How to open a company in malta

A step-by-step guide to opening a company in Malta in 2024

Starting a business in Malta is a great choice thanks to its prime location, tax perks, and supportive business climate. This guide breaks down the essentials of opening a company in Malta, such as picking a business type, the registration process, and meeting ongoing requirements.

Benefits of opening a company in Malta

Malta has several benefits for businesses, such as:

Strategic location and EU membership benefits

In the middle of the Mediterranean, Malta is a perfect spot for connecting Europe, North Africa, and the Middle East. This makes it a great place for international trade and logistics. 

Being a part of the EU, Malta offers businesses easy access to the European market, simplifying trading goods across borders. Plus, Malta has top-notch infrastructure, including great ports and reliable telecommunications, which helps keep business operations running smoothly.

Malta’s favourable tax system

Malta is known for having one of the best tax systems in Europe. The country uses a full imputation system, which lowers the tax burden on shareholders. While the corporate tax rate is set at 35%, it can drop to as low as 5% for some types of income thanks to this system.

Also, Malta has over 70 agreements to prevent double taxation, ensuring that your income isn’t taxed twice when doing international business. These tax perks, along with possible tax credits and exemptions, make Malta a smart choice for businesses looking to manage their tax efficiently.

Pro-business regulatory environment

Malta’s government is dedicated to fostering a business-friendly environment, making it an attractive destination for entrepreneurs and investors. This commitment is evident in the country’s straightforward company registration process and well-structured regulatory framework. The Malta Financial Services Authority (MFSA) and Malta Enterprise play a crucial role in assisting businesses at every stage, from establishment to continuous operations. Additionally, Malta’s legal system is fully aligned with European Union regulations, ensuring a high level of transparency, compliance, and reliability for businesses operating within its jurisdiction.

Types of companies you can open in Malta

You can open different types of companies in Malta. Before you start the registration process, you need to know which one is best for you and your business goals.

Limited liability company (LLC)

A Limited Liability Company (LLC) is the most common type of business entity in Malta because it offers flexibility and protection. Shareholders’ liabilities are limited to their share capital, making it a secure option for investors. This structure is suitable for both small and large businesses, providing a safe environment for investment. In Malta, LLCs need a minimum share capital of €1,165, with at least 20% paid up. They must have at least one director and one shareholder and must file annual financial statements.

General partnership

In a General Partnership, two or more partners share the management and profits of the business. Unlike LLCs, all partners in this structure have unlimited liability, meaning their personal assets can be used to cover business debts.

While this increases risk, it allows for a simpler setup process and less regulatory compliance compared to an LLC. General Partnerships are ideal for businesses, such as professional services firms, where mutual trust and shared responsibility are important.

Sole proprietorship

A Sole Proprietorship is the simplest form of business entity, where one person owns and operates the business. This structure is easy to set up and has minimal regulatory requirements. The owner has complete control over all business decisions and keeps all profits. 

However, the main downside is that the owner has unlimited liability, meaning personal assets are at risk if the business incurs debts. Sole Proprietorships are great for small businesses and freelancers who want to control their operations fully.

Foreign company

Foreign companies can operate in Malta either by setting up a branch or incorporating a subsidiary. A branch is just an extension of the parent company and isn’t a separate legal entity, so the parent company is responsible for its obligations.

A subsidiary, on the other hand, is a distinct legal entity that limits liability to the subsidiary itself. Doing business in Malta allows foreign companies to take advantage of Malta’s strategic location, tax benefits, and supportive business environment while maintaining their international presence.

Important steps before registering your company

To start a business successfully in Malta, it’s crucial to choose the right business structure, choose a unique company name, and gather all necessary documents.

Choose the right business structure

When starting a Malta company, picking the right business structure is crucial. Your choice depends on the nature of your business, the level of liability you’re comfortable with, the tax implications, and the administrative requirements.

For instance, an LLC provides limited liability protection, making it a good fit for most businesses. In contrast, a Sole Proprietorship offers simplicity and full control but comes with unlimited liability.

Select a unique company name

Selecting a unique and distinctive name for your company is a crucial step in the registration process. To prevent confusion and potential legal issues, the chosen name must be easily distinguishable from existing businesses. Conducting a thorough name search through the Malta Business Registry is a smart approach to ensuring its availability. Additionally, the name should accurately represent the nature of your business and adhere to any naming regulations set by Maltese law. Compliance with these guidelines helps establish a professional identity and avoids unnecessary delays in the registration process.

Necessary documentation for registration

Registering a company in Malta involves submitting several essential documents to ensure compliance with legal and regulatory requirements. Among the most critical are the Memorandum and Articles of Association, which define the company’s structure, objectives, and internal regulations. These documents serve as the foundation of your business, outlining the roles and responsibilities of directors, shareholders, and other key stakeholders.

Additionally, applicants must provide identification documents and proof of residence for all directors and shareholders to verify their identity and eligibility. A registered office address in Malta is also mandatory, as this serves as the official location for legal correspondence and company records. For certain business structures, evidence of capital may be required to confirm financial stability. Ensuring all these documents are prepared correctly can streamline the registration process and help avoid unnecessary delays.

A step-by-step guide to opening a company in Malta

By following these steps, you can successfully complete the process of registering and setting up a company in Malta, ensuring all legal and administrative requirements are met.

Step 1: Reserving a company name

The first step in registering a company in Malta is to reserve a unique name. You’ll need to submit an application to the Malta Business Registry. This process ensures that your chosen company name isn’t already in use or too similar to existing names. It’s a good idea to have a few alternatives in case your first choice is unavailable.

Step 2: Drafting the Memorandum and Articles of Association

Next, you need to draft the Memorandum and Articles of Association. These documents outline the company’s structure, objectives, and operational guidelines. The Memorandum details the company’s name, registered office, share capital, and the extent of liability of its members.

The Articles of Association, however, set out the rules for the company’s internal management. It’s crucial to ensure these documents comply with Maltese law and clearly define the roles and responsibilities within the company.

Step 3: Filing the registration application

Once your documents are ready, you can file the registration application with the Malta Business Registry. This includes submitting the Memorandum and Articles of Association along with other required forms and identification documents.

The application must also include the details of the company’s directors, shareholders, and the registered office address. Ensuring all information is accurate and complete will help avoid delays in the registration process.

Step 4: Paying registration fees

After submitting your application, you’ll need to pay the required registration fees. The fee structure depends on the type of company you’re registering and its share capital.

Payment can usually be made online, and keeping a record of the transaction for future reference is important. The fees cover the administrative costs of processing your application and issuing the necessary certificates.

Step 5: Obtaining the certificate of registration

Once your application and payment are processed, the Malta Business Registry will verify all the details. If everything is in order, they will issue a Certificate of Registration.

This certificate confirms that your company is legally recognized in Malta and can commence business operations. It’s an essential document that you’ll need for various post-registration steps, such as opening a bank account and registering for VAT.

Post-registration steps to run a company in Malta

After registering your business in Malta, ensure you complete VAT registration, open a business bank account, and set up a suitable office space.

VAT registration

After receiving your Certificate of Registration, one of the first things you’ll need to do is register for VAT. This involves applying to the VAT Department in Malta.

You’ll need to provide details about your business, including your expected turnover and the types of goods or services you’ll be offering. Once registered, you’ll receive a VAT number, which is required for invoicing and tax purposes.

Opening a business bank account

Opening a business bank account in Malta is another crucial step. You’ll need to provide your Certificate of Registration, identification documents, and possibly proof of address.

Some banks might also request a business plan or financial forecasts. Having a local bank account is essential for managing your finances and making transactions easier.

Setting up an office space

Setting up a physical office is a key step in establishing your business in Malta. When selecting a space, it’s important to consider factors such as location, accessibility, and the nature of your operations. A well-located office can enhance visibility, attract clients, and provide convenience for employees.

Depending on your Budget and long-term business goals, you can choose to either lease or purchase office space. Leasing offers flexibility, making it ideal for startups and businesses that anticipate growth or relocation in the future. On the other hand, purchasing office space can be a worthwhile investment for companies seeking stability and long-term cost savings.

Additionally, businesses operating in the digital sector or offering remote services may opt for co-working spaces or virtual offices, which provide a professional address without the overhead costs of a traditional office. Evaluating your business needs and financial capacity will help you make the best decision for your company’s operational success.

Compliance and ongoing requirements

To ensure smooth business operations in Malta, stay compliant by filing annual returns and financial statements, adhering to tax schedules, and following employment regulations.

Annual returns and financial statements

Once your company is established in Malta, it is mandatory to file annual returns and financial statements with the Malta Business Registry (MBR). These filings serve to update the registry on any structural or operational changes while also providing a clear overview of your company’s financial health and compliance status.

Annual returns include details such as company directors, shareholders, and registered office addresses, ensuring that company records remain up to date. Financial statements, on the other hand, must be prepared in accordance with International Financial Reporting Standards (IFRS) or General Accounting Principles for Small and Medium-Sized Entities (GAPSME), depending on the company’s size and nature.

Submitting these documents accurately and on time is essential to avoid penalties and maintain good standing with regulatory authorities. Many businesses seek the assistance of accountants or corporate service providers to ensure compliance and seamless financial reporting.

Tax filings and payments

Malta’s corporate tax rate stands at 35%, but businesses can significantly reduce the effective tax burden through refund mechanisms and tax credits, making it an attractive destination for companies. To remain compliant, businesses must file annual tax returns and fulfill obligations related to Value Added Tax (VAT) and employee-related taxes, such as social security contributions and payroll taxes.

Ensuring strict adherence to tax deadlines is crucial, as delays or non-compliance can result in penalties and fines. Many businesses seek professional tax advisors to navigate Malta’s tax system effectively, maximize available tax benefits, and maintain full compliance with local regulations.

Employment regulations

When hiring employees in Malta, businesses must register their workforce with Jobsplus, the national employment agency, to ensure compliance with local employment regulations. It is also essential to draft employment contracts that align with Maltese labor laws, covering aspects such as working hours, wages, leave entitlements, and termination conditions.

Beyond legal requirements, employers must adhere to health and safety standards to create a secure working environment. Compliance with the Occupational Health and Safety Authority (OHSA) regulations helps protect employees from workplace hazards and ensures that businesses operate responsibly. By following these guidelines, companies can maintain a legally compliant and productive workforce.

Find additional support and resources for your new company

Government agencies like Malta Enterprise and Business First offer funding, advisory support, and resources to help new companies in Malta.

Government agencies and resources

Malta Enterprise and Business First play a crucial role in supporting businesses by offering a range of resources, including funding opportunities, incentives, and regulatory guidance. These organizations are dedicated to simplifying business processes, making it easier for both startups and established companies to navigate Malta’s economic landscape.

Malta Enterprise primarily focuses on financial assistance, such as grants, tax credits, and investment aid, aimed at fostering business growth and innovation. Meanwhile, Business First acts as a one-stop shop for entrepreneurs, providing essential guidance on company registration, licensing, and compliance matters.

By leveraging the support of these institutions, businesses can access the tools and knowledge needed to establish a strong foundation and achieve long-term success in Malta’s dynamic market.

Professional services

Utilizing legal, accounting, and consultancy services can significantly enhance the efficiency and success of your business in Malta. Legal advisors play a crucial role in ensuring compliance with local laws, handling contracts, and mitigating legal risks. Their expertise helps businesses navigate regulatory requirements, avoiding potential disputes and penalties.

Meanwhile, accountants manage financial records, oversee tax obligations, and ensure compliance with Malta’s corporate tax and VAT regulations. Proper financial management is essential for maintaining transparency and optimizing tax efficiency.

Additionally, business consultants provide strategic guidance, helping entrepreneurs make well-informed decisions regarding growth, market expansion, and operational improvements. Engaging professional services not only enhances business operations but also ensures long-term stability and success.

FAQs

What is the minimum capital requirement for an LLC?

The minimum capital requirement for opening a Limited Liability company in Malta is around €1,165, with at least 20% paid up at incorporation.

How long does the registration process take?

Registering a company in Malta usually takes about two to three weeks, depending on application completeness and registry workload.

How to open a small business in Malta?

Choose a business structure, reserve a company name, draft necessary documents, register your company, and complete post-registration steps like VAT registration and opening a bank account.

Which business is profitable in Malta?

Profitable businesses in Malta include tourism and hospitality, IT and iGaming, financial services, health and wellness, and education and training.

Can a foreigner start a business in Malta?

Yes, foreigners can start a business in Malta with no ownership restrictions, enjoying a straightforward setup process and a business-friendly environment.