Company Registration in Malta
Papilio Services Limited
04 October, 2016
Company registration in Malta is fairly easy to incorporate
The Maltese Company Act, Chapter 386 is the legislation that oversees all aspects of company registration in Malta. Maltese legislation has a strong British influence and as Malta is a fully-fledged member of the European Union it is also guided in principle from European Directives.
What are the advantages of setting up a company in Malta?
Malta has developed over the last ten years into one of the leading financial services centres in the world that has attracted business and investors with a number of attractive incentives. Whereas most countries adopt the classical taxation model that sees corporate profits first taxed in the hands of the company and then taxed in the hands of the shareholders when they are subsequently distributed, the Maltese Tax System uses the full imputation system of taxation. The full imputation system ensures that profits are taxed at the company level, which in Malta this is 35% but when the profits are subsequently distributed, the dividend carries an imputation credit of the tax paid by the company on the profits. Thus meaning the profits are taxed only at the company level in Malta.
Malta also has in excess of over 65 double tax treaties with countries around the world that in the main are based on the OECD model. Malta has also adopted the Parent Subsidiary directive which ensures that profits that have been taxed at the subsidiary level are not unfairly taxed again at the parent company level.
The banking system in Malta is robust and rated the 10th soundest banking system in the world by the World Economic Forum Competitiveness Index in 2014 – 2015 and has passed all relevant stress tests. All legislation in Malta is in Maltese and in English, which is also a national language and is widely spoken throughout the islands. As a former British colony, Malta still retains a strong influence from the days the British occupied the islands.
Business in Malta is generally conducted in English and the education level of the work force in Malta is of a high standard in general. If is often the case, that most offices through the employees will be able to communicate in a number of languages.
Malta is also unique in the fact that it recognises the concept of trusts, owing to its history with the British and also recognises the concept of foundations, which arises from Civil Law and is more commonly used in mainland Europe. This opens up a plethora of opportunities for wealth and succession planning.
Malta has one of the lowest rates of VAT in the European Union at the current rate of 18%.
Starting a business in Malta – registration
The first consideration to make when starting a business in Malta is whether you want to incorporate a new company or simply move management and control of an existing company to Malta. A company that is incorporated in Malta is tax resident in Malta, whilst if the company is not incorporated in Malta but has its management and control actively in Malta, it will also be deemed to be tax resident in Malta. It is important to source out a professional and experienced tax advisor to ensure the correct route is taken and that all possibilities are explored.
Starting a business in Malta is a relatively easy process provided all of the necessary KYC has been gathered and is in good order. The first step is to choose the type of entity. There are two types of limited liability companies:
- Malta Private Limited Liability company or
- Malta Public Limited Liability company
It should be noted that the minimum share capital for each type of company is as below:
The minimum share capital of a Malta public company is EUR 46,587.47;
- At least 25% of that capital must be paid when the company is formed
The minimum share capital of a Malta private company is EUR 1,164.69;
- At least 20% of that capital must be paid when the company is formed
This minimum number of shareholders must be two in the case of a Malta Public Limited Company and can be one in a Malta Private Company.
Some other types of legal vehicles allowed according to the Maltese Act are:
- international holding companies
When forming a limited liability company in Malta, the first thing to take care of is the drafting of the Memorandum and Articles of Association of the company. The documents on completion and approval should be submitted with the Maltese Companies Register. The incorporation procedure can take as little as 24 hours if everything is in place, but on average it usually takes a couple of days.
Other considerations that should be taken into accounts include:
- The location of registered office, which should be in Malta;
- The appointment of directors and a company secretary
- The opening of a corporate Malta bank account;
- The appointment a local auditor (all accounts must be audited once per year);
- register for taxation purposes with the relevant authorities such as the Inland Revenue Department and VAT Department if applicable;
- register with the Employment Training Corporation if the company is intending to be an employer.
As Malta Company Formation experts, Papilio Services Limited has been assisting clients for many years in setting up companies and can guide you through the process in an efficient and professional manner. They can also provide corporate director and company secretary positions.
Papilio Services Limited, through its associated companies are also licensed to provide Trusts and Foundation services.
Benefits of setting up a company in Malta
- EU Member State – access to a single market
- Schengen Zone – travel between member states is without internal border control
- 10th soundest banking system in the world by the World Economic Forum’s Competitiveness Index 2014-2015
- Business culture – as a former colony of the United Kingdom, the Maltese business is strongly influenced by British culture
- Language – Maltese and English are the official languages
- Banking and financial services - full range of personal, commercial and trade services to clients
- Trustee services – Papilio Services Limited is licenced to act trustee or co-trustee, provide fiduciary services and act as an administrator or private foundations
- Short travel times – close ties with major European hubs and North African markets
- Taxation – the attractive Malta tax system is compliant with EU non-discrimination principles and approved by OECD.
- Weather – mostly sunny throughout the whole calendar year
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