In most recent years many foreigners have been and still are relocating to Malta to start a business here. There are many reasons, benefits and advantages in doing so, some being: Malta is a cosmopolitan island located in a strategic location, it has a diversified economy, lots of sun and outdoor activities, the cost of living, although rising is still on the lower side, it welcomes families, offers tax benefits, is part of the EU and the Schengen Area, and many other good things. Such newly formed ventures and startup companies are key players to new economy, generating money and contributing to the country's GDP. Building a competitive economy and attracting foreign direct investments (FDI) should be a key part of any modern and solid country.
There are different options to set up a business in Malta mainly
being:
Self Employed (Sole Trader)
Registered Partnership
Limited Liability Company
There are various common factors between the above-mentioned types
of setting up a business, such as obligations to apply for a VAT
number, to obtain an employment number (PE number), registering
yourself and your employees with Jobsplus, keeping your books up to
date and much more. When it comes to self-employment and registered
partnerships the pros here are that it involves less and less
paperwork in terms of corporate, tax, auditing and accounting
obligations. Of course, one still needs to submit VAT returns,
prepare a yearly income statement (profit and loss), file for
personal tax returns and pay NI Contributions. Here the costs to
hire an accountant are on the lower side so this will help you keep
your business running expenses low. The cons on the other hand is
that one is operating under his/her own name, which means they
carry unlimited liability, so any problems are to be resolved on a
personal level and furthermore there is no limits to the liability
that can be brought against the individual.
When it comes to a Limited Liability Company the pros here are that it is generally deemed to be more professional to trade under a company as it shows a level of seriousness and a proper structure for your business. Moreover, a company is a separate legal entity that is set to carry trading activities in its own name. The company provides full powers and responsibilities to the director. The liability of the company is limited to the company only and not oneself as an individual, as we have seen when it comes of the self-employed scenario. This option brings some cons with it in terms of expenses as one would need a corporate service provider to incorporate the company and set up the structure, as well as yearly auditing fees and company tax returns, in addition to the bookkeeping fees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
