Starting a business in Malta
With its year-round sunshine and flexible workers, this small island is a great place to register a company. Working with customers or suppliers in the rest of the world is quite straightforward as there are transportation links with mainland Europe and North Africa. Registering and starting a company is easier here than it is in many other countries, unless your business is in the Medical or financial field which has more licences and restrictions to consider.
Opening a company in Malta?
Our tax advisors and company formation experts can assist you with company incorporation and tax planning.
Follow these ten steps on how to register a business:
1. Choosing between Limited Liability or Self-Employed status
Having a limited liability company protects the owner by separating the business from the individual person. It also has a more formal and official status which looks more impressive to clients who are thinking of working with you. These benefits come with some additional bureaucracy however, such as yearly audits and at least two named shareholders who appear on the registration. For a simpler approach, the self-employed route needs fewer steps and less paperwork, but the owner is at personal risk from law suits and debts without the protection of limited liability. Starting the new business off in the best way for your circumstances needs careful consideration, so do some research and take time to think it all through.
2. The Memorandum and Articles of Association
For a limited liability company, you will need to draft these two important documents and register them with the Registry of Companies. These documents can be complicated and could act as the contract between shareholders so it is recommended that a lawyer or specialist is consulted. The documents will detail what directors of the company can do and what their limitations are, if any. For self-employed status this step is not necessary.
3. Deposit the Minimum Share Capital
Any new limited liability company will need a sum of money as capital to pay for a number of things before any income starts to roll in. The amount of money invested as capital should make up part of the Memorandum and Articles of Association. The minimum share capital must be more than €1,200, but only 20% of the agreed sum needs to be deposited at a bank at the beginning. When this money is available to be paid into a bank, let the banker know what it is for and it will be held separately until the new company is fully registered. The bank will issue a receipt which is an important document and must be kept safe for use in the next step.
4. Register the new business
This step is only needed for limited liability companies and involves sending documents to the Financial Services Authority. Firstly, a company registration form needs to be completed and sent in to the authority along with the share capital receipt from the bank, the Memorandum and the Articles of Association. There is a registration fee to pay but the process is quick and only takes a couple of days. For more information about the fees involved and how the process takes place, the Financial Services Authority are very helpful and can be approached directly.
5. Getting a licence for your business
The Commerce Department has all the information needed about licensing and it is the best place to go to with any queries. For most companies all that is needed to get a licence is the completion of a simple form that details the businesses activity. If you are setting up as a beautician or food outlet, there are more licences to apply for governing those business particular areas. The cost of the licences vary and is related to the type of business being set up amongst other things. You will have to continue to pay licensing fees annually, but for a small, simple company it could be as little as €70 a year.
6. Obtain a Tax Identification Number
This is a fairly straightforward step. You will need to complete an online form, for which there is no fee to pay. Once you have the TIN you will need to submit yearly tax returns whether you are a limited liability company or self employed. When it comes to filing tax returns, it is strongly suggested that you seek professional assistance to prevent any errors, especially if accounting is not something you are familiar with.
7. Registering for VAT
VAT needs to be charged when a business turnover exceeds €35,000 in a year, which means the company must be VAT registered. A tax year runs from January to December. The registration is free, and it is a quick process. For businesses who earn under €7,000 each year, there is no need to register for VAT. However, when the turnover is between €7,001 and €35,000, registration for VAT purposes is optional. In these instances it is worth researching in more detail about the best option for you, and maybe seeking some advice. The VAT department has a website where a lot of information is available to help you fully understand the implications.
8. Registering for a PE number
A PE Number is only required for Limited Liability companies as you will be one of the employees by default. Acquiring a PE number is another quick process that does not incur a fee, you simply complete the form online that can be found at the Inland Revenue Department’s website. It typically takes around three days to gain the PE number.
9. Reporting to the Employment and Training Centre
The ETC (now referred to as Jobs Plus) collects all the employment registration details for the island and all businesses must register with them. When a new business is started a new form must be completed for every employee taken on. Upon termination of an employee, further forms must be filled and filed. These processes are easy to carry out and there are no costs involved.
10. Data Protection requirements
If your business is going to collect personal and sensitive data from clients, you must register a company for data protection. To keep your customers safe, there are steps which need to be put in place to protect the information you collect and store. Guarding against software breaches and loss or theft of data should be taken seriously, and in line with European standards. The fines for loss of data can be huge, and the integrity of the company can be irreparably ruined. Additionally, since Malta is part of the EU, you must comply with the GDPR requirements when collecting data. More information can be found on the Governments Data Protection Website.
Companies Providing Corporate Services
There are many companies in Malta providing corporate services. They can help you with all the steps required above to register a company. We have an extensive list of top companies that can assist you in relocating to Malta and provide you with individual services or complete business solutions. Find more information and contact us by clicking here.