Types of Companies in Malta

Raghvendra Sonker

07 Mar, 2025

Malta is one of the preferred destinations in the world for corporations as its business regulatory framework is very accommodating and comprehensive, which paves grounds for investment advantages from potential investors worldwide.

The Companies Act, 1995 cover a wide range of business structures. The Maltese Companies Act^[1], 1995 has taken significant references from the UK Companies Act and European laws for enacting laws and rules. It provides requirements for establishing a company in Malta. There are different types of companies in Malta that can be established are: a partnership, a limited liability company (private or public), a sole proprietorship, co-operatives, an investment company, and a branch of a foreign company.

Limited Liability Company

Limited Liability Company is the most famous form of business enterprise in Malta. Limited liability companies can be private or public companies. The fundamental difference between the companies is their requirement for paid-up share capital. The legislation provides for the setting up of the two types of Limited Liability Companies.

1. The public limited liability company;
2. The private limited liability company.

Public Limited Liability Company

The public limited liability company can offer shares or debentures to the public to raise funds. The companies are not allowed to issue any form of application for its shares or debentures unless it is registered and a prospectus has been issued.

• The amount of authorised share capital shall be €46,587.47 subscribed by minimum of two persons; (Article 72(1), Malta Companies Act, 1995).
• The paid-up share capital must be at least 25% (Article 72(3), Malta Companies Act, 1995).
• A public company must nominate two directors; (Article 137(1), Malta Companies Act, 1995).

Private Limited Liability Company

A private company must draft its memorandum of association and articles of association. The right to transfer its shares is restricted; a private company shall not cross the threshold of 50 members. They are not allowed to raise money by offering shares or debentures of the company. The shareholder’s liability is limited to the no. of shares they held.

• The private limited liability company is not restricted to the number of objects of business operations; the practices must be legal and lawful.
• The private company’s authorised minimum share capital shall not be less than €1,164.69 (Article 72(1), Malta Companies Act, 1995).
• A private company is mandated to appoint at least one director who shall be obligated to manage the business of the company and one company secretary who shall manage the administrative functions of the private company (Article 137(2), Malta Companies Act, 1995).

Co-operatives

Co-operative Societies Act, 2001 primarily governs the Co-operatives in Malta. There is no single enactment applicable to any specific sector of co-operatives, but other laws also play a crucial part in co-operatives’ regulations.

As per Article 20 of the Constitution of Malta, a state must recognise the social function of co-operatives and encourage their development. Article 12(1)(q) of the Income Tax Act also notably exempts the income of co-operatives from payment of income tax.

Partnership

Under Maltese law, a partnership can be created; whereby two or more members come together to operate a business to make profit. A partnership is created via a Deed of Partnership which sets out the partners’ names and the objects of activity. Under the general partnerships, one or more partners share the liabilities and obligations to the company’s debts and assets.

Limited Partnership

There are two types of partners under limited partnerships: general partners and limited partners. The general partners will be authorised to handle the company’s management and will be liable with all their respective assets to the business liabilities. One the other hand, the limited partners will be held liable only to the extent of their contributions under a limited partnership.

Sole Proprietorship

Sole Proprietorship is simplest form of business entity to set up in Malta. Basically the sole proprietorship is a type of business where a self-employed person runs the operation. The sole proprietor must take licenses and permit as per the Maltese Companies Act, 1995 and register herself/himself with Inland Revenue for tax compliances.  The debt and liabilities for the business will fall on the sole proprietor. If the business’s revenue exceeds 24,000 Euros for services and 35,000 Euros for goods, then sole proprietorship must register with Maltese Tax Authorities for VAT (Value Added Tax).   

Branch Office

The branch office will perform its day to day functions as per the directions given by the parent company.

Foreign businesses have other options for starting a company, such as subsidiaries, joint-stock companies and sole proprietorship in Malta. A subsidiary company will be registered under one of Malta’s limited liability types of companies.

Conclusion

The business organisations set up in Malta are only taxed on revenues generated from managing a business within Malta. Maltese government don’t levy tax on the worldwide income of the corporation. Malta is also well-known for offering tax benefits to companies involved in the online gaming and betting business.  As Malta is an island nation, its proximity to the sea and European countries makes the country a suitable place for manufacturing and trading goods.

Read our Article:How to proceed for Company Incorporation in Malta?