Setting up in Malta

Malta is a small island nation with big advantages when it comes to doing business. Here’s why it stands out:

• EU Member State: Access to the European single market and compliance with EU laws and standards.
• Strategic Location: At the crossroads of Europe, North Africa, and the Middle East.
• English-Speaking Workforce: English is an official language, and business is conducted in English.
• Attractive Tax Regime: Shareholders may benefit from tax refunds, reducing the effective corporate tax rate to as low as 5%.
• Strong Legal Framework: Based on a mix of civil and common law, offering stability and investor confidence.
• Well-Regulated Sectors: Particularly in finance, iGaming, blockchain, and aviation.

The most common business structure in Malta is the Private Limited Liability Company (Ltd), but other options exist depending on your needs:

• Private Limited Liability Company (Ltd) – Ideal for most SMEs and startups.
• Public Limited Company (PLC) – Suitable for larger companies or those seeking to list on a stock exchange.
• Partnerships – Both limited and general partnerships are possible.
• Sole Traders – For self-employed individuals (not a company structure, but often compared).
• Branches of Foreign Companies – For international firms expanding into Malta.

To incorporate a private limited company in Malta, you’ll need to meet the following requirements:

• Directors: At least one individual or corporate director (can be non-resident).
• Shareholders: Minimum of one shareholder (can be the same person as the director).
• Company Secretary: Mandatory appointment; can’t be the same person as the sole director unless the company has more directors.
• Registered Office: A physical address in Malta.
• Share Capital: Minimum €1,200, of which at least 20% must be paid up.
• Memorandum & Articles of Association: The company’s founding document outlining its structure and purpose.

The company registration process goes as follows:

1. Choose a Company Name
   The name must be unique and approved by the Malta Business Registry (MBR).
2. Draft and Sign Company Documents
   These include the Memorandum and Articles of Association, along with personal documentation of shareholders and directors.
3. Deposit Share Capital
   Open a temporary bank account and deposit the required capital.
4. Submit Documents to the MBR
   Once submitted and approved, you’ll receive your Certificate of Incorporation.
5. Receive Company Number and Registration
   You are now officially a registered company in Malta.

This process can take as little as 2–5 working days with the right support.

Once your company is registered, you’ll need to take a few more steps to begin trading:

• Register for Tax and VAT
  Depending on your activities, your company may need a VAT number and a PE (Permission to Employ) number.
• Open a Business Bank Account
  Necessary for day-to-day operations and compliance.
• Employment Registration
  If hiring staff, you must register as an employer and file appropriate paperwork.
• Maintain Annual Compliance
  Includes filing annual returns, audited accounts, and tax declarations.

Malta offers a unique full imputation tax system:

• Standard corporate tax rate is 35%, but thanks to tax refunds available to shareholders, the effective tax rate can drop to as low as 5% in certain cases.
• No withholding tax on dividends, interest, or royalties paid to non-residents.
• Access to over 70 Double Taxation Agreements with other countries.

This makes Malta particularly appealing for holding companies, trading companies, and service providers.

At Fairwinds Management, we assist international clients with the full company formation process in Malta. Whether you’re launching a startup or expanding your business into Europe, Malta offers a powerful base for growth. If you are ready to set up, get in touch with us today to discuss your business goals and how we can help you establish a company quickly and efficiently.

Fairwinds Management Limited is a MFSA licensed firm offering Business Solutions in Malta. As part of our services, we offer Accounting, Administration, Corporate and Legal solutions.  Fairwinds Management also manages the brand Accounting Services. More information about us and our key services please visit our website. You may reach Fairwinds Management on +356 2704 0903 or info@fairwindsmanagement.net.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.