Malta Company Formation – Everything You Need to Know

This guide will detail everything you need to know about starting a business in Malta, including the benefits and step-by-step process involved in opening a company in Malta, tax implications, costs, and more.

You will learn:

• Benefits of Setting Up a Company in Malta
• Company Types and Names in Malta
• Requirements for Setting Up a Company in Malta
• Required Documents for Malta Company Formation
• Step-by-Step Process for Company Formation in Malta
• Regulatory and Compliance Requirements
• Taxation & Double Tax Treaties in Malta

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Company Types and Names in Malta

1. Private Limited Company (Ltd)

The Private Limited Company (Ltd) is the most common business structure in Malta. Shareholders’ liability is limited to the unpaid amount on their shares, offering protection for personal assets. It can be established by a single shareholder or multiple owners. The minimum share capital requirement is €1,165, with at least 20% paid up at incorporation.
The company name must end with “Limited” or “Ltd.” to show it is a limited liability company.

2. Public Limited Company (plc)

A Public Limited Company (plc) is designed for larger businesses or those that plan to raise capital publicly. It must have at least two directors and two shareholders, and a higher minimum share capital than a private company.
The company name must end with “p.l.c.” to distinguish it from private limited companies.

Requirements for Setting Up a Company in Malta

Establishing a company in Malta requires compliance with specific legal, financial, and regulatory obligations. Below are the key requirements to ensure a smooth company formation process.

1. Malta Company Incorporation – Shareholder

Every company in Malta must have at least one shareholder, who can be either an individual or a corporate entity.

• The shareholder holds ownership of the company through shares.
•  Corporate Shareholders can be Maltese or foreign nationals; there are no nationality restrictions
• The minimum share capital for a private limited company is €1,165, with at least 20% paid up at incorporation.
• The shareholder’s details must appear in the company’s Memorandum and Articles of Association, which are filed with the Malta Business Registry (MBR)

2. Malta Directorship and Company Secretary

A Maltese company must appoint at least one director and one company secretary.

Director:

• A Private Limited Company (Ltd) must have at least one director, while a Public Limited Company (plc) requires a minimum of two directors.
• Directors can be individuals or corporate entities, and they do not have to be Maltese residents.
• However, having a local director is often recommended to simplify administrative and banking processes.

Company Secretary:

• Every company must appoint a company secretary responsible for maintaining company records, preparing annual returns, and ensuring compliance with Maltese law.
• The secretary must be an individual (not a corporate entity).
• If a company has only one director, the director and secretary cannot be the same person.

3. Local registered office requirement

• A company in Malta must have a registered office address in Malta.
• The registered office address is where official correspondence is sent and must be maintained throughout the business’s operations.
• Companies can use corporate service providers for a registered office if they do not have a physical location.

Required Documents for Malta Company Formation

To register a company in Malta, the following documents must be prepared and submitted to the Malta Business Registry (MBR):

• Memorandum and Articles of Association – This document outlines the company’s name, business activities, registered office, share capital, and details of shareholders, directors, and the company secretary.
• Identification Documents – Certified copies of passports or national ID cards for all directors, shareholders, the company secretary, and other diligence documents.
• Proof of Address – Recent utility bills or bank statements (not older than three months) for all company officers and shareholders.
• Bank Reference or Professional Letter – A reference from a bank or a licensed professional (such as a lawyer or accountant) confirming the good standing of the shareholders and directors.
• Share Capital Deposit Proof – Evidence that the minimum share capital has been deposited into a Maltese bank account.
• Registered Office Address – Documentation confirming the company’s registered office in Malta.
• Due Diligence Forms – Required under Malta’s anti-money laundering regulations for all individuals involved in the company.

Step-by-Step Process for Company Formation in Malta

Setting up a business in Malta is simple, and entrepreneurs can register a company online or remotely, with no need to travel.

1. Submit Online Application: Complete the company registration form online through the Malta Business Registry (MBR) portal, specifying the type of company and required services.
2. Provide Due Diligence Documents: Submit identification, proof of address, and other due diligence forms for all directors and shareholders.
3. Compliance Review: The Malta Business Registry reviews the submitted documents to ensure compliance with Maltese law.
4. Deposit Share Capital: Open a bank account in Malta and deposit the minimum share capital of €1,165 for a Private Limited Company, with at least 20% paid up. Obtain a bank confirmation certificate as proof of payment. For a Public Plc, the minimum share capital is €46,588, with at least 25% paid up.
5. Drafting Incorporation Documents: Once cleared, the Memorandum and Articles of Association are drafted and sent for signature. The courier must return the original signed documents.
6. Company Incorporation: After receiving the signed documents, the company is officially registered and the Certificate of Incorporation is issued within a few days.
7. Register for Tax and VAT: Apply for a Tax Identification Number (TIN) with the Commissioner for Revenue. If the company’s turnover exceeds the threshold, register for VAT.

Regulatory and Compliance Requirements for Companies in Malta

Annual returns and financial statements

• All Maltese companies must file annual returns with the Malta Business Registry (MBR) to update company details.
• Companies must prepare financial statements in accordance with International Financial Reporting Standards (IFRS) or General Accounting Principles for Small- and Medium-Sized Entities (GAPSME).
• Financial statements audited are required for companies exceeding certain turnover thresholds.
• Profit and loss accounts must be submitted along with an income tax return to the Maltese tax authorities.

Licensing requirements for certain industries

• Some industries require specific licenses from regulatory bodies such as the Malta Financial Services Authority (MFSA) or the Malta Gaming Authority (MGA).
• Businesses involved in financial services, gaming, pharmaceuticals, and investment firms must obtain approvals before starting operations.
• Non-compliance with licensing rules can lead to penalties, revocation of business licenses, and legal action.

Anti-Money Laundering (AML) and KYC regulations

• Companies must comply with Anti-Money Laundering (AML) laws and implement Know Your Customer (KYC) procedures to prevent fraud and illicit activities.
• The Malta Financial Services Authority (MFSA) and the Financial Intelligence Analysis Unit (FIAU) monitor compliance.
• Businesses must conduct due diligence on clients, report suspicious transactions, and maintain records to prevent financial crime.

Accounting & Auditing Requirements for Maltese Companies

All Maltese companies are required to maintain proper accounting records that accurately reflect their financial position and transactions. Annual audited financial statements must be prepared in line with Malta Financial Reporting Standards or International Financial Reporting Standards, providing an accurate and fair view of the company’s finances.

Most companies are also required to have their accounts audited by a licensed Maltese auditor, although small private companies meeting certain thresholds may be exempt. These financial statements must be filed with the Malta Business Registry, along with corporate tax returns, as accurate records are essential for tax compliance and transparency. Companies must keep supporting documents for at least six years.

Cost of Company Formation in Malta

The company’s authorized share capital determines the registration charge that must be paid to the Registrar in Malta. The starting cost is €245; if the approved share capital exceeds €2,500,000, the maximum price is €2,250.

How long does it take to register a company in Malta?

Setting up a company in Malta usually takes about 2 to 3 weeks, depending on the type of company and how fast all documents and checks are completed. For simple cases, it can be done in as little as 24 hours to 5 working days.

Taxation & Double Tax Treaties in Malta

Malta can take advantage of some intriguing opportunities as a signatory to nearly 70 Double Taxation Treaties.

Depending on your company’s audited financial accounts, corporate tax in Malta is computed at a flat rate of 35% on gross profits. However, a tax rebate scheme for shareholders of Malta-registered businesses might lower the overall net effective tax rate to 5% for trading corporations and 0% for holding company structures.

Regardless of the situation, shareholders cannot get these tax returns unless certain legal conditions are met.

Licensed shipping companies that own or run tonnage tax ships are not required to pay taxes in Malta.

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.