Company Formation Malta
Updated on Thursday 26th November 2020
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Malta is a very attractive destination for foreign investors wanting to expand or set the grounds for new companies. BridgeWest offers tailored solutions for clients who want to incorporate a company in Malta. BridgeWest provides services for company formation in Malta and our local agents offer assistance related to the following, presented below:
- drawing up the articles of association that can be signed through the power of attorney (Maltese laws require powers of attorney for any public notary proceedings);
- drawing up documents for company incorporation in Malta - specimen signatures, identification copies, application form required by the Maltese Company Registration Office;
- arranging public notary proceedings - all procedures for company incorporation are done in front of a Maltese public notary;
- providing a registered office in Malta on demand - the registered office serves as headquarters for the company in Malta and it will be made public;
- setting up a bank account for the company in Malta - BridgeWest will help in setting up the share capital bank account, as well as a current bank account once the company is incorporated;
- recommending a Maltese accountant, as accounting services are needed for new businesses in Malta.
The most common types of companies in Malta
The private limited company in Malta – the Maltese private limited company is the most common type of company because it only requires a shareholder and a director, who can be an individual or a legal entity. The minimum share capital for a private limited company in Malta is approximately EUR 1,200. All private limited companies must have a secretary. Shareholders are held accountable for the company’s obligations and debts to the extent of their share contribution. The shares of private limited companies cannot be traded on the Maltese stock exchange.
The limited liability company in Malta represents one of the simplest ways to start a business in this country, as it is one of the most popular entities addressed to both local and foreign investors, who can benefit from numerous advantages under this business form, which is commonly met throughout the world, including for offshore incorporation. In Malta, the limited liability company is defined by the following characteristics:
- the procedure for company incorporation in Malta can be completed in only 2 days;
- foreign investors are allowed to own 100% of the company’s shares, meaning that they do not need to associate with resident investors when starting a business;
- the limited liability company can be founded by 1 shareholder and it can have up to 50 members;
- out of the required authorized capital, of EUR 1,200, necessary for incorporating the limited liability company, 20% has to be paid up;
- other aspects pertaining to the limited liability company are prescribed by the Companies Act – Chapter 386.
The public limited company in Malta – the Maltese public limited company is required to have at least one shareholder, one director and one secretary. The shareholders of a public limited company in Malta are held liable for the company’s debts and obligations to the extent of their share contributions. The minimum share capital for a public limited company in Malta is approximately EUR 47,000 and the shares can be transferred or traded on the stock exchange.
The Maltese branch, subsidiary or representative office - foreign companies are allowed to set up separate enterprises from the parent company, where the foreign company will be a shareholder in a Maltese company. Foreign companies can also open extensions of the parent company in Malta.
What are the basic requirements for opening a company in Malta?
Once the investors have decided upon the legal entity that they want to register in Malta (partnerships are also available), the procedure itself can start. A company that has legal personality will be formed based on the memorandum of association, which represent the statutory document of a business form.
This document has to be drafted in accordance with the provisions of the Companies Act and this is why we highly recommend you to request legal representation and company formation services from our team. Once the document is drafted and signed, it must be submitted with the Malta Business Registry, along with the Form BO1.
Once the documents necessary are submitted and the Registrar analyses the file, it will issue a certificate of registration, as long as all papers provide the necessary information. This represents the first step through which a legal entity become recognized as a company in Malta.
It is also important to know that the registration of a new company will require the payment of various fees; in Malta, the fees are established based on the capital of the company and the type of registration (paper format or online registration – the latter being much cheaper). Most of the world’s jurisdictions impose registration fees and this can also be a common practice for the institutions of countries where one can start the offshore company formation process.
What are the steps in setting up a Maltese corporate bank account?
One of the steps for company incorporation in Malta refers to setting up a corporate bank account. This procedure is necessary for all corporate entities (such as the limited liability company or the public limited company, which are seen as having legal personality, with their own rights and obligations). The requirement to have a corporate bank account is a compulsory step regardless of the country of incorporation; for instance, offshore jurisdictions will require to set up an offshore bank account for business purposes.
The requirements for opening a bank account will, however, vary from a jurisdiction to another, and from a legal entity to another. For instance, there is a much simpler legal procedure to set up a bank account as a natural person than the one necessary for opening a corporate bank account. Our team of specialists in company registration in Malta can advise on the formalities necessary for both situations, if you need banking services here.
When opening a company in Malta, investors should prepare the following basic documents for setting up a corporate bank account: the required minimum share capital that will be deposited in the account, identity documents, the statutory documents of the newly founded company, information on the shareholders and directors, various company documents, such as the papers issued by the Malta Business Registry and others. For an offshore bank account, the procedure may be simpler, depending on the jurisdiction.
Taxation in Malta
The corporate tax in Malta is 35%. The standard VAT rate in Malta is 18%, but reduced rates of 7% apply in tourism services and 5% apply to certain products. The taxes on distributed profits in Malta range between 0 and 10%. The basic tax system applicable to businesses in Malta is prescribed by the Income Tax Act. The provisions of the Act are supervised by the Office of the Commissioner for Revenue.
The standard corporate tax of 35% is charged to most of the business activities developed in this country, including for petroleum based activities, which are generally charged at different rates. However, this tax rate is charged on petroleum activities related to production sharing contracts that were signed only after 1996; other than this, the standard corporate tax rate charged on petroleum activities, which is known as the petroleum profits tax, is applied at a rate of 50%.
BridgeWest is also able to offer ready-made Maltese companies and VAT registration. Please contact us for more information about how to open a company in Malta and prices. Our team can also put you in contact with our consultants who can provide offshore company formation services.