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 all about creating a business-friendly environment. This is clear from their easy company registration process and supportive regulatory framework. The Malta Financial Services Authority (MFSA) and Malta Enterprise are there to help businesses every step of the way, from setting up to ongoing operations. Malta’s laws align with EU regulations, ensuring transparency and reliability.
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
Choosing a unique name for your company is a key part of the registration process. To avoid confusion, the name must be distinctive and not too similar to existing businesses. Conducting a name search through the Malta Business Registry to ensure the name is available is wise. The name should also reflect your business’s nature and comply with any naming rules or restrictions Maltese law imposes.
Necessary documentation for registration
Registering a company in Malta requires several important documents. These typically include the Memorandum and Articles of Association, which outline your company’s structure, objectives, and regulations.
Other necessary documents include identification and proof of residence for directors and shareholders, a registered office address in Malta, and evidence of capital for certain business types.
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
Finally, you’ll need to set up an office for your business. When choosing a space, consider factors like location, accessibility, and the nature of your business. Depending on your budget and long-term plans, you can lease or purchase office space.
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
After your company is set up, you must file annual returns and financial statements with the Malta Business Registry. This updates the registry on any changes and provides an overview of your company’s financial performance. Timely and accurate submissions are crucial to avoid penalties.
Tax filings and payments
Corporate tax in Malta is 35%, but the effective rate can be reduced. You’ll need to file annual tax returns and handle VAT and employee-related taxes. Staying compliant with tax schedules is essential to avoid fines.
Employment regulations
When hiring, register employees with Jobsplus and ensure contracts comply with local labor laws. Adhering to health and safety standards is also necessary to protect your 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 provide valuable support to businesses, including funding, incentives, and regulatory guidance. They aim to simplify business processes and offer assistance from startup to ongoing operations.
Professional services
Legal, accounting, and consultancy services can greatly aid your business. Legal advisors ensure compliance, accountants manage finances, and consultants provide strategic advice, helping you make informed decisions.
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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.
