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THE MAIN CHARACTERISTICS OF MALTA COMPANY

GENERAL
Type of entity
Private Limited Liability Company
Type of law
Civil
Political stability
Good
Our time to establish a new company
2-3 days
Corporate Taxation
35%, of which 31% are reimbursed to shareholders 6 months later or effective tax rate may be reduced to 0%-10%
Double taxation treaty access
Yes
SHARE CAPITAL OR EQUIVALENT
Standard currency
EUR
Permitted currencies
Any convertible currency
Minimum amount of capital to be free
20% at the constitution
Share Capital common
EUR 1165
DIRECTORS
Minimum number
One
Local required
Not
Publicly accessible records
Yes
Location of meetings
Anywhere
SHAREHOLDERS
Minimum number
Two
Publicly accessible records
Yes
Location of meetings
Anywhere
COMPANY SECRETARY
Required
Yes
Local or qualified
Yes
ACCOUNTS
Requirement to prepare
Yes
Audit requirements
Yes
Requirement to file accounts
Yes
Publicly accessible accounts
Yes
OTHER
Annual Return
Yes
Annual Return Fees
EUR 100

INTEREST OF THE JURISDICTION

Advantages of a company in Malta

  • Companies registered in Malta are considered resident in Malta, wherever ownership or management exists or business is carried out.
  • Anonymity (Nominee services offered ensures your personal anonymity).
  • No withholding taxes, stamp duties or exchange control restrictions apply on distribution to non-resident shareholders.
  • Dividends can be expatriated without any restrictions.
  • Limited liability with minimal paid up capital requirement (min. EUR 250).
  • Companies can be redomiciled to Malta.
  • Annual and general meetings of the Maltese Company may be held outside Malta.
  • Tax exemptions.
  • Full tax exemption on participating holdings.

Possible disadvantages of a company in Malta

  • 5% implied tax on profits from the trading activities (possibility of lowering it).
  • Relatively high corporate income tax rate, however, an effective system for paying back the tax paid.

PRESENTATION OF JURISDICTION

Malta is an island country in Southern Europe. It is located between the southern coast of Italy and North Africa. The total area is 316 km ², it includes the islands of Malta, Gozo, Comino and several small uninhabited islets. The population of Malta is about 430 thousand people.

It is a unique crossroads of the Mediterranean archipelago, where the intertwined different nations, cultures, religions, languages – it is the richness of the island, or simply an open air museum. Malta’s economy is based on tourism service and international trade industrial electronic equipment and appliances. And even though, Malta is a Civil Law Jurisdiction, all modern legislation including company tax and maritime laws are modelled on their UK counterpart, still Malta has its own features that set it apart from the UK for offshoring solutions.

Legislative power in Malta belongs to the Parliament, which is called the House of Representatives. The Chamber consists of 69 members who are elected for a period of 5 years by secret ballot.

The House of Representatives appoints the President, who is the head of state.

The executive power is exercised by the Prime Minister and the Cabinet of Ministers. The government forms the main directions of domestic and foreign policy and ensures their implementation.

Determining the impact on the political sphere and the state structure of Malta has membership in the EU. Malta became a full member of the EU in 2004.

The legal system of Malta is mixed. Significant influence on it had a period of British colonization, as well as French law. The main source of law is legislation and maritime trade practices. The judicial system consists of general courts and the Constitutional Court. The hierarchy of general courts is headed by the Civil Court of Appeal and the Commercial Court and the Criminal Court of Appeal. Minor cases are examined by magistrates’ courts, which consist of justices of the peace. All judges are appointed by the President for the submission of the Prime Minister.

Types of companies and incorporation procedure

The most common forms of business in Malta are partnerships, investment companies, public and private limited liability companies. The process of incorporation in Malta is governed by the Companies Act of 1995 and the corporate legislation of the EU. To create a company it is necessary to submit a memorandum and Articles of association to the Registrar (both English and Maltese). Also need to pay a fee.

01. Partnership

A partnership can be created by two or more partners. There are two types of partnerships. One of the types provides for a partnership in which the participants bear unlimited responsibility for the obligations of the partnership (Partnership En Nom Collectif). The second type of partnership is characterized by the fact that it consists of participants with unlimited liability and responsibility limited by their contribution to statutory capital (Partnership En Commandite).

02. Private Limited Liability Company

The most popular form of the company is a private limited liability company, furthermore private companies may be either exempt or non exempt. Management of the company is carried out by directors who can be appointed by shareholders. The scope of their duties, as a rule, is defined in the Articles of Association. Each company must have a secretary who is an official of the company and is responsible for compliance with the requirements of the law. The minimum authorized capital of a private company, as a rule, is 1164,69 EUR and is divided into shares.

Taxation

  • Malta’s tax legislation combined with flexible conditions for the provision of financial services, it contributes to the development of the country as an international financial and business center. One of the main advantages of Malta is that the tax system provides a complete exemption from corporate tax on any profit distributed in the form of dividends by the company. And although the corporate tax rate is quite high compared to offshore jurisdictions and is 35%, however, the company’s tax is available to shareholders as a loan at the time of their distribution. The tax refund system is extended to all income received from Malta and all shareholders, regardless of their residence.

  • Companies resident in Malta are subject to corporate income tax on their worldwide income. Residents are companies registered under Maltese law, or if the main office is in Malta. Non-residents are taxed only if they conduct business in the sphere of trade through a branch or representative office. No withholding tax is levied on dividends, interest, royalties paid to nonresidents.

  • Malta has concluded many treaties on avoidance of double taxation.

    Considering Malta’s membership in the EU, the VAT taxation rules apply here, similar to the EU rules. The standard VAT rate is 18%, reduced rates can be applied to certain groups of goods and services.

Bank system and economy overview

Malta economy can be characterized as modern and market, the population of this country has a high standards of living. Foreign trade and tourism are important directions of the economy. Malta has strong historical trade and economic ties with the countries of Western Europe and North Africa. The industry is represented by electronic, textile, food, chemical and pharmaceutical spheres. There is a very highly skilled workforce, which allows this small island nation to maintain the competitiveness and high quality of manufactured goods in Europe.

Since the entry of Malta into the EU, its financial and banking sector has increased significantly. The banking system is high developed, and it is headed by the Central Bank of Malta. It lends to commercial banks, oversees their activities and regulates the financial sphere of the country. Today, Malta is the largest financial center due to its high standards and good organization. A strong banking sector is the backbone of the country’s economy and attracts business and investment from around the world.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening