The Republic of Malta is a group of three settled islands called an archipelago. These islands are Malta, Gozo, and Comino. The Maltese islands are about 100 kilometers south of Italy, in the middle of the Mediterranean Sea. In the financial world, Malta is known for being the friendliest place for foreign investors to put their money.
If you have plans in forming a company in Malta, you must follow the country’s rules, regulations, and specific steps. Malta is a member of the European Union (EU), and its laws and regulations are the same as those of the EU.
Setting up a business in Malta can be a complicated process that involves many formal steps and paperwork. This article provides an overview of the legal requirements and steps for the formation of a Malta company.
9 Steps in Forming A Company in Malta Along with the Legal Requirements: Overview and Conditions
Business Type
The first thing to do to register a company in Malta is to decide what kind of company you want to make. Malta allows many types of companies, such as private limited liability companies, public limited liability companies, branches of foreign companies, and partnerships “en nom collectif” or “en commandite.”
Each type of business has its own legal requirements and effects, and the choice depends on the business’s situation and goals.
Selecting Limited Liability or Self-Employed Status
A limited liability company protects the owner because the business is kept separate from the owner. It’s also more serious and official, making you look better to potential clients who want to work with you.
But to get these perks, you must deal with more paperwork, like annual audits, and have at least two named shareholders on the registration. The self-employed way is easier because it has fewer steps and less paperwork.
Still, the owner doesn’t have the protection of limited liability from lawsuits and debts.
Company or Business Name
The next step is to come up with a unique name for the company. The Registrar of Companies in Malta must accept the name.
The name can differ from another company’s name in Malta, and it has to meet the standards of the Companies Act for terms. The name should also show what the business is about and be clear and friendly.
Deposit The Minimum Share Capital and Shareholders
A Maltese company’s formation is based on the share capital and owners of the company. A private limited liability company must have at least EUR 1,165 in share capital.
One or more people can own shares in a private company, but at least two must own shares in a public company. Shareholders can be individuals or legal entities, and their liability is limited to the amount they invested in the business.
The Memorandum and Articles of Association
You must write these two important papers for a limited liability company and register with the Registry of Companies in Malta. These papers can be hard to understand and could be used as a contract between shareholders, so it is best to talk to a lawyer or other expert.
The papers will list what the company’s directors can do and, if there are any limits, what they can’t do.
Register Your New Business
Only limited liability companies need to do this step, which includes sending documents to the Financial Services Authority.
First, a company registration in Malta has a form that must be filled out and sent to the government along with the share capital receipt from the bank, the Memorandum, and the Articles of Association. You must pay a fee to sign up, but the process is quick and only takes a few days.
Directors and Company Secretary
A Maltese company must have at least one director who is a natural person and can also be a partner. The director must live in Malta or send a representative who is allowed to do so.
The company must also choose a secretary, who can be a person or another business. The company secretary is responsible for keeping the company’s legal papers current and meeting all legal requirements.
License Registration for Your Business
The Commerce Department, which has all the needed information, is the best place to go with questions about licenses. For most businesses, all that is required to get a permit is to fill out a straightforward form with information about what the company does.
If you want to open a beauty shop or a restaurant, you’ll need more licenses than if you’re going to sell clothes. The cost of the licenses varies and depends, among other things, on what kind of business is being set up.
You will have to keep paying licensing fees annually, but for a small, simple business, it might only be €70 a year.
Taxation and VAT
When a business makes more than €35,000 in a year, it needs to charge VAT. This means that the company needs to be VAT listed.
There is no need to sign up for VAT if your business makes less than €7,000 a year. But if your sales are between €7,001 and €35,000, you don’t have to register for VAT.
To register a company in Malta, you have to pay taxes on all of their money, no matter where it comes from. Malta has a sound tax system, with a standard company tax rate of 35%, which can be lowered to 5% in some cases by getting tax refunds.
In these situations, you should find out more about the best choice for you and maybe even ask for help. The department in charge of VAT has a page with a lot of information to help you fully understand what it means.
Conclusion
In Malta, you must follow the law and do certain things to start a business. First, the Registrar of Companies in Malta must agree on the company name.
Next, a Memorandum and Articles of Association must be written and filed with the Registrar. These documents describe the company’s organization and goals.
The minimum share capital must also be put into a Maltese bank. The company must hire a secretary and sign up with the Malta Financial Services Authority (MFSA) if regulations say so.
Lastly, the company must get all the permits and licenses and follow tax and employment laws. Ultimately, forming a company in Malta means following the law, sending in paperwork, and registering a company in Malta with the proper officials. For exact compliance, you should talk to a professional.
FAQs
How do you start a business in Malta?
A: To start a company in Malta, you need to choose a name and gather the necessary paperwork.
Register the company with the Malta Business Registry, get a Tax Identification Number (TIN), open a bank account, get any licenses or permits you need, and make sure you meet all local tax and legal requirements.
What do the laws say about starting a business in Malta?
A: To start a business in Malta, register it with the Malta Business Registry, name at least one director and shareholder, give a registered office address, get a tax identification number (TIN), and follow local rules and laws.
What kinds of businesses can be set up in Malta?
A: In Malta, you can create different kinds of companies, such as private limited liability companies (Ltd), public limited liability companies (plc), partnerships, sole proprietorships, and branches of foreign companies.
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