Company Registration in Malta- An Overview
Malta is an island present in Southern Europe. The capital of Malta is Valleta and the largest city is St. Paul’s Bay. There are lot of thriving opportunities in Malta which attract different investors to carry out the process of company registration in Malta.
Setting up a company in Malta is quite straightforward, as only one shareholder and one director are required for the process of company registration. The director and shareholder of the company do not require to be a Malta national.
It is cheap to set up a company in Malta. An applicant going for the process of company registration in Malta can do it with a minimum capital of EUR 1165. When a company is formed in Malta, the government allows the company to register with EU VAT (European Union VAT). This system of VAT allows different forms of incentives from the government.
Malta has various tax treaties with other countries such as the USA, the UK, EU and Australia. This helps the applicant to carry out business with minimum issues. Malta acts as an offshore island to provide specific form of tax benefits to companies which set up head quarters. Hence if a company is setting up an office in Malta, using the office as the headquarters would serve the purpose for tax incentives and exemptions.
Benefits of Company Registration in Malta
The following are the benefits of Malta Company Registration:
- Ease of Doing Business
Setting up a business in Malta is quite straightforward. The applicant would require only an initial capital of EUR 1165 to set up a company. Apart from this, there is no requirement for resident directors or shareholders in Malta. A company which is incorporated in Malta can have any national carrying out the duties of shareholders and directors.
- Tax Treaties
An applicant going for the process of company formation in Malta would get benefits of EU VAT registration. Apart from this, Malta has different forms of Double Taxation Treaties with countries such as the USA, the UK, Singapore and Canada. Due to this companies would not be taxed twice. A company which selects Malta can use its offshore structure to gain specific form of tax benefits. However, the company would require to utilise this entity as the headquarters to avail specific tax benefits.
- Local Language
In Malta, English is considered as the local language. More than 80% of the population in Malta speak English. Hence there are no communication gaps between foreign investors, government authorities and employees in Malta.
- Infrastructural Facilities
Malta is an island located between Africa, Middle East and European Union, hence there is lot of transfer of resources between the above countries. Outside EU, Malta has the largest seaport. This would make it an ideal place for carrying out business for entrepreneurs.
- Crypto currency
Malta is considered as one the largest places where crypto currency dealings occur. Hence investors can consider all the above advantages for company registration in Malta.
Eligible Business Structures for Company Registration in Malta
There are different forms of business structures which can be utilised for company registration in Malta. The following are the types of business structures used for company registration in Malta:
- Limited Liability Company (LLC)
This entity is also known as a Maltese Limited Liability Company. The liability of the shareholders and directors is limited to a specific amount of subscribed capital. For forming this type of entity, minimum one director and one shareholder are required. The minimum capital required for this form of entity is EUR 1165. A company secretary is also required for registering this form of entity. Financial statements of an LLC can be submitted to the Inland Revenue Service (IRS). Usually, this form of entity is utilised for forming small and medium enterprises (SME).
- Malta Representative Office
Usually a Maltese representative office would be utilised for carrying out promotion of products. Marketing of services and products is allowed through this office. However, this office cannot carry out operations which are carried out by the parent company.
- Public Limited Company
This is also known as a Maltese PLC. These forms of organisations are allowed to issue shares to the public. Shares can be traded through the local Maltese Borza Stock Exchange. Apart from this, these companies can also list their shares in other EU stock exchanges. The minimum capital required for forming this type of entity is EUR 46,500.
- Malta Branch Office
A foreign company can start operations in Malta through a branch office. An investor going for company registration in Malta can utilise this, form of business structure for carrying out operations under the scope of the parent company. A branch office is not allowed to carry out any other operations. A Malta resident is required to be appointed as a branch representative for this form of entity.
- Free Zone Company
This type of company is permitted to carry out specific form of activities within the industry. An investor wanting specific forms of exemptions can go for this type of business structure. There are different types of benefits such as VAT and Tax reduction for the whole entity. At least one director and two shareholders have to be appointed for running this type of company. A Maltese resident is required to be appointed as a representative.
Eligibility Criteria for Company Registration in Malta
The following eligibility criterion is required for company registration in Malta:
- Capital Requirements
The minimum capital required for a private limited company is EUR 1165. Hence an investor going for the process of company registration in Malta can utilise this form of company. If the company wants to be converted to a public limited company, then the minimum capital required is EUR 46,500. For a private limited company, at least 20% of the capital must be paid up by the shareholders when subscribing to the memorandum of association.
- Name Reservation
An applicant going for the process of company registration in Malta has to reserve the name. Once the name of the company is reserved, it would be valid for a period of three months. The registrar would have a say in the approval of the name of the company.
The number of shareholders in the company depends on the type of company which is utilised. For a private limited company, the minimum number of shareholders must be two. This would be applicable for a public company also. A maximum of 50 shareholders can be appointed for a private limited company in Malta. Shareholders can be any national. There is no requirement for the shareholders to be Maltese citizens.
- Key Executives
The key executives that have to be appointed for company registration in Malta will include directors and a company secretary. At least one director must be appointed for a private limited company. For a public limited company, two directors must be appointed to carry out respective duties. The names and information pertaining to the directors must be entered into the companies’ registry of Malta. The memorandum of association must also state the appointment of the company secretary for the company.
Procedure for Company Registration in Malta
The following procedure has to be utilised for company registration in Malta:
- Choose the type of Business
First and foremost, the applicant has to choose the type of relevant business structure for company registration in Malta. Depending on the type of activities carried out, the applicant can choose the business from the above business structures.
- Select the name of the Company
In the next step, the applicant would have to select the name of the company. The name of the company must be unique and must not be already taken. An application for the name of the company must be made with the trade registry. The name of the company must not be conflicting with any other business names.
- Prepare all the documents
In this step, the applicant would have to prepare the relevant documentation. These documents will include the memorandum of association, articles of association and other documents for the trade registry. This registry is also known as the MBR registry. All the documents have to be notarised along with signatures.
- Deposit Share Capital
Then the applicant must open a corporate bank account in Malta. With this step, the applicant would have to deposit the share capital in the bank account.
- Register the Company for Tax
After all the documents have been filed with the Registrar of Companies of Malta, a certificate of registration would be provided to the applicant. This certificate of registration is evidence of company registration in Malta. Once this certificate is issued, the applicant would have to register with the authorities for filing all the compliances and other requirements.
Compliances for Companies Registered in Malta
All companies that are registered in Malta would have to comply with the requirements of law. The following compliances have to be adhered for companies registered in Malta:
- Fee for company registration.
- Corporate Tax Rate Applicable- 35%. For specific forms of companies there are refund applicable which reduces the corporate tax rate to 25%.
- VAT- VAT applicable in Malta is 18%.
- Tax Returns and Financial Statements- Tax returns and financial statements have to be filed nine months within the end of the accounting year.
- All Maltese Companies have to carry out regular accounting audits. However, the audits carried out would be determined based on the asset size and the size of the company.
- Tax Compliances have to be filed with the Inland Revenue Department.
- Labour Compliances have to be followed as per the requirements of Local Maltese Law. 10% have to be paid for social security for the employees.
Documents Required for Company Registration in Malta
The following documents are required for company registration in Malta:
- Information on the name of the company
- Memorandum of association (Statements related to objects of the company)
- Minimum Subscribed Capital Requirements for the company
- Articles of Association of the Company
- Bank Deposit Payment Slip (Payment of Subscribed Capital)
- Information on the registered address of the business.