Company formation in Malta is the process of registering a new business with the Maltese government according to the rules and laws of the country. Malta is a small island country in the Mediterranean Sea. It has become popular to start a business in Malta because it has good tax benefits, is in a good location, and has strong laws.

The Republic of Malta has a lot to offer people who want to start a business there, such as tax breaks and low costs for setting up and running a business. This is why businessmen around the world are willing to invest and set up their businesses in the country. But why start a business in Malta? Why not other countries? Here are some of the most important reasons to start a business in Malta.

Malta is known for having a good business climate and enticing tax breaks. Starting a company in Malta can be a smart move for individuals and businesses that want to do business in other countries.

Legal Requirements and Documents for Company Formation in Malta

Company Name

Choosing a name for your business is an important part of setting it up. Your company’s name must be unique and new.

It’s a good idea to do a detailed search to make sure that the name you want is available and doesn’t sound too much like the name of another company. The first step in creating a company in Malta is coming up with a unique name for it. 

The Maltese government must agree on the name, and it shouldn’t be too similar to the name of any other company in Malta. It is also important to make sure that the name follows the rules for naming in Malta and doesn’t have any words that are insulting or not allowed.

Board Of Directors And Shareholders

While starting a company in Malta, at least one shareholder and one chairman are needed for a private limited liability company. Shareholders can be people or businesses, and they don’t have to live in Malta. But at least one director must live in Malta. 

This person will be in charge of the company’s general management and operations. When starting a company in Malta, it’s important to know what the owners and directors do and what their jobs are. 

The company is owned by its shareholders, and directors are chosen to run the day-to-day business of the company. In Malta, the Companies Act (Chapter 386 of the Laws of Malta) says how companies are set up and run, as well as what shareholders and employees are responsible for.

Company Type

Malta lets people start different kinds of businesses. These include private limited liability companies (Ltd), public limited liability companies (PLC), branches of foreign companies, partnerships, and sole proprietorships. Here are some types of companies you can start in Malta.

• Sole Proprietorship 

Malta’s simplest and most prevalent company entity is a sole proprietorship. The sole owner runs the business. Sole proprietorships need little paperwork and give flexibility in decision-making and management. The proprietor is individually liable for all business obligations and liabilities.

• Partnership

Two or more people or entities form a business in a partnership. Limited partnerships have general partners who control the firm and limited liability partners. Partnership agreements define each partner’s rights and duties.

• Ltd or Private Limited Company

An Ltd is a legal entity apart from its owners. It protects shareholders’ personal assets from business defaults and obligations. An Ltd must have a director and shareholder and file annual financial statements with Maltese authorities.

• Public Limited Liability Company (Plc)

Like an Ltd, a Plc can sell shares to the public and is subject to more laws. Larger companies that want to go public and raise capital through an IPO should form plcs. (IPO).

• Branch Office

A foreign company’s Malta branch office does business. The foreign corporation must record and file the debts and liabilities of its branch offices.

• Limited Partnership (LP)

Limited partnerships combine aspects of partnerships and limited liability companies. General partners run the business, while limited partners have limited liability. Investment limited partnerships are managed by general partners and funded by limited partners with restricted liability.

When picking the right company type for your business in Malta, it’s important to think about things like liability protection, taxation, reporting requirements, and management structure. 

You should talk to an experienced accountant or lawyer to make sure you choose the right type of company for your business goals. Also, if you want your business to start up and run easily in Malta, it’s important to follow all of the laws and rules.

Share Capital

Malta does not set any minimum share capital requirements for company formation. But the company must have an authorized share capital, which is the highest number of shares it can give out. The authorized share capital can be expressed in any currency and can be increased or lowered at any time after the company is formed.

Registered Office And Secretary Of The Company

While starting a company in Malta, you must have a registered office address where all legal notices and communications can be sent. Also, the company must hire a company secretary who lives in Malta. The company secretary is in charge of making sure that the business meets all of its legal and regulatory requirements.

Steps in Company Formation in Malta

Business Name Reservation

The first stage in company establishment is reserving a unique name with the Maltese authorities. Apply to Malta’s Registrar of Companies online. Approved names are reserved for three months.

After reserving the company name, draft the Memorandum of Association and Articles of Association. These documents define the company’s organization, activities, and constitution.

Submission of Company Documents

After the company documents are prepared, shareholders and directors must sign them and submit them to the Registrar of Companies with the necessary supporting documents, such as identification documents and the Malta registered office address.

Taxation

To start a business in Malta, you have to register it with the Malta Business Registry, get the right permits and licenses, and follow the country’s tax rules. Depending on what kind of business it is and how big it is, it may have to pay corporate income tax, value-added tax (VAT), and other taxes. 

It’s important to know Malta’s tax rules and get professional help to make sure you’re following them. After incorporation, the firm must register for VAT, income tax, and social security contributions, depending on its commercial activity. 

Conclusion

Companies seeking EU expansion may benefit from incorporating in Malta (EU). With its tax incentives, talented labor, and strategic position, Malta indeed has a good business climate. 

To successfully incorporate a company in Malta, you must choose the correct type of organization, register with the Malta Business Registry, receive permissions and licenses, and comply with local legislation and taxes.

Malta offers access to the EU market, a favorable tax regime, and a business-friendly climate. 

To comply with local requirements and maximize commercial benefits in Malta, company formation must be carefully planned and executed. Professional guidance can help Malta-based companies build and start businesses.

FAQs

• What do you need to do to start a business in Malta?
• There must be at least one chairman and one shareholder.
• At least €1,165 must be put into the company.
• The main office is in Malta.
• Articles of Association and the Memorandum of Association
• How long does it take in Malta to start a business?

In Malta, it usually takes between 3 and 5 business days to set up a company.

• What are the tax consequences of setting up a business in Malta?

Malta has a good tax system. The company tax rate is 35%, but companies can get their money back, so the real tax rate is only 5%.

• Can a person from outside of Malta start a business there?

Yes, outsiders can start a business in Malta, and there are no rules about who can own a business there.