Buying an apartment in Malta with a company to use as an office

[uncreative]

Hi,
Thinking to move to Malta, and build up the typical maltese company setup.
I need for my own and for substance rules (ATAD2/3) an fix office for the company.

Is it possible to buy a standard apartment and use it as a regular office or must it be a commercial property p.e with an "office license" so that it can serve as a substance or be recognized as an office and expenses can be tax deductible. I dont want to live in this office, just for working.

Does anyone have experience, maybe from other EU countries?

 

[Martin Everson]

uncreative said:
Is it possible to buy a standard apartment and use it as a regular office or must it be a commercial property p.e with an "office license" so that it can serve as a substance or be recognized as an office and expenses can be tax deductible. I dont want to live in this office, just for working.
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Normally premises would need to have a Category D Class 4A license to use an office. However you can use a Category A Class 1 (Residential Uses) as an office if it complies with the law below (see page 7).

https://legislation.mt/eli/sl/552.15/eng/pdf
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CATEGORY A - RESIDENTIAL USES

CLASS 1 Dwellings

Use as a residence, whether or not as a sole or main residence, by any of the following:

(a) a single person or by people living together as a family;

(b) not more than six residents living together, including a household where care is provided for residents;

(c) lodging of not more than sixteen persons, provided that the operation is licensed by the Malta Tourism Authority and the premises are located within an Urban Conservation Area;

(d) a resident concurrently with his or her occupation or business, provided that it is identified as the ordinary residence of the person undertaking the occupation or business and the activity:

(i) uses less than half the residential floorspace of the dwelling capped at 50 sq m provided that the minimum dwelling size is not prejudiced;
(ii) relates to beauty and wellness related services, or professional offices, or medical services, or education, or any other activity which in the opinion of the Authority is compatible with residential use;
(iii) is not a client intensive activity;
(iv) does not generate a disproportionate vehicular traffic or parking which is detrimental to the amenity of the area in which it is conducted;
(v) can be carried on in any residential area within the Development Zone without undue detriment to the amenity of that area by reason of noise, vibration, smell, fumes, smoke, soot, ash, dust,grit, light, radiation or incompatible visual impact; and
(vi) is conducted in a residence which does not form part of a block of apartments or any other block of buildings accessible from an external common entrance.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[CyprusLawyer101]

I dont know if you want the substance to satisfy any other condified law in Malta, but the true application of substance is for the purposes of establishing an operation in the country of establishment so that taxation rights are justified in the country of establishing the company by assessing risks assumed and operations performed. Therefore details such as whether an office has a licence to be an office or not, are irrelevant. In the event of an investigation the real question will be what actual work is performed, what risks are assumed by the company and therefore what profit should be attributed to the particular operation.

 

[uncreative]

Martin Everson said:
Normally premises would need to have a Category D Class 4A license to use an office. However you can use a Category A Class 1 (Residential Uses) as an office if it complies with the law below (see page 7).

https://legislation.mt/eli/sl/552.15/eng/pdf
----- quote start

CATEGORY A - RESIDENTIAL USES

CLASS 1 Dwellings

Use as a residence, whether or not as a sole or main residence, by any of the following:

(a) a single person or by people living together as a family;

(b) not more than six residents living together, including a household where care is provided for residents;

(c) lodging of not more than sixteen persons, provided that the operation is licensed by the Malta Tourism Authority and the premises are located within an Urban Conservation Area;

(d) a resident concurrently with his or her occupation or business, provided that it is identified as the ordinary residence of the person undertaking the occupation or business and the activity:

(i) uses less than half the residential floorspace of the dwelling capped at 50 sq m provided that the minimum dwelling size is not prejudiced;
(ii) relates to beauty and wellness related services, or professional offices, or medical services, or education, or any other activity which in the opinion of the Authority is compatible with residential use;
(iii) is not a client intensive activity;
(iv) does not generate a disproportionate vehicular traffic or parking which is detrimental to the amenity of the area in which it is conducted;
(v) can be carried on in any residential area within the Development Zone without undue detriment to the amenity of that area by reason of noise, vibration, smell, fumes, smoke, soot, ash, dust,grit, light, radiation or incompatible visual impact; and
(vi) is conducted in a residence which does not form part of a block of apartments or any other block of buildings accessible from an external common entrance.

------ end quote
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Ok cool, that helps, thanks!

CyprusLawyer101 said:
I dont know if you want the substance to satisfy any other condified law in Malta, but the true application of substance is for the purposes of establishing an operation in the country of establishment so that taxation rights are justified in the country of establishing the company by assessing risks assumed and operations performed. Therefore details such as whether an office has a licence to be an office or not, are irrelevant. In the event of an investigation the real question will be what actual work is performed, what risks are assumed by the company and therefore what profit should be attributed to the particular operation.
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Thank you, yes in terms of substance, I think there will be no major problems, since I will have an active business with a Malta ltd , and I will be there myself as director a few months/year, also will have another employee who will work in the office fulltime. I think it will be sufficient...

Last edited: Oct 24, 2022

 

[CyprusLawyer101]

uncreative said:
Ok cool, that helps, thanks!


Thank you, yes in terms of substance, I think there will be no major problems, since I will have an active business with a Malta ltd , and I will be there myself as director a few months/year, also will have another employee who will work in the office fulltime. I think it will be sufficient...
Click to expand...

Looks just fine. Since you are there then no questions can be raised. Good luck !