Company Formation in Malta: Fast and Easy-3 Steps for Company Registration Without Travel:
- Send us an agreement for company formation services with the following key information, and in addition, our manager will meet or phone you to ensure correct and complete information that is needed to prepare the documents.
To open a Limited company in Malta, these are mainly the Articles of Association which regulates the internal management of a company and, the Memorandum of Association with the key information about the company:
- company name
- object (= activities)
- registered address
- if the Limited Liability Company is a Private LLC or a Private Exempt LLC (no body corporate as director, less than 50 shareholders)
- Director and Company Secretary (both can be non-EU citizens; the director can be a corporate body; Company Secretary must be an individual, at Private Exempt LLC companies the Director and Company Secretary according to art. 211 of the Companies Act (Chapter 386 Laws of Malta)
- shareholder – the location of the holding that you probably need for the refund in case of profits will depend on the residence of the shareholders
- share capital (standard: 240 € paid in, which is around 20% of 1164.69 € minimum authorized share capital),
- Meet us in person or by Skype for compliance; fill in the mandatory customer due to diligence papers; make a transfer for share capital, public fees and our costs:
- Sign the papers that we prepare and email to you for company formation (memorandum and articles of association, forms for the Malta Business Registry – MBR) and send them back to our office. Incorporation at the Registry of Companies (ROC) at the Malta Business Registry (MBR) will usually happen within 2 working days. Then the company receives an income tax number from IRD (Inland Revenue Department, also in charge of the corporate tax), can apply for a VAT certificate (that allows to act in line with the EU VAT directive), and, start the procedure to open a bank account.
Company formation of a new company or takeover of a company is offered only together with other services (accounting, payroll administration, office services etc.) because this way we know the activities of our clients.
The tasks of a Company Secretary are mainly administrative formalities, e.g., organization of meetings of the companies, filing of returns, and submitting documents to the Registrar of Companies at the Malta Business Registry.
However, Maltese law puts extensive compliance requirements on companies that organize nominee directors or nominee corporate secretary functions. If these tasks are done by the real director, the company saves costs and bureaucracy. As a service provider, we inform in time about deadlines and prepare the documentation, so the company can meet its obligations, its statutory, and its compliance requirements.
If we also assist the company to apply for a bank account (safe and secure financial institutions in Malta and or outside Malta), please be aware that banks do their own due diligence, so we have little influence on their decision. However, we can help clients in most cases.
Company in Malta: – Benefits:
Company Formation in Malta – quick registration of a Limited Liability Company (LLC)
- 5% corporate tax (after refund) – Malta – companies have the lowest tax in the EU
- Tax advantages for residents without domicile
- EU compatible tax laws, friendly administration
- EU with freedom of movement, Schengen, Euro, and English as an official language
- Well educated multilingual workforce, diversified economy with strong ICT and finance sectors
- Sunny climate, good flight connections, an island with tourism and much entertainment
- There is a special DLT (digital ledger technology) regulation for ICOs, blockchain, and cryptocurrencies, based on Maltese legislation (Malta Digital Innovation Authority Bill, Innovative Technology Arrangements and Services Bill, and Virtual Financial Asset Bill). While the legislation looks attractive, the relevant authority is extremely reluctant to issue licenses. Since the regulations were introduced, many companies applied for a license, but until May 2021, only two companies received one. The management of Zugimpex, therefore, recommends clients to wait until licenses are issued regularly, before moving such activities to Malta.
Registration of a General Partnership (GP) or of a Limited Partnership (LP):
In Malta, it is possible to form a General Partnership with unlimited joint and several liability of all partners.
In the case of a Limited Partnership (“en commandite”), there are one or more Limited Partners who are just liable for the contribution made to the partnership, in addition to at least one General partner..
Partners can be both individual and legal persons. The use of a (local or foreign) legal person as a General Partner is possible to reduce liability.
For the registration, the following information is required:
- Company name
- Object (= activities)
- Registered address
- Partnership agreement that specifies the General Partner, the Limited Partners and their contribution.
- The defined authorized capital (must be paid in full)
- Application: standard documents to be submitted to the Malta Business Registry (MBR)
A Maltese corporation can change its status to a partnership. A partnership agreement is required stating that the company wants to move from a company to a partnership.
A partnership must submit a financial statement plus tax declaration to the tax office, but the published annual return does not always have to be submitted to the ROC (Registry of Companies).
Legal Benefits of a Company in Malta:
Licenses in Malta often are valid for the entire EU; but in Malta, costs for obtaining and administrating the authorization are much lower. Whether online gaming, shipping, airline, or investment funds, Malta offers the passport to the EU/EEA market at reasonable costs. For IPOs, a combination with the first listing in Malta and a second listing on a larger EU stock exchange might be much cheaper than a single listing on the larger exchange.
Malta makes a difference between residence and ordinary residence. A residence is constituted by habitual and continuous presence; a person does not need to be 183 days per year in Malta to be resident for tax purposes. However, the person must consider the definition of residence in art 4 of double taxation agreements as well as the question of which agreement is applicable.
According to Maltese Law, the residence for legal persons is the place of management and control, however, it is not sufficient to be able to exercise management and control, relevant decisions should actually be taken there. Therefore, the airplanes are full of businessmen who are happy to fly for a business trip to Malta to meet regularly there for important decisions.
Directors of corporations can have their residence outside of Malta, however, if directors or shareholders are not citizens of the EU, EEA or Switzerland, the commercial register (MBR) asks for additional due diligence documents (e.g. a professional reference of a lawyer or auditor, a bank reference, a copy of an identity document and an utility bill as a proof of residence).
In Malta, second jobs are possible, they are free from social charges, there is a special tax rate, and the total amount of working hours is limited only for employment, not in total. Consequently, it is cheaper for clients to employ proper persons part-time, they provide a real substance that can be built up over time. For daily business, real employees avoid delays caused by nominee directors who are often not available and afraid of their liability.
The same principle applies for the structure: instead of fiduciaries as shareholders, a structure with a holding company outside Malta is in most cases the better solution.
After Malta was criticized by international bodies concerning the enforcement of its Anti Money Laundering legislation, the government introduced amendments to the Company Service Providers Act and subsidiary legislation in 2020. Since then, The Malta Financial Services Authority MFSA regulates company service providers, including law firms and audit companies. The legislation requires not only special licenses for fiduciary relationships and nominee directors but also defines extraordinary procedures. Therefore, nominee directors and fiduciaries carry a huge legal risk, combined with a corresponding bureaucratic and financial burden.
If escrow agent services are required to fulfill an international contract or another temporary trigger event, this service can also be provided by our licensed Swiss company using reputable Swiss legislation.
It is not required for a Maltese company to have a bank account in Malta, as banks are very restrictive and accounts in other countries are permitted. Check our guidelines on how to deal with banks and you will have more success in opening a bank account.
There are reasonable conditions for a Maltese company to receive a VAT number which is an important consideration for companies that are trading within the European Union.
Redomiciliation, Merger, Management and Control, Branch:
Malta allows foreign companies to redomicile to and out of Malta using a standardized procedure. If the original company is in a blacklisted jurisdiction, a more complex procedure is required. Before such re-domiciliation, the financial statement in the old jurisdiction can be reworked to ensure a long-lasting (tax) benefit in the new jurisdiction.
In case of a partnership, migration within the EU is rather simple because the partners have the right of free movement and there is no need for liquidation.
Also, a company can move to Malta by merging with a Maltese entity. Cross Border Mergers are regulated in the Directive 2005/56 EU. Mergers can happen for various reasons, and in some cases even to benefit from different legislations regarding insolvency or employee rights.
A foreign company can move its management and control to Malta and declare this to the local tax authorities. This allows using entities that were former offshore and to still benefit from tax advantages.
A branch of a foreign entity in Malta can be useful, too: Malta has the right to tax the income of the branch, but in some cases, passive income of the Branch arising outside Malta is not taxable in Malta. Branches can be opened and closed easily.
Limited Liability Company (P.L.C.) in Malta:
This legal form is mainly used for investment companies, the requirements are at least two directors and a secretary, the minimum capital is 46600 Euro, of which 25% (11650 Euro) must be paid in.
Malta focuses on transparency, so the shareholders of a P.L.C. are published as “involved parties” on the website of the Malta Business Registry if the company is not listed on a stock exchange.
Most P.L.C. companies are investment vehicles with variable capital (SICAV Société d’ Investissement à Capital Variable). SICAV structures are specially regulated by the Investment Services Act (Chapter 370 Laws of Malta). They can be used as “umbrella companies” with independent sub-funds.
Associations in Malta:
An agreement to associate between at least 3 members is required, which can be done for any lawful purpose. Usually, there is a standard template, which needs to be completed by the name, the address, the objects, and the administrators. If all administrators reside outside Malta, a resident person needs to be appointed as representative.
Registration at the MBR is possible, but not always mandatory. On the website of MBR, the members are not published. Associations are regulated in the Voluntary Organisations Act (Chapter 492 Laws of Malta) which has been amended 2018.
Shipping Companies and Vessels:
Malta is one of the leading maritime hubs in the region with one of the largest international ship registers worldwide. The shipping sector is regulated by specific laws and regulations around the Merchant Shipping Act of 1973 and supplemental regulations. The regulations apply to the yachting industry, too.
To benefit from the tonnage tax regime, clients need to register a company that qualifies as a shipping organization (according to the Maltese Merchant Shipping Act) and receives a license from the government. The ship can also be registered in another jurisdiction if the Maltese tonnage tax is paid. The ship may not have less than 1000 net tonnage.
Intellectual Property Registration: trademarks, patents, design rights:
Trademark registration protects the brand name and gives the trademark owner the exclusive right on the tradename and the logo. Registration in Malta is possible with the Intellectual Property Office (IPO) or at the EU level with European Union Intellectual Property Office (EUIPO) in Alicante in Spain. The European trademark register application is easy and registration is valid for 10 years from the date of registration. Then it shows up at an EU trademark search. Later, renewal is possible. In case of additional registration, the WIPO (World Intellectual Property Organization, cooperation with United Nations) gives guidelines on how to register trademarks in the 97 countries of the Madrid System.
Trademarks are a combination of words and symbols; they can be registered for the EU in one or more of the 45 classes of the International Classification of Goods and Services established by the Nice Agreement (known as the “Nice Classification”). Malta, however, is a single-class jurisdiction.
Designs can be protected for a period of five years by registering a new design right with an individual character. Then they can be licensed. To register, a design shall not be purely functional and must fulfill criteria of morality. Applications have to be filed with the comptroller of the Commerce Department.
It is possible to apply for a Registered Community Design (RCD) at the European Union Intellectual Property Office (EUIPO) or for international protection at the World Intellectual Property Organization (WIPO) office in Geneva.
Copyrights protection for software, original literary, scientific, and artistic work lasts until the death of the creator plus 70 years in the EU and plus 50 years outside the EU according to the Berne Convention. Registration of copyrights is not required; it is sufficient to attach the copyright symbol plus the year of creation to the text. Sometimes it is useful to create documents that prove the ownership of copyrights.
Zugimpex: your 1st Choice for Formations, Offering, Professional Services, Reasonable Fees, and a Friendly Atmosphere:
- Comprehensive Services from one source for your company in Malta.
- Quick Customer Due Diligence – we expect you have good financial standing, good qualification, and successful experience in your business.
- (Please note – Zugimpex does not provide any services to US citizens or persons residing in the USA. For companies with their registered office or for persons residing in Germany, Italy or France, coordination with a local tax advisor based there is required)
- Fair price calculation for setting up a company in Malta and running it:
- Company formation and incorporation in Malta: 1500 € including domicile, flexi desk, and basic postal service for one year, excluding public fees of around 350 €. Our clients enjoy our flexi desk solution for the same costs as a virtual office but can use the infrastructure and therefore have proof of substance.
- Annual costs depend on the activities: starting from 2500 € per year including domicile, flexi desk and basic postal service (from the following year), bookkeeping, VAT declaration, financial statement, and parts of tax declaration. As an industry standard and including all surrounding tasks like sorting, filing, and checks, qualified bookkeepers process around 15-20 bookings per hour which corresponds to 40-60 booking lines. However, the larger part of the time is used for sorting documents, allocate payments and contacting clients for missing information (e.g., if there are payments without invoices). For a financial statement, it takes between 5 and 15 hours.
- Mandatory annual audit costs from an external auditor including special declarations to the tax office: in most cases between 500 € and 1500 € per company depending on the activities.
Malta Residency: Residence Document (ID Card) for EU/EEA citizens:
EU/EEA citizens who are moving to Malta can easily take a residency in Malta and work in Malta because of their right to free movement within the EU.
Apart from the pleasant lifestyle, the favourable taxation for “residents without domicile” allows that foreign-sourced income that stays outside the country and capital is not taxed. In addition, based on the rules about automatic exchange of information, foreign banks will inform the Maltese tax authorities (and not the tax authorities at their previous residency) of funds kept in their accounts.
- According to Subsidiary Legislation 460.17, Malta recognizes the right to free movement of EU citizens and treats them equally with its nationals.
- If an EU citizen wants to stay in Malta for more than 3 months, he will need to apply for a residence card. There have been cases of EU nationals living in Malta for more than 3 months without it. Since they are members of the same community, they cannot be deported. Instead, they may be subject to a penalty of around 300 euro or a criminal case, should they fail to pay the fine.
- It is advised to apply for the Maltese residence card maximum of 3 months after the arrival:
- It serves as a proof of residence for both local and foreign banks.
- It can be presented to the tax authorities of the former residence country.
It simplifies life: you will need it to acquire a car or apply for a mortgage
How to obtain a Malta ID card (“residence document”) from Identity Malta:
EU/EEA/Swiss nationals’ applications for a residence card in Malta are handled electronically. An applicant will need to define the reason for his stay, fill in the respective form, and submit it along with the supporting documents.
To Rent an apartment or a house, a long-term property lease agreement will better justify the claim for residence. It is important that the landlord gives a copy of his ID, registers the contract online with the Housing Authority which forwards the rental approval letter automatically via email to the landlord and to the tenant. Also, it is reasonable to have utility bills registered under the own name, because banks require such documents as a proof of residency.
Currently, there are the following forms and procedures for EU nationals willing to establish a Malta residency:
EU/EEA/Swiss nationals can start working as soon as they sign a work contract, and then they can apply for the residence permit within the upcoming 3 months. Before applying for the residence card, they will have to arrange a couple of things:
- Sign an employment contract.
- Rent a place: see above.
- Register for a social security number or present such details from another EU state (A1 form). Then the income tax number is automatically issued within 2-3 days and it is possible to call 153 to ask for it.
- Then an account must be created at the agency “Jobsplus” and it is required to submit the employment engagement form from the dashboard. A few days later the approval form is ready for download.
- Apply for the ID Card: download and fill in Form A – Employment / Self Employment, prepare the documents from the checklist and send the application to email@example.com.
Before getting started as a private entrepreneur in Malta, EU nationals need to prepare a couple of papers:
- Rent a place: see above.
- Proof of the business address (e.g., a commercial rental agreement), if it is not possible to operate from your residence address.
- Register for a social security number or present such details from another EU state (A1 form). Then the income tax number is automatically issued within 2-3 days and it is possible to call 153 to ask for it.
- Submit the Jobsplus engagement form as self-employed.
- Obtain a license where applicable.
- gaming license from Malta Gaming Authority MGA,
- financial services license from Malta Financial Services Authority MFSA,
- trade license from the Trade Services Directorate,
- hospitality licenses from Malta Tourism Authority MTA, health certifications
- employment agency license from the Department of Industrial and Employment Relations)
- different warrants for professional services like Accountant or Architects
- other licenses in the medical sector and in the real estate sector
- Apply for a Maltese VAT number.
- Apply for the ID-card: download and fill in Form A – Employment / Self Employment, prepare the documents from the checklist and send the application to firstname.lastname@example.org.
This category covers individuals who can prove sufficient income or savings, as well as pensioners. The basic requirements are:
- Rent a place: see above.
- Acquire comprehensive insurance for health-related risks (persons aged over 70 or with prior health issues should consider opting for employment or self-employment).
- Provide proof of sufficient resources “not to become a burden on the State”: €14,000 in capital or an active income of €92.72 per week (please note that decisions are taken on a case-by-case basis, and it may happen that even applications with a higher income will not qualify).
- Apply for the ID card: download and fill in Form J – Self-Sufficiency, prepare the documents from the checklist and send the application to email@example.com
This type of residence requires the acceptance letter from a qualified educational institution, health insurance, and proof of sufficient means to sustain oneself temporarily (similar to the Self-Sufficiency scheme).
- Apply for the ID card: download and fill in Form M – Study, prepare the documents from the checklist and send the application to firstname.lastname@example.org.
EU nationals who do not fall under any of the above categories can claim residence based on family ties with another EU national who is already resident in Malta. Applications are accepted from a spouse, from children under 21, from dependent family members (children above 21 – e.g. students; parents, grandparents), but also if there is a partner for at least 2 years
- Apply for the ID card: download and fill in Form F – Family Members, prepare the documents from the checklist and send the application to email@example.com.
Once an applicant receives a confirmation email, it will be sufficient proof of his online registration.
Several weeks later, the person will be invited for submitting the biometric data and e-signature at the office of Identity Malta. The date of this visit is the date that will be printed on the residence card which will be ready to pick up another few weeks later.
For the renewal of the ID card, a similar process is required, using a different application form.
Special Schemes – Zugimpex can assist as Authorized Registered Mandatory (ARM)
”The Residence Programme (TRP)”
Applicants have to prove that they rent or buy a qualifying property. This scheme is useful if a person travels most of the time but receives substantial employment income from an employer in the EU. With a Maltese residency, in most cases, he only pays the minimum tax of 15.000 Euro per calendar year.
”The Malta Retirement Programme”
- Rent a property for a minimum of 9600 € per annum or purchase a property of at least 275000 € (8750 € or 250000 € for real estates in Gozo or in the south of Malta);
- Full pension must be received in Malta and shall amount to 75% of the chargeable income.
- For 5 years, the person shall stay at least 90 days per year in Malta and shall not reside in any other jurisdiction for more than 183 days per year.
- Taxation: 15% of the pension remitted, minimum tax 7500 € per year
Residence Permit in Malta (with Schengen – Visa) for Non-EU Citizens:
Malta actively attracts highly qualified and wealthy foreign residents and offers different options to get a beneficial permanent residence permit or Maltese citizenship + passport.
Non- EU citizens can receive a temporary residence permit that can lead to a permanent residence permit after several years.
Depending on the country of origin, third-country nationals can stay 90 days within a period of 180 days in the Schengen area. For longer stay and for citizens from other countries, a visa for Malta is required. A residence permit in Malta offers access to the Schengen area.
Options to get a temporary residence permit for non-EU citizens:
- create a company that really invests 100,000 Euro and rent or buy an apartment of reasonable quality. Authorities are checking these points carefully, so real implementation is important.
- Work permit in Malta: If an employer asks for a work permit; this is easier to get this for highly qualified personnel – they need no test that a candidate cannot be found in EU/EEA.
- A well-known corporation establishes a subsidiary or a branch. They want to place a key person as a manager of this entity.
- Study in Malta
- Self-sufficiency (proof needed)
Special Schemes to receive a permanent residency in Malta – Zugimpex can assist as Authorized Registered Mandatory (ARM):
1. ”The Global Residence Programme”
- Rent a property for a minimum of 9600 € per annum or buying a property of at least 275000 € (8750 € or 220000 € for real estates in Gozo or in the south of Malta).
- An applicant shall not reside in any other jurisdiction for more than 183 days per year.
- Income and capital gains in Malta: 35%
- Income arising outside Malta and remitted: 15%
- minimum tax 15000 € per year
- Work permit is not excluded.
- Application process with strict Due Diligence
2. Nomad Residence Permit
Nomad Residence Permit allows individuals from Non-EU/EEA countries with a monthly income of at least 2700 Euro to move to Malta and perform their activities there.
The applicants must prove their income from:
- employment contract with a foreign employer; or
- Freelance or consulting contracts for foreign clients or
- Activities for a foreign company where he/she is partner/shareholder.
How to apply for the Nomad Residence Permit at Residency Malta Agency:
The first application can be submitted from outside Malta, then an initial National Visa is issued valid for 180 days, so it is possible to travel to the country.
After arrival follows the formal application for the Nomad Residence Permit, which is valid for a year and renewable. The application should be done in time because the authority needs some time to perform a comprehensive background check.
Checklist of the required documents:
- Application form N1 and N2 (for family) if applicable
- GDPR declaration Form N4
- Europass CV signed
- Letter of intent
- Proof of sustainable income
- Employment contract and tax documentation if applicable or service contract
- Documentation if a company in another country is owned.
- Bank statement in the name of the applicant showing the main sources of income for the last 3 months.
- Rental or purchase contract for a residence in Malta
- Local/ International comprehensive health insurance policy
- Health declaration
3. ”High Qualified Persons Rules”
- Qualifying contract of employment (special positions with a licensed company in certain sectors like financial services, gaming services, aviation, and assisted reproductive technology sector)
- Income at least around 87000 € per year in 2021 (indexed)
- Taxation: 15% up to an income of 5000.000 €, the rest is exempt from tax.
4. “The Malta Retirement Programme”
5. “Malta Citizenship by Investment”
Malta offers this passport scheme; however, it is politically controversial and expensive, therefore we recommend it only in exceptional cases.
Liquidation of Companies:
A Maltese company has ongoing costs and obligations, and if this shall not continue, the company can be sold, transferred or there is a liquidation voluntary basis.
This is the company liquidation process: Starting activities for the liquidation of a limited company:
- general meeting: resolution with liquidation date, liquidator, and appointed audit firm.
- notice of resolution to the Registrar (Form B (1)).
- Declaration of solvency by the directors (Form B (2)) within one month, including a statement of assets and liabilities,
- Declaration with Form L by the Liquidator.
Liquidation activities within 12 months (or general meeting every 12 months):
- Confirmation of outstanding amounts by Inland Revenue Department, VAT department and MFSA and settlement
- Deregistration with Inland Revenue Department, VAT department and Jobs Plus.
- Audit for the ending period
- Payment of all liabilities
- Collection or sales of receivables
- Closing of bank accounts
- audit for the period from the date of dissolution up to the date of distribution
- tax return plus payment, tax office issues a tax clearance
- general meeting: Liquidator presents accounts, audit report and scheme of distribution.
- Notice to the Registrar at the Registry of Companies (ROC).
- Publication in the Gazette, waiting for objections.
- After 3 months, the registrar strikes the company off the register. Then the company status is “dissolved”
Additional and Interesting Information about Malta:
Malta has EU membership, Euro and English as the second official language. 510,000 inhabitants (almost 100.000 foreigners, around 40% of them non- EU) live in Malta with Valletta as its capital. The country has 300 sunny days a year and the sunrise earlier in winter when people go to the office. Most people live on the main island Malta, which is located about 130 km south of Sicily, the 2 other islands are Gozo and Comino. There are excellent flight connections to most European centres with over 30 airlines.
Malta is positioning itself as an onshore location compatible with EU laws, but at the same time it provides an attractive environment to enterprises and individuals: Malta was set by the OECD on the whitelist, has numerous double taxation agreements and is rarely in the field of fire of high tax countries. At the same time, it is possible to get access to attractive EU- subsidies. Authorities in Malta act customer-friendly, there are one-stop shops that offer to investors flexible and individual solutions.
A favourable environment attracts investors: stable real estate prices, a reasonable salary level, low taxes, reasonable costs for services and a predictable political environment. Thousands of highly qualified people from the EU and outside of the EU move to Malta because of attractive jobs, nice weather, low taxes, and an entertaining lifestyle. Also, it is possible to earn a lot: working hours are limited for one employment with one employer by EU regulations, but employees can work unlimited time by combining several jobs.
(updated June 2021)