An international trading company (ITC) is defined in section 2 of the Income Tax Act, as a company registered in Malta which is engaged solely in carrying on trading activities with persons who are not resident in Malta and which has its objects expressly limited to such trading activities as well as to such acts and activities as are necessary for the conduct of its operations from Malta. This type of company may also engage in:

• purchases for export of goods manufactured, assembled or processed in Malta provided that such purchases are not made from a person who owns directly or indirectly more than 15% of the ordinary share capital of the said International Trading Company;

• trading with companies registered in Malta under the Malta Financial Services Authority Act, 1994 as amended in 2002; and

• trading with other International Trading Companies.

An ITC is therefore a normal onshore Maltese company having its status recognised only for tax purposes.