Most people who have tried their luck in some of the biggest online casinos in the world have seen the small license logo at the bottom. Malta has been the best place to legally open an online gambling company for a while now. But, is Malta still a good place to start an iGaming business now, when the market is already developed?
The short answer is yes. Because the market has been growing even faster than the competition, there is still a huge opening for those who would like to invest in the business. And this small Mediterranean island-nation is still the best place.
But, there are some things to take into consideration:
- Malta corporate tax is low but resident tax is not
- Legal company is not the same as the entire operation
- Finding a niche yields better profits
And the last is quite important. An online casino with a targeted approach to something like live casino gameplay can have a specialized clientele and better results with a smaller operation.
It is true that having a master license will attract more players in general, but that will also invoke a larger overhead with maintenance and wages. And the low overhead is possibly the biggest draw of investing in online gambling.
Location, Location, Location
This has been the first rule of business for all industries since forever. But, as is with any online business, when investing in online gambling companies this can be divided into three separate locations to minimize taxes and optimize growth.
The fact that Malta is in the EU grants many advantages, both when it comes to the single European market and the protections and trust infused by both the member nations and the organization as a whole.
But, wages, office space, and resident corporate and individual taxes are quite high. So, the best way to go is for the holding company to be Maltese while both the owners and most of the workforce are not.
Diversifying locations is the greatest benefit of internet-based businesses, and you should take full advantage of that fact.
For example: If you are an investor in Texas, which doesn’t have an income tax, you have your corporation in Malta with a 5% corporate tax, and the operation itself is in the Balkans where you can get a foreign investment subsidy and great wage/productivity ratio, you can vastly reduce your non-business external expenditure.
The issue here would be reducing your personal federal tax, but that is a work for a specialized accountant for every region, state, and country.
Malta doesn’t have a preferred tax rate for domestic companies. If you move your entire company to the island you will be under the full impact of the 35% corporate tax rate. This is generally done to dissuade foreign wealth from taking what is very limited space on the island.
But, if you are a foreign non-resident investor who is only doing business through a Maltese bank account, the refund on this tax rate can lower your tax burden all the way down to 5%.
Additionally, Malta is very open to such a relationship and the administration is forthcoming when opening a company and applying for a domestic bank account. Take in mind that the process of obtaining a bank account is significantly longer than opening the company itself.
Thus, take care to stay financially liquid before you can start receiving any money to your business account
Industry Based on Trust
Online gambling is an industry based on trust, and that is contrary to brick and mortar gambling in many ways. Malta is still a good place to start an iGaming business exactly because it is an EU member with a license and laws that inspire trust in the company working there.
Customers see this and see that unlike regular casinos the online options are much more focused on their enjoyment and less on draining their wallet. As a matter of fact, any type of predatory behaviour will usually mean a license revocation, spelling doom for the company.
But, for those who want to stay clean and really care about having a good business, this is a godsend.
Competition is clean, and you can even get other companies to ‘’cross-market’’ with you if you have different niches. And with the global market on the rise, the entire industry has a very positive outlook.
Individual company benefits caused by such a low-stress business environment are unquantifiable but are definitely noticeable. You will work better, grow faster, and you won’t have anyone trying to trip you on your way up, which is very rare.
A Vastly Expanding Market
Online gambling in the United States of America rose more than 224% in the last year. In November, the market has seen its fifth consecutive month of growth, and it doesn’t seem to be slowing down.
But, this growth anomaly is somewhat due to the lockdowns and the inability of players to enjoy traditional casinos. It is predicted that this growth won’t repeat in 2021. Still, this doesn’t mean that the market won’t grow further.
If you can get a good niche and gain a good understanding of what your customers want, you can make a brilliant business with excellent growth potential. And, with a Malta Gaming Commission license and a 5% corporate tax burden, you will inspire trust in the customers while making a good profit.