Guide to setting up a business operation in Malta


There are many reasons why you might consider setting up a business in Malta. Aside from the friendly people, the climate, amazing scenery and heritage, Malta also offers many other financial, practical and lifestyle benefits.

As a location, Malta is made for business. In fact, business is at the heart of this small country’s culture and boasts a very strong financial and professional services industry.

This page has been developed specifically to give you all the information you need and a few things to consider when planning how to set up your business operations in Malta.


Why set up a Company in Malta?

Member of the EU

Malta has been a member of the European Union since 2004. Being a member of the EU brings some fantastic benefits including free trade between member states, a vast potential market, and the freedom of movement within the EU in addition Malta operate the currency which makes trading between nations simpler.

Low effective rate of corporate tax for Maltese businesses

The Malta system aims to attract investors, entrepreneurs, and high net worth individuals to the island by offering excellent tax incentives and schemes for businesses and individuals.

Most of the companies incorporated in Malta are subject to a corporate tax rate of 35%. However, foreign shareholders can claim a 6/7th tax refund on any tax paid by the company on profits, distributed as dividends. This system can lower the effective rate of tax to 5% subject to certain conditions.

It is also possible to get an exemption from taxation on capital gains from a disposal, or from dividend income, should a company have a participating holding.

Malta has several tax benefits which will reduce the company income tax through the full imputation and tax credits available when distributing profits to the shareholders.

Quality of workforce

Malta has a lower-cost and highly qualified workforce compared to the rest of Europe. The cost of living in Malta is 15-20% cheaper compared to its EU counterparts. Most importantly, the standard of education in Malta is world-class, making Malta an excellent spot to find your perfect team.

Low Language barrier

Malta is an English-speaking country, although Italian is also widely spoken. This makes doing business with the rest of the world a much easier task. Moreover, as Malta attracts many EU citizens, it is more than likely, you will find a multilingual workforce here than anywhere else in the EU.

Excellent transport links

Positioned between Europe and Africa, Malta benefits from being one-hour ahead of UTC. Moreover, access to Malta is simple thanks to excellent transport links via air and sea, with the government investing to create continuous improvements.

Advanced IT infrastructure

Despite the small scale of Malta, the IT infrastructure is also excellent with satellite technology and high capacity fibre-optic submarine cables linking Malta with Europe.

Malta Climate

Malta enjoys a stunning climate, with around 3000 hours of sunshine per year. The island receives its fair share of rain during the winter season, but this is very concentrated, and rainfall usually only lasts a few hours at a time.

All the facts and figures about setting up a business in Malta are outlined in our simple infographic.

Malta Facts

What are you looking to achieve by setting up a business in Malta?

Are you already a business owner or are you considering setting up a completely new venture? What has led you to the decision to set up a business abroad?

These might seem like very obvious questions, but the answers to these questions can have a significant impact on the route you choose to set up your business operation.

For example, it may be one of the following reasons:

1. A new business and a new lifestyle

2. A non-EU business looking to gain a foothold in the EU or to monitor/control any activity in Africa

3. Business expansion

4. Tax benefits of setting up a business in Malta

5. A British company looking to gain a strategic advantage post Brexit

Company formation in Malta is an ideal corporate structure for business operations. It offers protection with a separation of assets and liabilities from the company’s shareholders as well as a beneficial tax regime. Finally, company incorporation in Malta can be a quick process taking as little as 2 days for company registration

Setting up a business operation - Your options

Company Formation

Malta is a popular location for setting up a new business operation.

It may be that you're considering Malta as part of a lifestyle change, in which case, as we've already highlighted, Malta might be your destination of choice for the climate, the Mediterranean lifestyle and the lower overall cost of living.

All of these benefits complement the fact that Malta is a popular jurisdiction for company registration due to the many tax benefits on offer alongside over 80 double taxation treaties. Add to this the skilled and professional multilingual workforce where English is a national language (as well as Italian).

Malta has also been a part of the EU since 2004, which comes with several benefits including :

1) Easy movement of goods and services within the EU region

2) Easy access to Global markets via EU trade agreements

3) Free movement of people within the EU region, opening up the opportunities to access the best talent available

Company formation in Malta is an ideal corporate structure for business. It offers protection with a separation of assets and liabilities from the company’s shareholders as well as a beneficial tax regime.

Most importantly your business operation can be up and running in just a few days as Company incorporation in Malta can be a quick process taking as little as 2 days.

You should consider this option if...

This option gives you complete flexibility to set up and build a completely new entity and a stand alone business operation.

Branch Establishment

If you have an established business operation already an alternative to setting a new business could be to set set up a Branch in Malta.

The benefit of this is that you access all of the business benefits that Malta has to offer. However, a branch of your business would not be seen as setting up a separate legal entity. In fact, the establishment of a branch of an organisation, is often seen as an extension of the parent company whilst still maintaining an element of independence.

The main difference between setting up a branch and a subsidiary company is that a parent company would have shared legal responsibility for its branch in Malta whereas a subsidiary in Malta would have its own legal personality and separate legal responsibilities.

In addition, a branch would be seen to form part of the assets of the parent company and the accounts of the branch are usually merged into the accounts of the parent company which is based outside of Malta.

Should the branch cease to continue to carry out business activities in Malta, it would avoid the need for a liquidation and would simply de-register from the local authorities signalling the end to its business activities in Malta.

There are also several taxation benefits to setting up a branch, with different rules in place compared to setting up a subsidiary company. Naturally, it is advisable to fully understand the different rules and regulations in place and to seek guidance prior to establishing a branch in Malta.

You should consider this option if...

If you have an established business operation already, setting up a branch of your business in Malta provides you with the opportunity to take advantage of all the benefits that Malta has to offer including access to the EU and the associated business opportunities.

Re-Domiciliation of a Business

An alternative to setting up a branch in Malta is to register your business in Malta. Doing this provides you with all of the benefits.

A non-Maltese company that is relocated to Malta retains its status as a corporate body and no new legal entity is created. The most significant benefit of company re-domiciliation to Malta is that it maintains all its assets, liabilities, rights and obligations.

A corporate body that is incorporated and registered under the laws of an approved country may be registered and continued in Malta. The jurisdiction must have similar regulations as Malta, and the law of the company’s original country or jurisdiction must allow for such continuation.

You should consider this option if...

If you are a business owner already, but want to move your business operation to a completely new location than this is the option to consider.

Has Brexit been a challenge?

If your business is still suffering from the after affects of Brexit why not get in touch with our team and we'll arrange a FREE consultation to discuss the options available to remove the 'red-tape'?

CLICK HERE TO BOOK YOUR FREE CONSULTATION

Alternatively, if you're searching for a solution, or maybe you're just curious and want to review your options, we've created this useful guide to highlight some of the opportunities available to UK businesses in order to remain competitive in the Post-Brexit market.

Click here to DOWNLOAD your copy now

Setting up a new Business in Malta - The procedure

The process to register a company in Malta includes registering a memorandum of association subscribed and signed by its members (shareholders) with the Maltese ROC (Registry of Companies) and the issuing of a certificate of registration by the Maltese ROC.

The memorandum of association of the company must state the following:

  • The name of the company
  • The registered office address of the company
  • The objects of the company
  • Whether the company is a private or public company
  • The amount of authorised share capital of the company, the division thereof into shares of a fixed nominal amount, the number of shares issued to the subscribers and the amount paid-up of each share and the rights attached to different classes of shares (if applicable)
  • The name, residence and identity of each subscriber and the number of shares subscribed for
  • The number of directors and the name, residence and identity of the first directors of the company and how the representation of the company is to be exercised
  • The name, residence and identity of the first company secretary of the company
  • The period, if any, fixed for the duration of the company
  • In the case of a public company, a document showing the total amount (or estimate) of formation costs and a description of any special advantage granted to persons taking part in the formation of the company must also be filed with the ROC.

    Articles of association may also be registered. These normally regulate the relationship between the company and its members and between the members themselves.

    The articles typically deal with matters such as transfers of shares (and any restrictions applicable), procedures of general meetings and board meetings, resolutions, notices and dividends.

    If you register a company in Malta and do not register any articles of association, the model contained in the Maltese Companies Act becomes the articles of association of the company.

    How long does it take to set up a business in Malta?

    We can set up a Malta company within 48 hours from receiving the relevant documents.

    The documents in question would need to include all due diligence documents and share capital funds/fees. Once the incorporation is complete, the MFSA will publish a Certificate of Incorporation which will also display the Malta Company Registration number.

    STEPS TO SETTING UP A COMPANY IN MALTA:

    Name Reservation –2-3 hours

    Drafting and Notarizing Incorporation Documents –1 day

    Depositing Share Capital –1 day

    Company and Tax Registration –2 days

    VAT Registration –1 week

    Employer ID Number –3 days

    Employment Registration –2 days

    Defining the Corporate Structure - Public or Private Limited Company

    PLC v Private Limited Company

    Shares of a private limited company are not offered to the general public. Private companies are still incorporated. These companies are still required to have legal documents to form the business. Private companies must have at least one director.

    To raise capital via a public investment the company must be a PLC. PLCs are like LTDs, except they are publicly traded, with shares that can be freely sold and traded on a stock exchange. Meanwhile, PLCs must have at least two directors and hold annual shareholder meetings.

    What is a PLC?

    A public limited company (PLC) is a public trade company. A PLC designates a company that has offered shares of stock to the general public. The buyers of those shares have limited liability. Meaning, they cannot be held responsible for any business losses in excess of the amount they paid for the shares.

    Its operations are regulated and it is required to publish periodic reports to shareholders and prospective shareholders on its true financial health.

    Requirements for a PLC

    The minimum share capital of a Malta Public Limited Company is 46,587.47 EUR.

    Individuals must pay at least 25% of that capital when they form the company.

    Pro’s & Cons of a PLC

    Pro’s
  • Companies can raise more capital by being a PLC.
  • Becoming a PLC allows shareholders liquidity.
  • Increased ability to raise future capital and make acquisitions (by offering shares to target companies).
  • Cons

  • Increased scrutiny and regulation
  • Larger number of shareholders to be accountable to
  • Volatility in valuation increases as the company is beholden to financial markets.
  • Private Limited Company

    What is a Private Limited Company?

    The objects in a private limited company can be unlimited but must be specified in the memorandum and articles of the company.

    The private limited company must have at least one director which can be a natural person or a legal entity.

    The company secretary of the private limited company in Malta has to be at least one natural person and cannot be the director.

    There needs to be at least two shareholders of a private limited company up to a maximum of 50 persons.

    Private Exempt Limited Company – Key Points

    The objects in a private exempt limited company can be unlimited but must state a primary purpose for the company and this must be specified in the memorandum and articles of the company.

    The private exempt limited company must have at least one director which has to be a natural person. Legal entities are not permitted to act as a Director in a private exempt limited company.

    The company secretary of the private exempt limited company in Malta has to be at least one natural person and can be the director. There needs to be at least one shareholder of a private limited company up to a maximum of 50.

    Requirements for a LTD Company

  • The minimum share capital of a Malta Private Limited Company is 1,164.69 EUR.
  • Individuals must pay at least 25% of that capital when they form the company.
  • Possible Advantages of a LTD Company

  • Minimised personal liability
  • Professional status
  • Can be tax efficient
  • Personal Remuneration can be higher
  • Separate legal entity and personality
  • Creditability and trust
  • Investment & lending opportunities
  • Protection of company name
  • Things to Consider

    There are some less favourable aspects associated with limited company formation, as one would expect from anything that provides so many benefits. However, most of these perceived disadvantages pale in comparison to the tax advantages, enhanced professional image, and limited liability protection you may enjoy.

    The most notable disadvantages are as follows:

  • You will be required to pay an incorporation fee to set up a company and register it with the local registry
  • company names are subject to certain restrictions and certain words cannot be used
  • you cannot set up a limited company if you are an undischarged bankrupt or a disqualified director
  • certain personal and corporate information may be disclosed and in the main availablte to the public
  • accounting requirements may be needed as your company may need to file accounts and these may need to be audited
  • you may need to appoint an accountant / tax advisor to help you with your tax affairs
  • strict procedures must be followed when withdrawing money from the business
  • a statement declaring the shareholders, directors and share capital of the company and annual accounts will need to be filed each year
  • a Company Tax Return and annual accounts must be delivered to the company registrar every year.
  • companies are required to adhere to strict record-keeping requirements, including taking minutes of meetings and recording all decisions taken by directors and shareholders
  • company registers and records must be maintained and made available for public inspection at your registered office
  • if you make any changes to your company details, you must notify the registrar and authorities immediately
  • Our Company Formation Process

    Step 1: Initial Consultation We will have a call to answer your questions, understand your businesses requirements and offer more information that will aid your decision.

    Step 2: Send Proposal We will send a personalised overview of the Malta company formation costs as well as attaching more useful information.

    Step 3: Call with Local Expert We will arrange a more technical call with one of our local partners to go through any more questions as well as offer a more technical breakdown of the structure.

    Step 4: Complete KYC Documentation We will start the onboarding requirements set by local laws that govern all company service providers.

    Step 5: Company Formation Once we have all the required documents and you have passed our risk-based assessment, we will aim to set up the company within 3-5 business days.

    Step 6: Continuation We will continue to assist your business in whatever capacity you need us. We will be here to advise and assist your business throughout its lifetime.

    We also have other European offices, therefore if you wish to discuss the benefits of other countries, let us know and we will inform you of the best structure for your business.

    If you need more detailed information, why not download our Malta Company Formation Guide?

    Malta Company formation

    Considerations

    When setting up your business there are several important elements to take into account. We have listed just some of the items that you need to consider when you are planning the set up and structure of our business.

  • Initial Set-Up and Substance
  • Registered Office or Office Space
  • Company Director (Individual & Corporate)
  • Company Secretary
  • Corporate Trustee
  • Application to Open a Bank Account/Payment Service Provider Account
  • Registration of Company as an Employer
  • Registration of Company for VAT purposes
  • Ongoing operations

    One your business operation is up and running you need to ensure that you not only remain complaint with the business and financial regulations in Malta below we've compiled a list of support functions that you may need to consider as part of the overall budgeting process.

  • Bookkeeping
  • Payroll
  • Recruitment
  • VAT Returns
  • Preparing Financial Statements
  • Income Tax Returns
  • Claims for a Tax Refund
  • Annual General Meeting Resolutions
  • Compliance Checks and Services
  • Corporate Annual Returns
  • Staffing & Recruitment

    Setting up your business is usually the first step and that is usually followed by the decision of who will run or work in your business. Staffing your business with the right personnel can be crucial to future success of your business. Do you seek out employees yourself or do you seek the services of a specialist recruitment firm to assist get in the right people for your business.

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