Benefits of Incorporating a Malta Company
Malta's competitive tax system, extensive network of Double Taxation Agreements, fast incorporation, and its English-speaking educated workforce make it an increasingly popular business vehicle for companies from all over the world to register a company in Malta. Whether one is in need for a Malta holding Company (to be used as part of an effective asset-holding structure), a Malta trading Company, a ship-owning Company, an investment vehicle or a captive insurance company, Malta provides several solutions to accommodate such requirements.
Malta Company Registration Procedure
A straightforward and online company setup
The steps to set up a company in Malta are very straightforward and can be done remotely or online without the need to travel. Our corporate service team can efficiently guide you through the whole process for a smooth registration of your Maltese company during a meeting or a call.
In order to form a company in Malta, you would need to:
- Fill in an online company application form. This will enable us to understand what type of Company is required and what annual services are required from our end.
- Complete the required due diligence documents on the directors and shareholders.
- Once these are received, our compliance team will review the documents.
- Once all is cleared, the memorandum and articles of the company will be drafted for signature. Original signed documents need to be sent to our attention by courier.
- Once received, the company will be set up within a few days.
Throughout the whole process, our team of dedicated professionals will also guide you on the following considerations:
- The minimum share capital in Malta. This is €1,200 per company, of which 20% must be paid up, along with this, there is a disbursement fee of €320 payable to the authorities along with our professional fees.
- Tax planning. As a brief overview, the Malta trading company will be taxed at 35% on trading profits, upon a distribution of dividends to the shareholder, the shareholder will become eligible to claim a tax refund on Malta tax paid of either 6/7, 5/7 or 2/3 depending on the stream of income, which will result in a net effective tax rate in Malta of roughly 5-10% depending on the refund claim.
- Substance requirements. We will be able to guide you on the necessary substance required in Malta such as directors, shareholding, office space and/or employees which is becoming increasingly important to ensure that management and operations are being carried out from Malta to safeguard your company from international tax matters whilst adding value to your Malta Company.
- Opening a Bank Account. Our experienced team can efficiently guide you through the various options available to open a bank account both in Malta and in other countries.
Malta Company Incorporation Overview
|Company Law||Malta Companies Act 1995|
|Type of Company||Limited Liability Company (LLC)|
|Language of Legislation and Corporate Documents||English|
|Length of Time to Incorporate||A few working days, following receipt of all original documents required|
|Government Registration Fee||€245 for an authorised share capital of up to €1,500|
|Shelf Companies Available||No|
|Name Restrictions||Names identical or similar enough to ones already registered or offensive or otherwise undesirable or misleading|
|Endings and Abbreviations Required||Limited Company, "Limited" or its abbreviation "Ltd."|
|Length of Time to Verify Name Availability||Up to 1 working day|
|Reservation of Names Permitted||Yes, at a fee|
|Language of Name||Must be written in English alphabet|
|Name of Banks, Insurances, Investment Funds, Trust Companies or their Equivalents Require Consent, Approval or Licence||Yes|
|Minimum Number of Shareholders||1 or 2 in case where a corporate Director is appointed to the Board|
|Corporate Shareholders Permitted||Yes|
|Local Shareholders||Not necessary|
|Disclosure of Ultimate Beneficial Owners||Yes|
|Minimum Authorised Share Capital allowed||€1,164.69|
|Bearer Shares Permitted||No|
|Registered Shares Permitted||Yes|
|Number Par Value Shares Permitted||No|
|Minimum Number of Directors||1|
|Minimum Number of Company Secretaries||1|
|Corporate Directors Permitted||Yes|
|Corporate Company Secretaries Permitted||No, unless on Public Companies|
|Disclosure of Directors / Company Secretary||Yes|
|Disclosure of Directors / Company Secretary||Yes|
|Appointment of Subsequent Directors / Officers||Yes|
|Annual General Meeting of Shareholders Required||Yes - notice to be given to every member of the company and its auditor|
|Board Meeting of Directors Required||Yes, quarterly - for place of effective control and management|
|Location of Directors and Shareholders Meetings||Malta - for place of effective control and management|
|Registered Office Address||Yes|
|Operational Office||Not a legal requirement, however, recommended i Malta - for place of effective control and management|
|Register of Directors / Officers to be kept at Registered Office Address||Yes|
|Company Seal Required||No|
|Copy of Minutes to be kept at Registered Office Address||Yes|
|Copy of Share Register to be kept at Registered Office Address||Yes|
|Minimum Annual Government Fee||€100 where the authorised share capital of the Company does not exceed €1,500|
|Requirement to File Annual Return||Yes|
|Requirement to file Audited Financial Accounts||Yes|
|Requirement to file Annual Tax Return||Yes|
|Member of Apostille of the Hague Convention||Yes|
|Increase or Reduction of Share Capital||By extraordinary resolution|
|Appointment or Resignation of Director(s) and Company Secretary(ies)||By ordinary resolution|
|Removal from Registry||Following dissolution & consequential winding up|
|Corporate Tax||35% however refunds may apply to the shareholder(s)|
|Double Taxation Agreements||Yes|
Company Types & Company Name
- Private Limited Liability Company;
- Public Limited Liability Company.
The name of a private Company must end with the words 'Ltd.' or 'Limited' whereas a public Company must have 'p.l.c.' at the end.
Since Malta forms part of the European Union, our Maltese legislation provides for the setting up of a European public limited liability company, commonly known as a Societas Europaea (SE). The option of having an SE established offers clients the opportunity to operate within the European Union without the constates of the laws of each member state. If such company is registered in Malta, then its home state would be considered Malta and therefore regulated by the laws of Malta. Once registered, instead of receiving a "C" number, such companies would obtain an "SE" number. The Societas Europaea is easily transferrable within the EU/EEA and would normally be formed either through a merger or consolidation, the formation of a Holding company or subsidiary or through a reorganisation. For each set up certain conditions must be adhered to for which we would be happy to guide you accordingly with. At all times, an SE must have a subscribed share capital of €120,000.
Malta Company Incorporation – Shareholders
Every Private Limited Company must have, at least, one (1) shareholder who may either be an individual person or a corporate entity. Meanwhile as Company formation agents offering a wide range of Corporate Services, we can also offer holding shares through CSB Trustees & Fiduciaries Limited which is a member of CSB Group that is licensed by the Malta Financial Services Authority (MFSA) in order to provide such services. CSB Trustees & Fiduciaries has also announced the extension of the authorisation so as to act as an administrator of private foundations.
Malta Directorship and Company Secretary
A company that is registered in Malta must have a minimum of one (1) director or two (2) directors in the case of public companies, and one (1) company secretary. Whereas a director could be both an individual and a corporate entity, the company secretary must be an individual, unless a company is registered and licenced in Malta to offer/hold such company secretary position. Individuals in the role of Company Director or Company Secretary can be non-EU citizens and can have residence outside of Malta.
The requirement to ensure that the management and control of the company are carried out from Malta for taxation purposes is becoming of increasing importance. Therefore, although it is not a local requirement for one to have a board composed of Malta resident shareholders, it is recommended that one does consider appointing as a minimum fifty percent of the board to be construed of local directors along with a local company secretary who is aware of the Malta legislation.
As a reputed and trusted Corporate Service Provider, CSB Group's team of professionals, who hold extensive knowledge on the Maltese legislation, can be appointed as directors and company secretary and would cover the various roles as outlined in the Malta Companies Act.
READ MORE ABOUT DIRECTORSHIP & COMPANY SECRETARY ROLES
Sourcing of Employees
Further to the appointment of Directors and a Company Secretary, in order to create greater value for the company and ensure that operations are being carried out from Malta, it would be beneficial to have an office and employees in Malta, always depending on the size and activity of the company. Companies wishing to add such levels of substance within their company may contact us to discuss in more detail and we will assist and guide them accordingly.
READ MORE ABOUT OUR RECRUITMENT SERVICES
Malta Registered Office
Every company must have a registered office address situated in Malta. CSB Group provides registered office facilities to companies registered in Malta.
READ MORE ABOUT MALTA BACK OFFICE ADMINISTRATION SERVICES
Procedure to Open a Bank Account
When it comes to banking options, a person interested in setting up a company in Malta must find a bank suitable for the company's current structure and activities. These in turn must match the risk appetite and client acceptance of the bank. Opening a bank account is something that we can assist you with, thanks to the excellent collaboration we have with a number of local and foreign banks. One may wish to also consider electronic money institutions as a means of online banking as opposed to a fully-fledged licensed bank account. When setting up a Maltese company, it is not a requirement to open a bank account in Malta as it is also possible to have a bank account outside of Malta if necessary. The process to open up a bank account in Malta could be lengthy. It is important to note that any final decision made by the bank is out of our control, however, with our assistance to review the bank chosen and to review the documentation that one will provide to the bank prior to submission, we are effectively capable of ensuring that you will be providing the correct and accurate information to increase your chances of success.
Company Formation in Malta – Fees
The company registration fees in Malta are payable to the Registrar of Companies upon incorporation of the company. Currently, they vary from a minimum of EUR 245.00 to a maximum of EUR 1,750.00, depending on the value of Authorised Share Capital. A minimum, annual fee of EUR 100.00 is payable together with the submission of an Annual Return and this is normally coordinated through our offered secretarial, directorship and back-office services.
The share capital may be divided into ordinary shares and preference shares and classes or variants thereof. In Malta, bearer shares are not allowed. Ownership of company shares or debentures is evidenced by their entry in the Company's register of members or of debentures and by the issue of a share or debenture certificate.
Time Required to Set Up a Company In Malta
The length of time required to set up a company in Malta depends on the type of company involved and on the timely submission of all information and documentation to our offices.
Taxation & Double Tax Treaties
Malta is currently signatory to almost 70 Double Tax Treaties and some interesting opportunities exist when putting into place the appropriate corporate structure. Corporate tax in Malta is calculated at a flat-rate of 35% on the gross profits based on the audited financial statements of the company. However through the availability of a tax refund system granted to shareholders of Malta-registered companies, the overall net effective tax rate could be reduced to 0% in the case of holding company structures, and 5% in the case of trading companies. In either case, there are specific legal requirements that must be satisfied in order for shareholders to benefit from such tax refunds. Licensed shipping organisations which own or operate tonnage tax ships are exempt from taxes in Malta.
READ MORE ABOUT OUR TAX ADVISORY SERVICES
Accounting & Auditing Requirements
Malta-registered companies are required to keep proper accounting records and have their financial statements audited at the end of each financial year in accordance with the Malta Companies Act, 1995 and International Accounting Standards. Financial statements should include the directors' report, the auditors' report, balance sheet, profit and loss account, notes to the financial statements, together with schedules to the profit and loss account. Fully-fledged accounting services and payroll services are offered by CSB Group in Malta. We also assist clients with the coordination of the auditing of financial statements by third party auditors.
READ MORE ABOUT OUR ACCOUNTING SERVICES
Documents to Form a Company in Malta
New company registrations in Malta are constituted by Memorandum & Articles of Association (M&A) that are subscribed to by the shareholder/s; and a certificate of registration that is issued by the Malta Registrar of Companies in respect thereof. The M&A would state the name of the company; the name, address and official identification of the subscribers; whether the company is a private company or a public company; the registered office address of the company in Malta; the activities of the company; details regarding the authorised, issued and paid-up share capital; the number of directors and their particulars, the number of company secretaries and their particulars, and the manner in which the legal and judicial representation of the company is to be vested.
Exchange Control and Share Capital
Maltese Companies are not subject to any exchange control restrictions.
The authorised and issued share capital of a private company shall be of a minimum of €1,164.69 of which at least 20% is to be paid-up front.
In the case of public companies, the minimum authorised and issued share capital shall be of €46,587.46 of which at least 25% must be paid-up. Companies may have their share capital denominated in € (Euro) or any other major currency.
Company Redomiciliation in Malta
A company wishing to transfer their operations to Malta, would not need to necessarily liquidate their current operations in their present country and set up from scratch in Malta. A company redomiciliation option allows the company to move the company domicile to Malta whilst the legal entity originally set up in a foreign jurisdiction remains in existence. A request by a foreign company to register as being continued in Malta shall be made to the Registrar of Companies in the manner and form required by the company. Moving domicile to Malta means that the company would need to comply with the laws and regulations of Malta without the need to set up a newly owned legal entity.
READ MORE ABOUT COMPANY REDOMICILIATION
Company Mergers in Malta
Mergers and acquisitions can come in many ways and forms, such as a simple transfer of shares or a subscription to a new share issue, a merger by acquisition or a merger by a formation of a new company, a joint venture or a transfer of property. CSB Group capably equipped to assist our international clientele with any cross border arrangements within a timely and professional manner on all aspects of Maltese corporate structures.
Malta Branch Establishment
Although a Maltese branch is not considered to be a legal entity, it must still be registered with the Malta Registrar of Companies. A branch is easy and quick to set up and must notify the Registrar within one month of operating in Malta. There is no minimum share capital requirement to set up a branch and such setup is subject to similar laws and regulations to that of a registered Malta company including the possibility to apply for a tax refund on any Malta tax leakage. However, one must keep in mind that a branch is not a legal entity.
READ MORE ABOUT BRANCH ESTABLISHMENT
Registration of a Partnership in Malta
There are two partnership types allowed by the Maltese Companies Act. These are en commandite (commonly known as "limited partnership") or en nom collectif (commonly known as "general partnership"). Both Maltese partnerships have their own separate legal personality which is separate from that of its partners. The Maltese law allows for partnerships to own and hold property under any title at law and also be sued.
Malta Company vs. Partnership
The setting up of a partnership is slightly different to that of a company, such as needing to have a partnership deed set up whilst also needing to appoint the general partners and the limited partners, depending on the type of partnership set up chosen. The process and timeline is pretty similar to that of a privately owned trading company with a few differences in the documentation prepared. It is also possible to convert a Limited Liability Company (LTD) into a partnership, should certain conditions be met.
Although it may be possible to find shelf companies, this is not something that we offer as the cost, time and documentation to set up a new company is identical and therefore we would rather recommend setting up a new company from day one. Having said that, occasionally we may have clients wishing to sell their company and should that occasion arise, we would be willing to assist them in finding a suitable buyer.
Frequently Asked Questions about Registering a Company in Malta
Why do companies register in Malta?
Malta is strategically located in the middle of the Mediterranean and also forms part of the European Union. With English being a primary language in Malta and the work ethic found on the Island, it is easy to see why companies decide to set up in Malta. Further to this, Malta also offers some benefits for Maltese companies to make use of our approved taxation system.
Is Malta offshore?
Malta forms part of the European Union and is therefore not considered to be an offshore country.
What is to cost of registering a company in Malta?
This will vary depending on the services required from our end which we will be happy to discuss in more detail depending on your requirements. With regards to registration fees, a disbursement fee of €320 will be applicable which will cover the registration fee and certified copies of the Memorandum and Articles of the company for a company with a share capital of up to €1,500.
How much is the VAT in Malta?
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% or 5% or 0%.
Is Malta tax free?
No, the effective tax rate in Malta is 35%. There are instances when this can be reduced should certain conditions be met.
What is the company tax rate in Malta?
The effective tax rate is 35%, should certain conditions be met and the tax refund availed of, this could be reduced to 5-10%. Should certain exemptions apply, the tax rate may also be reduced to 0%.
What are the documents required in order to incorporate a company in Malta?
There will be a company application form to be filled in along with some due diligence documents required.
How long does it take to register a company in Malta?
Once the original package of certified documents are received, within a few days the Company may be set up.
Do I need to have a physical address?
As a minimum one would need a registered address in Malta. It is also possible to obtain a physical personalised address which will provide greater benefits to your company.
What capital does a Maltese company need?
The minimum share capital is €1,200.
How many directors and shareholders are required in a Maltese company?
A minimum of 1 director and 1 shareholder is required.
What are the annual document filing and fee obligations?
Audited financials, corporate tax returns and one annual return must be submitted annually to the respective authorities
Are there any company name restrictions?
The forming entities are free to choose the name they wish as long as this is not already in use, already reserved or very similar to other company names. The name can neither be misleading, offensive, or otherwise undesirable. The name must be written in the English alphabet.
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.