Starting a business in Malta involves several important steps, such as choosing the right company type, registering with the Malta Business Registry, and applying for any required licenses. You’ll also need to register for VAT and take care of corporate taxes.
The country’s economy grew by 4.6% in 2023, and it maintains one of the lowest unemployment rates in the EU at 2.5 percent. Its Mediterranean location and EU membership provide access to a market of over 500 million consumers, making it an ideal base for international trade and investment. Without a doubt, this presents Malta as an ideal environment for international trade and investment.
This article will explain everything you need to know about starting a business in Malta including the legal requirements, necessary documents, residence permits to apply for, and some of the best business sectors to consider.
This is what to expect:
- Types of Legal Company Structures in Malta
- How to Start a Business in Malta as a Foreigner: A Step-by-Step Guide
- Benefits of Starting a Business in Malta
- Documents Needed for Starting a Business as a Foreigner in Malta
- Taxes on Businesses in Malta
- How to get a Residence Permit or Permanent Residency in Malta
- Best Businesses to Start in Malta
Types of Legal Company Structures in Malta
Starting a business in Malta as a foreigner means choosing from different types of companies. Each type has its own rules about ownership, the capital needed, and responsibility for debts. Picking the right company depends on your business size and goals.
Here are the main types of companies in Malta and how they work.
01/
Private Limited Company (Ltd)
– Minimum share capital: €1,165 (only 20% or €233 needs to be paid upon incorporation)
– Number of shareholders: 1 to 50
– Directors: At least one, can be an individual or a corporate body
– Company secretary: Mandatory
– Legal personality: Separate from its owners
– Taxation: Subject to Malta’s standard corporate tax rate of 35%, with refund mechanisms available to shareholders, often bringing the effective tax rate down significantly.
02/
Public Limited Company (plc)
– Minimum share capital: €46,588, with at least 25% paid up
– Minimum number of shareholders: Two
– Minimum number of directors: Two
– Company secretary: Required
– Regulated: Subject to more rigorous compliance and disclosure obligations than private companies
Financial institutions, investment firms, and large-scale businesses commonly use this structure.
03/
Sole Proprietorship
– Minimum capital: No minimum capital required
– Liability: Unlimited; the owner is personally responsible for all debts and obligations
– Registration: Must register with the Malta Business Registry and obtain necessary trade licenses
It is suitable for freelancers, artisans, and very small businesses. However, due to unlimited liability, personal assets can be at risk if the business incurs debt.
04/
General Partnership (En Nom Collectif)
– Liability: Unlimited for all partners
– Capital: No minimum capital required, but partners usually contribute funds or assets
– Management: All partners typically take part in management unless agreed otherwise
– Registration: Partnership deed must be filed with the Malta Business Registry
This structure suits family businesses or professionals starting a venture together.
05/
Limited Partnership (En Commandite)
– Liability: General partners have unlimited liability; limited partners’ liability is restricted
– Capital: No specific capital requirement
– Use case: Often used for investment funds and asset management
– Legal form: Can be established with or without legal personality
This model allows passive investors to participate in a business without taking on operational risk.
06/
Branch of a Foreign Company
– Registration: Must be registered with the Malta Business Registry
– Legal status: Not a separate legal entity; the parent company is liable for the branch’s obligations
– Local representative: Required to act on behalf of the company in Malta
– Reporting: Must file accounts of both the branch and the foreign parent
A branch is best for multinational companies looking to expand operations in Malta without forming a subsidiary.
Comparison of company types in Malta
| Structure | Legal Personality | Liability | Min. Share Capital | No. of Owners | Management | Best For |
|---|---|---|---|---|---|---|
| Private Limited (Ltd) | Separate legal entity | Limited to the amount invested | €1,165 (20% paid-up) | 1–50 shareholders | At least 1 director + secretary | SMEs, holding companies, consultancy |
| Public Limited (plc) | Separate legal entity | Limited to the amount invested | €46,588 (25% paid-up) | Minimum 2 shareholders | At least 2 directors + secretary | Large companies, public fundraising, listing |
| Sole Proprietorship | No separate legal entity | Unlimited (personal assets at risk) | No minimum | One individual | One individual Owner-managed | Freelancers, artisans, small local businesses |
| General Partnership | Can have legal personality | Unlimited for all partners | No minimum | Minimum 2 partners | Usually jointly managed | Family-run businesses, small firms |
| Limited Partnership | Optional legal personality | Mixed: general partners unlimited; limited partners up to contribution | No minimum | At least 1 general and 1 limited partner | Managed by general partners | Investment vehicles, funds, passive investors |
| Branch of Foreign Co. | Not a separate entity | Parent company bears full liability | No minimum | Foreign parent company | Local representative required | Foreign companies expanding into Malta |
How to Start a Business in Malta as a Foreigner: A Step-by-Step Guide
Starting a business in Malta as a foreigner can be easy if you understand the steps involved. Malta has a business-friendly environment with clear regulations, but it’s important to follow legal requirements and plan carefully.
Here’s a detailed guide to help you get started:
01/
Choose your business structure
02/
Prepare the required documentation
For private limited companies, you must draft and notarize the company’s constitution, outlining the company’s rules and purpose. Foreigners often require a local address for official correspondence, which can be arranged through service providers.
03/
Register your company with the Malta business registry
Registration involves paying a fee, and once accepted, your company will receive a registration number and become a legal entity. This step can take a few days to a couple of weeks depending on the type of company and completeness of the application.
04/
Obtain necessary licenses and permits
You should check with the relevant authorities or Malta’s Trade License Department to understand what is required for your sector. Starting the licensing process early helps avoid delays in launching your business.
05/
Obtain PE Permission to Employ Staff
The process requires submitting details about your business and the roles you want to fill. It may include demonstrating efforts to hire locally before recruiting from abroad. PE permission is mandatory before you can legally employ staff in Malta.
06/
Register for taxation and social security
You will also have to register your employees for social security contributions and set up payroll if hiring staff.
07/
Open a business bank account
Having a Maltese bank account facilitates payments, payroll, and tax filings, and is often necessary for certain licenses or permits.
08/
Comply with ongoing reporting and compliance
Working with a local accountant or corporate service provider can help you meet these obligations and avoid penalties.
Benefits of Starting a Business in Malta
1. Attractive corporate tax system: Malta’s corporate tax rate is 35%. However, thanks to a special complete imputation system, shareholders can receive tax refunds that can reduce the effective tax rate to as low as 5-10%.
2. Access to the European Union market: As an EU member, Malta provides access to the entire European Market of about 500 million consumers, allowing your business to trade freely across EU countries without customs barriers.
3. Skilled multilingual workforce: Malta’s workforce is young, highly educated, and fluent in English and several other languages, which makes communication and operations smoother for international businesses.
4. Strong financial services sector: Malta has a well-regulated banking system and a growing financial services industry, including fintech, gaming, and blockchain companies. The country is also known for its clear regulatory approach and favorable Malta crypto tax guidelines. This means the country is also a other welcoming environment for crypto-related businesses, innovative startups, and diverse business models.
5. Low setup and operational costs: Compared to many Western European countries, Malta offers competitive costs for office space, utilities, and salaries, helping businesses maximize profitability from day one.
Documents Needed for Starting a Business as a Foreigner in Malta
- Residence permit: If you are a non-EU/EEA/Swiss national and intend to stay in Malta for over 90 days to run your business or work, you must apply for a residence permit. This permit allows you to reside and conduct business activities in Malta legally. EU/EEA/Swiss nationals don’t need a residence permit but must register their presence if staying longer than 3 months.
- Identification documents: Valid passport or national identity card of all directors and shareholders. Proof of residential address such as a utility bill or bank statement, usually not older than 3 months.
- Company constitution: Memorandum and Articles of Association also called the company’s constitution, which define the company’s objectives, rules, and shareholder rights. This document must be drafted and notarized by a Malta-based notary or lawyer.
- Declaration of compliance: A formal statement by a legal professional or company formation agent confirming that all legal requirements for incorporation have been met.
- Proof of registered office: Evidence of a local registered office address in Malta. This is mandatory for all Maltese companies and can be provided by a corporate services provider.
- Director and shareholder details: Full names, addresses, dates of birth, and nationalities of directors and shareholders. Declaration of consent from each director and shareholder to act in their respective roles.
- Bank reference or financial information (sometimes requested): Proof of funds or bank reference letters to demonstrate the source of initial capital may be requested by banks when opening an account or by authorities during due diligence.
- Tax Identification Number (TIN): For directors and shareholders, especially for tax registration purposes after company formation.
- Additional Licenses or Permits (if applicable): Depending on your business sector, you may need to provide licenses or permits (e.g., financial services, gaming, health, food).
- Employment Permission documents (if hiring staff): Application for Permission to Employ (PE) from Jobsplus if you intend to employ staff.
Taxes on Businesses in Malta
1. Corporate Income Tax: The standard corporate tax rate is 35% on taxable profits. However, Malta operates a full imputation system, allowing shareholders to claim tax refunds on dividends, which often brings the effective rate down to between 5% and 10%. This system is one of the key aspects of how taxes in Malta support a competitive environment for businesses.
2. Value Added Tax (VAT): The standard VAT rate is 18% on most goods and services. Reduced rates of 7% and 5% apply to specific goods and services, such as some food items, medical supplies, and utilities. However, businesses must register for VAT if their annual turnover exceeds €35,000.
3. Social Security Contributions: Employers must contribute to social security for their employees, generally around 10% of the employee’s gross salary. Employees contribute around 10% as well.
4. Capital Gains Tax: Capital gains from the disposal of immovable property are taxed at 12% if the property was owned for more than 183 days. Gains from the sale of shares and securities may be exempt or taxed differently depending on circumstances.
5. Stamp Duty: Stamp duty applies to certain transactions, including property transfers (typically 5%), share transfers, and other legal documents.
How to get a Residence Permit or Permanent Residency in Malta
Foreign entrepreneurs looking to start a business in Malta can benefit from residency programs that offer long-term stability, access to a business-friendly environment, and in some cases, tax advantages. While these programs do not automatically grant the right to work or manage a business directly, they allow foreign nationals to reside in Malta, own a company, and apply for the permits needed to operate.
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Malta Residency by Investment
The Malta Permanent Residence Programme also known as the Malta Golden Visa is a residency-by-investment scheme available to non-EU/EEA/Swiss nationals who want to invest in Malta and have the right to reside there long-term. While this program does not automatically grant the right to work or run a business, it is suitable for individuals who want to relocate, manage international operations remotely, or live in Malta while owning a business legally established in the country.
To operate a business locally, MPRP holders must still obtain separate work or self-employment authorization from Identity Malta or apply for a work permit if they wish to run the business themselves actively.
These are the investment options to choose from:
- Property rental: At least €14,000/year in Malta (€12,000/year in Gozo) for 5 years.
- Government contribution: €60,000
- Property purchase: At least €375,000 in Malta (€300,000 in Gozo) held for 5 years
- Government contribution: €30,000
- Charitable donation: €2,000 to a registered Maltese NGO
Malta Global Residence Programme (GRP)
The Malta Global Residence Programme is aimed at non-EU/EEA/Swiss nationals who want to live in Malta while benefiting from a favorable tax system. It allows foreigners to reside in Malta and pay a flat 15% tax on foreign income brought into the country, with a minimum annual tax of €15,000.
To qualify, applicants must show they earn at least €100,000 per year or hold €500,000 in assets, have health insurance, and rent or buy a qualifying property in Malta. The GRP also does not automatically grant the right to work or run a business actively, but it does allow you to own or invest in a company.
If you plan to manage the business or be employed by it, you must apply for a separate work permit. This program is a good option for entrepreneurs with international income who want to live in Malta and manage their businesses passively or remotely.
Best Businesses to Start in Malta
| Business Type | Why It’s a Good Opportunity |
|---|---|
| iGaming Company | Malta is a world leader in online gaming with strong regulation, EU licensing, and global reach. |
| Financial Services Firm | The sector contributes over 10% to Malta’s GDP and benefits from tax efficiency and EU access. |
| Tourism and Hospitality Business | With nearly 3 million annual visitors, there’s constant demand for stays, tours, and experiences. |
| Digital Marketing or IT Services | High internet use (94%), skilled talent, and a supportive environment for tech startups. |
| Language School or Training Centre | Malta is a top destination for English learners from Europe, Asia, and South America. |
| Real Estate and Property Management | Driven by expat demand, Golden Visa programs, and rising property values in urban areas. |
| Import-Export or Trade Business | Malta’s location supports easy access to EU, North Africa, and Middle Eastern markets. |
| Sustainable Products or Green Tech | Government support and EU funding make eco-businesses increasingly viable and future-proof. |
As part of our commitment to providing transparent and reliable services, we are proud to be a licensed agent in Malta, holding the official license number AKM-AGEN. This certification demonstrates our dedication to the highest standards in the investment migration industry and further enhances our ability to offer expert guidance and support to our clients.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
