Opening a company in Malta is a straightforward process because this country has a sound legislation for business registration and one of the most attractive taxation systems in the European Union. Most entrepreneurs are inclined to open businesses in the financial services and online gaming industries because of the advantageous conditions the Government offers, but other sectors are also sought. Boasting a skilled workforce and cheap labor costs, Malta is one of the best countries to do business in Europe. Our lawyers in Malta will guide you through the steps required for starting a business in this country.
|Types of business entities in Malta
– private and public limited liability company,
– general and limited partnership,
– sole proprietorship,
– holding company
Best use for an LLC in Malta
Number of shareholders
At least 2 shareholders
|Minimum share capital
– EUR1,200 for private LLC,
– EUR47,000 for public LLC
|Formalities and documents for registration
– name verification and reservation,
– Articles of Association,
– licenses and permits application,
– registration for tax payment
|Local bank account required (YES/NO)
|Resident director required (YES/NO)
|Legal representative required (YES/NO)
|Local office required (YES/NO)
|Government approval for foreign investors (YES/NO)
|Time frame for company registration
Around 9 weeks
|Time frame for tax registration
Around 3 weeks
|Possibility of hiring foreign employees
|Investment incentives offered (YES/NO)
|We provide support for registration (YES/NO)
In case you are looking for offshore company formation services, we recommend our partners – BviCompanyIncorporation.com.
Types of companies which can be set up in Malta in 2024
The Company Law provides for several types of structures which can be registered in Malta. Among these, the simplest one is the sole proprietorship which is subject to the fewest requirements as it only needs an individual who will act as the sole owner of the business. Partnerships are also simple business structures, which compared to the sole trader will require at least two members who can be individuals or companies and who can have full or limited control over the business, depending on the type of partnerships established. From this point of view, it is possible to create general and limited partnerships.
The most complex business forms are the private and the public limited liability companies, however, these also offer important benefits, among which limited liability in relation to the business’s debts and obligations. The requirements for opening a Maltese business in the form of a private or public company are more extensive than in the case of the other available types of structures. These requirements imply a larger number of shareholders and a minimum share capital.
In the case of a private company, the minimum number of shareholders is two, while the share capital that needs to be deposited for setting up such a structure is close to 1,200 euros, out of which 20% must be deposited upon the registration of the business. In the case of a public company, the same number of shareholders is required, however, the minimum share capital is a little over 46,000 euros and at least 25% of the amount must be deposited in the bank account upon incorporation. Foreign companies are also allowed to operate in Malta through branch offices and subsidiaries.
Our Maltese lawyers can guide foreign investors interested in setting up businesses here. Below, they will detail every requirement related to opening a business in Malta.
Choose a trade name before starting a business in Malta
The company or trade name is the first step that needs to be completed when opening a business in Malta. The reservation is made with the Companies Register and there is a 10 euros fee. Those who want to open companies in Malta must know that the trade name must be unique, for which case it is advisable to select at least 3 names. A certificate granting the right to use that name will be issued by the Trade Registrar.
The procedure is completed the same day the name is submitted for approval by the Trade Register which will issue a certificate in this sense.
Necessary documentation for opening a business in Malta in 2024
When opening a business in Malta, you will typically need to prepare and submit various documents to the Maltese Business Registry (MBR). The specific documents required can vary based on the type of business entity you are establishing (e.g. limited liability company, partnership, sole proprietorship, etc.), but here is a standard compilation of commonly required documents and information that may be necessary:
– Memorandum and Articles of Association: These are the constitutive documents of a company, outlining its purpose, structure, and rules.
– Registration form: You will need to complete and submit the necessary registration form for your business entity, which can vary depending on the type of company you are establishing. Our lawyers in Malta can guide you on which registration form you are required to submit based on your company structure.
– Company name reservation certificate: This certificate confirms the availability and reservation of your chosen business name.
– Identity and address verification: Documentation presenting the identities and residential addresses of the company’s directors, shareholders, and company secretary.
– Shareholders’ agreement (if applicable): For companies with multiple shareholders, a shareholders’ agreement may be required. You can ask our Maltese lawyers whether you need a shareholder’s agreement or not.
– Registered office address: You need to provide the registered office address of the company, which must be within Malta.
– Particulars of directors and company secretary: Details of the company’s directors and company secretary, including their names, addresses, and consent to act in their respective roles.
– Share capital information: Information about the share capital structure, including the number of shares, their value, and the allocation among shareholders. The experienced attorneys at our law firm in Malta can guide you in detail about the share capital you need to open a specific company structure.
– Statutory declaration: A declaration from the company secretary or a director confirming that all legal requirements have been met during the company formation process.
– Payment of registration fees: You will need to pay the applicable registration fees to the Registrar of Companies. In this article, you can find information about registration fees provided by our attorneys in Malta.
Please note that specific requirements may vary depending on the type of business structure you are establishing, and there may be additional documents required for certain industries or business activities. It is advisable to consult with our lawyers in Malta to ensure you fulfill all legal obligations and submit the correct documentation when registering your business with the Registrar of Companies.
Certificate of registration in Malta
After completing the relevant application form and assembling the required documents, including identity proofs, you can submit your application to the Registrar of Companies. Once your application is approved and all legal requirements are met, you will be issued a Certificate of Registration. Ensuring ongoing compliance with Maltese laws is crucial to maintaining your company’s status. Consulting with legal or business professionals is advisable throughout the process to navigate the specific requirements of your company type. If you are seeking any legal assistance, please get in touch with our Maltese lawyers for assistance. Besides company formation, if you are planning to purchase a property in Malta, the services of our lawyers are at your disposal.
Register your company for VAT in Malta
Upon officially establishing a company in Malta and receiving the Certificate of Registration from the Registrar, it becomes necessary to register for VAT. This tax is set at a standard rate of 18% in Malta, particularly if the company operates as a ‘trading’ entity as opposed to a ‘holding’ entity. The registration process varies depending on the applicant’s status, whether it is a sole proprietor, a company legal representative with a valid Maltese ID Card, or a foreigner without one. This procedure can be completed in as little as a day and typically involves submitting essential documents, such as an application form through our attorneys in Malta, an authorization letter, identification documents of a company’s legal director, self-registration through e-ID, and self-registration using valid identity/residence card details if applicable. In case of any uncertainty, our lawyers in Malta are available to guide you through the VAT registration process.
Having a registered address when opening a business in Malta
One of the most important requirements for having a Maltese local business is choosing and registering a legal address with the Trade Register. This address will be used by the authorities for official notifications, but it can also be used by clients and business partners. A Maltese company can have a registered address while also having a different location in which its activities are completed. The legal address of the company must be established before the registration of the business and must appear on all the official documents issued by the Maltese company.
Our law firm in Malta can assist with virtual office services which are quick and efficient solutions for having a legal address for the business registration procedure. We invite you to contact us and ask about these services.
Opening a corporate bank account in Malta in 2024
Another important requirement that needs to be complied with before registering the business with the local authorities is opening a bank account in which the share capital will be deposited. There are plenty of local banks that offer such services, and our lawyers can guide you in choosing one. The opening of a corporate bank account takes less than in other EU countries thus reducing significantly the business registration procedure. Once the company name is reserved, the legal address is chosen and the bank account is created, the registration procedure can begin.
We remind foreign investors that they can benefit from full business registration services through our Maltese law firm. Remote registration is also possible through a power of attorney.
Steps for setting up a business in Malta in 2024
It is quite simple to open a business in Malta considering there are only a few steps to be completed and the fact that usually no special permits or licenses are required. The Government requires only companies in the financial, insurance, medical, and pharmaceutical sectors to obtain licenses with the competent authorities. Our Maltese lawyers can explain what the steps for obtaining a business license are.
When opening a company in Malta, a businessman must follow the next steps:
– reserve a unique company name with the Maltese Commercial Register,
– have the memorandum and articles of association drafted and notarized by a public notary,
– deposit the minimum share capital depending on the type of company,
– register the business with the Trade Register by submitting the documents mentioned above,
– apply for a trade license or other special licenses issued by the authorities,
– register for VAT and obtain a tax identification number with the Maltese tax authorities,
– open a corporate bank account which will be used for the current financial operations of the company.
The cost of a business license in Malta is contingent upon the nature of the company you intend to establish. To illustrate, initiating a limited liability company incurs a fee of €360, whereas commencing as a sole trader requires a €100 fee. Detailed information on business licenses and associated charges can be accessed from our law firm in Malta.
When hiring employees, the company must register with the Employment Training Corporation. Our law firm in Malta can assist you with the business formation process. We can also help in obtaining EORI numbers in Malta.
The most employed types of companies in Malta
One of the most important aspects when setting up a business in Malta is to know what the suitable type of vehicle is. The limited liability company and the Maltese holding company are the most advantageous types of structures a foreign investor can open in the country because of the low maintenance costs and the effective corporate tax system which reduces the tax burden on companies significantly. Malta also has an extended network of double taxation treaties which can sometimes result in a zero percent tax rate in certain cases.
The other types of companies which can be established in Malta are the sole proprietorship and the partnership which can be general or limited.
Hiring employees in Malta
One of the important procedures related to opening a business in Malta is hiring employees. This procedure must respect the provisions of the Employment Law and all relations between employers and workers must be secured through various types of labor contracts. Both local and foreign workers who have a good command of the English language can be found in Malta. It is also possible to hire foreign workers, provided that the company applies for work permits for non-EU citizens.
FAQ on opening a business in Malta in 2024
Foreign investors interested in opening businesses in Malta can find below a few questions and their answers:
How long does it take to start a business in Malta?
It takes about 2 weeks to register a company in Malta.
Do I need to be present in Malta to register the business?
The future owner’s presence is not a requirement if they have a local representative who can handle the registration procedure. Our attorneys in Malta can represent clients based on a power of attorney.
Is it necessary to deposit a share of capital to open a business in Malta?
Not all types of business forms require a minimum amount of money imposed by the law, however, the limited liability company which is the most popular does. Investors will need approximately 1,200 euros to register such a company.
Does the company need to have a local address in Malta?
Yes, this is one of the requirements imposed by the law.
Do I have any other alternatives if I don’t want to wait for a new business to be registered?
Yes, there is also the option of buying shelf or ready-made companies in Malta. These will usually take the form of limited liability companies.
What are the main costs associated with opening a Maltese company?
Most foreign investors interested in doing business in Malta are attracted by it because of the low taxes imposed by the authorities, however, Malta is also appealing because of the reduced business start-up costs.
The main costs an entrepreneur must consider when opening a company in Malta are:
- the business name reservation fee (the procedure can be completed online with the Trade Register);
- the preparation of the documents for company registration which implies their drafting and notarization;
- the share capital which depends on the type of structure selected (limited liability companies have fixed amounts of money to consider as share capital);
- the registration of the company with the Trade Register which is subject to a specific fee;
- the opening of a corporate bank account can also be subject to fees, depending on the chosen bank;
- the licensing procedure can also imply certain fees, depending on the authorities issuing them;
- the registration for data protection which is a new procedure linked to the business registration procedure.
If you decide to open a business here and need assistance, our law firm in Malta can guide you.
Costs related to the preparation of the Maltese business’ statutory documents
One of the most important business start-up costs in Malta is related to the preparation of the company’s statutory documents. These are the Memorandum and Articles of Association and imply having them drafted and notarized by a public notary in Malta. Foreign shareholders in Maltese companies must also consider having their identification papers translated and notarized. Foreign companies opening branches or subsidiaries in Malta must have their statutory documents translated and notarized.
Here is what you need to know about the business start-up costs of a Maltese company when it comes to the preparation of the statutory documents:
– it takes approximately one day to have the documents drafted and notarized in Malta;
– the documents can also be drafted by a lawyer or law firm in Malta (our attorneys can help in this sense);
– the cost of the notarization and drafting of the Memorandum and Articles of Association depends on the number of pages and ranges between 500 and 1,000 euros;
– to lower the costs of the preparation of these documents, a power of attorney can be granted to a representative and thus avoid travel expenses;
– foreign citizens must also include the translation fees for the foreign documents to be filed with the Trade Register in Malta.
You can rely on our attorneys in Malta for representation during the whole business registration procedure.
The company registration fee in 2024
The business start-up costs in Malta are also influenced by the registration fee imposed by the Trade Register. This fee usually depends on the share capital of the company. Where the share capital is below 100,000 euros, the fee to consider is quite small. Tax registration, obtaining the VAT number, registration for employment purposes and social security contributions are free of charge.
We mentioned above the registration for data protection which came into effect not long ago as a consequence of the implementation of the GDPR. The fee for registering for data protection is approximately 24 euros.
Special licenses and permits
When opening a company in Malta, you might need additional special licenses and permits depending on the nature of your business activities. Here are some industries that might require additional licensing and permits, as explained by our attorneys in Malta:
- Education – Both public and private educational institutions are regulated by the Ministry of Education;
- Practices, operations, and activities in the energy and water sectors in Malta are subject to regulation. This includes: utilities, service providers, retailers, and operators in these sectors;
- Employment agencies- If you open a business in Malta in this sector, you need to obtain a license issued by the Director of Industrial and Employment Relations;
- Specific trading activities will require trading licenses as approved by the Commerce Department;
- The health, welfare & beauty sector is regulated by the Healthcare Standards Directorate;
- Skilled professionals such as lawyers, accountants, and engineers require warrants or licenses to provide their services in Malta.
- Real estate and property development activities, including buying, selling, leasing;
- Operators in the transport industry require licenses to comply with regulations and safety standards.
Our Maltese lawyers can provide you with details regarding the additional permits and licenses.
Taxation for Maltese companies
After you open a company in Malta, you must ensure you fulfill your tax obligations per Maltese tax laws to avoid penalties and legal issues.
A company established in Malta is regarded as having its domicile and residence in Malta. As a result, it is subject to taxation in Malta on its worldwide income.
Companies in Malta are subject to a flat corporate income tax rate of 35%.
As mentioned above, if you open a company in Malta that engages in taxable supplies of goods or services, you are generally required to register for VAT and comply with VAT regulations. Malta has introduced a new reduced VAT rate of 12% to complement its existing 7% and 5% reduced rates, effective from January 1st, 2024, as officially announced. Alongside this change, there are also zero-rated supplies. While the standard VAT rate of 18% remains unchanged, the 12% rate is applicable to various services including the hiring of pleasure boats, certain health care services, securities custody services, and specific credit and credit guarantee management services. Similar to other EU member states, Malta now has the capability to implement a broader spectrum of reduced VAT rates, due to the adoption of reduced VAT rate freedoms in 2022. Our lawyers can offer you comprehensive information about VAT registration for your businesses in Malta.
You should also know that if your company engages in import, you will have to pay customs duties.
There are also excise duties, imposed on specific products, including energy, alcoholic beverages, tobacco products, and mobile telephony services.
If you open a company in Malta and hire employees, you must also pay social security contributions for your employees. These contributions are based on set rates and maximum weekly amounts determined by your employees’ age.
If you need assistance regarding taxation, our lawyers in Malta can provide more guidance.
Why open a business in Malta?
Opening a business in Malta offers several advantages. This includes its strategic location in the EU, a competitive tax regime, a skilled workforce, and a stable economy.
This business-friendly environment makes it an ideal choice for entrepreneurs and investors looking to establish and grow their businesses in Europe. This is demonstrated by the following statistics provided by the National Statistics Office, regarding the number of registered Maltese businesses in 2022:
- There was a 1.2% increase in the number of registered business units compared to 2021;
- Small businesses, with approximately 10-49 employees, experienced significant growth in 2022, with a 6.9% increase;
- Sole owners or partnerships accounted for 56.3% of registered units;
- Limited liability companies or public limited companies made up 39.8% of the total businesses.