Malta – Company Formation Services 2018-12-03T10:41:43+00:00

Malta
Company Formation Services

Key Corporate Features

General

Type of Company

Private Limited Liability Company

Political Stability Good
Common or Civil Law Civil (strong Common Law influence)
Disclosure of Beneficial Owner No (optional)
Migration of Domicile Permitted Yes
Corporate Taxation Yes but credits / refunds should apply to shareholder(s).

Language of Name

Latin Alphabet

Corporate Requirements

Minimum Number of Shareholders / Members

Two / One

Minimum Number of Directors / Managers One
Corporate Directors / Managers Permitted Yes
Company Secretary Required Yes

Usual Authorised Capital

€1,165

Local Requirements

Registered Office/Agent

Yes

Company Secretary No
Local Directors No
Local Meetings No
Register of Directors Yes

Register of Members

Yes

Annual Requirements

Annual Return

Yes

Submit Accounts

Yes (Audited)

Recurring Government Costs

Minimum Annual Tax / Licence Fee

N/A

Annual Return Filing Fee

€100 (min)

Introduction

The Republic of Malta is an archipelago consisting of three inhabited islands Malta, Gozo and Comino. The Maltese islands are situated in the middle of the Mediterranean Sea about 100 km South of Italy.

Population

The population of the Islands is approximately 400,000. Maltese society is homogenous having its own identity and language. The natural population growth has in recent years been supplemented by a net inflow of Maltese who had previously emigrated to America, Canada, Australia and the United Kingdom.

Political Structure

Republic of Malta is a Parliamentary republic. Its legislature is an unicameral House of Representatives of 69 members directly elected on a single transferable vote system of proportional representation. The constitution provides for the allocation of extra seats should one party receive a majority of the popular vote, but a minority of seats in the House of Representatives.

Last general election on March 9th 2013; next election due in 2018

Head of state is the President, elected by the House of Representatives for a five-year term; currently Marie Louise Coleiro Preca, who was elected by parliament in April 2014

The Executive Cabinet, headed by the prime minister, responsible to parliament. There is currently a majority Labour Party government

Main political parties – Labour Party (PL); Nationalist Party (PN); Alternattiva Demokratika (AD)

Infrastructure and Economy

Malta has achieved exceptional economic development during the last few years. The country managed to maintain an average GDP growth rate of 4% between 2005 and 2008, mainly due to large investments in infrastructure projects. Thanks to its solid financial foundation, with little inclination for toxic loans, the country came out of the crisis relatively well. In 2015, growth amounted to 4.3% of GDP, supported by dynamic domestic demand, large infrastructure projects and the stability of the banking sector. It should remain strong in 2016.

The Maltese economy is one of the most dynamic economies in the Eurozone. Since the fiscal responsibility law passed in 2014, the public finances have been significantly consolidated. The deficit is expected to fall below 2% of GDP, allowing the EU to close the excessive deficit proceedings initiated in 2013. During the Malta Summit in November 2015, the EU decided to release EUR 1.8 billion to curb the exodus of African migrants to Europe, where Malta represents an important access gate. The priorities of the 2016 budget include the following: further strengthening public finances, reducing the tax burden in order to improve the standard of living, attracting foreign investment, strengthening social services including health care, safeguarding the environment, supporting regional development (Gozo and the south of Malta), continuing investment in infrastructure and improving government efficiency through the elimination of bureaucracy.

Malta has one of the lowest unemployment rates in Europe (5.7% in 2015).

The agricultural sector represents less than 2% of the Maltese GDP and employs around 1% of the workforce.

The economy is primarily based on tourism (which accounts for nearly 30% of the country’s GDP, with more than 1 million tourists visiting Malta annually) and on manufacturing (electronics and pharmaceutical products), which accounts for over 75% of the total exports.

Services represent 65% of the GDP and employ over three-quarters of the workforce. The financial sector manages assets equivalent to 643% of GDP.

Malta does not have any mineral or energy reserves and is thus completely dependent on imports in this field.

Language

The Republic’s official languages are Maltese and English; all Maltese citizens speak the latter fluently. Business correspondence is mainly in English. Most of the population is also fluent in Italian.

Currency

Euro from 1 st January 2008.

Exchange Control

Exchange controls have been abolished since 19 April 2004, save for certain restrictions for transactions involving non-residents from non-EU/non-EEA countries.

Type of Law

Malta is a Civil Law jurisdiction, however, all modern legislation including company, tax and maritime laws are modelled on their UK counterparts.

Principal Corporate Legislation

Companies Act, 1995; Trusts and Trustees Act, 1988; Malta Financial Services Authority Act, 1994; Investment Services Act, 1994; Banking Act, 1994; Financial Institutions Act, 1994; Financial Markets Act, 2002 and the Business Promotion Act, 1988.

Company Information

Procedure to Incorporate
This entails the deposit of the paid-up share capital into a bank account and the filing of the Memorandum and Articles of Association with the Registrar of Companies. Non-EU/ non-EEA resident shareholders are also required to submit a bank reference besides an identification document for the immediate shareholder (e.g. passport copy or certificate of incorporation).

Restrictions on Trading

There are no specific restrictions on trading imposed on Maltese Companies. However, it must be noted that companies involved in particular spheres of economic activity may require a license before commencing their activities. Such activities would include investment services, insurance business, other financial services and also gaming activities, to mention a few.

Companies incorporated prior to 31st December 2006 and having the status of an International Trading Company (ITC) are subject to the restriction that no trading activities can be conducted with persons resident in Malta, except as provided by the Income Tax Act.

The Income Tax Act specifically allows the following activities to be undertaken by an ITC:

– engage in purchases for export of goods manufactured, assembled or processed in Malta, provided that such purchases are not made from a person who owns directly or indirectly more than 15% of the ordinary share capital of the said International Trading Company.
– trade with companies registered in Malta under the Malta Financial Services Authority Act 1994;
– trade with other International Trading Companies;
– manage Maltese companies whose business is restricted to affiliated insurance (or “captive insurance”) carried on exclusively with non-residents;
– provide management, administration or other services to collective investment schemes resident in Malta where such schemes are marketed exclusively outside Malta and are licensed or exempt from licensing under the Investment Services Act, 1994.
– provide ship management services provided that objects are limited to activities relating to the management of ships which are not less than one thousand tons and which are engaged in the carriage of goods or passengers.

Powers of Company

A Maltese company may exercise all those powers outlined in the Memorandum and Articles of Association of the Company.

Language of Legislation and Corporate Documents

English.

Registered Office Required

Must be maintained in Malta.

Shelf Companies Available

No.

Time Scale to Incorporate

Three to five working days.

Name Restrictions

Anything identical or similar to the name of a company already incorporated or reserved; anything that in the opinion of the Registrar of Companies is offensive or otherwise undesirable.

Language of Name

Names can be expressed in any language using the Latin alphabet .

Suffixes to Denote Limited Liability

The name of the company must end with the word “Limited” or “Ltd” in the case of private limited companies and “p.l.c.” in the case of a public limited company.

Disclosure of Beneficial Ownership to Authorities

The identity of the beneficial owners of a Maltese company may remain confidential if a trustee company authorised by the Malta Financial Services Authority is engaged to act as shareholder on behalf of the underlying beneficial shareholders.

This confidentiality is maintained as long as the company and its beneficial owners are not involved in any Money laundering activity.

Compliance

The minimum authorised and issued share capital under Maltese Law is as follows:

Private companies – €1,165 with at least 20% thereof paid up upon subscription;
Public companies – €46,588 with at least 25% thereof  paid upon subscription.

Classes of Shares Permitted

A company may have different classes of shares.

Registration Fee

A registration fee is payable to the Registry of Companies and depends on the amount of authorised share capital.  The fee ranges between a minimum of €245 and a maximum of €2,250.

Annual Fee

An annual registration fee is also payable to the Registry of Companies with the minimum fee being €100 for companies having a share capital not exceeding €1,500.

Financial Statement Required

Annual returns and audited accounts.

Directors and Company Secretary

Companies must appoint at least one director (two in the case of a public company), residents or non-residents, local or foreign corporations, and one company secretary. The law does not require that the company secretary be resident in Malta. A director may be a corporate entity but the company secretary must be an individual. Furthermore, a sole director cannot occupy the post of company secretary as well unless the company is a single member company.

Shareholders

The minimum number of shareholders is normally two; however a “single member company” may also be registered, subject to the satisfaction of certain requirements.

Private holding companies can have up to 50 shareholders and whilst there is no limit on the number of shareholders for Public holding companies. The shareholders of Maltese companies can be Malta-resident or non-resident individuals or corporations.