Shareholders hailing from 165 different countries, out of a total of 195 countries, have companies registered in Malta.

This information came to light in a reply given by Prime Minister Joseph Muscat to a parliamentary question by shadow speaker for the economy Claudio Grech.

The data tabled shows that 30,696 companies are registered in Malta with foreign shareholding. The way in which the information was provided shows the number of companies registered locally divided up by the nationality of shareholders. It must therefore be kept in mind that companies could be listed twice when considering that some companies could have shareholders coming from different countries.

One must also keep in mind that a sizeable number of holding companies could be listed in the information provided.

It was found that a total of 1,382 companies registered in Malta have foreign shareholding coming from the British Virgin Islands, a known tax-haven.  Also of note are the 1,312 companies registered locally who have foreign shareholding coming from Libya – a region suffering massive instability ever since the collapse of the Muammar Gaddafi regime in 2011.

A total of 667 companies are listed as having Swiss shareholding, 658 companies are connected with Turkish shareholding while 801 companies are connected with the USA and Minor Islands.  A relatively low number, at 46 companies, are registered locally with Azerbaijani shareholding.

Out of EU countries, Italy, the UK and Germany registered the highest number of shareholders with companies in Malta. Italian shareholders cover 3,500 companies, UK shareholders make up 2,760 companies while German shareholders make up 1,854 companies.

Malta has repeatedly, and more intensely over the past few years, come under fire due to its tax imputation system. Prior to joining the EU, meaning it was therefore ultimately accepted by the EU, Malta awards companies with foreign shareholding a 6/7 tax rebate on company profits allowing them to effectively pay five per cent corporate tax.

This is generally lower than in other European countries meaning that the island has been successful in attracting many cross-border companies to register in Malta and benefit from the generous tax rebate.

The most prominent critic of Malta’s taxation system comes from Germany, among other EU states, who argue that multinational companies should be paying their taxes in the areas where they are earning most of their profits, in other words are carrying out most of their operations.

Moves have been made in the EU sphere to push for the Common Consolidated Corporate Tax Base which would turn this argument into supranational law. Malta would suffer extensively due to its small size and geographically isolated location companies do not turn the type of profits that they do in much larger member states.

While Maltese authorities argue that tax is within the national remit, and Malta was accepted into the EU as things are, scandals such as the Panama Papers revelations have given critics a louder voice on clamping down.

Minister Konrad Mizzi and chief of staff Keith Schembri were caught with secret Panama companies sheltered by New Zealand trusts. While it is not illegal for PEPs to have companies in tax havens, it calls into question their motives as in the case of Mizzi, all earnings should have been coming from his government work. Both denied any wrongdoing and are still in top government positions today.