Malta's "5% effective corporate tax" is the most quoted number in offshore structuring, and it is also the most misleading one still in wide circulation, because the company genuinely pays 35% first and only gets six-sevenths of it back later, sometimes much later. Georgia's 1% has no such asterisk: it is 1%, paid once, with nothing to reclaim. Here is what Malta's system actually costs and takes in practice, against Georgia's regime, so the comparison is between two real numbers rather than one real number and one marketing simplification.
What Malta actually taxes
Every Malta-registered company pays a flat 35% corporate income tax on its chargeable income, confirmed on PwC's Malta corporate tax summary. There is no lower band for small companies and no exception for a one-person operation. That 35% is real, charged in full, and due before anything is refunded.
Personal income tax is progressive: 0% up to EUR 12,000, 15% up to EUR 16,000, 25% up to EUR 60,000, and 35% above that, also confirmed by PwC. VAT is 18%, identical to Georgia's standard rate. Malta has run an optional Final Income Tax Without Imputation regime, FITWI, since September 2025, letting a company elect a flat 15% final tax instead of the standard system, but it is aimed at large groups responding to the OECD's global minimum tax rules, per Deloitte Malta's tax alert on FITWI, and it forfeits any refund entitlement in exchange for the flat rate, so it is not the route a small structure built around the refund system would choose.
The headline numbers, side by side
| Georgia | Malta | |
|---|---|---|
| Headline small-business rate | 1% of turnover, Small Business Status, up to 500,000 GEL | No turnover regime; flat 35% corporate tax on all profit |
| Effective rate after refund | Not applicable, 1% is final | Roughly 5% on trading income, after a 6/7ths shareholder refund |
| Cash actually paid upfront | 1% | 35%, refunded later in most of it |
| Standard personal income tax | 20% flat | 0-35% progressive |
| Standard VAT | 18%, registration above 100,000 GEL turnover | 18% |
| Non-dom remittance basis | Not applicable | Yes, foreign income untaxed unless remitted |
| EU member | No | Yes |
| Stripe supported | No | Yes |
Why "5% effective" is not the same as "5% now"
Malta operates a full imputation system: the company pays 35% tax on its profit, and when that profit is distributed as a dividend, the shareholder can claim a refund of six-sevenths of the Malta tax the company already paid on trading income, which brings the combined burden down to roughly 5%. That mechanism is genuinely real and has been in place for decades. It is also not what "5% tax" sounds like it means.
The refund is a cash reclaim, not a lower withholding rate. The company pays the full 35% when it files, the dividend is distributed, and only then does the shareholder submit a refund claim to Malta's tax authority. By law that claim must be paid within 14 days of being valid and complete, but multiple professional sources describing the process in practice put actual turnaround at two to four months, and a claim can be halted entirely if the company has any outstanding VAT return, payroll filing or penalty from a prior year. A structure with real cash flow needs can find a meaningful share of its money parked with the Maltese tax authority for months at a time.
The other detail most "5% in Malta" pitches skip is that the clean version of this structure normally involves two companies, not one: a Malta trading company that earns the income and pays the 35%, and a separate holding entity, frequently registered outside Malta, that receives the dividend and files the refund claim. That second entity is its own incorporation, its own accounting, and its own annual cost, on top of the Malta trading company's mandatory audited financial statements, which every Malta company must file regardless of size. None of this is a trick or a scam; it is simply a materially more expensive and more administratively demanding structure than the "5%" headline implies on its own.
Georgia's 1% against Malta's real numbers
Run a solo consultant billing EUR 80,000 a year with low costs through both systems as they actually operate, not as the marketing describes them.
| Georgia, Small Business Status | Malta, company plus refund | |
|---|---|---|
| Tax paid on filing | 1% of turnover | 35% of profit |
| What happens next | Nothing - the 1% is final | Dividend distributed, refund claim filed, wait 2-4 months |
| Net effective tax, eventually | 1% | Roughly 5%, once the 6/7ths refund actually arrives |
| Tax on EUR 80,000 | EUR 800 | Roughly EUR 28,000 paid upfront, netting to roughly EUR 4,000 once refunded |
| Extra structure required | None | Audited accounts, often a second holding company, ongoing professional fees |
For a solo operator, the Malta route is a poor trade even at its final, refunded number: a genuinely lower headline than Georgia's would need to be dramatically lower to justify tying up 35% of revenue for months and running two audited entities to get there. Our 1% tax pillar covers why Georgia's regime works so cleanly for exactly this profile: one entity, one rate, nothing to reclaim.
Malta's non-dom remittance basis: the other real advantage
Separately from the refund system, Malta runs a genuine non-dom regime for individuals. A Malta tax resident who is not domiciled there is taxed on Malta-source income and on foreign income actually remitted into Malta, while foreign income left outside Malta is not taxed at all, confirmed on PwC's Malta individual tax summary. Foreign capital gains are exempt even if the money is brought into Malta, which is a genuinely distinctive feature few remittance-basis countries still offer since the UK scrapped its own version.
Non-doms with more than EUR 35,000 of unremitted foreign income owe a minimum annual tax of EUR 5,000, a floor rather than a ceiling, and one Georgia's system has no equivalent to since Small Business Status carries no minimum tax at all. This regime is a genuine reason a high-net-worth individual with significant foreign investment income might choose Malta over Georgia, entirely separate from the corporate refund mechanics above.
Where Malta genuinely wins
Larger, EU-facing structures with real substance and cash flow. For a company with meaningful working capital, a finance function that can manage the refund cycle, and genuine EU clients who expect an EU counterparty, Malta's system, run properly, does land at a competitive effective rate inside a full EU and eurozone jurisdiction with Stripe support.
The non-dom remittance basis for a high-net-worth individual. Someone with substantial foreign investment income who keeps most of it outside Malta, remitting only what they need to live on, gets a genuinely favourable personal tax position that has nothing to do with the corporate refund system at all.
EU standing and a wide treaty network. Malta is a full EU member, and Georgia holds its own treaty with Malta as part of a network of more than 55 agreements confirmed on the Ministry of Finance of Georgia's treaty page, which our double taxation treaties guide covers in full, so this is not a treaty-access question but an EU-standing one.
Where Georgia genuinely wins
Simplicity and cost, overwhelmingly, for a solo operator. Small Business Status is 1% paid once, with nothing to claim back and no cash tied up waiting on a foreign tax authority. Malta's system demands audited accounts every year regardless of size, frequently a second entity, and professional fees to manage a refund cycle that a one-person consultancy has no real need to run.
No cash flow drag. Malta's 35% is a genuine cash outflow before any of it comes back, which is a real problem for a business that needs its working capital rather than a business with reserves to spare. Georgia's 1% is simply never there to begin with.
A structure most CFC regimes struggle to reach, and no residency requirement. A Georgian Individual Entrepreneur is a sole proprietorship rather than a company, which a meaningful number of controlled-foreign-company regimes do not reach the way they reach a Maltese limited company. Georgia's tax regime comparison covers when moving to a Georgian LLC instead genuinely changes that calculation, and Georgian tax residency is, as with every comparison in this cluster, a separate question entirely from holding the tax status.
Malta is not the only jurisdiction chasing this kind of high-earner audience. Cyprus runs a comparable non-dom pitch built around dividends rather than a refund mechanism (Georgia vs Cyprus), the UAE offers a genuinely different zero-personal-tax trade for the same profile (Georgia vs the UAE), and Bulgaria undercuts both on headline rate for anyone who does not need Malta's specific refund mechanics (Georgia vs Bulgaria). Outside Europe, Paraguay and Armenia (Georgia vs Paraguay, Georgia vs Armenia) run entirely different systems worth a look before committing to either of these two.
We'll look at your actual cash flow, whether you could genuinely run the refund cycle, and where you are tax resident today, then tell you honestly which one wins for your numbers. Thirty minutes, no cost.
See what it costs
The question a rate comparison cannot answer alone
Malta's refund system only works for someone who can genuinely absorb paying 35% upfront and wait out the reclaim, which is a cash flow and administration question, not a tax rate question. A tax consulting engagement that actually models your cash timing against Malta's refund cycle is worth more here than any published effective rate, because the 5% figure is a destination, not a description of what happens on the way there.
Residency matters on both sides too. Malta's non-dom benefit only applies to someone who is genuinely Malta tax resident, while Georgia's 1% applies to the business regardless of where its owner personally lives, which shifts the real question back to whether your home country still taxes you, not whether Georgia or Malta does.
So which one actually wins
Georgia wins for a solo consultant, developer or small agency that wants the lowest real cost with no cash tied up and no audit requirement, which describes almost everyone this comparison is written for.
Malta wins once a business has genuine EU substance, the working capital to fund the refund cycle without strain, and either a large enough trading profit or significant foreign investment income to make the non-dom remittance basis worth the administration. For that specific profile, and only that profile, Malta's system does what it says on the tin, just not as quickly or as simply as the "5%" headline suggests.
Key takeaways
- Malta's standard corporate tax is a flat 35%; the widely quoted 5% effective rate only appears after a shareholder claims a 6/7ths refund the company must fund itself first.
- The refund is legally due within 14 days but commonly takes two to four months in practice, and any outstanding compliance issue can halt it entirely.
- Malta's clean structure typically needs two companies and mandatory audited accounts, adding real cost the 5% headline does not include.
- On EUR 80,000 of solo income, Georgia's 1% costs roughly EUR 800; Malta's real cash cost is 35% upfront, later netting to roughly EUR 4,000 once the refund arrives.
- Malta's non-dom remittance basis exempts foreign income kept outside Malta and foreign capital gains entirely, with a EUR 5,000 minimum tax for qualifying non-doms.
- Georgia wins overwhelmingly on simplicity and cost for a solo operator; Malta only makes sense for a larger, EU-facing structure with real cash flow and administration behind it.
Frequently asked questions
Is Malta's corporate tax really only 5%?
No. The standard rate is a flat 35%, paid in full when the company files. The widely quoted 5% only appears after a shareholder claims a refund of six-sevenths of that tax following a dividend distribution, which is a separate cash reclaim process, not a lower rate charged upfront.
How long does Malta's tax refund actually take?
By law, a valid claim must be paid within 14 days of being complete and correct. In practice, professional sources describing the process report two to four months from claim submission to receipt, and any outstanding VAT, payroll or penalty issue with the company can halt the refund entirely.
Do I need two companies to use Malta's refund system?
Not strictly, but the standard clean structure usually involves a Malta trading company that earns the income and a separate holding entity that receives the dividend and claims the refund. That second entity adds its own incorporation and ongoing accounting cost on top of the Malta company's mandatory audited financial statements.
How does Georgia's 1% compare to Malta's effective rate?
Georgia's 1% is paid once, with nothing to reclaim and no cash tied up. Malta's effective rate, once the refund is actually received, lands around 5%, but getting there means paying 35% upfront and waiting months, which makes Georgia's number both lower and far simpler for a solo operator.
What is Malta's non-dom remittance basis?
It taxes a Malta tax resident who is not domiciled there only on Malta-source income and foreign income actually brought into Malta, leaving foreign income kept outside the country untaxed. Foreign capital gains are exempt entirely, even if remitted, and non-doms with more than EUR 35,000 of unremitted foreign income owe a minimum annual tax of EUR 5,000.
Does Malta have Stripe?
Yes. Malta is a fully supported Stripe country, while Georgia has never appeared on Stripe's list. A Georgian company can still take card payments through Paddle, Wise, Payoneer or direct bank acquiring, covered in our payment processors guide, but none of them is a native Stripe integration.
Does Georgia have a tax treaty with Malta?
Yes, one of more than 55 double tax treaties Georgia holds, confirmed on the Ministry of Finance of Georgia's own treaty page. It matters mainly for structuring between the two rather than for someone simply choosing one over the other.
What is Malta's FITWI regime?
Final Income Tax Without Imputation is an optional flat 15% final tax regime available since September 2025, mainly aimed at large groups responding to the OECD's global minimum tax rules. Electing into it forfeits the shareholder refund entirely, so it is generally not the right choice for a structure built around the 6/7ths refund mechanism.
Is Georgia or Malta better for a solo consultant?
Georgia, in almost every case. Malta's system is built for a company with real trading volume, working capital to absorb the 35% upfront payment, and the administrative capacity to run audited accounts and a refund claim. A solo consultant gets none of the benefit and all of the cost.
Which is cheaper to set up, Georgia or Malta?
Georgia, by a wide margin. Small Business Status registration runs to roughly 600 GEL, about $220. A Malta company requires minimum share capital of roughly EUR 1,165, notary fees, registration fees and, from year one, a mandatory annual audit, putting realistic first-year costs well into four figures before any refund claim is even filed.
Will my home country still tax me if I register in Malta or Georgia?
Possibly, in both cases, and it depends entirely on your own country's rules rather than either jurisdiction's rate. Malta's non-dom benefit only applies once you are genuinely Malta tax resident; Georgia's 1% applies to the business regardless of your personal residency, which shifts the real question back to your home country's residency-breaking rules.