Company Formation in Malta
Exemplary judicial and regulatory environment
Centre for logistics and transportation
Malta offshore company formation
Malta Private Limited Liability Company
– An advantageous geographic position that allows us easy access to both the European and North African markets
– A well-established economic climate that is well-known for its increasing strength in the financial services industry.
– A robust legal structure that complies with EU standards
– A network of favourable double taxation agreements with more than 70 nations worldwide
Company Registration in Malta is perfect for:
Shipping and yachting
International Investment
E-Commerce
International Trading
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Four Easy Steps To Register A Company In Malta
1. Preparation
Ask for a free corporate name search We evaluate the name’s suitability and, if necessary, offer suggestions.
2. Filing
- Fill in the company name, directors, and shareholder(s) by logging in or registering.
- Add the shipping address, the business address, and any additional instructions.
3. Payment
Choose your payment method
4. Delivery
- All relevant documents, including as the Certificate of Incorporation, Business Registration, Memorandum and Articles of Association, etc., will be sent to you electronically. After that, a jurisdiction’s new corporation is prepared to conduct business!
- You can use the company package of paperwork to open a corporate bank account, or we can assist you using our extensive banking support service knowledge.
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Documents Required to Register a Company in Malta
- A utility bill with the exact address of the household and a certified true copy of the passport that is no more than three months old.
- A bank reference, which should attest to the applicant’s moral reputation and dependability.
- A letter of recommendation from a bank or other professional reference.
FAQs
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EU Compliant Tax Regime
By allowing residents and non-residents alike to file tax refund claims, Malta implemented the final changes to its business tax system in 2007 to eliminate the last vestiges of positive tax discrimination.
At this time, additional characteristics that make Malta a more desirable location for tax planning were also adopted, such as the participation exemption.
Malta has amended its tax rules over the years and will continue to do so in order to bring them into compliance with various OECD and EU directives, providing a desirable, aggressive, and fully compliant tax system.
Capital Requirements
20% of the issued share capital, or €1,164.69, must be paid up at incorporation for a private business. The denominator of this capital may be any foreign currency that is convertible. A factor that removes foreign exchange concerns is the fact that the chosen currency will also serve as the company’s reporting currency, the currency in which tax is paid, and the currency in which any due tax return is received. Maltese company law also permits the formation of businesses with changeable share capitals.
Shareholders
Despite the fact that businesses are typically formed with multiple shareholders, a single member corporation can also be formed. Shares may be held by a variety of parties, including people, corporations, trusts, and foundations. An alternative is for a trust corporation to hold the shares in the beneficiaries’ best interests.
Objectives
A private limited corporation may have any number of objectives, but these objectives must be listed in the memorandum of association. A primary objective must also be specified for a Private Exempt Limited Company.
Directors and Secretary in Malta company
The qualifications for directors and the company secretary vary between private and public corporations. A public corporation must have a minimum of two directors, whereas private companies are only required to have one. A body corporate may also function as a director. A corporate secretary is required for any business. In Malta, a company secretary must be an individual, albeit a director may also serve in that capacity. A lone director may also serve as the company secretary in the case of a private exempt business based in Malta.
It is essential to appoint Malta resident directors even though there are no legal requirements regarding their residency or that of the company secretary because doing so ensures that the company is efficiently run in Malta. For client companies managed by us, our professionals are qualified to serve as officers or make recommendations for officers.
Confidentiality
Professional practitioners are required to uphold the strict standards of confidentiality outlined in the Professional Secrecy Act. These professionals include, among others, lawyers, notaries, accountants, auditors, trustees, and executives of nominee companies. Professionals who divulge trade secrets may be subject to a maximum punishment of € 46,587.47 and/or a 2-year prison sentence, according to Section 257 of the Maltese Criminal Code.
Meetings
Malta law mandates that firms hold at least one annual general meeting and that there cannot be a delay of more than 15 months between one annual general meeting and the next. A firm is not required to hold another general meeting in the year of registration or the year after convening its first annual general meeting.
Formation Method
The memorandum and articles of organisation must be submitted to the Registrar of Companies together with proof that the company’s paid-up share capital has been placed in a bank account in order to register a business. A registration certificate will then be given out.
Incorporating Time-Scale
When all necessary information, documents for conducting due diligence, and payment have been sent, the incorporation process for Malta firms can be completed in 3 to 5 days. A corporation can be registered in about 24 hours for an extra cost.
Accounting Year & Accounting
International Financial Reporting Standards (IFRSs) must be followed while creating yearly audited financial accounts. These documents must be submitted to the Registry of Companies for public inspection. Alternately, Maltese law has the option of selecting a financial year end.
Double taxation agreements in Malta: Efficient system
Malta-based businesses could profit from:
- Unconditional relief, including a credit mechanism for underlying tax relief
- Network for Double Tax Treaties
- System of FRFTC (Flat Rate Foreign Tax Credits) Unilateral Relief
Unilateral Relief
The unilateral relief mechanism turns Malta into a virtual double tax treaty with a wide number of other nations, allowing for a tax credit in situations where foreign tax has been paid, whether or not Malta has a double tax treaty with that jurisdiction. To be eligible for unilateral relief, a taxpayer must demonstrate to the Commissioner’s satisfaction that:
- that the income arose overseas;
- that the income suffered foreign tax; and
- the amount of foreign tax suffered.
The loss of the foreign tax will be made up for by a credit against the tax due in Malta on the gross chargeable income. The credit cannot be greater than Malta’s overall tax obligation on the foreign-sourced income.
Tax Treaty Network, based in the OECD
Malta has ratified more than 70 double taxation treaties to far. The majority of agreements, including those made with other EU members, are based on the OECD model.
Directive on EU Parent and Subsidiaries
The EU Parent-Subsidiary Directive, which prohibits the cross-border transfer of dividends from subsidiary to parent firms within the EU, has been accepted by Malta as an EU member state.
Directive on Interest and Royalties
According to the Interest and Royalties Directive, interest and royalties paid to a firm in a member state are free from taxation in the member state where they were earned.
Taking Part Exemption
Malta holding companies are allowed to be set up such that they can hold stock in other businesses, and these participations in other businesses count as participating holdings. Holding The following companies may qualify for this participating exemption based on participating holding rules for dividends from such holdings and gains realised on the sale of such assets if they satisfy either of the following requirements:
- a company holds directly a minimum of 5% of the equity shares of a company whose capital is completely or partly divided into shares, which holding confers an entitlement to at least 5% of any two of the following (“Equity holding rights”)
- right to vote;
- profits available for distribution; and
- assets available for distribution on a winding up; or
- a company is an equity shareholder in a company, therefore it is entitled to call for and acquire the entire balance of the equity shares not held by that equity shareholder company to the extent permitted by the law of the country in which the equity shares are held; or
- a company is an equity shareholder in a company, therefore it is entitled to first refusal in the event of the proposed disposal, redemption, or cancellation of all the equity shares of that company not held by that equity shareholder company; or
- a company is an equity shareholder in a company and is entitled to either sit on the Board or appoint a person to sit on the Board of that company as a director; or
- a company is an equity shareholder which holds an investment representing a minimum total value of €1,164,000 or its equivalent in a foreign currency, as on the date or dates on which it was acquired, in a company and that holding in a company must be held for an interrupted period of a minimum of 183 days; or
- a company is an equity shareholder in a company and where the holding of such shares is for the furtherance of its own business and the holding is not held as trading stock for the purpose of trade.
Equity shares deal with the holding of the share capital in a company which is not a property company and which entitles the shareholder to at least any two of the following three years: the right to vote, the right to profits available for distribution to shareholders and the right to assets available for distribution on a winding up of the company.
Participation exemption can also apply to holdings in other entities which could be a Maltese limited partnership, a non resident body of persons with similar characteristics, and even a collective investment vehicle where the liability of the investors is limited, as long as a holding satisfies the criteria for the exemption outlined below:
- it is resident or incorporated in the EU;
- it is subject to any foreign tax at a rate of at least 15%; or
- less than 50% of its income is derived from passive interest or royalties.
The above are the safe harbours set. In cases where the company in which the participating holding is held does not fall within one of the aforementioned safe harbours, the income which is derived therefore may nevertheless be exempt from tax in Malta if both the conditions below are satisfied:
- the equity shares held in the non-resident company must not represent a portfolio investment; and
- the non-resident company or its passive interest or royalties have been subject to tax at a rate which is not less than 5%
Flat Rate Foreign Tax Credit
Companies which are receiving overseas income may benefit from the FRTC, provided that they provide an auditor’s certificate stating that the income arose overseas. The FRFTC mechanism assumes a foreign tax suffered of 25%. A 35% tax is imposed on the company’s net income grossed up by 25% FRFTC, with the 25% credit being applied against the Malta tax due.
To ensure clarity regarding the application of domestic tax law to a particular transaction, it is permissible to request a formal ruling in certain circumstances that are set down by law.
These decisions are often made within 30 days of an application and are legally binding for the Inland Revenue for five years as well as two years after a change in the law. A letter of guidance may be provided through an unofficial system of Revenue feedback.
Malta offers various forms of partnerships and limited liability companies:
- Public (plc);
- Private (Ltd). Partnerships
- en commandite the capital of which is divided into shares
- en commandite the capital of which is not divided into shares;
- en nom collectif
According to Maltese law, refunds must be paid within 14 days of the day they become due, which occurs when the firm and shareholders have submitted a complete and accurate tax return, the tax is entirely paid, and a complete and accurate refund claim has been completed.
Refunds of taxes paid on income earned directly or indirectly from immovable property are never eligible for claim.
A full refund
Shareholders may request a complete refund of the tax paid by the company, resulting in an effective combined tax rate of zero, with regard to:
- Gains or income are earned from an investment that meets the criteria for a Participating Holding.
- In the case of dividend income, if such a Participating Holding complies with the anti-abuse rules or comes under one of the safe harbours.
5/7ths of the refund
In two situations, a 5/7 return is granted:
- Whether the income is passive interest or royalties;
- In situations where the income is derived from a participating holding and does not meet the safe harbours or anti-abuse requirements.
2/3 of the refund
A shareholder’s double taxation relief claim is only eligible for a 2/3 refund of the Malta tax paid on any foreign income received by a Malta firm.
The 6/7ths refund
If shareholders get dividends from sources other than those above stated, they are then eligible to request a return of 6/7ths of the Malta tax that the firm has already paid. Shareholders will profit from a Malta tax rate that is effective at 5% as a result.
No other taxes from the Malta company
- There are no withholding taxes on the distribution of dividends to shareholders;
- No taxes or restrictions on the distribution of the dividends from the Malta company;
- Tax is paid and refund is received in same currency of company’s share capital.
- No withholding taxes on interest and royalties to non-residents;
- No capital duties;
- No wealth taxes;
Malta has implemented all relevant EU directives pertaining to company taxation as a member of the EU, notably the Interest and Royalties Directive and the EU Parent-Subsidiary Directive.
This completely complies with EU legislation and further harmonises Maltese law with the laws of all other member states, making Malta’s corporate legal framework.