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Malta Company Formation Guide

Updated:2018-7-30 15:56:06    Source:www.tannet-group.comViews:169

Malta company formation, also known as Malta business set up, is an attractive investment choice. Malta has been described as one of the best places in the world to live, and an ideal choice for investment. According to a survey carried out in 2016, Malta ranked in second place as the best country for expats to live in, based on its pleasant climate, geographical position, low crime rate, reliable banking system, and, last but not least, its tax planning incentives and opportunities.

Tannet’s associates in Malta can provide you with information and guidance when deciding on a business structure in Malta. We can handle the registration procedure and all the aspects related to the process. Below is a guide to incorporate a company in Malta.

I. Why Set Up a Business in Malta?
1. History: Malta is proud of its ancient temples, which date back earlier in human history than any other structure in the world.
2. Currency: Malta is a full member of the European Union (EU), with the Euro as its official currency.
3. Climate: Malta’s bathing water is among the EU’s best, which is an additional bonus to the Island’s 300 days of sunshine.
4. Infrastructure: Malta is known as a ‘smart island’ because of its excellent information technology(IT) infrastructure.
5. Labour: When it comes to recruitment and human resources, Malta guarantees value for money, as wages are highly competitive not withstanding the remarkable quality of Maltese workers.
6. Accessibility:There are directs flights to/from all major cities in Europe and North Africa.

II. Types of Business Structure
While business activities could be carried out on a personal basis as self-employment, for additional protection (in some cases) and formality one could consider the following types of structure.

1. Limited liability company
Any person, resident or not, may set up a private limited liability company (LLC) in Malta with a minimum paid-up share capital of 233. By default, any LLC incorporated in Malta obtains Maltese fiscal residence and domicile, and is thus taxable on worldwide income.

2. Branches
Presence through branches in Malta must be registered as overseas companies (OC) with the Registry of Companies. A branch is merely the extension of the actual foreign company and would have no separate legal entity.

3. Partnerships
Partnerships in Malta could be official setup under any of two forms:
(1) Partnership en nom ctif in which all partners would have unlimited, joint and several liability which could go beyond the initial capital contribution invested therein.
(2) Partnership en commandite in which at least one of the partners would have unlimited (general) liability. The capital of such partnerships may be divided into shares.

4. Foundation
A foundation in Malta can be established for a private interest or for a public purpose. Private interest foundations act in a similar way to a trust, and also act as a wealth management tool. Public purpose foundations, however, serve as charitable institutions or as bodies intended to promote a specific purpose.

III. Basic Establishment Procedure
Here we take limited liability company as an example. Once the company and all involved parties have been duly vetted for due diligence purposes, a corporate service provider (CSP) would submit on behalf of the prospective company the memorandum and articles of association, mainly highlighting the name (a name reservation facility in advance is available), registered address,main objectives (usually including a number of secondary objectives that entitle the company to perform its legal business, aside from the specified principal objectives), share capital composition and structure,board composition and the company’s expected fixed duration,if any.

LLCs registered in Malta must prepare and submit an annual return on the date of the company’s annual anniversary together with settlement of the annual fee, which ranges from 100 to 1,400. In addition, the company’s annual audited accounts would must be submitted at the Registry of Companies within 10 months after financial year-end (reduced to 7 months in case of public companies).

IV. Taxation System of Malta
The Maltese general tax system follows a three-based principle under which Malta taxes:
(1) Income and capital gains sourced within Maltese territory;
(2) Foreign income and capital gains derived by persons who are both ordinary resident and domiciled in Malta;
(3) Foreign income remitted into Malta by persons who are either ordinary resident but not domiciled in Malta, or are domiciled but not ordinary resident in Malta.

Companies incorporated in Malta are taxable on their worldwide income and capital gains at an initial corporate tax rate of 35% on taxable profit. Taxable profit is arrived at after allowing for a deduction of all expenses that are wholly and exclusively incurred in the production of income. Malta exerts no thin capitalization rules, and as such there are no limitations on the amount of interest expenses that can be deducted.

Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512, or emailing to You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

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