Registering a company in Malta offers numerous advantages including favorable tax rates and strategic location. This guide provides a detailed overview of the process, costs, and benefits.
What are the Types of Companies in Malta?
Limited Liability Company (LLC)
- Private LLC: Limited to fifty members, cannot invite the public to subscribe for shares or debentures. Offers limited liability, meaning shareholders are only liable up to the amount unpaid on their shares.
- Public LLC: Can offer shares or debentures to the public, requires a minimum capital of €46,587.47, with at least 25% paid up.
General Partnership
- En Nom Collectif: Partners share unlimited liability for the partnership’s obligations. Suitable for small and medium-sized businesses where mutual trust is high.
- En Commandite: Includes both general partners (with unlimited liability) and limited partners (liable only up to their contribution). Provides flexibility in management and investment.
Single Proprietorship
- Owned by one individual, who has unlimited liability. Ideal for solo entrepreneurs starting small businesses.
Overseas Company
- A foreign company that establishes a branch in Malta. Must register with the Malta Business Registry and provide specific documentation, including the charter, list of directors, and a statement of business activities.
How to Choose a Company Name in Malta?
Choosing a company name in Malta requires careful consideration to ensure it meets specific criteria. The name must be unique and not already in use by another registered company, which can be verified on the Malta Business Registry’s website.
It should not be offensive or misleading about the nature of the business, and certain words may require special permission from regulatory bodies. Additionally, the name should be relevant and reflective of the company’s activities and values.
The procedure for verifying and registering a company name involves several steps. First, use the « Company Search » feature on the Malta Business Registry’s website to ensure the name is not already taken.
Once availability is confirmed, you can reserve the name with the Malta Business Registry to secure it for your use during the registration process. Finally, the chosen name must be included in the Memorandum and Articles of Association submitted during the company registration process.
It’s also important to consider trademark issues and ensure the name does not infringe on existing trademarks. Conducting a trademark search can help avoid legal complications. Additionally, if you plan to establish an online presence, checking the availability of the domain name is advisable to maintain brand consistency.
What Documents are Required for Company Registration in Malta?
When registering a company in Malta, specific documentation is necessary to comply with legal requirements. The primary documents required include:
- Memorandum and Articles of Association: These documents detail important aspects of the company, including the type, subscribers, registered office, share capital, and directors. For corporate shareholders, Form BO1 might be needed.
- Evidence of Paid-up Share Capital: This can be in the form of a bank deposit advice, proving that the initial capital has been deposited into a bank account.
- Identity Proofs: Passports or identity cards of individuals and officers involved in the company are required to verify their legitimacy and association with the company.
- Bank References for Non-EEA Resident Shareholders: Satisfactory references should confirm the credibility and financial standing of the shareholders.
- Beneficial Owner Form: This form identifies the true owners of the company.
- Certified Copies: All documents must be certified by a notary or lawyer to ensure their authenticity and compliance with Maltese regulations.
For overseas companies establishing a branch in Malta, additional documents are required:
- Charter or Memorandum and Articles of Incorporation: An authentic copy must be provided.
- List of Directors and Secretaries: Details about the individuals managing the company.
- Branch Office Details: Information about the branch office’s address and business activities.
- Registration Fee: A cheque for the registration fee based on the company’s authorized share capital.
These documents must be meticulously prepared and submitted to ensure a smooth registration process with the Malta Business Registry.
How Much Does It Cost to Register a Company in Malta?
Registering a company in Malta involves various costs, primarily based on the company’s authorized share capital. The registration fee paid to the Registrar of Companies varies according to the amount of share capital.
For companies with an authorized share capital under €1,500, the fee is €245. As the share capital increases, the fee also rises. For companies with an authorized share capital over €2.5 million, the maximum fee is €2,250. Specific types of companies, such as Investment Companies with Variable Share Capital (SICAVs), typically used for collective investment schemes, have a standard registration fee of €1,750.
In addition to the registration fee, there might be other costs associated with the preparation of required documents and certifications. This includes the cost of notarizing documents, obtaining necessary bank references, and legal fees for drafting the Memorandum and Articles of Association.
It’s essential to account for these expenses when planning to register a company in Malta, ensuring you have adequate funds to cover all related costs. These costs contribute to the overall budget required for successfully setting up a business in Malta.
What is the Process for Registering a Company in Malta?
Registering a company in Malta involves several key steps. Here is a detailed breakdown of the process:
- Choose the Type of Company: Decide on the most suitable company structure, such as a Limited Liability Company (LLC), General Partnership, Single Proprietorship, or an Overseas Company.
- Select a Unique Company Name: Ensure the chosen name is unique and compliant with Maltese regulations. Verify its availability through the Malta Business Registry.
- Prepare Necessary Documentation: Gather and prepare the required documents, including the Memorandum and Articles of Association, evidence of paid-up share capital, identity proofs of involved individuals, and beneficial owner forms.
- Submit the Application and Pay the Registration Fee: Submit the application along with the necessary documents to the Malta Business Registry and pay the registration fee, which varies based on the company’s authorized share capital.
- Obtain a Certificate of Registration: If all documents are accepted, the Registrar issues a certificate confirming the company’s existence and authorization to conduct business.
- Register for VAT: Once the company is registered, you must register for Value Added Tax (VAT) at 18% if it is a trading entity. The process varies depending on the applicant’s status (sole proprietor, company legal representative with a Maltese ID, or foreigner).
- Set Up a Business Bank Account: Open a business bank account in Malta to manage financial transactions and comply with legal requirements.
- Comply with Additional Legal Requirements: Ensure compliance with any other regulatory requirements, such as obtaining necessary permits, licenses, or registrations specific to your business activities.
Each step is crucial for the successful registration and operation of a company in Malta. Thorough preparation and adherence to the legal procedures will help streamline the process and avoid potential delays.
Can Foreigners Register a Company in Malta?
Yes, foreigners can register a company in Malta without any restrictions on foreign ownership. Malta offers a business-friendly environment that facilitates the establishment and operation of businesses by foreign investors. One of the most popular choices for foreigners is the Limited Liability Company (LLC) due to its flexibility and the limited liability protection it offers to its shareholders.
Before starting operations, foreigners should consider several factors. Securing adequate funding is essential, as is opening a company bank account in Malta to manage financial transactions. Obtaining the necessary insurance coverage and a Permission to Employ (PE) number for hiring employees are also critical steps. Additionally, identifying the appropriate location for the company’s office, warehouse, or factory is important for operational efficiency.
Malta’s strategic location within the EU, combined with its pro-business policies, makes it an attractive destination for foreign entrepreneurs. The country’s membership in the Schengen Area provides visa-free access to many European countries, facilitating business travel and networking. Furthermore, Malta’s favorable tax regime and double taxation treaties offer significant advantages to foreign-owned businesses.
Registering a company in Malta is a straightforward process for foreigners, supported by a robust legal framework and a conducive business environment. This accessibility and support make Malta a preferred choice for international business ventures.
What are the Benefits of Incorporating a Company in Malta?
Incorporating a company in Malta offers several significant benefits:
- Favorable Tax Regime:
- Despite a corporate tax rate of 35%, shareholders can claim back a portion of the paid tax through the Malta Taxation Refund System, potentially reducing the net effective tax rate to as low as 5% for trading activities and 10% for passive income.
- Various tax deductions are available, further lowering the effective tax rate.
- Low Entry Barriers:
- Foreign ownership is permitted with 100% ownership allowed for overseas companies and individuals.
- Affordable registration costs and a streamlined registration process make it easier to establish a business.
- Double Taxation Avoidance Treaties:
- Malta has signed over 70 double taxation avoidance agreements with various countries, protecting businesses from being taxed twice on the same income.
- Exemptions on Duty:
- Exemptions are available on duty for share transfers and increases in share capital, reducing operational costs and improving efficiency.
- Schengen Area Benefits:
- Being part of the Schengen Area allows easy movement between Malta and other Schengen countries, facilitating business operations and travel.
- Strategic Geographical Location:
- Malta’s location in the Mediterranean offers easy access to major European capitals and North Africa, enhancing business connectivity.
- Pleasant Mediterranean Climate:
- Malta’s favorable weather throughout the year adds to its appeal as a business destination, contributing to a high quality of life.
These benefits make Malta an attractive destination for entrepreneurs and businesses looking to expand internationally, providing a supportive and efficient environment for business growth.
