Are you planning to establish your next business or expand in Malta? With its business-friendly environment, tax benefits, and EU access, Malta is a top choice for investors.
Here’s a starting point about what you need to know regarding company formation in Malta.
There are many advantages to forming a company here which is a straightforward procedure which can be finalised in as little as 48 hours. For taxation purposes, you can get a refund of up to 6/7 for foreign shareholders, there are full tax exemption for holding companies and no withholding taxes or stamp duties in the case of profit repatriation.
Our experts are available to guide you through the process but we outline the basic steps below.
Types of companies
There are several types of company available in Malta and we can guide you through the process of setting up each one without problems. In order they are:
Public limited company
A public limited company is listed on the stock exchange and have a minimum share capital of 46,600 euros of which 25% must be paid upon incorporation.
Private limited company
A private limited company in Malta has the following features:
- there must be a registered office in Malta
- only one director is necessary, and must be a natural person, but can be of any nationality and resident anywhere
- only one member is necessary
- shares can be registered but not bearer; preference or redeemable shares are permitted; and shares do not have to carry voting rights
- there must be a company secretary
The minimum authorised and paid-up capital is EUR1,165, where the capital is does not exceed the minimum, it must be fully subscribed in the memorandum. Where it exceeds the minimum, at least 20% of the nominal value of each share must be paid up.
International Holding Company
An International Holding Company (IHC) holds participation(s) in foreign companies and it has an effective tax rate is 11.67% or less; if dividends emanate from a 'participating holding', i.e. one of more than 10% in the paying company, then the effective rate of tax is nil.
The IHC can make use of Malta's Double Taxation Treaties.
General Partnerships
General Partnerships are created under the Companies Act of 1995 as a partnership which has a partnership name. There is a Deed of Partnership giving the address of the registered office, the names of the partners, its duration, the objects of the partnership, and the amount of capital contributed by each partner. The Deed is registered by the Registrar of Companies.
The partners are liable severally and jointly for the full debts of the partnership.
Limited partnerships
Limited partnerships in Malta have general partners, who are responsible for management, and have unlimited liability, and limited partners, who are liable only to the extent of their capital investments to the partnership.
A limited partnership is formed under the Companies Act of 1995 and is subject to the same rules as a general partnership. The SICAV (Societed'Investissement a Capital Variable) is also formed under the Act, but as a partnership limited by shares and is used by mutual funds.
Foreign branch
Branches of foreign companies are permitted but are taxed at the same rate of tax as domestic companies. No additional taxes are withheld on profits transferred back to head office.
Trusts
The Trusts and Trustees Act 2004, which came into effect in January 2005, and allows local residents and firms to use local trusts, while also furthering Malta's international obligations on transparency, non-discrimination, and the prevention of money laundering.
The Recognition of Trusts Act 1994 brought into effect the Hague Convention, and resulted in a division of trusts into:
- Foreign trusts, governed by whatever law the settlor has nominated.
- Maltese trusts, where the proper law of the trust is Maltese, and the governing legislation is The Trusts and Trustees Act 2004.
How do I register a company in Malta?
First there is a minimum share capital to be deposited in the case of a public or private company. For a public company this is 46,600 euros, 25% of which must be deposited before registration and for a private company it is 1,165 euros.
Both types of company must have a minimum of two shareholders, even if the Company Act also allows a single shareholder to establish a company in Malta. The company has to have a registered office in Malta.
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The main steps to setting up a company are:
- You must reserve a company name with the Maltese Commercial Register, this must not cause confusion with another company, be offensive or already taken.
- You must draft the company’s memorandum and articles of association which our experts can assist you with.
- You must deposit the minimum share capital, and then file the application with the Trade Register.
What documents are required to register a company in Malta?
The memorandum and articles of association, a confirmation of the company name reservation, the bank receipt confirming the share capital deposit, passport copies of the shareholders, directors and company secretary.
Whatever your requirement, we can organise the process for you and ensure that it is as effortless as possible.
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