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Thinking about expanding your business internationally? Great move! Now, you’re faced with a critical decision: Where should you register your company? Lately, we’ve seen a surge of interest about registering or relocating EU-registered businesses to Dubai. Let’s take a closer look at the benefits and considerations of both jurisdictions: European Malta and the Emirate of Dubai.
Both locations come with their unique perks, but depending on your business needs, one might just nudge ahead of the other. Let’s explore what each destination has to offer, so you can make a decision that feels right.
Malta: a perfect blend of trust, compliance, and abundant opportunities with 5% corporate tax in Europe!
Malta might be a small island, but when it comes to international business, it punches well above its weight. Located in the heart of the Mediterranean, this EU member state offers some incredible advantages for companies looking to trade globally.
- EU Membership Perks: Since Malta is part of the European Union, registering your company here automatically opens doors to the EU’s vast market of 450+ million consumers. Plus, your business will benefit from EU trade agreements and regulations, which can provide stability and trust.
- Tax Incentives: Malta’s tax refund system is a major draw. While the corporate tax rate is technically 35%, most companies can take advantage of refunds that bring the effective rate down to as low as 5%, which is incredibly competitive, especially in Europe. That’s music to any entrepreneur’s ears!
- Full Imputation System for the taxation of dividends. This means that when a company distributes dividends to its shareholders, the tax paid at the corporate level is credited against the tax liability of the shareholders. As a result, shareholders don’t pay double tax on their income. This system is particularly beneficial for companies with international investors.
- Reputation and Regulation: Malta’s rock-solid legal framework, aligned with EU standards, gives businesses credibility. Whether you’re dealing with partners, investors, or clients, a Malta-based company sends a message of trust and compliance.
- Strategic Location: Nestled between Europe, North Africa, and the Middle East, Malta is a natural trading hub. It’s perfect if your business wants to tap into diverse markets.
Setting up in Malta does come with some bureaucratic processes that may take a little patience. However, with a good consultant on your side, you can navigate these waters like a pro. Contact us right now!
Dubai: A Global Powerhouse in the Middle East
Dubai has made its name as a glitzy business hub, and for good reason. Part of the UAE, it’s known for its thriving economy, futuristic infrastructure, and tax-friendly policies. If you’re eyeing the Middle East or even South Asia for trading, Dubai deserves your attention.
- Zero Corporate Tax (Mostly): Yep, you read that right. Dubai offers a zero percent corporate tax rate for most businesses, especially if you operate within one of its free zones. That’s a major financial win for many companies.
- Free Zones Galore: Dubai’s free zones are like mini-business utopias. They allow full foreign ownership, no import/export duties, and minimal red tape. Popular ones include Jebel Ali Free Zone (JAFZA) and Dubai Multi Commodities Centre (DMCC).
- World-Class Infrastructure: Dubai’s ports, airports, and connectivity are next-level. Whether you’re importing, exporting, or running an e-commerce operation, logistics are a breeze.
- Global Prestige: Let’s face it, having “Dubai” in your company address is a flex. It’s a brand in itself, signaling that you’re operating from a top-tier global hub.
However, Dubai isn’t without its downsides. While free zones offer tax-free benefits, companies outside of these zones are subject to taxes. And while Dubai’s reputation is stellar, its legal and regulatory environment isn’t as universally familiar as Malta’s, especially for companies seeking EU compliance.
When it comes to operational costs, setting up and maintaining a company in Dubai is not a cost-effective solution compared to Malta or other European jurisdictions. Administrative expenses for a Dubai-based company tend to be on the higher side.
Keep in mind, specific implications for international trading, particularly when it comes to business banking and routine transactions:
Limited EU Banking Access:
Companies registered in Dubai may face challenges when dealing with EU banks or clients due to the UAE’s non-EU status. Some European clients and financial institutions may view Dubai-based companies as less aligned with their compliance standards compared to businesses registered in EU jurisdictions like Malta.
Higher Costs for Transactions:
International payment fees can be higher when operating from Dubai compared to European jurisdictions. Additionally, if your trading partners are based in regions like the EU, processing fees, exchange rates, and banking charges may eat into your margins.
Currency Limitations:
While the UAE dirham’s peg to the US dollar is a strength, it can also be a limitation if your business frequently deals in other currencies, such as euros or pounds. Currency conversion fees can add up.
Which One Should You Choose?
It depends on what you’re after. Both Malta and Dubai are excellent choices, but their appeal varies based on your business goals.
Choose Malta If:
- You want access to the EU market and its trade benefits.
- You prioritize unlimited banking opportunities and complete business freedom.
- You value a trusted legal and regulatory framework.
- Tax incentives like the refund system catch your eye.
- You’re interested in a central location that bridges Europe, Africa, and the Middle East.
- You’re seeking affordable incorporation fees and lower administrative costs.
Choose Dubai If:
- You’re targeting the Middle East or Asian markets.
- Tax-free benefits and free zones align with your business model.
- Logistics and global trade routes are key to your operations.
- You want the prestige of being based in a high-profile business hub.
- You are ready to handle high administrative costs.
If your business is focused on long-term growth, especially with ties to Europe, Malta has a slight edge. Its EU membership, combined with its attractive tax system and excellent reputation, makes it a rock-solid choice. Dubai is undeniably flashy and offers quick wins, but Malta’s blend of trust, compliance, and opportunity makes it a favourite for businesses that want stability and sustainability.
At the end of the day, the choice comes down to your goals, your market, and where you see your business thriving. Whichever route you take, both destinations offer incredible opportunities to grow your international trading business. So, what’s it going to be—sunny Malta or dazzling Dubai? Either way, your global business adventure is about to begin, and we’re here to make the process seamless.
Let’s get started on registering the effective company. Contact us now!
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