Malta Company Formation
Malta Company Formation
As Malta Company Formation & Registration Agents, we specialise in providing corporate solutions and services to all types of companies from start-ups to large corporate entities. We offer 360˚ support from a registered office and VAT compliance to bookkeeping and more.
Contact our team today to arrange a consultation by emailing us on enquiries@papilioservices.com or call us directly on +356 2258 2000, and we will respond to you within 24 hours.
Why register a company in Malta?
Malta is a popular jurisdiction of choice for company registration due to the many tax benefits alongside over 80 double taxation treaties.
Member of the EU
Malta has been a member of the European Union since 2004. Being a member of the EU brings some fantastic benefits including free trade between member states, a vast potential market, and the freedom of movement within the EU in addition Malta operate the currency which makes trading between nations simpler.
Low effective rate of corporate tax for Maltese businesses
The Malta system aims to attract investors, entrepreneurs, and high net worth individuals to the island by offering excellent tax incentives and schemes for businesses and individuals.
Most of the companies incorporated in Malta are subject to a corporate tax rate of 35%. However, foreign shareholders can claim a 6/7th tax refund on any tax paid by the company on profits, distributed as dividends. This system can lower the effective rate of tax to 5% subject to certain conditions.
It is also possible to get an exemption from taxation on capital gains from a disposal, or from dividend income, should a company have a participating holding.
Malta has several tax benefits which will reduce the company income tax through the full imputation and tax credits available when distributing profits to the shareholders.
Quality of workforceMalta has a lower-cost and highly qualified workforce compared to the rest of Europe. The cost of living in Malta is 15-20% cheaper compared to its EU counterparts. Most importantly, the standard of education in Malta is world-class, making Malta an excellent spot to find your perfect team.
Low Language barrier
Malta is an English-speaking country, although Italian is also widely spoken. This makes doing business with the rest of the world a much easier task. Moreover, as Malta attracts many EU citizens, it is more than likely, you will find a multilingual workforce here than anywhere else in the EU.
Excellent transport links
Positioned between Europe and Africa, Malta benefits from being one-hour ahead of UTC. Moreover, access to Malta is simple thanks to excellent transport links via air and sea, with the government investing to create continuous improvements.
Advanced IT infrastructure
Despite the small scale of Malta, the IT infrastructure is also excellent with satellite technology and high capacity fibre-optic submarine cables linking Malta with Europe.
Malta Climate
Malta enjoys a stunning climate, with around 3000 hours of sunshine per year. The island receives its fair share of rain during the winter season, but this is very concentrated, and rainfall usually only lasts a few hours at a time.
Registering a company in Malta is an ideal corporate structure for business operations. It offers protection with a separation of assets and liabilities from the company’s shareholders as well as a beneficial tax regime. Finally, company incorporation in Malta can be a quick process taking as little as 2 days.
However, company registration in Malta can sometimes be difficult, especially if it's your first time. Therefore, Papilio Services wants to help by laying out a simple 10 step company formation guide to help you with opening a limited company in Malta.
Step 1: Choose whether you want to set up a Limited Liability Company (LTD) or go Self-Employed
So, what's the difference? The main difference is the level of protection you have if anything goes wrong, such as lawsuits or defective products. If your self-employed, you take on that personal risk. But, if you have a Limited Liability Company, you are legally separated from the business. However, having a Limited Liability Company, there is more compliance. Creating a company requires having an annual audit, compliance checks and more. If you're considering having a Limited Liability Company, you need to make sure that the business is not only viable, but you seek correct and quality advice to avoid possible mistakes.Step 2: Prepare Documentation for Company Formation
If you're setting up a Limited Liability Company, you need to draft the memorandum and articles of association. You can fill out these documents yourself; however, if you're new to setting up a business in Malta, we suggest you seek expert advice to avoid time-consuming mistakes. You must also have a detailed description of:- The activities/assets of the company;
- What income the company is expected to earn;
- The ownership structure up to the individual beneficial owners and any
- intermediate corporate entities;
- The persons who will make up the Board of Directors.
Step 3: Minimum Share Capital
The minimum share capital required in Malta for a Limited Limited Company is €1,164.69 (or the equivalent in another convertible currency). Setting up a bank account in Malta can be a complicated process to navigate due to the compliance and anti-money laundering checks. As an alternative to depositing the initial share capital in an account in the name of the company, you can use the services of a company service provider (CSP).Step 4: Registration
You will be required to present all documentation and the share deposit receipt to the MFSA (Malta Financial Services Authority). The process of registration typically takes 2-5 working days, depending on the size and activities of your business.
Step 5: Obtain a Licence (if applicable)
Certain activities are regulated, and you will need to apply for a relevant licence to be compliant with local regulations. Licences differ based on the activities of the company, and this may require a meeting with the specific governmental agency in some cases. This licence fee is renewed on an annual basis to stay compliant with local laws.
Step 6: Obtain a Tax ID number
You need to get a tax identification number so that you can submit your annual tax return forms. This ID number will differ depending on if you're self-employed or a Limited Liability Company. Again, as taxation is a complicated matter, it may be worth seeking the advice of a qualified tax professional.
Step 7: Register with the Maltese VAT Department (if applicable)
In the eyes of the Commissioner for Revenue, if you're performing an economic activity, then you're considered as taxable. A company registered in Malta which is trading in Malta is required to register for VAT within 30 days of its first supply of goods and services made in Malta.
There are three types of VAT registration which cater to:
- General VAT registration
- Small undertakings
- EU Intra Community activity.
Once you have you have registered with the VAT department you would usually:
- Have a VAT number with the prefix MT;
- Have to issue fiscal receipts or tax invoices on all transactions made;
- Typically submit a VAT return for a tax period of three months by the no later than six weeks after the end of the tax period, or as directed by the Commissioner.
Step 8: Get a PE (Permission to Employ) number (if applicable)
This step depends on whether you intend to have employees in your business. This process typically takes three days to complete as the Ministry of Finance does a thorough vetting process.
Step 9: Register with Jobsplus (if applicable)
This step does apply to you if you employ people, self-employed or a Limited Liability Company. You need to fill out a form for each employee.
Step 10: Data Protection Registration
Following the implementation of GDPR (the General Data Protection Regulation), it is essential that when you start your business, you create specific safety procedures to ensure third parties can't steal your customer's information. You can find more information about this on Malta's IDPC (Information and Data Protection Commissioner) website.
As Malta Company Registration agents, we will assist you through the whole process. Contact us for a consultation to discuss your business requirements.
All the facts and figures about setting up a business in Malta are outlined in our simple infographic.
If you need more detailed information, why not download our Malta Company Formation Guide?
What type of companies can be set up in Malta?
Public and private limited companies can be registered in Malta. Additionally, Malta-based holding companies provide a reliable and advantageous option for mergers and acquisitions, offering you the benefits of tax efficiency, added flexibility and EU compliance. Moreover, trusts and foundations are also possible solutions.
Branch Establishment
If you have an established business operation already an alternative to registering a company in Malta could be to set up a Branch in Malta.
The benefit of this is that you access all of the business benefits that Malta has to offer. However, a branch of your business would not be seen as setting up a separate legal entity. In fact, the establishment of a branch of an organisation, is often seen as an extension of the parent company whilst still maintaining an element of independence.
The main difference between setting up a branch and a subsidiary company is that a parent company would have shared legal responsibility for its branch in Malta whereas a subsidiary in Malta would have its own legal personality and separate legal responsibilities.
In addition, a branch would be seen to form part of the assets of the parent company and the accounts of the branch are usually merged into the accounts of the parent company which is based outside of Malta.
Should the branch cease to continue to carry out business activities in Malta, it would avoid the need for a liquidation and would simply de-register from the local authorities signalling the end to its business activities in Malta.
There are also several taxation benefits to setting up a branch, with different rules in place compared to setting up a subsidiary company. Naturally, it is advisable to fully understand the different rules and regulations in place and to seek guidance prior to establishing a branch in Malta.
Re-Domiciliation of a Business
An alternative to setting up a branch in Malta is to register your business in Malta. Doing this provides you with all of the benefits.
A non-Maltese company that is relocated to Malta retains its status as a corporate body and no new legal entity is created. The most significant benefit of company re-domiciliation to Malta is that it maintains all its assets, liabilities, rights and obligations.
A corporate body that is incorporated and registered under the laws of an approved country may be registered and continued in Malta. The jurisdiction must have similar regulations as Malta, and the law of the company’s original country or jurisdiction must allow for such continuation.
Malta Company Registration FAQs
How much does it cost to register a company in Malta?
The Maltese company registration fee is payable to the Registrar of Companies at the time of incorporation. This can range from a minimum of EUR 245.00 to a maximum of EUR 1,750.00, depending on the value of Authorised Share Capital. In addition, an annual fee of EUR 100.00 must be paid upon submission of an Annual Return and this is generally managed through our directorship and back-office services. The share capital can be divided into ordinary shares or preference shares with various classes and variants available. Bearer shares are not permitted in Malta and ownership is evidenced by entries in the Malta company register as well as issuance of official share/debenture certificates.
Contact us for a complete list of setup fees and ongoing administrative fees.
How long does it take to register a company in Malta?
We can register a Malta company within 48 hours from receiving the relevant documents. The documents in question would need to include all due diligence documents and share capital funds/fees. Once the company formation process is complete, the MFSA will publish a Certificate of Incorporation which will also display the Malta Company Registration number.
How do I register my company in Malta
Steps to setting up a Company in Malta:
Can a foreigner register a company in Malta?
Malta welcomes businesses from foreign nationals and makes the process of setting up and running a business easy with its pro-business government policies. The country has no restrictions on foreign ownership, creating a favorable environment for entrepreneurs to thrive.
Do I need a Registered Office?
Every business would need to have a registered office. Papilio Services can provide you with a registered office if required or help arrange for the lease of suitable office space per the company’s requirements.
Should a Malta Company appoint a director who is a resident of Malta?
It is preferable to have a Director who is a resident in Malta, and this can be as a sole director or a joint directorship. As well as assisting with the management and control of the organisation, an experienced local director, who is based in Malta, will have established contacts within the government authorities such as the Inland Revenue Department and the Maltese VAT Department.
Do I have to open a Malta Bank account?
The company is not required to have a local bank account, but it helps with regards to having actual business transactions in Malta. However, unless you have physical presence in Malta through a rented office space, employees, and a local resident director, this will not be a viable option.
The second option is to consider a Payment Service Provider (PSP). We can make the introduction to trusted providers if needed.
What is the Malta Company Tax rate?
Most of the companies incorporated in Malta are subject to a corporate tax rate of 35%. However, foreign shareholders can claim a 6/7th tax refund on any tax paid by the company on profits, distributed as dividends. This system makes the effective rate of tax 5%.
It is also possible to get a full refund should a company have a participating holding.
What are the capital requirements to set up a Malta Company?
Can a Company Redomicile to Malta?
For companies wishing to transfer operations to Malta, redomiciliation offers a convenient option. This process allows the original legal entity in the foreign jurisdiction to remain intact while moving its domicile to Malta with minimal effort. All that's required is for the company to submit a request to the Registrar of Companies in accordance with set guidelines. By relocating its domicile, the company can benefit from operating under Maltese laws and regulations without having to establish an entirely new corporate entity.
Is it possible to set up a branch in Malta?
A branch establishment in Malta can represent an opportunity for your business to grow by operating within the country without having to officially incorporate a company. The process of establishing a branch and registering it as an overseas company is relatively simple, while also providing potential fiscal advantages. For many businesses, setting up a branch offers a cautious way of entering the Maltese market and carrying out their activities without facing the legal complexity associated with incorporating or re-domiciling a company.
Can Papilio Services act as Malta Company Formation Agents?
We are registered to act as a Company Services Provider by the Malta Financial Services Authority. Through an associated company, we are also licenced to carry out services related to Malta trusts and foundations.
Substance Requirements
Without a confirmed definition of the management and control requirement, you would need the below measures when you set up a company in Malta:
Director - this can be either a resident or non-resident, however for a stronger case for substance in Malta, having a Board of Directors with at least 50% or more being a Maltese national or having a permanent place of residence in Malta;
Business decisions take place in Malta - recording the meeting minutes locally and regular board meetings and annual general meetings; Economic substance - such as an office and employees.
The basic requirements for substance depend on the country who would challenge the management and control of the business. If you want to know more about what substance we can offer, contact us directly for a discussion on your requirements.
Malta Company Formation Fees
The Malta company formation fees are payable to the Registrar of Companies for the registration of a company and are calculated according to the company’s authorised share capital as indicated in the table below:
| Authorised Share Capital | Fee Payable |
|---|---|
| Up to €1,500 | €245 |
| €1,501 to €5,000 | €245 plus €15 for each €500 in excess of €1,500 |
| €5,001 to €10,000 | €350 plus €20 for each €1,000 in excess of €5,000 |
| €10,001 to €50,000 | €450 plus €20 for each €2,500 in excess of €10,000 |
| €50,001 to €100,000 | €770 plus €20 for each €10,000 in excess of €50,000 |
| €100,001 to €250,000 | €870 plus €10 for each €15,000 in excess of €100,000 |
| €250,001 to €500,000 | €970 plus €10 for each €10,000 in excess of €250,000 |
| €500,001 to €1,000,000 | €1,220 plus €20 for each €20,000 in excess of €500,000 |
| €1,000,001 to €2,500,000 | €1,720 plus €10 for each €50,000 in excess of €1,000,000 |
| Over €2,500,000 | €2,250 |
A minimum annual fee of €100 is payable with the submission of the Annual Return. We offered the back-office services that meet Malta standards and we coordinate with our team accordingly.
Documents to Set Up a Malta Company
To set up a Malta company, you need to have several documents to form the company with Papilio Services:
Complete our establishment forms and financial activity forms enabling us to understand what type of Company is required and what annual services are required from our end.
Complete the required due diligence documents required on all of the directors, shareholders and UBO's.
Once these are received, our compliance team will review the documents.
Once received, the company will be set up within 3-5 business days.
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 office directly by courier.
Malta Company Tax Planning
Most of the companies incorporated in Malta are subject to a corporate tax rate of 35%. However, the Malta Tax System is a full imputation system. This system means that a shareholder can claim a 6/7th tax refund on any tax paid by the company on profits distributed as dividends. This system makes the effective rate of tax 5%. It is also possible to get a full refund should a company have a participating holding.
If you need Malta tax advice, contact us so we can assess your requirements and create a tax strategy.
No Withholding Tax in Malta
European Union tax programmes – this includes the Parent-Subsidiary Directive and the Interest and Royalties Directive Malta has in place more than 80 double taxation treaties in force with countries all over the world.
What does a Malta Company Secretary do?
It is a legal requirement for every company in Malta to have a company secretary, which must be an individual and not be a corporate entity. The Company Secretary is responsible for the filing of all statutory forms and ensuring specific company resolutions are filed with the Registry of Companies.
In an increasingly complex environment, the Company Secretary is also responsible for providing technical advice on legal, financial and compliance matters. As part of our corporate services, we can offer an experienced and competent Company Secretarial Services in Malta to carry out the company’s official duties and ensure that all compliance is adhered to and done to a high standard.
The responsibilities of a Malta company secretary include the keeping of:
-
- A minute book of general meetings of the company;
-
- A minute book of meetings of the board of directors;
-
- The registrar of members;
-
- The keeping of other records the board of directors require;
-
- Ensure proper notices are given for all meetings;
-
- Ensure that all returns and documents of the company are prepared and delivered following the Companies Act;
What does a Malta Company Director do?
Company directors in Malta can be of any nationality although having at least one local Maltese director is advisable. Alongside having local expertise and knowledge, company directors in Malta usually have established communication lines with government authorities such as the Maltese VAT department and Inland Revenue Department, to name a few. Therefore, this ensures that any issues that may arise can be dealt with quickly and efficiently.
Moreover, it is a requirement that all company directors in Malta are listed on the Malta Business Registry (MBR) website.
Papilio Services – Malta Company Registration Agents
As a licensed agent, we can help you with company registration in Malta as well as support the company by offering all the services to make the business compliant such as bookkeeping, VAT returns, and audit coordination.
What are the requirements for company registration?
Step 1: Initial Consultation - We will have a call to answer your questions, understand your businesses requirements and offer more information that will aid your decision.
Step 2: Send Proposal - We will send a personalised overview of the costs of registering a company in Malta as well as attaching more useful information.
Step 3: Call with Local Expert - We will arrange a more technical call with one of our local partners to go through any more questions as well as offer a more technical breakdown of the structure.
Step 4: Complete KYC Documentation – We will start the onboarding requirements set by local laws that govern all company service providers.
Step 5: Company Formation & Registration – Once we have all the required documents and you have passed our risk-based assessment, we will aim to set up the company within 3-5 business days.
Step 6: Continuation – We will continue to assist your business in whatever capacity you need us. We will be here to advise and assist your business throughout its lifetime.
Through an associated company, we are also licenced to carry out services related to Malta trusts and foundations. Our clients’ requirements are all unique; however, here is some of the recent work that Papilio Services has carried out for our clients to name a few:
-
- The setting up of beneficial royalty structure in Malta;
-
- Establishing holding companies with a variety of complex private equity interests;
-
- Setting up a holding company that contains several subsidiary companies as part of a worldwide international trading group;
-
- Establishing a holding company holding private equity vehicles;
We also have other European offices in the Netherlands and Czech Republic, therefore if you wish to discuss the benefits of other countries, let us know and we will inform you of the best structure for your business.
Visit our insights page to stay up to date on key issues related to Malta company registration.
After company registration in Malta, what next?
Efficiently managing the time-consuming administrative and regulatory obligations of your business can be daunting and expensive. To ease this burden, Papilio Services provides tailored business support services that allow you to keep up with the demands of running a successful company without having to hire extra staff. From accounting and payroll solutions to comprehensive consulting services, we strive to make it easier for you to stay ahead of the curve while cutting down on cost - helping you maximize efficiency and profitability.
Things to keep in mind after you set up a company in Malta
Accounting, Bookkeeping and Auditing Requirements
Our first accounting and bookkeeping services in Malta will include a review of the practical methods your business follows to ensure that the information is stored and passed on in the most efficient way possible to carry out the bookkeeping services in Malta diligently and thoroughly.
Our team will ensure all to record all transactions accurately and that all ledgers are maintained, and that we carry out all necessary reconciliations.
The financial transactions will be ordered and stored in an orderly way to make the audit process as simplified as possible. We prepare financial accounts using either International Financial Reporting Standards (IFRS) or using the local General Accounting Principles for Smaller Entities (GAPSME) regulations.
We offer full support with in-house accounting services, payroll services as well ee also assist clients with the coordination of the auditing of financial statements by third-party auditors.
Back-office support
In Malta, the back office services are a critical part of running an efficient and cost-effective business. These non-specialized administrative tasks support the successful operations of any organization, requiring only diligence and attention to detail for high levels of performance and professionalism.
Registered office
Papilio Services provides registered office spaces in Malta, allowing our clients to stay compliant with local legislation. We understand the importance of meeting these regulations and also the need to minimize overhead costs for businesses. When registering your company, our offices can help you fulfil both objectives.
Has Brexit been a challenge?
If your business is still suffering from the after affects of Brexit why not get in touch with our team and we'll arrange a FREE consultation to discuss the options available to remove the 'red-tape'?
CLICK HERE TO BOOK YOUR FREE CONSULTATION
Alternatively, if you're searching for a solution, or maybe you're just curious and want to review your options, we've created this useful guide to highlight some of the opportunities available to UK businesses in order to remain competitive in the Post-Brexit market.
Click here to DOWNLOAD your copy now
Recent Posts
Contact Us