Welcome to our guide on starting a business in Malta, designed for expats and digital nomads!
Whether you want to start a new company or grow your current business, Malta has many opportunities and benefits for the international business community.
In this article, we will guide you through the important steps and things you need to think about when setting up your business in Malta, from picking the right legal structure to understanding the local tax rules.
Why Register a Company in Malta?
Malta is an excellent location for businesses for several reasons. English is one of the official languages, and 88% of the population speaks it fluently. The country has a modern telecommunications network and a highly skilled professional workforce.
Economically, Malta performs better than many nearby EU countries in terms of GDP per capita, life expectancy, and social benefits.
Located in the centre of the Mediterranean Sea and close to Gibraltar, Sicily, and North Africa, Malta is strategically positioned as a gateway to the markets of Europe, Africa, and the Middle East. The business environment in Malta is dynamic and supportive, with tax efficiencies that allow entrepreneurs to easily trade their products and services across the EU.
Benefits of Registering a Company in Malta
Registering a company in Malta comes with several benefits:
- Double Taxation Agreements: Malta has formed around 70 agreements with various countries to prevent double taxation. This protects businesses from being taxed twice on the same income. For this reason, Malta is an attractive location for foreign investors looking to set up their businesses.
- Favourable Tax System: The tax system in Malta is particularly appealing to international entrepreneurs wanting to lower their tax bills and enhance their investment possibilities. Although the corporate income tax rate is 35%, shareholders can receive a refund for taxes already paid by the corporation.
- Skilled Workforce: Malta boasts a high-quality educational system and relatively low living costs, making its workforce extremely competent compared to other EU countries.
- Visa-Free Travel: As a member of the Schengen Area, there are no travel restrictions between Malta and other Schengen countries, simplifying movement for business purposes.
How to Register a Company in Malta for Expats and Digital Nomads
The Maltese government has implemented various programs to encourage entrepreneurship. A lot of Malta’s workforce is employed in service industries, which account for almost half of the nation’s GDP.
The travel and tourism sectors amounted to 2.6 billion euros in 2023. Additionally, manufacturing contributed approximately 6.76% to Malta’s Gross Domestic Product (GDP). These factors make Malta an attractive destination for business owners.
Procedure to Register a Company in Malta
Registering a company in Malta involves a straightforward process outlined below:
- Choose a Business Structure: Start by selecting the type of business structure that best fits your needs. Options in Malta include a limited liability company, partnership, sole proprietorship, overseas company, or other legal forms available.
- Select a Business Name: After deciding on the structure, choose a name for your business. Ensure that the name is not already in use or too similar to existing names, does not include any offensive language, and accurately represents your business.
- Deposit Required Share Capital: Open a bank account and deposit the required share capital needed to formally set up your company in Malta.
- Gather Necessary Documents: Collect all documents needed for registration, such as the articles of association and memorandum of association. If any shareholders are corporate entities, include Form BO1 with your application.
- Apply for Business Registration: Submit your company incorporation request along with all required documents to the Malta Business Registry (MBR).
- Acquire the Certificate of Registration: The Registrar will check your documents for authenticity and validity. Once approved, you will receive a Certificate of Registration, officially recognizing your business.
Documents Required for Malta Company Registration
To register a company in Malta, you will need to gather the following documents:
- Articles of Association of the company
- Proof of depositing the required share capital in the company’s bank account
- Form BO1
- Information about the company’s directors and shareholders
- The address of the company’s registered office in Malta
- A description of the company’s corporate structure and its main business activities
- Memorandum of Association of the company
Types of Business Entities Available for Company Registration in Malta
When registering a company in Malta, you can choose from several types of legal entities, each suited to different business needs:
- Limited Liability Company (LLC)
- Public LLC: These can issue stocks and debentures to the public to raise funds.
- Private LLC: These companies are restricted from public fundraising. They limit member liability to their contributions and can have no more than 50 shareholders.
- Partnership Firms
- General Partnership: Formed by two or more individuals who engage in a business to share profits.
- Limited Partnership: Must include at least one general partner with unlimited liability and other partners whose liability is limited to their investment.
- Sole Proprietorship
- This is the simplest form of business in Malta, where the sole owner is fully responsible for all business decisions and liabilities. It’s ideal for individual entrepreneurs.
- Overseas Company
- A foreign business that sets up operations in Malta must register with the Malta Business Registry within one month of establishing a branch or office.
At Expatax Malta, we can guide you through selecting the appropriate business structure for your needs and assist with the entire registration process, ensuring compliance with Maltese regulations.
Eligibility Criteria for Company Registration in Malta
When registering a company in Malta, there are specific criteria you need to meet:
- Directors: Private companies must have at least one director, while public companies need at least two.
- Corporate Secretary: Every company in Malta is required to appoint a corporate secretary.
- Capital Requirements: Public companies must have a minimum capital of EUR 46,587.47, and private companies must have at least EUR 1,164.69.
- Registered Office: Every company must have a registered office located within Malta.
- Annual General Meeting: All companies in Malta are required to hold an annual general meeting.
Tax Structure for Malta Company Registration
When you register a company in Malta with Expatax Malta, it’s essential to understand the tax obligations that come with it. Companies in Malta must register with the local tax authorities to handle various business taxes. Here’s a breakdown of the main taxes:
- Corporate Income Tax: The standard rate for corporate income tax (CIT) in Malta is 35%.
- Value-Added Tax (VAT): The general VAT rate applied to products and services is 18%, although some items may be taxed at reduced rates of 7% or 5%.
- Payroll Taxes: Under the Final Settlement System (FSS), companies are required to withhold income tax and social security contributions directly from employees’ salaries.
- Social Security Contributions: Employers must contribute to social security at a standard rate of 10% of each employee’s wages.
Cost for Company Registration in Malta
Here’s what you need to know about the expenses:
- Business Registration Cost: The standard fee for registering a business in Malta is EUR 245. This fee can vary depending on the amount of share capital your company has.
- Accounting Expenses: Expect to spend about EUR 160 per month on accounting services.
Additionally, there are other costs to consider when setting up your business. These include hiring employees, opening a bank account, and obtaining the necessary business licenses. At Expatax Malta, we provide detailed guidance to help you manage these expenses effectively as you start your new venture.
We Make the Process of Setting up a Business in Malta Hassle-Free
In conclusion, setting up a business in Malta means knowing about different rules and costs, from choosing how to structure your business to handling taxes and expenses. We can assist you with every step of this process, including documentation, tax registration, and ensuring compliance with local regulations.
Sources
Tips for transitioning to life in Malta
Percentage of English-speaking population in Malta
Malta Double Taxation Agreements
Malta and the Schengen area rules
Travel and tourism statistics in 2023 in Malta
Share of manufacturing in Malta
Minimum capital for registering a company in Malta
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