In this article, we give an overview of Malta Company Formation and the benefits of setting up a company in Malta. For further information, get in touch to schedule a free consultation with Interserv.
Company Formation in Malta
Malta enjoys a stable political climate and a bi-partisan political scene that is largely convergent on issues of national and economic importance. The country is considered to be one of the best performing Eurozone economies, with a steady economic growth and low unemployment rate.
Malta Company Formation and Trading Companies
Malta Trading Companies provide entrepreneurs with the ideal platform for the establishment of international trading activities. A Malta Trading Company may be utilised for numerous trading activities such as information technology & telecommunications, e-commerce, market research, i-gaming, financial services and fintech, pharma, logistics, shipping and aviation, as well as traditional and renewable energy.
As the name suggests, a Holding Company is used to organise the ownership of any lawful asset, whether it is commercial or personal in nature.
The advantages of Setting up a Company in Malta
Benefits of Malta Company Formation include very attractive tax rates, quick incorporation and the possibility to set up company and bank accounts without visiting Malta. At Interserv, Malta company formation agents, we help you to set up the company and look after its ongoing obligations so that you can focus on your business and your clients.
Malta Company Formation: an Overview
Some quick information about Malta Company Formation:
- A Malta Company may be incorporated in as little as 48 hours
- Incorpation may be done remotely – no need to visit Malta
- The Companies Act 1995 governs companies in Malta
- A Malta company requires at least one director and one company secretary
- Malta offers two company types: the Private Limited Liability Company and the Public Limited Liability Company
- Company name may be reserved for 3 months
- Malta Companies are registered with the Malta Business Registry
- Foreign exchange controls do not apply to Malta Companies
- An attractive tax regime applies to Malta Companies
Malta Company Formation: Country Profile
Located south of Italy between Europe and North Africa, Malta achieved independence from the United Kingdom in 1964. Malta joined the European Union and Schengen zone in 2004, adopting the Euro in 2008.
Malta’s strategic position fostered its development as an international trading post, and the country remains a leading hub for container and freight movements. In recent decades other industries have flourished in Malta, including Financial Services and Fintech, Pharma, Life Sciences and BioTech, education and training, remote Gaming, incentive travel and real estate development.
Malta Company Formation and the Malta Companies Act
Malta Companies Act, which is the principal piece of Malta Trading Companies are incorporated in terms of the Maltese Companies Act, which is the principal piece of corporate law in Malta. The Act is predominantly based on common law principles, and is also in line with EU Directives. Malta Trading Companies are onshore entities setup as partnerships or limited liability companies – the latter being the most popular corporate entities, due to their flexibility and tax efficiency.
|Government||Democracy with two main parties, centre right and centre left that agree on aspects related to foreign investment.|
|Independence||Malta is an independent Republic and a full EU Member State|
|Time Zone||CET, GMT+1|
|GDP/Capita||$33,123 (2019, UN)|
Malta Company Formation Benefits
- Effective tax rates as low as 5% for trading operations
- Qualifying holdings of a Malta Company are tax exempt
- There are no withholding taxes or stamp duties on distribution of profits from a Malta company to non-resident shareholders
- Malta is an EU Country, companies in Malta enjoy all the benefits and protections of EU legislation.
- Malta companies may hold accounts in banks outside Malta
- A Malta company is ideal to conduct international business
- English is an official language in Malta
More on Malta Company Formation and Taxation: Malta Notional Interest Deduction, Corporate Income Tax and Holding Assets through Malta Participation Exemption Rules.
Malta Company Formation Process
The procedure to incorporate a company in Malta is simple, consisting of
Free Consultation with our Advisor, where we understand your requirements and guide you accordingly
Client Onboarding Process (know your client) + Company Application Form (where you specify what services you require)
Draft of the necessary Documentation and Submission to the Malta Business Registry
Company file set up + assistance on ongoing basis (optional)
Once your Malta Company is set up, we may assist you with all the other services you may require for your Company in Malta:
Local Director & Malta Company Management
Back Office Services
Bank Account Opening
Office & Real Estate
Relocation of Key Personnel & Residency
Malta Company Formation Tax
Malta is attractive to the foreign investor with some key factors including:
- Anti abuse provisions must be met – these provide certainty
- Worldwide income is taxable, subject to relief
- No tax is applied on Capital remitted to Malta
- Attractive tax regime for qualifying trading operations and holding structures
- Participation Exemption for holding assets
- Notional Interest Deduction
- 70+ Double Tax Treaties in force
Operating or Trading Companies owned by non-resident beneficial owners may benefit from an effective tax rate as low as 5% with the right guidance. Get in touch with our Team to learn more about the 5% tax rate.
Malta Holding Companies: Tax Neutral
Holding companies may be set up so as to be tax neutral in most circumstances, with the possibility to do the following free of tax:
- Receive dividends from subsidiaries
- Receive Capital Gains from the sale of subsidiaries
- Payment of Dividends upwards to the shareholder
We specialise in providing tax advice to clients of every size at any stage of their business cycle, be it pre-setup, specific to a transaction, or in relation to selling part or all of their business structure.
Starting a Company: FAQs on Malta Company Formation
Below we answer the most frequently asked questions about Malta Company Incorporation
Malta Company Formation: What are the steps?
The process to setting up a company in Malta is not lengthy;
- One needs to submit all the essential due diligence documents together with the Malta company incorporation documents;
- A bank account needs to be opened and a share capital must be deposited. The minimum share capital of a private company is €1,165, whilst for public companies, it stands at €46,588. Bank account may be opened outside Malta. Even though an individual may opt not to open a bank account, he/she still needs to prove the initial share capital.
- Memorandum and Articles of Association are then drawn up to meet the shareholder’s requirements, in accordance with the Companies Act.
- A registration fee must also be paid, which varies depending on the share capital of the company.
How many shareholders are permitted in a Malta Company?
A private limited liability company (Ltd) can have from one to fifty shareholders. A public limited liability company (plc) must have at least two shareholders.
Is it possible for a Malta Company to have shares with different rights?
Yes, when setting up a company in Malta, shares may be defined by class. It is also possible to create new or to amend share classes after the Malta company incorporation. The different rights of each share class must be clearly set out within the Memorandum & Articles of Association.
How many directors are permitted in a Malta Company?
A private limited liability company (Ltd) company must have at least one director, while a public limited liability company (plc) must have at least two directors. The maximum number of directors must be stipulated within the Memorandum & Articles of Association.
Is it necessary to have a local director for a Malta Company?
Although it is not strictly necessary to have a Malta-resident director for unlicensed businesses, in practice a local director helps to substantiate the company’s claim to be resident in Malta for Management and Control purposes. As Malta company formation agents and an advisory firm, we do not offer in house directorship to avoid potential conflicts if interest, however we may introduce suitably licensed professionals.
Does the Company need a bank account in Malta?
A Malta company may choose to open relationships with any bank, licensed in Malta or abroad. There is increasing demand for digital banks and Electronic Money Institutions (EMI). We are able to assist with bank relationships from account opening through account maintenance and assist with selection of and introduction to wealth managers, where required.
How long does it take to set up a company in Malta?
Incorporating a company in Malta is straight-forward and usually only takes a couple of days from submission to the Malta Business Registry.
Prior to this, the local Malta corporate service provider must have in hand the necessary documentation and information.
Where the shareholders are an EU citizen or company, then a company can normally be incorporated within 24-48 hours. Non-EU citizens and companies are permitted to set up a company within Malta, however in line with EU law, these may require screening by the Malta Foreign Direct Investment Screening Unit.
Are bearer shares permitted in a Malta Company?
Malta’s stand in favour of transparency in business prohibits the use of bearer shares in Malta Companies.
Are Beneficial Owners reported?
All companies that are not owned directly by physical persons are required to report on the identity of the Ultimate Beneficial Owner (UBO).
What types of companies can be incorporated in Malta?
The usual commercial companies can all be set up within Malta, including both limited and public liability companies (Ltd and plc) as well as commercial partnerships and associations. However, there are also specific regulations that permit the incorporation of specific use companies including companies with variable share capital (SICAV), protected cell companies (PCC) and recognised incorporated cell companies (RICC).
Can a foreign company move to or from Malta?
Malta’s Company Act permits the re-domiciliation of a company, subject to the laws of the other jurisdiction. In the case of inward re-domiciliation, a company registered abroad may move its domicile to Malta, as long as the originating country permits such a move.
A Malta domiciled company may also apply for outward re-domiciliation as long as all local obligations have been met, and subject to the terms required by the new jurisdiction.
What are the benefits of Company Formation in Malta?
Malta is a well-regulated jurisdiction, with various laws permitting different types of entities, ranging from private or public companies, trusts, foundations and protected cell companies. Malta has also established a number of strong industries, such as intellectual property, remote gaming, financial services and maritime/aviation. Malta is global player in the field of pharmaceuticals with several research laboratories and a law regulating the cultivation and processing of medical cannabis. The costs of setting up a company in Malta are very reasonable, in fact, professional facilities and service fees run at more modest rates than in comparable jurisdictions in Europe.
Malta offers foreign investors an efficient tax system that has been approved by the European Commission and the OECD, whereby qualifying shareholders may receive a partial refund of corporate tax paid.
Why work with us at INTERSERV for your Malta Company Formation?
Your choice of Malta Company Formation Agents is important. You need a team that take the time to know you and your business, that know what they are doing and are pragmatic problem solvers.
We have been in business since 2004 and as entrepreneurs ourselves we consider ourselves as business partners with our clients, able to provide the right advice at the right time. Reserve your consultation today.