Registration for an online company is the same as other economic activities. The cost for registering a company in Malta is the same for online or brick-and-mortar stores. However, one topic of note is the Value Added Tax (VAT). Registering for VAT could be the biggest concern for a new business, and often it is not clear whether a business needs to register for VAT. VAT is applied throughout the EU, and a business could be liable to pay VAT in multiple countries based on what jurisdictions it is operating in. There could also be a reporting requirement for VAT purposes, even if VAT is not due for settlement. Therefore, having an idea of what transactions will take place in your e-commerce business and where they will take place is an important consideration. It is advised to have all tax planning in order before proceeding to avoid future headaches.
In most cases, a license is not required for the clients we work with, however, this can be assessed during a free consultation.
The Maltese Government designed the National E-commerce Strategy of 2014-2020 to identify initiatives to undertake and to boost e-commerce in the country. Therefore, there are certain benefits from starting an online business in Malta. First, e-commerce company registration in Malta can provide tax efficiency. Malta Enterprise is the country’s economic development agency and provides incentives for enterprises demonstrating commitment towards growth, an increase in value added and employment.
Second, Malta offers a competitive VAT rate compared to other European countries. In Malta, goods and services are generally taxable at a standard VAT rate of 18%. However, certain goods and services have a reduced rate of 7%, 5%, or even 0%.
Lastly, Malta is a great place for entrepreneurs with an international, highly educated workforce. Companies generally conduct business in English, and many people are multilingual.
An e-commerce business would need to demonstrate that business operations, decision making, and management control take place in Malta. Every business needs to have a registered office, and Papilio Services can provide you with a registered office or help arrange leasing options. In addition, it is also preferable to have a director who is a resident in Malta.
-Speak with a specialist
-Determine what type of e-commerce business you want to operate
-Map out the flow of transactions – how many there will be, who your customer is (business or individual), where the customer is based and what supplies you will be making.
-Consider what happens when the business grows. E-commerce businesses can grow quickly creating tax implications in the future. Have you planned your tax considerations in the scenario that you sell your business and it has gone up in value?
-Register for VAT
We can assist different types of e-commerce businesses, and our company has helped many clients set up and succeed. These include sellers on e-commerce merchant platforms, drop shippers, software developers, and IT consultancy to name a few. We can help make your e-commerce business tax efficient and compliant with all legal, tax, and compliance regulatory obligations.
If you are thinking about registering a company in Malta, specifically an e-commerce business, and are interested in having an initial call to discuss your situation, please contact us. We assist with a range of services from initial e-commerce company formation alongside other corporate matters to assisting with all background business administration and compliance obligations. Contact us today to arrange a consultation to discuss your e-commerce business requirements.