Registration Process
Malta offers an environment for foreign investors with the added advantage of having a unique business environment that is strongly based on the principles of smart and open market economy. Establishing a business in Malta is relatively straightforward, but would require the guidance of a competent professional or consultancy firm to assist you with the necessary steps. The first stage involves the registration of your company with the Maltese Registrar of Companies which requires a minimum number of two shareholders. These shareholders may be either individuals or legal entities and do not need to be Maltese residents. The other documentation required consists of the Memorandum of Association (MoA) and the Articles of Association (AoA). A bank account in a Maltese financial institution needs to be opened so as to deposit the share capital of a minimum of EUR 1,200.
Taxation
Taxation remains an important factor in deciding whether to set up a business in an offshore jurisdiction such as Malta. Generally, the main Maltese corporate tax rates apply on company profits which are taxed at 35%. However, there are also some companies offering lower tax rates such as Captive Insurance Companies, which can be taxed at a rate of 5%. Moreover, for certain types of income, companies may benefit from special tax treatment such as shipping companies which are subject to the Tonnage Tax, and foreign trading companies which can avail of the participation exemption when distributed profits are derived from abroad. This exempts the income from taxes provided certain conditions are met.
Administration of the Company
Administering a company in Malta involves various obligations and responsibilities, some of which have to be fulfilled on a specific date. One of them is the annual submission of financial statements to the Commission of Companies and Mergers. This must be accompanied by the filing of corporate tax returns to the Maltese Inland Revenue Department. If a company has more than limited liability, then it must also be audited. Furthermore, a company must prepare and hold general meetings of its members at least once every year. All directors of the company are obliged to keep registers and records regarding the company’s assets and liabilities, loans members and manager of the company.
How to Open a Company in Malta: The Legal Requirements
One of the most important aspects of opening a company in Malta is being aware of the legal requirements. These will vary depending on if the company is to be a limited liability company, a private company or a public company. A Maltese Limited Liability Company (LLC) has to be registered with the Registrar of Companies, it must have at least two shareholders and a local registered address. Private companies may only acquire the status of LTD, whereas public companies must acquire the status of PLC. All decisions affecting the company must be agreed upon and documented in the Articles of Association. A company must also have an appointed Director who has to be at least 18 years old and have a non- criminal record.
Professional Aid
Although Malta offers a simple and straightforward procedure in setting up a company, it is still wise to seek professional aid, either from an independent financial advisor or a corporate services provider, who will assist you in setting up a business in the most efficient manner. Where legal advice is required, it is possible to obtain that from an independent lawyer who knows the legislation and regulations applicable in Malta. This service is invaluable as Malta is renowned for its complex legislation.
Obtaining Resident Permit for Expatriates
If the company’s shareholders or directors are non-EU/EEA citizens, they will need to obtain a resident permit from the Maltese Immigration Department to live and work in Malta. The Maltese Immigration Department may issue a one-year residence permit to an expatriate who is an officer, director or shareholder of a Maltese company. This residence permit can be renewed on an annual basis.
Operating Costs
When setting up a business in Malta, it is important to consider the costs involved in running a business. The main costs for setting up a company in Malta consist of the registration and share capital of the company, all of which will be subject to fees, such as the company incorporation fees and the professional advice costs. Once the company is incorporated and operating, the ongoing costs to be considered are salaries of employees, rent, power, office and equipment utilities, advertising and marketing, legal and professional services and banking fees.
Employment
Employing staff for a Maltese business can be an enjoyable experience, with the Maltese people known for their hospitality and helpfulness. Malta provides an adequate number of qualified individuals across a wide range of professions and backgrounds. Employers may be eligible to benefit from various incentives related to hiring expatriates, such as partial refund of salaries costs, part-time work, subsidised training and internships.
Government Assistance
The Maltese government is also keen to assist foreign companies setting up in Malta and provides various resources such as business agreements and collaborations, workspace and centre funding, recruitment incentives, and access to global networks. Additionally, Malta is part of the European Union, and therefore companies can benefit from EU funding opportunities.
Banking & Financial Services
Malta offers a fully fledged banking network with prudent and stringent regulatory regimes, as well as a fully transferable currency for European countries, which can be seen as great advantages for companies setting up in Malta. Companies can obtain a business license to gain access to both local and international banks for services such as payment processing and banking, as well as access to an array of fringe financial services, such as currency exchanges and accounting services.
Learning the Language
Learning the language of the country where you have chosen to open your business is important to help achieve further success. Despite Malta being a mainly English-speaking country, learning new knowledge of the Maltese language and culture can open up new avenues and help to engage better with the local market.
Finding a Residence in Malta
Finding a residence in Malta is a vital component of setting up a business, as the majority of business activity and regular meetings occur in person. The law in Malta provides for the right to buy and own property for those who hold a residence permit. Property prices in Malta vary greatly across the island, and it is important to ensure that the chosen location is suitable for the company.
Regulations & Business Compliance
Before a business is officially operational, it has to comply with certain regulations and standards of operation. Amongst the most noteworthy, is the requirement of a minimum share capital and the compliance with regulations regarding the organization of the company, employment and consumer protection. Companies must also adhere to certain accounting and auditing standards which must be met before financial statements can be submitted for audit.
Security and Privacy
Security and privacy are paramount for companies, and Malta provides a secure infrastructure to protect businesses across all levels. Companies may benefit from data protection rules, such as those focusing on the use of customer information, security measures and the enforcement of consumer regulations.
