The Limited Liability Company or Ltd is the most commonly used form of company in Malta, established by subscription of capital divided into shares. It can take the form of a Public Limited Company (PLC) or Private Limited Company (LTD). There are also Private Exempt Companies which, subject to certain conditions, constitute a variant of the LTD.
The minimum share capital for the establishment of a PLC is € 45,589, which must be subscribed by at least two partners. The amount must be stated in the company's statute (Memorandum and Articles of Association). When registering, partners must pay at least 25% of the nominal value of the share held. When the share capital is equal to the minimum established by law, it must be fully subscribed in the statute. If, instead, it is greater, the minimum required by law must be subscribed. Partners can subscribe their corporate capital under forms other than money as provided for by law. When money is not used, the law requires the making available of assets which may be subject to economic appraisal. A PLC can offer its own shares and/or bonds to the public, but this issue must be accompanied by an explanatory brochure. For the company's management, the law requires the presence of at least two directors and a company secretary.
The minimum share capital required is € 1,165, of which 20% (€ 233) must be paid at the time of establishment. In Malta, a company can choose its capital to be expressed in any currency and there is no restriction or exchange control. The company's income tax is paid in the same currency as the share capital, and any tax refunds are also paid in the same currency. A Ltd must have at least two natural or legal persons as shareholders. A private Limited Liability Company can, however, be established as a single-member company, subject to certain conditions set forth by the Companies Act.
The registration fee depends on the amount of the share capital, with a minimum of € 210. Establishment usually takes up to 24 hours and can be carried out autonomously or by commissioning an authorised agent, a commercial accountant or a lawyer specialised in commercial law.
Two documents required for the establishment of a LTD in Malta: the Memorandum of Association and the Articles of Association. The first is, in essence, a list of partners who intend to give life to the new company; the second is instead composed of a list of articles that regulates relations among partners as well as the powers and responsibilities of those who will manage activities. In order to simplify and streamline the registration process for a new company, it is possible to submit only the Memorandum of Association; in this case, the Articles of Association provided for by law will apply. The above procedure applies if the company has a single partner.
The shareholding structure can include up to 50 members (the minimum number is 2) and their respective shares or bonds cannot be the subject of transaction and/or offer to the public, insofar as there are constraints on their transfer. The law also provides that the company's management be entrusted to at least one director and a company secretary; these functions cannot be performed by the same person.
The Private Exempt Company is a special form of LTD. The shareholding structure must be composed exclusively of natural persons, numbering no more than 50. No other company should be involved. The presence of just one shareholder ("Single Member Company") is also allowed only in the case in which the statute refers to the company's main activity. In this case, the company will carry out only the main activity established. The director can also serve as company secretary.
Branches of overseas companies
Within one month of the establishment of a branch in Malta, an overseas company must provide the Registrar of Companies with a complete dossier containing the following documentation:
A tax rate of 35% of company profits is applied in Malta. The peculiarity of the Maltese tax system is application of the full imputation system. This particular system of taxation provides for a refund of 6/7 or 5/7 of the amount paid as tax on profits. The refund is paid by the tax administration to the shareholder of the Maltese LTD company for the distribution of profits and within 60 days of the request. The refund obtained is then subject to taxation in accordance with applicable laws in the country and the reference tax scheme. The refund is equal to 6/7 of the amount paid in the case of profits generated by business or 5/7 in the case of earnings generated by interest or royalties. By way of example: an Italian resident owns the shares of a Maltese company that sells software and at year end has a profit of € 100,000; the company pays € 35,000 to the Maltese tax authorities. Subsequently, the company distributes the net profits to the Italian shareholder, paying him € 65,000, and the Maltese tax authorities refund 6/7, or € 30,000, to the Italian owner of the company. From the point of view of the Maltese company, taxation is thus reduced to 5% of profits. Profits and redemption obtained by the shareholder are then taxed in Italy as personal income based on Italian rates.
The benefits of this tax system can be maximised if the shareholder is resident in a country that does not tax income received abroad.
|Average start-up times||From 1 week to 20 days|
|Availability of pre-established (ready-made) companies||Yes|
The effective corporate tax rate is 5%. Even though the regular corporate tax rate is 35%, a refund of 80% of that amount would be obtained as a foreign shareholder. This results in a highly competitive final rate of 5%.
|Published information about the company's directors||
The names of company officials appear in public documents. However, the use of appointed officials can prevent the customer's name from appearing.
|Legislation and controls||
Companies in Malta are regulated by the 1995 Companies Act. The control authorities are the Maltese Business Register and the Malta Financial Services Authority.
|Confidentiality||Malta offers a high level of privacy|
|Risk indicators||Average political risk: 15%