Company Formation and Registration in any jurisdiction can be a simple and straightforward process or a complete nightmare. Furthermore, in this globalised world, choosing the right location for your business can have a significant impact on your success. However, setting up a company in Malta has become extremely popular in recent years due to the fantastic tax incentives, and it’s a membership to the EU.
You can read our previous articles on company formation in Malta below to help you with your research:
However, starting a company can sometimes be difficult, especially if it’s your first time. Therefore, Papilio Services wants to help by laying out a simple 10 step company formation guide to help you with opening a limited company in Malta.
Choose whether you want to set up a Private Limited Liability Company (LTD) or go Self-Employed
Minimum Share Capital
Obtain a Tax ID number
Register with the Maltese VAT Department
Get a PE (Permission to Employ) number
Register with the ETC (Employment and Training Centre)
Data Protection Registration
Step 1: Choose whether you want to set up a Limited Liability Company (LTD) or go Self-Employed
So, what’s the difference? The main difference is the level of protection you have if anything goes wrong, such as lawsuits or defective products. If your self-employed, you take on that personal risk. But, if you have a Limited Liability Company, you are legally separated from the business.
However, having a Limited Liability Company, there is more compliance. Creating a company requires having an annual audit, compliance checks and more. If you’re considering having a Limited Liability Company, you need to make sure that the business is not only viable, but you seek correct and quality advice to avoid possible mistakes.
Step 2: Prepare Documentation for Company Formation
If you’re setting up a Limited Liability Company, you need to draft the memorandum and articles of association. You can fill out these documents yourself; however, if you’re new to setting up a business in Malta, we suggest you seek expert advice to avoid time-consuming mistakes. You must also have a detailed description of:
- The activities/assets of the company;
- What income the company is expected to earn;
- The ownership structure up to the individual beneficial owners and any
- intermediate corporate entities;
- The persons who will make up the Board of Directors.
Step 3: Minimum Share Capital
The minimum share capital required in Malta for a Limited Limited Company is €1,164.69 (or the equivalent in another convertible currency).
Setting up a bank account in Malta can be a complicated process to navigate due to the compliance and anti-money laundering checks. As an alternative to depositing the initial share capital in an account in the name of the company, you can use the services of a company service provider (CSP).
Step 4: Registration
You will be required to present all documentation and the share deposit receipt to the MFSA (Malta Financial Services Authority). The process of registration typically takes 2-5 working days, depending on the size and activities of your business.
Step 5: Obtain a Licence (if applicable)
Certain activities are regulated, and you will need to apply for a relevant licence to be compliant with local regulations. Licences differ based on the activities of the company, and this may require a meeting with the specific governmental agency in some cases. This licence fee is renewed on an annual basis to stay compliant with local laws.
Step 6: Obtain a Tax ID number
You need to get a tax identification number so that you can submit your annual tax return forms. This ID number will differ depending on if you’re self-employed or a Limited Liability Company. Again, as taxation is a complicated matter, it may be worth seeking the advice of a qualified tax professional.
Step 7: Register with the Maltese VAT Department (if applicable)
In the eyes of the Commissioner for Revenue, if you’re performing an economic activity, then you’re considered as taxable. A company registered in Malta which is trading in Malta is required to register for VAT within 30 days of its first supply of goods and services made in Malta.
There are three types of VAT registration which cater to:
- General VAT registration
- Small undertakings
- EU Intra Community activity.
Once you have you have registered with the VAT department you would usually:
- Have a VAT number with the prefix MT;
- Have to issue fiscal receipts or tax invoices on all transactions made;
- Typically submit a VAT return for a tax period of three months by the no later than six weeks after the end of the tax period, or as directed by the Commissioner.
Step 8: Get a PE (Permission to Employ) number (if applicable)
This step depends on whether you intend to have employees in your business. This process typically takes three days to complete as the Ministry of Finance does a thorough vetting process.
Step 9: Register with the ETC (Employment and Training Centre) (if applicable)
This step does apply to you if you employ people, self-employed or a Limited Liability Company. You need to fill out a form for each employee.
Step 10: Data Protection Registration
Following the implementation of GDPR (the General Data Protection Regulation), it is essential that when you start your business, you create specific safety procedures to ensure third parties can’t steal your customer’s information. You can find more information about this on Malta’s IDPC (Information and Data Protection Commissioner) website.
If you need help with your company formation or with any of the above matters when setting up a Maltese business, Papilio Services can assist you. We can provide you with many services, including:
- Malta Company Formation
- Registering a Company in Malta
- Setting up a Maltese Holding Company
- Setting Up a Malta Bank Account
- Providing Office Space
- Payroll and HR Services
- Malta Compliance Services
- Legal Services in Malta
- Invoicing and Bookkeeping Services
- Company Director Services
- Company Secretary Services
- Registered Office in Malta with mail receiving and forwarding services
- Dedicated telephone line specifically for your company
- Dedicated fax lines for your business
- Website and Email set up
- Tax and VAT Compliance in Malta
- and much more.
You can call us directly on +356 2122 7553, email us on firstname.lastname@example.org or fill out the contact form below, and we will respond within 24 hours.