In order to open a business office in Malta, you need to acquire an operating license that is often issued by the relevant government department. There is normally a fee for the license and it depends on the nature of the business you wish to start and where you want it located. To develop a business premise, you also need a license, which is normally issued by the Malta Planning Authority.
Any company issuing financial services requires a license from the Authority of Financial Services in Malta. Additionally, any business is mandated to get registered with the Inland Revenue and VAT Departments. The regulation of company registrations in Malta is carried out by the Malta Financial Services Authority. This state is considered tax-efficient when it comes to trading and holding companies. Any person wishing to form a company in Malta doesn’t have to worry too much about the expenses involved as they are relatively low. This means that Malta is a cost-effective territory for small, medium-sized businesses and large companies.
There are two types of companies that are normally allowed to set up operations in Malta. They are International Trading Companies (ITC) and International Holding Companies (IHC). Both of them are designed to ensure they take advantage of tax treaties that Malta has signed. The latter deals with activities of foreign shareholders and any other that generate passive income. Any income that is generated by such entities is subjected to an advantageous tax regime.
However, an ITC is considered a normal Maltese company. The big difference between the two is that an ITC’s, trading undertakings take place from and not in Malta. An ITC is not allowed to have foreign investments or equities.
If you wish to start a business as shareholders, you will need to be two or more. The shareholder information will be made available on public file. These shareholders can be individuals or corporations. In case one of the parties wants to remain unidentified, you can use nominee shareholders.
To start a business, you will only need a single director who can be an individual or a corporation. The director’s details also appear on a Maltese public file. To benefit from tax treaty, your company will be required to demonstrate that it is tax resident in the country. This means that the majority of the company’s board of directors needs to reside in Malta.
Every company in this state needs to have a registered office in the country and appoint a Maltese nominee corporation that has been registered as their secretary or director. Do not expect to have tax treaty relief if your company does not have a majority of its directors residing in Malta.
How to Register Companies
The most common type of business in Malta is a limited liability company. To come up with a valid company that operates in accordance with the Companies Act of Malta, you will need two people to enter into a memorandum of association. Also, you will require a certificate of registration from the Registrar of Companies to confirm your association.
The next step is reserving a unique name for the company. You can do this personally at Business First or online through the Registry of Companies.
Make a Deposit of the Minimum Share Capital
This minimum deposit will depend on the type of company you wish to start, which will be determined in the Memorandum and Articles of Association. A Maltese or international bank then proceeds to open an account for the company where the minimum share capital is to be deposited. However, the following documents need to be approved:
• A Know your Client form that is fully filled
• A request for the account opening, including its type, preferred tax payment mode and currency
• A copy of your Memorandum and Articles of Associations
• A filled form that has been signed by the directors, appointing the bankers, normally issued by the bank
• The confirmation of the directors’ permanent address via an identification statement that the Maltese Embassy has confirmed
Get Your Business Established at the Trade Register and Get a Tax Identification Number (TIN)
Once your company name has been registered and you have a signed memorandum and articles association and confirmed your deposit, the registration process will be deemed complete. All you need is to bring the documents to the Registry of Companies. As soon as the registration process is complete, you will be given a registration certificate. For you to carry out any business in Malta, you will need a TIN. This is normally registered with the Inland Revenue Department using your registration certificate.
Apply for a Trade Licence
Normally, there are two types of business licences, which depend on the type of activity your business is going to be undertaking. If you want to start a food and beverage company, you will require a No Objection Declaration. This is normally issued by the Environmental Health Directorate. Any other company can operate with a trading licence. To get the latter, simply go via the Business First or the Trade Licensing Unit. You will need the following documents:
• Copy of ID card or passport
• Notification form that allows you to operate a new commercial activity
• A shareholders’ declaration
• Development Class Number
The procedure normally takes 10 days.
Register for VAT
In Malta, VAT should be applied for to all imported goods. Your company has to be registered for VAT if its turnover goes beyond 35,000€ for goods and 24,000 € for services. The VAT registration can be carried out online or personally at the Business First offices.
Who is Allowed to Incorporate?
The subscribers may be individuals or corporations. A trustee, who is an authorized person as per the Maltese law, is also allowed to hold a company’s shares.
Incorporation Required Time
The time to incorporate a firm is dependent on the type of company chosen for the activity whether you have all the documents and information required. All the required documents need to be in possession of the Registrar of Companies. This process takes 2-3 days to be completed.
Any Maltese registered company needs an office in the same country. You can have this handled by a law firm or any other corporate service provider. In case of any changes to the registered office, the company should inform the Registrar of Companies.
A private company can be described as one that:
• Has a maximum of 50 shareholders
• Has restricted the transfer of its shares
• Forbids any public invitation to subscribe for shares
Any private company is required to have a minimum of €1,165 allowed share capital. This share capital should be subscribed by not less than two people. The authorized share capital is equivalent to the minimum set by law and should be subscribed in your memorandum. In case it exceeds the minimum, it that fact has to be stated in the memorandum clearly.
Private Exempt Companies
There are certain conditions that might make a private corporation qualify as an exempt company, which helps it gain some advantages. The conditions are included in the memorandum or articles of association and include:
1. Having not more than 50 people who hold the debentures of the company
2. Having no corporate body as the holder or having interest in the company’s shares
A private company is allowed to have a maximum number of 50 shareholders. Its minimum number is two shareholders although the Companies Act also allows registration of a one-member corporation. The latter is also referred to as a private limited liability company and qualifies as an exempt corporation. A one-member company’s Memorandum of Association is supposed to show the main trading activity that the corporation is planning to carry out.
Company Secretary and Directors
Every private company is supposed to have a minimum of one director and secretary. It is not allowed for a company to have its only director as the corporation secretary unless it is considered a private exempt business. Also, a sole director who is also a secretary is not allowed to become the only director of the same company.
It is the job of the company’s director to take the necessary steps to ensure that the corporation’s secretary is a person who has adequate knowledge of the functions of the said position possesses the relevant experience too. There is no legal requirement for the company secretary to resides in Malta.
Employing Your Staff
Before you hire workers, the employer is supposed to ensure that the company is compliant with the Maltese labour regulations. The entrepreneur needs to register and declare to the ETC or employment training corporation. They will give the required training for the necessary skills, which range from basic to technical courses and all the Maltese regulations.
When compared to other European nations, opening an office Malta is very simple as long as you follow the right procedure.