With its strategic location in the centre of the Mediterranean, a robust legal framework, favourable tax regime and many opportunities to widen your professional network, there are a wealth of benefits to doing business in Malta.
Our latest article provides a comprehensive overview of what to expect when it comes to setting up a company in Malta.
Setting up a company in Malta is a relatively straightforward process but can be a more complex affair if you don’t dot the i’s or cross the t’s. Here are the main things you need to know:
Company Types
There are a number of company types in Malta – a Limited Liability Company, Holding Company, General Partnership and Overseas Company.
The Public and Private Limited Liability Company (LLC) are the most common chosen by foreign investors.
With a Private Limited Liability Company, you can:
– restrict the right to transfer its shares;
– prohibit any invitation to the public to subscribe for any shares or debentures of the company.
With a Public Limited Liability Company, you can:
– offer shares or debentures to the public.
You can only issue any form of application for its shares or debentures if the company is registered and the issue is accompanied by a prospectus.
Company Name
When forming a Maltese Company, the choice of name is yours however, it must:
– not already be in use by someone else; and
– be clear, concise and reflect the planned trading activity of the company.
A proposed company name may be reserved by submitting a notice to the Registrar of Companies.
If approved, the proposed name will be reserved for a period of three months. If the Registrar of Companies states refusal to reserve the name you will usually be informed without delay.
Registered Office
A Malta Company is required by law to have a registered office, which must be a physical address in Malta. Registered office services can only be provided by a company that is authorised by the Malta Financial Services Authority (MFSA) to provide such services.
Objectives / Main Trading Activity
All companies registered and incorporated in Malta must declare or indicate the proposed objectives and/or main trading activities of the company.
In general terms, this is the economic activity that will be carried out by the company including operating, investing and financing activities that create value for its shareholders.
Minimum Share Capital
The minimum authorised and issued share capital of a Maltese company differs depending on the type of company.
– A Private Company requires a minimum share capital of €1,165 of which 20% has to be paid-up at the point of registration.
– A Public Company requires a minimum share capital of €46,588 of which 25% has to be paid-up at the point of registration.
The share capital must be deposited into a bank account in the name of the company being formed and a deposit receipt must then be submitted to the Malta Business Registry (‘MBR’) to evidence the same.
Director(s)/Company Secretary
A Public Company in Malta is required to have at least two directors. A Private Company must have at least one director.
Every company registered in Malta must have a Company Secretary, which must be a ‘physical person’. It is not permissible for companies to incorporate nor operate with one vacant.
Shareholder(s)
The shareholders of a Maltese entity may be an individual or body corporate. Details of such shareholders are made available on the MBR’s public filings. For those looking to retain anonymity, Malta does permit for shares to be held on their behalf by Nominee Shareholders.
– A Private Limited Liability (Ltd) company can have 1- 50 shareholders
– A Public Limited Liability (Plc) company must have at least 2 shareholders
Memorandum and Articles of Association
Every Malta Company must have a Memorandum and Articles of Association, a statutory document that should contain the following information:
– Whether the company is a private or public company
– The name of the company
– The name and residence of each shareholder
– The company’s registered office in Malta
– The objectives of the company, specifying the main trading activities
– The amount of authorised share capital, the division thereof into shares of a fixed amount, if the share capital is divided into different classes of shares, the number of shares taken by each of the subscribers (also referred to as the issued share capital) and the amount paid up in respect of each share
– The number of directors:
a) The name, identification number and residence of the first director(s);
b) Where any of the directors is a body corporate;
c) The name and registered or principle address of the body corporate; and
d) How the representation of the company is to be exercised and the name of the first person(s) vested with such representation.
– The name and residence of the first company secretary or secretaries
– The period, if any, fixed for the duration of the company
– Copies of official identification documentation for each shareholder, director, legal and judicial representatives and company secretary will also be required.
Certificate of Registration
The Certificate of Registration in Malta is a legal document issued by the MBR. The certificate will include the company’s name, registered number, company type, registered office address and the date that it was officially registered.
The length of time in which it takes to incorporate a Malta company depends on the type and whether all of the correct documentation has been submitted. In some cases, this can be as little as 24 hours, once the MBR is in receipt of all the necessary documentation.
VAT requirements
Malta has one of the lowest VAT rates within the EU, sitting comfortably at 18%. This may be added on to the sale of goods, imports, provision of certain services and transactions that take place within the European Union.
However, VAT registration is required for companies registered in Malta whose operations are subject to taxation or in the case of a foreign company, that may not be registered in Malta but provides taxable supplies in Maltese territory.
This may include the provision of goods or services to consumers in Malta, provision of goods or services to a company in an EU member state, import of goods from outside the EU to Malta, selling of goods online to Maltese customers, holding goods in Maltese rented warehouses and provision of goods and services to another company which is liable for tax in an EU member state.
Annual Return and Accounts
All companies in Malta are required to prepare an annual return, due upon each anniversary date of when it was officially registered.
Companies are also required to file a copy of their annual accounts to the MBR, whether a profit or loss has been accrued during that year. The format in which accounts must be submitted will depend on the size of the company.
Both annual returns and annual accounts may be filed online.
Banking
A company registered in Malta must have a corporate bank account in its company name before initiating or getting involved in any business activities.
Can a non-resident set up a company in Malta?
With no restrictions on nationality or residence, the answer is YES; both non-resident individuals and body corporates can set up companies in Malta.
Choosing the most suitable entity type in the most appropriate jurisdiction can be a complex process and getting it wrong can significantly impact the success of a structure, immediately and/or in the future.
We assist our clients with the development and establishment of a tailored solution that is fit for purpose and which yields success.
As a group of modern corporate and trust services providers, we have extensive knowledge and experience of assisting clients from across the globe in establishing suitable corporate structures for a variety of purposes, including: trading; investment holding; estate and succession planning; real estate structuring and asset holding structures – many owning high value luxury assets such as yachts, aircraft, fine art and antiques.
Having been in the industry for over 35 years, we also know the importance of ensuring that we have a full understanding of the commercial rationale behind each client’s requirements before proceeding with the establishment of any type of corporate structure.
For more information on how we can assist you with the establishment and administration of your Malta Company, please contact info@sentientinternational.com.
