Malta has emerged as a prime destination for business due to its favourable corporate environment, which includes competitive tax rates, a network of Double Taxation Agreements, and a swift incorporation process.
The island also boasts a skilled, English-speaking workforce, making it an ideal location for international business operations. Here’s a detailed guide to help expatriates navigate the process of registering a company in Malta.
Step-by-Step Company Registration in Malta
1. Public and Limited Liability Companies in Malta
In Malta, you can register your business as either a Private Limited Liability Company or a Public Limited Liability Company. A private company’s name must end with “Ltd.” or “Limited,” while a public company’s name should conclude with “p.l.c.”
An LTD is modeled after the British limited liability company and is similar to an Italian SRL, a French SàRL, a Polish z.o.o. and other country-specific versions. In a nutshell, the shareholders of a limited liability company have their maximum risk limited to the capital they have invested in the company. If an LTD has a share capital of EUR 10,000 then the shareholders’ personal liability is limited to that original invested amount only. Compare this to a sole proprietor who operates in their own name and has a personal unlimited liability under the law.
2. Exploring the Societas Europaea (SE)
For businesses aiming to operate across Europe, registering as a Societas Europaea (SE) in Malta can be beneficial. This European public limited liability company enjoys ease of transfer across EU member states and is governed by Maltese law if registered in Malta. An SE must maintain a minimum subscribed share capital of €120,000, which can be formed through various methods such as mergers or by establishing a holding or subsidiary company. However, SEs are generally indicated for cross-European large businesses and, for most entrepreneurs, the SE is a complex and expensive route.
3. Company Redomiciliation in Malta
A company looking to transfer its operations to Malta does not necessarily have to liquidate its existing operations or start from scratch. The option of company re-domiciliation allows the company to change its domicile to Malta while maintaining the original legal entity established in a foreign jurisdiction. To register as a continued company in Malta, a foreign company must submit a request to the Registrar of Companies in the required manner and form. By moving its domicile to Malta, the company would need to comply with Malta’s laws and regulations without the need to establish a new legal entity.
4. Company Mergers in Malta
Mergers and acquisitions can take various forms, including a straightforward transfer of shares, a subscription to a new share issue, a merger by acquisition, a merger through the formation of a new company, a joint venture, or a transfer of property.
5. Malta Branch Establishment
Although a Maltese branch is not regarded as a separate legal entity, it must still be registered with the Malta Registrar of Companies. Setting up a branch is a quick and straightforward process, and the Registrar must be notified within one month of starting operations in Malta. There is no minimum share capital requirement for establishing a branch, and it is subject to similar laws and regulations as a registered Malta company, including the potential to apply for a tax refund on any Malta tax leakage. However, it’s important to remember that a branch is not considered a legal entity.
6. Shareholding Requirements:
Every Private Limited Company in Malta must have at least one shareholder, which can be either an individual or a corporate entity. In cases where a corporate director is appointed to the board, it is essential to ensure compliance with local regulations and proper corporate governance practices. The minimum authorised share capital allowed is €1,164.69. Specialist services are available to assist with managing shares, including options for holding shares through licensed trustees, which can enhance governance and streamline compliance.
7. Appointing Directors and a Company Secretary:
Private company in Malta must appoint at least one director, while public companies are required to have at least two directors; directors can be individuals or corporate entities. Every company also needs to appoint an individual as a company secretary unless it is registered and licensed in Malta to appoint a corporate entity for this role.
Directors and the company secretary can be non-EU citizens and are not required to reside in Malta, offering flexibility for international management. However, for effective tax management, it is recommended that at least fifty per cent of the board comprises local directors, along with a local company secretary who is well-versed in Maltese legislation.
8. Establishing a Physical and Registered Office in Malta
Setting up a physical presence in Malta, including an office and hiring local staff, is crucial for boosting your company’s operational effectiveness and credibility. Additionally, all companies are required to have a registered office address in Malta, which serves as the official point of contact for receiving government correspondence and legal notices. This not only ensures compliance with tax and corporate regulations but also helps establish substance in the local market.
9. Banking Needs
Opening a bank account is an essential step for managing your company’s finances. While you can choose to open a bank account in or outside Malta, having a local account can facilitate easier business transactions and compliance with Maltese banking regulations.
10. Fee Structure
The fees payable to the Maltese government on registering a company in Malta vary depending on the authorised share capital, with fees ranging from EUR 245 to EUR 1,750. Additionally, a minimum annual fee of EUR 100 is required for the submission of the annual return.
11. Tax Advantages and Double Tax Treaties
Malta offers a highly advantageous tax system, including nearly 70 Double Tax Treaties that prevent double taxation of the same income in two different jurisdictions. The standard corporate tax rate is 35%, but with the refund system, the effective tax rate can be significantly reduced for qualifying companies.
12. Documentation and Compliance
The registration process culminates with the submission of the Memorandum & Articles of Association. These documents detail the company’s operational framework, share structure, and governance and are essential for legal recognition in Malta.
13. Accounting and Auditing
Keeping proper accounting records and conducting annual audits are mandatory. These practices ensure compliance with the Malta Companies Act and international accounting standards, maintaining corporate transparency and fiscal responsibility.
To Conclude
Setting up a company in Malta as an expatriate offers numerous benefits, from tax efficiencies to strategic positioning within the EU.
By following these detailed steps and ensuring compliance with local regulations, expatriates can effectively establish and grow their business in Malta’s dynamic and supportive corporate environment.
Expatax is here to help, offering expert advice and guidance to make the process smooth and successful.
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