATCA/CRS reporting
   • EU DAC6 reporting obligations

Economic Substance Test: The Most Critical Aspect for Braunschweig Firms

In 2019, Malta introduced economic substance rules. These are decisive for recognition of your structure:

What the test requires:

Practical Implementation for Braunschweig Businesses:

A typical holding structure requires:

• A qualified director in Malta
• Regular board meetings in Malta
• Documented investment decisions
• Adequate office space and equipment
• Annual spending of at least €50,000–100,000

Legal Risks and How to Avoid Them

From my work with Braunschweig clients, these are the most critical points:

Risk 1: German permanent establishment of the Malta entity

Arises from: Excessive ties to German operations

How to avoid: Clear separation of business activities

Risk 2: Exit taxation for transfer of functions

Arises from: Shifting valuable intellectual property

How to avoid: Proper valuation and compensation

Risk 3: Abuse of law provisions

Arises from: Pure tax setup without real business substance

How to avoid: Develop real business in Malta

Risk 4: Changes in the legal landscape

Arises from: OECD/EU anti-tax avoidance measures

How to avoid: Flexible structures and regular adjustment

Frequently Asked Questions about Malta Structures in Braunschweig

1. Is a Malta structure for my Braunschweig company legal?

Yes, Malta structures are fully legal. Malta is an EU member, and its tax system has been approved by the European Commission. The only key: you need real business substance in Malta and not just a tax setup.

2. From what profit level is a Malta structure worthwhile for Braunschweig businesses?

As a rule of thumb: From €300,000–500,000 annual profit, a Malta structure becomes attractive. At that level, tax savings far exceed the ongoing costs.

3. Do I have to give up my Braunschweig location?

No, absolutely not. The Malta structure complements your German site; it doesnt replace it. Many of my clients keep their operations in Braunschweig and use Malta purely for international activities and holding functions.

4. How does the Braunschweig tax office react to Malta structures?

The Braunschweig-Wilhelmstraße tax office knows Malta setups and reviews them objectively. As long as you have real substance in Malta and fulfil all German reporting duties, you should have no problems. Transparency and proactive communication are key.

5. What are the disadvantages of a Malta structure?

Main downsides are: higher complexity, additional compliance costs, and the effort of creating substance in Malta. Plus, you’ll need to travel to Malta regularly for board meetings.

6. Can I integrate my existing Braunschweig companies into the Malta structure?

Yes, that’s possible—and often makes sense. Typically, a Malta holding is set above the German entity, or just certain activities (such as international sales) are shifted to Malta.

7. How long does it take to set up a Malta structure?

With professional help, the entire process takes around 3–4 months. The Malta company itself can be set up in 6–8 weeks, but integration with your German entity takes additional time.

8. What happens in a tax audit in Braunschweig?

If you have documented everything thoroughly, a tax audit is usually straightforward. Examiners will review the Malta structure, but if you demonstrate real substance and proper records, there are rarely objections.

9. Do I need separate tax advisors for Germany and Malta?

Yes, you need local expertise in both countries. Ideally, your advisors work together and coordinate regularly. That avoids misunderstandings and compliance issues.

10. What does a Malta structure cost in the first year?

For a typical Braunschweig SME, first-year costs are about €60,000–80,000 (including set-up). From the second year, ongoing costs are about €40,000–60,000 per year.

11. Can I dissolve the Malta structure later?

Yes, Malta structures are reversible. Winding up takes about 6–12 months and costs roughly €10,000–20,000. Make sure all tax aspects are handled properly when liquidating.

12. Which sectors in Braunschweig especially benefit from Malta structures?

Especially IT firms, consultancies, trading companies with international business, and businesses with intellectual property benefit. Traditional Braunschweig sectors like mechanical engineering can also gain greatly for their international operations.