Company Registration in Malta
Whether you seek to set up a retail business or a full-fledged production unit, the legalities for registering a company differ nation-wise. If you seek to leverage Malta as your next business destination, be prepared to stumble upon a handful of varied compliances. Malta sits at the crossroads of Europe, North Africa, and the Middle East, making it an ideal hub for those with global ambitions. With that being said, in this blog, we will shed some light on the legal implications concerning company registration in Malta alongside benefits, taxes, and much more. So, let’s dive straight in.
Numbers Reflecting the Business Potential of Malta
- The Maltese economy has long been experiencing robust growth driven by strong exports and domestic demand. Tourism is now well stabilized after being hampered by the COVID-19 outbreak. The domestic demand is upheld by the strong inflow of workers.
- In 2023, the country’s GDP clocked at 5.6% with the government’s deficit stood at 4.9%. The GDP is expected to attain a breakthrough figure in the coming years thanks to the higher immigration and tourism flows. This growth will push further the public debt-to-GDP ratio.
- The country has a fair policy for imposing interest rates on end users, making them pay a lot less than expected. The energy expenses are not stringent either, thereby reinforcing economic stability.
- Hindered by the COVID-19 outbreak, the tourism sector is now back on track with the number of tourist arrivals elevated by 26% in the initial two months of 2024.
- Global demand for electronics and professional services is expected to increase rapidly in the coming years.
- Expectedly, construction investment will bounce back and recover after experiencing a steep decline in 2023, growing by 1.4% by the end of 2025.
Benefits of Securing Company Registration in Malta
- The tax-efficient setup allows shareholders to claim refunds on taxes addressed by the organization after distributing dividends.
- Malta has signed a handful of double-taxation treaties with different nations, ensuring robust and hassle-free global trade.
- Being an EU member, Malta opens its gates to European markets, ensuring free movement of trade, capital, and manpower, allowing businesses to tap into a vast consumer base.
- Malta experiences zero dialect barrier since it fosters an English-speaking environment, simplifying collaboration and communication with global clients and partners.
- Malta fosters a skilled workforce fueled by diverse professionals belonging to various academic backgrounds, providing companies with a talent pool of individuals.
- The Maltese government reinforces a welcoming trade environment by providing a conducive framework supported by robust fiscal policies and incentives.
- Being a natural wonder, Malta offers a quality lifestyle for non-residents. This is combined with a rich history and vibrant culture, making Malta a viable avenue for workers and entrepreneurs alike.
- Malta’s financial sector is robust and business-friendly, ensuring seamless credit facilitation for diverse companies.
Business Structures Eligible for Company Registration in Malta
Malta offers a handful of legal structures available for company registration. The applicant can choose one of the following options based on their operational footprint and ability to address taxes and compliances.
1. Single-Member Company
A single-member company refers to an entity helmed by a single person holding all its shares. The structure must adhere to the conditions tied to the private exempt company. These include:
- The company can accommodate as many as 50 debenture holders.
- The debenture holders and directors of such a firm cannot be a corporate entity
- The company’s policies should be devised and implemented by key officials like directors or debenture holders.
2. Partnerships
A partnership in Malta is ideal for a group of individuals seeking to work collectively to achieve a common business goal. Such a structure is categorized as follows:
General Partnership (En Nom Collectif):
- Formed by two or more persons
- Partners experience unlimited liability, meaning they must cater to the partnership’s debts and obligations.
- A General Partnership is constituted via a partnership deed, a legal contract boasting the member’s rights and obligations.
- Member’s income is exposed to a tax cut
Limited Partnership (En Commandite):
- Seeks at least one general and limited partner.
- The general partner takes care of the managerial affairs, while the limited partner serves the role as mutually agreed upon.
- Approval from the Malta Business Registry (MBR) is mandatory to legalize these firms.
- Also, obtaining VAT, a Partnership Certificate, and a PE number is paramount via the Inland Revenue Department.
3. Limited Liability Companies (LLCs)
Limited Liability Company (LLC) is among the popular business structures in Malta, which can be either public or private:
Public Limited Liability Companies (PLCs):
- It can perform public share trading and debenture allocation
- It seeks subscriptions of at least two people, at least 25% paid up, and a minimum share capital of €46,587.47.
- This structure can hold any number of shareholders.
Private Limited Liability Companies (Private LLCs):
- Cannot perform public share trading
- Requires 20% paid-up capital and at least €1,164.69 of authorized share capital.
- Shareholders are liable to pay for company debts or other fiscal obligations within the extent of their contribution.
4. Overseas Company
A foreign company must secure registration from the competent authority within 30 days of starting operation.
Documents Required for Company Registration in Malta
To register a company in Malta, the following documents must be provided:
- Form BO1
- Memorandum of Association
- Articles of Association
- Evidence of Paid-up Share Capital (bank’s advice slip, which should include the name of the company in formation)
- Identity Proofs (such as passport or ID card copies) of individuals involved in the company, including directors, secretaries, and shareholders. If any directors or shareholders are foreign residents, a certificate of good standing from their country’s company registration authority is needed.
- Beneficial Owner Form
- Satisfactory Bank References for non-EEA resident shareholders
- A cheque for the Registration Fee
- Certified Copies of Documents by a notary/lawyer, if required
- Other Documents and Forms as requested by the Registrar’s Office
Procedure for Company Registration in Malta
To secure a company registration in Malta, follow the given steps carefully:
Step 1: Choose an Apt Business Structure
Select the business structure that aligns with your business goals and risk appetite to withstand taxes and operational compliance.
Step 2: Reserve a Company Name
Choose and reserve a name that is distinctively unique and legally fit. Avoid selecting names that are already registered or fall under the IPR.
Step 3: Determine Key Details
Decide on:
- Authorized and Issued Share Capital
- Company Officers (Directors, Secretary)
- Registered Address
- Company Duration
Step 4: Prepare Documentation
Gather necessary documents for incorporation, including:
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Form BO1 (if a corporate shareholder is involved)
- Evidence of Paid-up Share Capital
- Registration Fee
Refer to the above section for more details.
Step 5: Obtain a Certificate of Registration
Post document submission, the authority vets dossiers for accuracy and compliance. If the inspection pans out well, the authority shall grant the certificate, marking the end of the registration process and making the company legally constituted.
Step 6: VAT Registration
Securing VAT registration is mandatory for legally constituted entities regardless of nationality or industry.
Conclusion
Company Registration in Malta requires following a systematic bureaucratic procedure that attracts plenty of paperwork and compliance. Staying aligned with registration norms is vital to avert any possibilities of delay or rejection. If you are in two minds while catering to such a process, be with an expert firm like Adviso to ensure peace of mind. Adviso is a renowned agency well-versed in legalities concerning global incorporation or other government approvals.
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